Case | HBS Case Collection | January 2008 (Revised July 2008)

Opportunity Partners

by Robin Greenwood and James Quinn

Abstract

Philip Goldstein, the principal in a growing hedge fund and prominent activist investor, has taken a position in a Mexico-based closed-end fund. Following a hard-fought proxy contest in which he advocated for management to eliminate the fund's substantial discount, Goldstein earns a seat on the board of directors. Now he and the board are faced with the decision of how best to "unlock value" in the fund by delivering Net Asset Value to shareholders. The case, which provides rich detail on the workings of closed-end funds, invites students to examine the trade-offs among liquidating the fund, converting it to an open-end fund, or carrying out a self-tender offer. It also raises topics of fund selection and investing in country-specific funds such as Mexico.

Keywords: Investment Activism; Investment Funds; Business and Shareholder Relations; Value; Financial Services Industry; Mexico;

Citation:

Greenwood, Robin, and James Quinn. "Opportunity Partners." Harvard Business School Case 208-097, January 2008. (Revised July 2008.)