ISS Backs Harvard Fund Proposal

The nation's largest proxy-advisory firm is backing Harvard College's attempt to liquidate the Korea Equity Fund.

Institutional Shareholders Services is also recommending that investors give the green light to Harvard's proposal to fire Nomura Asset Management as the investment adviser, given the fund's high management fees and stiff competition from alternative investments, according to the Wall Street Journal.

Chronic discounts are a source of frustration for many institutional investors, who often pressure fund boards to liquidate or turn the funds into traditional open-end mutual funds that sell at net-asset value, the report observes.

Harvard College, the undergraduate college of Harvard University and the Korea Equity Fund's largest shareholder with a 29% stake, has proposed ditching Nomura and liquidating the fund. A vote is scheduled for a week from today.

Harvard hopes that the endorsement by "a neutral and respected outside observer" like ISS "would have some impact on shareholders," said Jeff Larson, CEO of Sowood Capital Management, Harvard's investment manager. Sowood announced ISS's position yesterday.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.