UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment
No. )
Filed by
the Registrant ¨
Filed by
a Party other than the Registrant x
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appropriate box:
¨ Preliminary
Proxy Statement
¨ Confidential,
for Use of the Commission Only (as permitted by Rule14a-6(e)(2))
¨ Definitive
Proxy Statement
x Definitive
Additional Materials
o Soliciting
Material Under Rule 14a-12
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COHEN
& STEERS SELECT UTILITY FUND, INC.
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(Name
of Registrant as Specified in Its Charter)
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WESTERN
INVESTMENT LLC
WESTERN
INVESTMENT HEDGED PARTNERS L.P.
WESTERN
INVESTMENT ACTIVISM PARTNERS LLC
WESTERN
INVESTMENT TOTAL RETURN PARTNERS L.P.
WESTERN
INVESTMENT TOTAL RETURN FUND LTD.
ARTHUR
D. LIPSON
WILLIAM
J. ROBERTS
MATTHEW
S. CROUSE
LYNN D. SCHULTZ
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(Name
of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
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Western
Investment LLC (“Western Investment”), together with the other participants
named herein, is filing materials contained in this Schedule 14A with the
Securities and Exchange Commission (the “SEC”) in connection with the
solicitation of proxies for the election of three nominees as directors at the
2008 annual meeting of stockholders (the “Annual Meeting”) of Cohen & Steers
Select Utility Fund, Inc. (the “Fund”). Western has filed a proxy
statement with the SEC regarding the Annual Meeting.
Item 1:
On March 7, 2008, the Wall Street Journal published the following
article:
Cohen
& Steers Funds Face Proxy Row
By
LINGLING WEI and SHEFALI ANAND
March
7, 2008; Page C3
Cohen & Steers
Inc., a publicly traded money-management firm and the largest U.S. investor in
real-estate investment trusts, is facing a proxy battle from a hedge fund over
two of its closed-end funds.
The hedge
fund, Western Investment LLC, claims that the interests of the directors of the
funds aren't aligned with those of their shareholders and that the directors
aren't doing enough to boost the funds' values. Hedge funds have been targeting
all kind of closed-end funds that are trading at discounts to the value of their
underlying assets. And real-estate funds are likely candidates for such activism
because they have been sold off amid fears the property market is
weakening.
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The
corporate-governance criticism appears ironic for Cohen & Steers,
given that the New York firm often preaches on that topic to the REITs it
invests in. "Absolutely, we consider ourselves a corporate-governance
leader," said Robert Steers, co-chairman and co-chief executive of Cohen
& Steers. "We're not embarrassed by what this firm is doing." He said
the funds have strong governance and investment records and he questioned
Western Investment's motivations.
Western
Investment, a large shareholder of the two funds -- the Cohen & Steers
REIT and Utility Income Fund and the Cohen & Steers Select Utility
Fund -- says the directors have failed to take steps to narrow the
persistent discounts at which the funds have been trading to their net
asset values, a measure of the worth of the funds' underlying holdings.
The REIT and Utility Income fund traded at a discount of 10.6% to net
asset value and the Select Utility fund at a discount of 5% as of
Wednesday, according to research firm Lipper Inc.
Recently,
Western Investment filed a slate of three directors to run for election to
the funds' boards at their annual meetings April 1. In a filing with the
Securities and Exchange Commission, Western Investment said truly
independent directors "would have long ago aggressively acted" to narrow
the funds' discounts to the values of their holdings through stock
buybacks. Western Investment said it believes Cohen & Steers has been
unwilling to do that because doing so would reduce the funds' net assets,
thereby lowering the management fees paid to the parent company. The money
manager collects fees based on the amount of assets under management.
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Western
Investment said the seven outside directors of the funds, who sit on the boards
of all the funds run by Cohen & Steers, serve to make the parent company
more profitable at the expense of shareholders of the individual funds. "The
directors are handpicked by the management," says Arthur Lipson, managing member
of Western Investment in Salt Lake City.
Cohen
& Steers says the criticism is off base. In letters to shareholders
yesterday in response to Western Investment's challenge, the funds' board said
both funds have outperformed their benchmarks over the one- and three-year
periods. "Your board is focused on sustainable and long-term performance and is
proud of the funds' strong track record," the letters said. Both funds have
managed to narrow the discounts to their net asset value through dividend
increases and investment performance, Mr. Steers said, adding that share
repurchases have only "very short-term benefit but create longer-term problems"
because that would leave the funds saddled with higher expenses.
This
isn't the first time Western Investment has launched such proxy fights. It has
been active in waging proxy fights against various kinds of closed-end funds in
recent years. Closed-end funds have a set number of shares that trade all day on
an exchange like a stock. Unlike traditional mutual funds, closed-end funds can
trade at a price different from the value of their underlying assets. If a fund
trades at a deep discount for a long period, activist shareholders sometimes
move to get their representatives on the fund's board, as Western is trying to
do. The goal is to try to reduce the discounts, by making the fund buy back
shares, or in an extreme case, liquidating it.