DRA - Diversified Real Estate Income Fund

[Guest MarkS]

I own some shares in this fund as a trade - and not a long term investment.  As part of a settlement agreement with Bulldog, the fund has agreed to buy back shares if during certain measurement periods the stock trades below an average discount of more than 10% to the net asset value. We've been in a measurement period that is about to end. The fund is trading at about a 11.4 % discount and pays a monthly dividend of a little less than 1% per month. The fund should offer to buy 10% of the fund's shares before the end of the year. I'm thinking that the discount  narrows significantly  as a result of the tender offer (plus I'll collect some dvidends.) If the discount narrows, I'll sell most of the shares keeping just a handful to tender into the offer.

 

Thanks

Mark

 

http://www.nuveen.com/Home/Documents/Default.aspx?fileId=66207

 

[LongTerm]

This will be the third of three buybacks over the past year. The other two were significantly oversubscribed so that the effective buyback was only about 15% of shares tendered, thus I wouldn't expect the discount to NAV to narrow significantly when the final buyback is announced. There is considerable financial and operational leverage in the fund as management has upped the payouts to try and avoid this last buyback IMHO.

[Guest MarkS]

You may be right Longterm. At least I won't have to wait that long to find out.

Thanks for the input.

Mark