Karpus Investment Management has plans to continue its protest of the transfer of two closed-end funds from Citigroup to Legg Mason. The firm led proxy contests on three funds and successfully prevented the transfer of two, the Salomon Brothers Inflation Management Fund and the Salomon Brothers Municipal Partners Fund. Citigroup must now re-solicit a vote on the transfer to shareholders.
But George Karpus, president, said his firm is hoping to beat those solicitations, too. “We have the intention, at this point if they don’t do anything to manage the discount,” he said, referring to changes that can be made to the management agreement as part of the transfer, such as allowing periodic tender offers. The firm is not in favor of open-ending the fund and initiating managed distribution is not an option because the practice is being reviewed by the Securities and Exchange Commission (www.fundaction.com, 2/4/05).
Karpus said his firm also plans to contest the reappointment of the funds’ boards of directors, but he said that would likely take more time because the funds often reappoint just a few directors at a time. Calls to Legg Mason were not returned.