Investment Partners Asset Management, Inc. announced today that it intends to vote against the proposed revised investment management agreement between Foxby Corp. (AMEX:FXX) and CEF Advisers, Inc. Foxby Corp. is a closed-end fund whose shares trade on the American Stock Exchange. Investment Partners Asset Management is a registered investment adviser and, together with its clients, has beneficial ownership of approximately 9.4% of the shares of Foxby Corp.
Foxby Corp. attempted to obtain stockholder approval for a new investment management agreement with its existing investment adviser, CEF Advisers, at its annual meeting of stockholders, originally scheduled for October 10, 2007, but adjourned until November 20, 2007. The new agreement provides that Foxby Corp. may request additional services to be provided by CEF Advisers or its affiliates and paid for by Foxby Corp. According to the proxy statement, these services may include, without limitation, accounting, administration, bookkeeping, broker/dealer record keeping, clerical, compliance, custody, dividend disbursing, fulfillment of requests for fund information, proxy soliciting, securities pricing, registrar, and transfer agent services.
Investment Partners Asset Management said that Foxby’s expenses are already unusually high. It noted that Foxby’s ratio of total expenses to average net assets is currently 2.73%, according to the fund’s most recent report to shareholders, and that the ratio has been as high as 7.76% in recent years. These ratios are substantially higher than those of other closed-end funds.
Investment Partners Asset Management also said that it had sent a letter to the directors of Foxby Corp., expressing its concern with the fund’s fees and costs, ability to utilize its sizable tax loss carry-forward, and historical discount to net asset value, and seeking a meeting with the fund’s independent directors in order to discuss these concerns. A copy of the letter is attached to the most recent amendment to its Schedule 13D, available online at http://www.sec.gov/Archives/edgar/data/1068897/000113743907000520/0001 137439-07-000520-index.htm. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)
Investment Partners Asset Management is a registered investment adviser for personalized asset management, financial planning, and estate preservation and providing highly personalized investment management and advisory services for mid to high net-worth clients. More information is available at its website, www.investmentpartners.com/assetmanagement.html.