Seligman Under Fire Yet Again

Aug.28.06 | About: Seligman Select (SEL)

With the notification this week that Karpus Investment Management is submitting a proposal that shareholders of the Seligman Select Municipal Fund (SEL) vote to fire Seligman at their next shareholders meeting, Seligman now finds all three of their closed-end funds under attack by unhappy shareholders.

My first impression is that this proposal has little chance of being approved. The board will probably counter that if the management agreement with Seligman is terminated, there will be chaos until a new adviser can be hired, which could adversely affect the fund's investment performance.

Also, Karpus only owns 3.28% of the outstanding shares, and it does not appear that there currently are any other large shareholders in the fund that will be able to offer enough support to get this proposal approved. But if SEL's discount stays around -14%, it could eventually attract some other hedge funds looking to liquidate it.

SEL 1-yr chart:

SEL 1-yr chart