I have heard that one liner from every closed fund manager since the beginning of time.
I tend to think you should be just as worried about the 20% deviation after the float.
Also, where do you think most funds draw the funds from to issue buy backs?
Yes, liquidity issues aren't an issue for the manager - just the investor - who gets talked into buying at the float and then selling at a ridiculous discount.
Closed funds have their purpose - its a shame only a small amount of managers use it for this purpose.
The market has changed, investment trends have changed - old school LICs/LITs haven't changed.
There should be liquidity events for closed funds that deviate significantly from NAV. I don't mean on market buy backs. I mean off market buy backs at NAV for people that have been forced to take a 20% haircut because the investor appetite for closed funds is at an all time low.
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