Tender results for DRA
The first part of my investment thesis for the Diversified Real Asset Income Fund (DRA) has panned out; they just completed one (out of a potential 3) self tender offers at 99% of NAV. Unfortunately, just like me, there were a number of other fund holders who tendered, and the tender offer was waaaayyy over subscribed. In fact, owners of 2/3 of the total shares outstanding tendered their shares. That means 2/3 of current fund shareholders just wanted to get their money back! I guess nobody was very happy with the historical performance of the fund!
The tender offer was structured to repurchase 10% of outstanding shares (approx. 2.5 million). With over 16 million shares tendered I was only able to sell 15% of my shares. As I said, I am comfortable holding this fund for at least the next 6 months. If over that timeframe the discount to NAV doesn’t average below 10% (today its around 11.8%) the fund will have to conduct a second tender for a further 10% of shares outstanding. In the meantime I’ll be collecting my 7% interest!