DMA: Reintroducing A Monthly Distribution Adds More Appeal

2025-03-23 10:20:18 ET

Summary

• Destra Multi-Alternative Fund has traded at a deep discount but is off some of the widest levels we've seen so far with changes over the years.
• The fund's strategy focuses on non-correlated alternative investments, but its high expenses and hedging strategy have kept total NAV returns muted.
• Despite relatively weaker underlying portfolio performance, that isn't necessarily a negative when there is an opportunity to realize the discount.
• They recently reinitiated a monthly distribution policy, and that can make it much more appealing to hold while waiting for that potential discount realization.

Written by Nick Ackerman, co-produced by Stanford Chemist

Destra Multi-Alternative Fund ( DMA ) is a unique closed-end fund that has been continually plagued by a deep discount since hitting the public space. The fund was actually a private interval fund previously before becoming a public CEF early in 2022. This is a relatively small fund, and with such a massive discount, it became an easy target for an activist group. Saba Capital Management started building a position in mid-2023. They continued to scoop up shares and are now holding a nearly 20% stake in the fund....

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