Ann: MGF Fund Update - February 2021, page-132

Arpeebee, by 'misalignment' I am just referring to how the funds under management being captive. In contrast to the open class, investors can vote with their feet by leaving the fund.
If I were a fund manager and wanted to drive the price higher:
Open class: Need to manage the underlying assets, to drive up NAV. Long term value.
Closed class: Underlying NAV still important, but can also market the fund more and talk it up.

I realised that this is somewhat simplified exaggeration but still feel there is enough truth to it to influence behaviour.

Thanks Cutty for your comment - that the gap should decrease as performance increases. I tend to agree.
And SnowSigma, I think technically (i.e. my emotion removed) you are correct. The discount allows me to buy the same assets for cheaper. And the issue of having to then sell at a discount is countered by being a long term buy. i.e. At some point in the future the gap will close and I can reallocate back to open class. I think if MGOC didn't exist I wouldn't have any problem.