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Goldstein Seeks Control of Another Fund

Shareholder activist Phillip Goldstein is waging yet another proxy battle to gain board seats on a closed-end fund, this time on the Strategic Global Income Fund of Credit Suisse Asset Management of New York.

Credit Suisse sent a letter to shareholders May 15 asking them to vote for its slate of four board members, instead of for Goldstein and three of his associates. The four open seats represent the entire board. Goldstein and his slate plan to raise the share price of the fund from $6.937, at which it opened on May 22, by opening the fund or buying back shares, according to Credit Suisse.

Opening the fund would be detrimental to shareholders since it would decrease its size and economies of scale, thereby increasing the fund's expense ratio, Credit Suisse said in its letter. Operating as an open-end rather than as a closed-end fund would also require the fund to have cash reserves on hand for possible redemptions, and having this money liquid rather than invested would reduce the fund's performance, Credit Suisse said.

Finally, the average annual return of the fund since its inception on March 30, 1990, through March 31 of this year has been 9.09 percent, Credit Suisse said.

In a proxy letter May 22, Goldstein told shareholders that quoting the fund's average annual return of 9.09 percent was misleading, since the fund opened at $12 a share on March 30, 1990, and had dropped to its current value of less than $7 a share.

"That's a loss of capital of more than 40 percent," Goldstein told shareholders.

The proxy vote for the Strategic Global Income Fund is scheduled for June 6.