From the latest quarterly: "The Fund's investment strategy will continue to focus on yield and credit at the expense of Treasuries and agencies. Increased global liquidity and a positively sloped yield curve will be positive factors for corporate securities. Corporate industries likely to outperform over the next few months include utilities, telecommunications and banks. "
My guess is the rights offering will allow management to make these types of investments without having to do it at the expense of treasuries.
I would add two more possibilities for the ACG rights offering. Closed End Fund managers charge a percentage fee based on the total dollars managed, so bringing more dollars under management increases their(parent company) profits; And by getting their hands on lots of new money to invest will hopefully allow them to invest the new money in higher risk corporate bonds which will generate a higher return for investors and save them(parent company) from cutting the dividend which they are currently paying but not generating from investments.
A dividend yield is never guaranteed, if such and such a fund has shown an ability to generate the ability to pay this dividend (through dividends +/- net cap gains/losses - fees), then in an inherently uncertain world, that MAY be an indicator they may be more likely do so in the future than a similar outfit..
Then again, if you can borrow at 3% and obtain a 10% yield, you can obtain a higher yield than the indicated yield of the assets held might indicate..Also not guaranteed..
If fees are based on assets are under management, in the short term a well-subscribed rights offering might raise the absolute amount paid to the fund management company, but if through "unwise" management decisions, said NAV drops, said management fees will also drop when compared to what the firm could earn by offering a similar rights offering for another fund of theirs.. ( which in hindsight appreciated more)
It's just like any investment decision, if (for your investment horizon) you think the expected value of the return to be earned by you is 8% (50% chance it'll earn 12% plus 50% it'll earn 4%, for example)and you see an expected 10% value somewhere else, invest in that somewhere else...(keeping in mind the company will deduct all its expenses, management fees and possibly whatever else they can think of it to put in there, possibly multiple lap-dances for the pension or mutual fund manager that might fully and oversubscribe to rights offering...)