DMA - DMA: Liquidity Could Be A Problem For This Value-Priced Unique CEF

2024-07-17 15:32:15 ET

Summary

• Destra Multi-Alternative Fund offers a unique strategy with investments in private securities, providing potential for high-yield and total return.
• The DMA closed-end fund's yield is currently uncertain due to lack of recent distributions, but its peer funds have yields between 7% and 9% right now, so this one could be around that.
• The fund employs reasonable leverage at 14.71% of the overall portfolio, trading discounted at 26.89% on net asset value with potential for capital gains.
• The fund's term structure could be problematic, as its investments are illiquid securities that may not be compatible with the mandate to liquidate the fund.
• The fund's attractive pricing and diversification potential could appeal to someone who is cognizant of the liquidity risks.

The Destra Multi-Alternative Fund ( DMA ) is a closed-end fund, or CEF, that provides a rather unique strategy that might appeal to some investors. The fund’s sponsor is not a company that is especially well known, so this admittedly might lead some people to be quite cautious. However, the company provides investment services to several funds that many readers are likely to be familiar with:

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