X-Message-Number: 9786
Date: Wed, 27 May 1998 05:10:58 -0700 (PDT)
From: Doug Skrecky <>
Subject: block ownership & closed-end funds

Journal of Financial Economics 33: 263-291 1993

"Private Benefits From Block Ownership and Discounts on Closed-end Funds"

Abstract:

   The greater the managerial stock ownership in closed-end funds, the
larger are the discounts to net asset value. The average discount for funds
with blockholders is 14%, whereas the average discount for funds without
blockholders is only 4%. This relation is robust over time and to various
model specifications that control for other factors that affect discounts.
We argue that blockholders recive private benefits that do not accrue to
other shareholders and that they veto open-ending proposals to preserve
these benefits. We support this argument by documenting a range of
potential private benefits recieved by blockholders in closed-end funds.

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