The struggle for control of closed-end funds has been boiling over as activist shareholders for the first time last month won a majority of board seats and another fund's board sought to change its bylaws to stave off the same fate.
Activists that have been trying to win changes in the Clemente Global Growth Fund on September 23 won five of the nine seats on the fund's board of directors. A week later, on Oct. 2, the board of trustees of USLife Income Fund filed a preliminary proxy statement with the Securities and Exchange Commission seeking to change its bylaws so that a 75 percent vote of shareholders was required to change it from a closed end to an open end fund. In addition, the board wants to double its size and stagger the terms of directors. Although many funds have sought such protections in their bylaws when they have started, it is rare for a board to make such changes once a fund is operating.