CHICAGO--(BUSINESS WIRE)--RiverNorth Capital Management, LLC (“RiverNorth”), an investment management firm specializing in opportunistic strategies, announced the launch of the RiverNorth Managed Duration Municipal Income Fund, Inc. (the “Fund”), a new municipal bond focused closed-end fund. RiverNorth will act as the investment adviser to the Fund and MacKay Shields LLC ("MacKay Shields") will act as subadviser. This is the second fund co-managed by the investment firms. The Fund will use the load waived pricing structure pioneered by RiverNorth last year. As a result, investors will not pay any upfront expenses, which allows the Fund to be priced at $20.00 per share with an initial net asset value (NAV) of $20.00 per share. Trading on the New York Stock Exchange began on July 26, 2019 under the symbol "RMM.”
The Fund’s primary investment objective is current income exempt from regular U.S. federal income taxes (but which may be includable in taxable income for purposes of the Federal alternative minimum tax). The Fund’s secondary investment objective is total return. As the investment adviser, RiverNorth will strategically allocate the Fund’s assets between two principal investment strategies: the Tactical Municipal Closed-End Fund Strategy, managed by RiverNorth, and the Municipal Bond Income Strategy, managed by MacKay Shields. In addition, the Fund will also implement a managed duration strategy which targets a weighted average effective duration within three years of the weighted average effective duration of the Bloomberg Barclays Municipal Bond Index**.
“The Fund is designed to capitalize on market inefficiencies in both the municipal closed-end fund and municipal bond markets,” said Patrick Galley, RiverNorth’s Chief Investment Officer. “We believe significant opportunity exists in the municipal market. Through opportunistic investments in municipal closed-end funds and municipal bonds, the Fund will seek to meet its investment objectives as well as provide investors with the potential for excess return through closed-end fund discount trading opportunities and active duration management.”
“We are thrilled to once again partner with the accomplished municipal closed-end fund team at RiverNorth,” said Robert DiMella, Executive Managing Director and Portfolio Manager of MacKay Shields. “We are excited about the Fund and believe that municipals are one of the most attractive sectors in fixed income today.”
The Fund raised $365 million in its initial public offering of shares of common stock. Should the underwriters exercise the overallotment option in full, which may or may not occur, the Fund will raise approximately $415 million.
The lead managers of the underwriting syndicate were UBS Investment Bank, Wells Fargo Securities, RBC Capital Markets and Stifel.
For more information, please visit us at www.rivernorth.com.
About RiverNorth
RiverNorth Capital Management, LLC is an investment management firm founded in 2000. With approximately $3.8 billion in assets under management as of June 30, 2019, RiverNorth specializes in opportunistic investment strategies in niche markets where the potential to exploit inefficiencies is greatest. RiverNorth is the investment manager to multiple registered and private funds.
About MacKay Shields LLC
MacKay Shields LLC (“MacKay Shields”) is an indirect wholly-owned subsidiary of New York Life Insurance Company and a wholly-owned subsidiary of New York Life Investment Management Holdings LLC. MacKay Shields is a fixed-income and equity investment management firm with approximately $123 billion in assets under management as of June 30, 2019. MacKay Shields manages fixed-income and equity strategies for high-net worth individuals, institutional clients, and mutual funds.
The Fund has no operating history. An investment in the Fund is not appropriate for all investors and is not intended to be a complete investment program. The Fund is designed as a long-term investment and not as a trading vehicle.
This document is not an offer to sell any securities and is not soliciting an offer to buy any securities in any jurisdiction where the offer or sale is not permitted. This document is not an offering, which can only be made by a prospectus. The information in this press release is not complete and is subject to change.
Investors should read the Fund’s prospectus and consider the Fund's investment objective, risks, charges and expenses carefully before investing. The prospectus should be read carefully before investing. For more information, please read the prospectus, call your financial professional or call 844.569.4750.
The Fund is a closed-end fund, and closed-end funds do not continuously issue shares for sale as open-end mutual funds do. Since the initial public offering has closed, the Fund now trades in the secondary market. Investors wishing to buy or sell shares need to place orders through an intermediary or broker. The share price of a closed-end fund is based on the market's value.
Shares of closed-end investment companies frequently trade at a discount to their net asset value and initial offering price. The risk of loss due to this discount may be greater for initial investors expecting to sell their shares in a relatively short period after completion of the initial public offering.
Risk is inherent in all investing. Investing in any investment company security involves risk, including the risk that you may receive little or no return on your investment or even that you may lose part or all of your investment. Therefore, before investing in the common shares of the Fund, you should consider the risks as well as the other information in the prospectus.
Weighted average effective duration is a mathematical calculation of the sensitivity of the price of a bond to changes in interest rates, measuring a bond’s expected life on a present value basis, taking into account the bond’s yield, interest payments, final maturity and, in the case of a bond with an embedded option (e.g., the right of the issuer to call the bond prior to maturity, or a sinking fund schedule), the probability that the option will be exercised.
Although the fund is load waived, normal fund expenses still apply.
Please consult your personal tax advisor regarding the tax implications of owning this fund.
*MacKay Municipal Managers™ is a trademark used by a portfolio management team within MacKay Shields LLC.
**The Bloomberg Barclays Municipal Bond Index is considered representative of the broad market for investment grade, tax-exempt bonds with a maturity of at least one year. The index cannot be invested in directly and does not reflect fees and expenses.
RiverNorth is not affiliated with MacKay Shields, UBS Investment Bank, Wells Fargo Securities, RBC Capital Markets and Stifel.
RiverNorth® is a registered trademark of RiverNorth Capital Management, LLC.
©2000-2019 RiverNorth Capital Management, LLC. All rights reserved.
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