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Individual Investor
Dan Plettner
Financial Services
- Education New York University; Miami University of Ohio
- Qualifications MBA, BS
- Investment Experience Approximately 20 years
Well-Intentioned Activism
This model seeks to benefit from the presence of observed, well-intentioned activism in the Closed-End Fund space. Activism in Closed-End Funds is a historical mechanism for unlocking shareholder value. The model seeks to maintain positions to the conclusion of observed Activism, with minimal turnover.
The model seeks to take positions only in funds where profile traits may attract, or already have attracted what is perceived as well-intentioned Activism. Positions here may be unique to this model, given the model's narrow focus.
Various private research techniques are used in effort to locate opportunities. Qualitative research focuses on under-followed securities. For this model, research seeks to identify Closed-End Funds which appear likely beneficiaries of current or forward looking Activism Campaigns.
The model manager has no control over any activism campaign and knows that on occasion Activism results in "Greenmail" or benefits not shared by all public shareholders. Accordingly, the model manager intends to assess the profile of each Activism target. The model seeks to avoid being a shareholder in targets in where Activism campaigns are less likely to result in a benefit shared by all public shareholders.
The model manager has no control over any activism campaign and knows that on occasion Activism results in "Greenmail" or benefits not shared by all public shareholders. Accordingly, the model manager intends to assess the profile of each Activism target. The model seeks to avoid being a shareholder in targets in where Activism campaigns are less likely to result in a benefit shared by all public shareholders.
Diversification will vary depending on the number of opportunities believed appropriate for the strategy, and conviction in such beliefs. Diversification of underlying positions can also exist within each Closed-End Fund, but ultimately, there is no mandate on the number of Closed-End Fund positions taken by the model.
When an Activism situation is believed likely to benefit all public shareholders, the account modeled here intends to maintain a position to the conclusion of any Activism. Such is not a mandate. In the event that a previously observed instance of Activism appears less likely to result in significant and equal benefits for all Public shareholders, the manager aims to exit at what is perceived opportune time. The model also may exit and/or re-enter positions based on valuations, timeliness, alternate opportunities within this style, etc.
Shareholders of constituent Closed-End Funds to this model will at times receive proxies from management and from Activists (commonly called "dissidents") to vote on Board members or Proposals. Covestor's model manager does not advise those subscribers on how to vote. Furthermore, Covestor does not vote proxies on behalf of its clients. In addition, Covestor’s Model Managers do not provide advice to subscribers regarding proxies. For additional information, contact Client Services at 866.825.3005.
This model is focused on only one of the model manager's "styles" for Closed-End Fund investing. To be clear, the model manager has never been an Activist himself. The model manager's investing history includes voting proxies as believed to be an ideal fashion to benefit himself as an ordinary shareholder. However, through July 2010 the model manager has never made a single Closed-End Fund proposal. This model is not intended to facilitate Activism, rather to participate in common benefits to all shareholders to the extent (if any) that observations and research make possible.
This model is focused on only one of the model manager's "styles" for Closed-End Fund investing. To be clear, the model manager has never been an Activist himself. The model manager's investing history includes voting proxies as believed to be an ideal fashion to benefit himself as an ordinary shareholder. However, through July 2010 the model manager has never made a single Closed-End Fund proposal. This model is not intended to facilitate Activism, rather to participate in common benefits to all shareholders to the extent (if any) that observations and research make possible.
Model commentary
Why I'm shorting these three closed-end funds
14 May 2013
All three trade at unjustified premiums to their NAV.
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