SWZ: Will Be Converting To A 'Hedge Fund' Style CEF

2025-02-25 11:11:30 ET

Summary

• The Swiss Helvetia Fund will soon shift to a hedge fund style investment strategy, focusing on undervalued U.S. securities with growth potential and closed-end fund activism.
• The fund discount may narrow because of the new investment strategy.
• The advisory fee will increase from 0.70% to 1.00%, which management justifies by higher human capital requirements and the absence of performance fees.
• New investment restrictions will allow short sales for hedging, issuing senior securities, and excluding closed-end funds from concentration limits.
• A conditional tender offer will occur if the discount remains above 10%.
• A 30% special distribution is expected when the existing portfolio is liquidated.

Back in 2019, I wrote an article entitled “ Swiss Helvetia Fund Will Likely Use an Activist Investment Strategy Soon. ” The headline title was premature by about five years, but it looks like the fund will finally be converting to a new strategy.

I’ve summarized a brief history of the fund below:

• 2017: Bulldog Investors elected two directors to the Fund Board. Shareholders then approved a proposal for a large self-tender offer and elected two more Bulldog-associated directors.

Read the full article on Seeking Alpha

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