Bulldog May Wage Proxy Battle for Firsthand Fund BuybackKelly Bit
Bulldog Investors, the $530 million activist hedge fund run by Phillip Goldstein, is pushing Firsthand Technology Value Fund Inc. to buy back shares because the closed-end fund is trading at a discount to net asset value.
Bulldog may wage a proxy fight against the closed-end fund and has suggested that it repurchase its stock to boost the value of shares, Goldstein said. Bulldog is the largest investor in Firsthand Technology Value Fund, whose share price was trading at a 26 percent discount to net asset value as of Feb. 4, according to data compiled by Bloomberg.
“If we do go forward with a proxy fight, if there’s an actual shareholder vote, I think we would prevail,” Goldstein said in a telephone interview last week.
The Firsthand Technology Value Fund, which is run by Kevin Landis, invests in private technology and clean energy companies, often those close to going public, including Facebook Inc., Twitter Inc. and SolarCity Corp. Bulldog, based in Saddle Brook, New Jersey, first bought shares around the time of Facebook’s initial public offering in May, after which shares of both the world’s most-popular social network and the closed-end fund declined, Goldstein said. Bulldog currently owns an 8.9 percent stake in Firsthand Technology Value Fund, according to data compiled by Bloomberg.
Tucker Hewes, a spokesman at Hewes Communications Inc. for San Jose, California-based Firsthand Capital Management Inc., the fund’s investment manager, declined to comment.
Closed-end funds issue a fixed number of shares and are listed on a stock exchange. A fund’s price per share is determined by the market and is usually different from the value per share of the fund’s underlying holdings, or net asset value.
Hedge funds and other investors who buy the shares at a discount to underlying holdings can profit from increasing prices should market sentiment change. A buyback lifts the share price for investors seeking to sell and reduces dilution of dividends for those opting to stick with the fund.