AllianzGI Diversified Income & Convertible Fund (the “Fund”)
has completed the closing of its initial public offering. The Fund
raised $280,000,000 in its common share offering (before deduction
of the sales load and offering expenses), excluding any exercise of
the underwriters' option to purchase additional common shares. If
the underwriters were to exercise their option to purchase
additional common shares in full, which may not occur, the Fund
would raise $322,000,000 (before deduction of the sales load and
offering expenses). The underwriters may exercise their option to
purchase additional common shares up to 45 days after the initial
public offering. Assuming the use of leverage of approximately 28%
of the Fund's managed assets and assuming the exercise of a portion
of the underwriters’ option to purchase additional common shares,
the Fund's managed assets may exceed $400,000,000. The Fund’s
common shares are listed on the New York Stock Exchange under the
symbol “ACV.”
The Fund is a diversified, limited term closed-end fund. The
Fund’s investment objective is to provide total return through a
combination of current income and capital appreciation, while
seeking to provide downside protection against capital loss.
“We believe that today’s world of low yields, price fluctuations
and fear of rising long-term rates presents special challenges for
some income-oriented investors,” said Douglas Forsyth, lead
portfolio manager on ACV and CIO Fixed Income US at Allianz Global
Investors. “The AllianzGI Diversified Income & Convertible Fund
takes a dynamic approach to seeking to provide income that looks at
various segments of a company’s capital structure and finds what we
believe to be attractive investment opportunities, be it
convertibles, high-yield or equity securities.”
Under normal market conditions, the Fund will seek to achieve
its investment objective by investing in a combination of
convertible securities, debt and other income-producing instruments
and common stocks and other equity securities. The Fund will
normally invest at least 80% of its net assets (plus any borrowings
for investment purposes) in a diversified portfolio of convertible
securities, income-producing equity securities and income-producing
debt and other instruments of varying maturities. It is expected
that substantially all of the Fund’s debt instruments and a
substantial portion of its convertible securities will consist of
securities rated below investment grade or unrated but determined
by Allianz Global Investors U.S. LLC (“AGI U.S.”), the Fund’s
sub-adviser, to be of comparable quality (sometimes referred to as
“high yield securities” or “junk bonds”). The Fund also expects to
normally employ a strategy of writing (selling) covered call
options on the stocks held in the equity portion of the portfolio
(the “Option Strategy”). The Option Strategy is designed to
generate gains from option premiums in an attempt to enhance
amounts available for distributions payable to the Fund’s
shareholders. The Fund currently anticipates that it will utilize
leverage as part of its investment strategy.
The Fund includes a term limit provision, which provides that
the Fund will terminate on its 15th anniversary in 2030, unless the
term is extended by the Fund's Board of Trustees for up to one year
or shareholders elect to extend the term.
The Fund’s Board of Trustees has approved a Repurchase Plan (the
“Repurchase Plan”) with respect to the Fund’s common shares for a
defined period following the Fund’s initial public offering in an
attempt to provide additional liquidity in the marketplace for the
Fund’s common shares. Pursuant to the Repurchase Plan, the Fund may
repurchase its common shares in the open market on any trading day
when the Fund’s common shares are trading at a discount of 2% or
more from the common shares’ closing net asset value (“NAV”) on the
prior trading day. Any repurchases will be made through a single
broker-dealer who was not an underwriter in the initial public
offering of the common shares acting as the Fund’s agent and will
be subject to Rule 10b-18 under the Securities Exchange Act of
1934, as amended, and other applicable laws. In addition to
providing potential additional liquidity in the marketplace, any
repurchases under the Repurchase Plan will be made by the Fund at a
discount to then current NAV of the Fund’s common shares and
therefore would be accretive to the NAV of the remaining common
shares following the repurchases, and the Repurchase Plan may also
have the effect of preventing or reducing a significant decline in
the market price of the Fund’s common shares in comparison to their
NAV. However, there can be no assurance that repurchases of the
Fund’s common shares under the Repurchase Plan will cause the
common shares to trade at a price equal to or in excess of NAV or
prevent or reduce any trading discount.
The Fund’s intends to make monthly distributions at rates that
reflect the past and projected net income of the Fund. The Fund’s
initial distribution is expected to be paid approximately 60 to 90
days from the completion of this offering.
The Fund will be managed by an experienced investment manager
that has a long track record in closed-end fund management.
AGI U.S. is an integrated investment management organization
that provides solutions across equity, fixed income, multi-asset
and alternative asset classes. The hallmark of AllianzGI U.S. is
entrepreneurial, autonomous investment teams supported by common
infrastructure. With a focus on clients, AllianzGI U.S. strives for
investment innovation, efficient execution and quality service.
Allianz Global Investors Fund Management LLC (“AGIFM”) is the
Fund’s investment manager, responsible for managing the investment
activities of the Fund and the Fund’s business affairs and other
administrative matters. AGIFM is an indirect, wholly-owned
subsidiary of Allianz Asset Management of America L.P. and is a
member of Munich-based Allianz Group. As noted above, AllianzGI
U.S., an AGIFM affiliate, is the Fund’s sub-adviser and is
responsible for managing the Fund’s portfolio investments.
BofA Merrill Lynch and Wells Fargo Securities were lead
underwriters in connection with the offering.
About Allianz Global Investors
Allianz Global Investors is a diversified active investment
manager with a strong parent company and a culture of risk
management. With 24 offices in 18 countries, we provide global
investment and research capabilities with consultative local
delivery. We have more than USD 488 billion in AUM1 for
individuals, families and institutions worldwide and employ over
500 investment professionals.
At Allianz Global Investors, we follow a two-word philosophy:
Understand. Act. It describes how we look at the world and
how we behave. We aim to stand out as the investment partner our
clients trust by listening closely to understand their challenges,
then acting decisively to provide them with solutions that meet
their needs.
The Fund’s daily New York Stock Exchange closing prices, NAV per
share, as well as other information, including updated portfolio
statistics and performance will be available at
www.us.allianzgi.com or by calling the Fund’s shareholder servicing
agent at (800) 254-5197.
Disclosures
The Fund is a newly organized, diversified, limited term
registered closed-end management investment company with no
operating history. Shares of closed-end investment companies, such
as the Fund, usually trade on a national stock exchange, and these
shares frequently trade at a significant discount from their NAV,
which may increase risk of loss for investors.
Because of the risks associated with investing in high yield
securities and other risks associated with the Fund’s principal
investment strategies, including, without limitation, limited term
risk and risks associated with the Repurchase Plan, the Option
Strategy and the use of leverage, an investment in the Fund
involves a high degree of risk and should be considered
speculative. Investors should consider their investment goals, time
horizons and risk tolerance before investing in the Fund. An
investment in the Fund is not appropriate for all investors, and
the Fund is not intended to be a complete investment program.
Investors should consider the Fund’s investment objective, risks,
fees and expenses carefully before investing, which are disclosed
in the prospectus.
The prospectus, which contains this and other information about
the Fund, should be read carefully before investing. There can be
no assurance that the Fund will achieve its investment objective or
be able to structure its investment portfolio as anticipated.
This document is not an offer to sell securities and is not a
solicitation of an offer to buy securities, nor will there be any
sales of securities in any jurisdiction where the offer or sale is
not permitted.
An investment in the Fund involves risk, including loss of
principal.
Convertible securities generally offer lower interest or
dividend yields than non-convertible debt securities of similar
quality. The market values of convertible securities tend to
decline as interest rates increase and, conversely, to increase as
interest rates decline. Investments in debt securities typically
decline in value when interest rates rise. This risk is usually
greater for longer-term debt securities. The Fund may invest in
foreign securities which involve greater volatility and political,
economic and currency risks and differences in accounting methods.
These risks are greater for investments in emerging markets.
Investments in lower rated and unrated securities present a greater
risk of loss to principal and interest than higher rated
securities. Debt securities of below investment grade quality are
regarded as having predominantly speculative characteristics with
respect to capacity to pay interest and to repay principal, and are
commonly referred to as “high yield” securities or “junk
bonds.”
Past performance is no guarantee of future results.
This material may include statements that constitute
“forward-looking statements” under the U.S. securities laws.
Forward-looking statements include, among other things,
projections, estimates and information about possible or future
results related to the Fund, market or regulatory developments. The
views expressed herein are for informational purposes only and are
not guarantees of future performance or economic results and
involve certain risks, uncertainties and assumptions that could
cause actual outcomes and results to differ materially from the
views expressed herein. The views expressed herein are subject to
change at any time based upon economic, market, or other conditions
and the Fund undertakes no obligation to update the views expressed
herein. While we have gathered this information from sources
believed to be reliable, the Fund cannot guarantee the accuracy of
the information provided. The views expressed herein do not
constitute a recommendation by AGI U.S. to buy, sell or hold any
security. The views expressed herein (including any forward-looking
statement) may not be relied upon as investment advice or as an
indication of the Fund’s trading intent. Information included
herein is not an indication of the Fund’s future portfolio
composition or the extent to which the Fund may utilize
leverage.
1 Combined worldwide assets as of 31 March 2015.
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For Information on AllianzGI Closed-End
Funds:Financial Advisors: (800) 926-4456Shareholders:
(800) 254-5197Media Relations: (212) 739-3501
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