To Morrison6 - Yes, you are spot on. TTG did exactly this about...

To Morrison6 - Yes, you are spot on. TTG did exactly this about a year ago. Looks like HHV has almost copied what TGG did. TGG did a cap raising at 1.25 when the price was trading at around 1.40. Small "unsophisticated" shareholders only got the 1:5 offer at 1.25. I took up the offer but the share price has only just recovered back to my buy price (despite the massive weakening in the AUD). The benefit of a LIC being a closed fund is always put forward as a major advantage over managed funds (which may be partly true) but at least managed funds never do cap raisings.

The other nasty to keep your eye on with the LICs are the options which are not always factored into the NTA. MFF for instance openly reports the impact of outstanding options which by most accounts is significant. In MFF's case the options (if exercised) will dilute the NTA by 10%. I do not know HHV as well but do not see any such reporting when NTA is stated. I assume there are options outstanding?

HHV has also today taken a $2M haircut on their investment in GID (which fell 50% at the open today). Seems like this might not be the next Sirtex.