- 11 - percent. ATI considered several factors in making this determination, including: KLLP is smaller in size than a publicly traded fund; closed-end funds generally have a staff of analysts and professional managers devoted to the full-time management of the fund investments which reduces risk whereas KLLP is not managed in the same manner; closed-end funds offer diversification of the portfolio of investments while KLLP is not diversified; and KLLP does not have a performance history whereas most closed-end funds have a performance history of 5 to 10 years. Once ATI determined an appropriate discount range of 21.8 percent to 25.5 percent, ATI then further adjusted the discount based on several factors and restrictions inherent in KLLP and using other partnership studies. One such study, published by Partnership Profiles, Inc. (PPI), found that the average discount for 18 publicly registered but nontraded miscellaneous partnerships, when the NAV of such partnerships was compared to the prices at which investors acquired units in them in the secondary market, was 29 percent. ATI also discussed another study published by PPI which compared the NAV of approximately 100 publicly registered but nontraded real estate partnerships with the prices at which investors acquired units in these partnerships in the secondary market. The average discount to NAV was 27 percent for the transactions studied. Therefore, ATIPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011