Investment Partners Asset Management Announces That a Shareholder Proposal Submitted by a Fund IT Manages Has Been Included in
30 August 2012 - 12:44AM
Investment Partners Asset Management ("IPAM") announced today that
a shareholder proposal submitted by a fund it manages has been
included as
PROPOSAL NO. 3 in the proxy statement
of closed-end fund Foxby Corp. (OTC:FXBY) ("Foxby" or the "Fund")
for consideration at the Fund's upcoming meeting of shareholders.
The proposal puts to a vote of shareholders a request that
Foxby's board of directors consider seeking an appropriate
registered investment company, or series thereof (including other
Winmill funds), with the potential goal of effecting a merger or
similar transaction with such company or series that is in the best
interests of the Fund and its shareholders.
This shareholder proposal was originally sent to Foxby in May of
2009 for consideration at that year's annual meeting. However,
after voluntarily delisting its shares from the American Stock
Exchange in late 2008, Foxby chose not to hold shareholder meetings
until recent events required it to do so in order to approve its
proposed advisory contract. As such, the upcoming meeting is the
first opportunity shareholders have had to vote on the shareholder
proposal or any other matter in 3 years.
Gregg Abella of IPAM stated: "Although the supporting statement
for the shareholder proposal in the proxy statement was written in
2009 and cites data from that timeframe, we believe the issues
raised in the shareholder proposal still remain valid. In our
opinion, it just seems like common sense that the board consider
alternatives for Foxby."
Foxby has still not regained the December 31, 2007 share price
of $2.96 and net-asset value per share of $3.43. However,
through August 27, 2012, Foxby has recovered somewhat from its
December 31, 2008 level in that its share price has increased from
$0.55 to $1.55 and its net-asset value per share has increased from
$1.26 to $2.13. The Fund has paid distributions or dividends
to shareholders twice in the past 5 years: $0.02 per share in the
fourth quarter of 2007, and $0.01 per share in the second quarter
of 2012. According to data from CEFConnect, as of August 24,
2012, Foxby appeared to be among the smallest, if not the smallest,
of closed-end funds (showing total assets of less than $7 million,
and common assets of less than $6 million); and compared to other
closed-end funds its shares traded at among the highest discounts
to net-asset value (at approximately 28%). Since Foxby still
seems to have the same number of shares outstanding on July 31,
2012 as it did in 2009, it does not appear that the Fund has taken
steps during that time to reduce its discount by repurchasing
shares in the open market. Expenses have come in lower than
projected in the 2009 shareholder proposal (at $92,369, for a 2.02%
expense ratio, in fiscal year 2011 for example), in part because
Foxby has eliminated annual meetings and the expenses associated
with a share listing on a national exchange such as the New York
Stock Exchange or Nasdaq. IPAM believes, however, that the OTC
market is not an appropriate market for a closed-end fund.
While IPAM thinks it would be prudent for Foxby's board to
consider a merger at this time, it encourages other shareholders to
follow their conscience when voting their proxies. As
fiduciaries on behalf of its clients, IPAM intends to send a clear
message to Foxby's board that the time has come to consider merging
Foxby with another fund (including other Winmill funds).
Accounts managed by IPAM and its affiliates currently own 83,831
shares of Foxby Corp. (excluding fractional shares). For the
reasons stated above, IPAM announced it intends to vote "FOR" this
shareholder proposal in accounts for which it has voting
authority.
About Investment Partners Asset Management
IPAM is an investment management firm, which adheres to a
combination of value investing, special situation participation, as
well as seeking to exploit inefficiencies created by fluctuations
and volatility of securities prices to obtain long-term investment
gains. Founded in 1995, IPAM manages investments for individuals
and families, businesses, and non-profit organizations applying
their comprehensive approach balanced with research and insight.
For more information about IPAM, please visit their website at
www.investmentpartners.com.
CONTACT: For more information contact:
Gregg T. Abella, Co-Principal
Tel: 732-205-0391
Email: gabella@investmentpartners.com
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