What Happens When Management Changes

Reference was made the other day to Source Capital (SOR) in regards to Mr. Braham's article in Barron's about CEF's. Steve Romick and his FPA team took over the fund in Fall, 2015. They must have done some real housecleaning of the portfolio resulting in a huge distribution to shareholders. Here's a quotation from a fund document "apologizing" for how long it took for the transactions to settle:

"Los Angeles (April 22, 2016) – Source Capital, Inc. (the “Fund”) is pleased to announce that the Agent for its Dividend Reinvestment Plan (the “Plan”), American Stock Transfer & Trust Company, completed its purchases of the Fund’s common stock for shareholders participating in the Plan with respect to the distributions announced on February 8, 2016. As you may recall, on March 15, 2016, the Fund paid the $33.65 long-term capital gain distribution combined with the $0.41 regular quarterly distribution announced on February 8, 2016. Due to the large combined size of these distributions and the commensurate number of shares that were required to be purchased for Plan participants, it took the Agent several weeks to complete the share purchases. The Agent will be posting the reinvested shares to your account by Monday April 25, 2016 and statements will be mailed shortly thereafter. Thank you for your patience."

I guess this is one way to deal with the persistent discount which averaged -9.57% for the past three years. It's now -1.69%. Fund price was a bit north of $65 at the time of the distribution. Now it's about $39. I wonder if SOR is going to be a clone of FPACX, albeit on a much smaller scale.