NEW YORK, March 8, 2019 /PRNewswire/ -- The Board of
Directors (the "Board") of The Taiwan Fund, Inc. (the "Fund")
(NYSE: TWN), today announced that it has selected Allianz
Global Investors U.S. LLC ("AllianzGI US") to become its Investment
Adviser, subject to stockholder approval. AllianzGI US is part
of the Allianz Global Investors group of entities, which are
wholly-owned subsidiaries of Allianz SE, one of the world's largest
financial services providers and a publicly-traded company. As of
December 31, 2018, the total assets
under management of Allianz Global Investors group of entities
amounted to US$577.4 billion (€ 505.1
billion), including US$5.516 billion
(€4.8 billion) invested in Taiwan
mandates. Based on a search for and review of qualified
investment managers conducted with the assistance of a consultant,
the Board concluded that AllianzGI US possesses the capabilities
and skill to provide the Fund the best opportunity to achieve
superior investment performance.
Allianz Global Investors believes that, as investor sentiment
fluctuates greatly from the underlying fundamentals, proprietary
fundamental research can exploit this inefficiency by identifying
companies with the potential for robust earnings growth not fully
discounted into the current share price. Its bottom-up,
fundamental-driven investment process is a reflection of this
philosophy. It believes that disciplined processes and multiple
sources for idea generation can significantly enhance conviction.
This approach allows it to concentrate on its key conviction ideas
which it believes should provide superior and consistent
outperformance for its clients.
Unlike most global asset managers, Allianz Global Investors has
a dedicated 11 person investment team based in Taiwan specializing in the local equity
market. This investment team has been continuously managing equity
mandates on behalf of Taiwan
government entities since 2012. The Allianz Taiwan Fund, a local
mutual fund which has an investment strategy similar to the one
proposed for the Fund, has ranked at the top of its local Lipper
peer group over one-, three-, five- and ten-year periods (as at
September 30, 2018).
The proposed Investment Advisory Agreement between the Fund and
AllianzGI US (the "Proposed Agreement") is subject to approval by
the Fund's stockholders at the Fund's Annual Meeting of
Stockholders scheduled for April 24,
2019. The Proposed Agreement provides for a base fee of 0.70%
of the Fund's average daily net assets. Commencing
September 1, 2019, the base fee will
be subject to a performance adjustment that will add or subtract
from the base fee 0.05% for each percentage point by which the
total return of the Fund exceeds, or is exceeded by, the return of
the TAIEX Total Return Index during each fiscal year of the Fund
(September 1 to August 31), with a
maximum adjustment of +/- 0.25%. The Fund believes that the
addition of this performance adjustment better aligns the interest
of the proposed Investment Adviser with the Fund's shareholders as
it rewards the Investment Adviser for the Fund's relative
outperformance against the Taiwan
market while as importantly reducing the Investment Adviser's fees
during any periods of relative underperformance, which will have
the effect of decreasing the Fund's overall expense ratio during
these periods.
The Fund also announced today that it has been successful in
negotiating fee reductions with certain of its service
providers. In addition, the Fund further reviewed its fees and
expenses and the Board has agreed to take steps to reduce its fees
and restructure its meeting arrangements so that its total expenses
for fees and meetings, including meeting-related expenses, will be
reduced by approximately 20%. These steps will be implemented
immediately.
The intent of these actions is to achieve and maintain a total
expense ratio of 1.50% while seeking other opportunities to reduce
its total expense ratio further. In this connection, the Fund
further announced today that it intends to conduct a thorough
review of all of its service provider arrangements, including its
custodian, administrator, transfer agent, CCO and CFO provider and
legal counsel. This review will begin as soon as the
transition to the Fund's new Investment Adviser is completed. In
addition to reducing expenses, the success in achieving a lower
expense ratio will depend on the Fund growing at a time in which
shares are being repurchased.
The Fund also announced today an enhancement to the Fund's
Discount Management Program intended to provide increased value to
stockholders, by providing the Board greater flexibility to meet
the objectives of the program in response to market conditions and
other factors. The Fund will continue to repurchase, in each twelve
month period ending August 31, up to
10% of its common shares outstanding as of the close of business on
August 31 the prior year. The Fund
will repurchase its common shares in the open market on any day
that the Fund's shares are trading at a discount that exceeds 9.5%
(the "discount threshold"). Any changes in the discount threshold
will be announced as made.
The Fund is a diversified closed-end investment company, which
seeks long term capital appreciation primarily through investments
in equity securities listed on the Taiwan Stock Exchange. Shares of
the Fund are listed on the New York Stock Exchange under the ticker
symbol "TWN."
For additional information on the Fund, including information on
the Fund's holdings, visit the Fund's website at
www.thetaiwanfund.com or call 1-877-217-9502.
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SOURCE The Taiwan Fund, Inc.