With the annual meeting set for Thursday, PIMCO isn’t too nervous, but Ironsides Partners is still pushing its proxy battle against the Goliath-sized fund manager.
The small activist out of Boston is taking PIMCO to task over its Pimco Dynamic Credit Income Fund ($PCI), which is trading at a guesstimated 10% discount to “fair value.” The proxy battle it has been waging, trying to get two nominees on the board, has gained little to no traction.
The answer for closing the Dynamic fund’s discount? Buyback shares of course. Or hell, why not offer a full blown tender offer at NAV? But ISS isn’t buying it, having recommended against Ironsides nominees.
The big reason from ISS? Well, the Dynamic fund has performed in line with peers and pays a 9% yield, so who cares if it trades at a discount to NAV.
But for Dynamic fund shareholders, there is a sneaky suspicion that none of PIMCO’s funds would ever trade at a discount to NAV if Bill Gross was still there, nor would a measly fund from Boston have the fortitude to wage a proxy battle.
Since Gross joined, Janus' ($JNS) stock has outperformed the PIMCO Dynamic Credit fund by 1,150 basis. Total return, Janus still winning by 450 basis points. Long live the bond king.