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Closed-end fund activism surges, shows need for Congressional action

May 14, 2024

By Investment Company Institute

ICI’s latest research shows that the number of traditional closed-end funds has continuously fallen for more than a decade as pressure from activist investors has surged. The report, The Closed-End Fund Market 2023, takes a close look at the latest trends in the CEF market. The research shows that no new traditional CEFs opened in 2023 as a record number of traditional CEFs were targeted by activist investors.


“Pressure from activist shareholders surged last year, with a record number of traditional CEFs being targeted compared with any year back to 2000,” said Shelly Antoniewicz, ICI deputy chief economist. “The increased shareholder activism has impacted the market so much that no new traditional CEFs opened for the first time in more than a decade.”


“Activist investors’ disruptive tactics are damaging the sector in pursuit of their own short-term profits. Last year, 90% of shareholder activism was concentrated among just three shareholders who held shares in more than half of all traditional closed-end funds,” said ICI CEO and President Eric Pan. “Over the past 80 years, CEFs have built a strong track record of helping investors save for the future. The House of Representatives recently passed legislation with strong bipartisan support that would protect the millions of Americans who use CEFs for retirement income. The Senate should make it a priority to pass this legislation too.”


To read the report, click here.



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