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Pioneer Shuts Its CEFs

yogibearbullyogibearbull
edited May 15 in Fund Discussions
Pioneer Shuts Its CEFs

Pioneer Investments is shutting its closed-end fund (CEF) operation that had $1 billion in 6 CEFs (HY, HY muni, FR). Victory Capital/VCTR (AUM $300 billion) bought Amundi that had bought Pioneer. These CEFs were up for management contract renewals and CEF activists such as Saba, etc had loaded up on shares to defeat the changes. So, when the votes for the new management contract failed, rather than fight the activists or change the fund structure (to OEF or ETF), Victory decided to just fold them. CEFs are among the oldest fund structures around but they have many issues that have prevented CEFs from becoming popular. Other fund structures have evolved – OEFs, CITs, ETFs, interval-funds (IFs). However, other CEF firms are unlikely to follow Pioneer, although some firms with minor CEF operations may also quit the business.

https://www.barrons.com/articles/pioneer-closed-end-funds-liquidates-2a668c7b?refsec=income-investing&mod=topics_income-investing

https://pioneerinvestments.com/products/closed-end-funds

https://www.icifactbook.org/pdf/2025-factbook-ch5.pdf

Comments

  • hank
    edited May 15
    Interesting. Thanks @Yogi. It’s the difference between NAV and market price that makes CEFs intriguing. I like that they don’t always trade in sync with the underlying assets. Sabra is intent on destroying these entities and converting them into OEFs or ETFs in order to skim off the extra value. Market forces at work. Boaz has a right to do this (and in the process charge his CEFS shareholders an exorbitant 3.5% management fee.) But I don’t know if that’s really in the CEFs owners’ best interest. Feels similar to corporate raiders who buy companies and strip off some of the assets for quick profits, while longer term the company may flounder or lose profitability.

    One or more of my CEFs have clauses in the prospectus saying that if the NAV exceeds the market price by a certain percentage over a certain period of time the fund will be converted into a OEF. Perhaps that’s intended to prevent Weinstein from targeting them.

    Weinstein is a convincing proponent of his methodology. I’ve listened to some of his media interviews and he comes across as very authentic and well intended. I do see there are 2 sides to the issue. There are a great many CEFs in existence including those run by well known Rick Rieder. So I don’t think they’re going to disappear any time soon.

    I do not own any Pioneer CEFs.
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