SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 10)
Under the Securities and Exchange Act of 1934
MVC Capital
(Name of Issuer)
Common Stock
(Title of Class of Securities)
553829102
(CUSIP Number)
George W. Karpus, President
Karpus Management, Inc. d/b/a
Karpus Investment Management
183 Sullys Trail
Pittsford, New York 14534
(585) 586-4680
(Name, Address, and Telephone Number of Person Authorized to Receive
Notices and Communications)
March 7, 2003
(Date of Event which Requires Filing of this Statement)
If the person has previously filed a statement on Schedule 13G to
report the Acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1 (b) (3) or (4), check
the following box. [ ]
(Page 1 of 11 pages)
Three Exhibits Attached.
ITEM 1 Security and Issuer
Common Stock
MVC Capital
meVC Advisors, Inc.
3000 Sand Hill Road, Building One-Suite 155
Menlo Park, CA 94025
ITEM 2 Identity and Background
a) Karpus Management, Inc. d/b/a Karpus Investment
Management (?KIM?)
George W. Karpus, President, Director and Controlling
Stockholder
JoAnn Van Degriff, Vice President and Director
Sophie Karpus, Director
b) 183 Sullys Trail
Pittsford, New York 14534
c) Principal business and occupation - Investment Management
for individuals, pension and profit sharing plans, corporations,
endowments, trust and others, specializing in conservative asset
management (i.e. fixed income investments).
d) None of George W. Karpus, JoAnn Van Degriff, or Sophie
Karpus (?the Principals?) or KIM has been convicted in the past
five years of any criminal proceeding (excluding traffic
violations).
e) During the last five years none of the principals or KIM has
been a party to a civil proceeding as a result of which any of them
is subject to a judgment, decree or final order enjoining future
violations of or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
f) Each of the Principals is a United States citizen.
KIM is a New York corporation.
ITEM 3 Source and Amount of Funds or Other Considerations
KIM, an independent investment advisor, has accumulated shares
of MVC on behalf of accounts that are managed by KIM (?the
Accounts?) under limited powers of attorney. All funds that
have been utilized in making such purchases are from such
Accounts.
ITEM 4 Purpose of Transaction
a) KIM has purchased Shares for investment purposes. Being
primarily a fixed income manager, with a specialty focus in the
closed end fund sector, the profile of MVC fit the investment
guidelines for various Accounts. Shares have been acquired
since October 31, 2000.
b) Although originally purchased for investment purposes only,
concerns regarding the fund?s large fee compensation, large cash
holdings and the market price?s wide discount to net asset value
prompted KIM to approach management. During April of 2002
KIM conversed with management several times, via phone and
e-mail, regarding our concerns. On June 21, the Fund contacted
KIM to inform us of a press release from June 20 regarding the
resignation of meVC Advisors. On September 20, 2002, KIM submitted
a proposal to be presented to shareholders at the next shareholder meeting
for the fund to conduct a tender offer of 25 percent of outstanding shares
at 95 percent of the fund?s net asset value. (See Exhibit 1) On October 2
we sent a letter to the acting Chief Operating Officier of the fund to
express our discontent with the actions taken by the board and
management. (See Exhibit 2) Our original proposal was rejected for
technical reasons, on October fourth we resubmitted the proposal after
the appropriate changes were made. Again on December 10, the proposal
was resubmitted to the Fund. (See Exhibit 3)
ITEM 5 Interest in Securities of the Issuer
A) As of the date of this Report, KIM owns 673,741 shares,
which represents 4.08% of the outstanding Shares. Karpus Investment
Management Profit Sharing Plan presently owns 3450 shares purchased
on December 20, 2000 at $9.94 (500 shares), January 17, 2001 at $11.69
(100 shares), February 7 and 8 at $11.68 (900 shares), March 16 at
$10.80 (200 shares), March 22 at $9.97 (100 shares), March 23 at $10.63
(50 shares), March 27 at $10.46 (300 shares), March 28 at $10.20 (100
shares), April 30 at $11.30 (200 shares), May 2 at $11.05 (50 shares),
September 21 at $9.60, January 9 and 10, 2002 at $9.94 (100 shares),
January 11 at $9.82 (100 shares), January 14 at $9.80 (50 shares), January
15 at $9.76 (50 shares), January 16 at $9.56 (50 shares), January 17 at
$9.61 (100 shares), January 18 at $9.60 (200 shares), January 29 at $9.47
(50 shares), May 5 at $8.85 (50 shares), and August 29 at $7.86 (100
shares). George W. Karpus presently owns 6000 shares purchased on
December 28, 2001 at $9.88 (1000 shares), January 10, 2002 at $9.93
(50 shares), January 15 at $9.76 (50 shares), January 18 at $9.61 (100
shares), January 29 at $9.47 (50 shares), February 20 and 21 at $8.83
(1000 shares), March 21 at $8.94 (25 shares), July 5 at $8.32 (725 shares),
August 12 at $7.44 (1000 shares), August 26 at $7.93 (50 shares), August
29 at $7.86 (100 shares), September 11, 12, & 16 at $7.75 (250 shares),
September 24 at $7.74 (200 shares), September 25 at $7.76 (100 shares)
and at $7.74 (100 shares), October 7 at $7.62 (200 shares), October 8 at
$7.57 (200 shares), October 11 at $7.65 (150 shares), October 28 at
$7.92 (300 shares), and November 22 at $8.16 (350 shares). Dana R.
Consler currently owns 685 shares purchased on March 23, 2001 at
$10.63 (50 shares), March 28 at $10.20 (100 shares), April 30 at
$11.29 (25 shares) and at $11.30 (200 shares), May 2 at $11.05 (25
shares), August 13 at $10.90 (100 shares), January 29, 2002 at $9.47
(50 shares), March 5 at $8.85 (50 shares), February 3, 2003 at $8.51 (50
shares), and February 19 at $8.23 (35 shares). Jo Ann Van Degriff
presently owns 500 shares purchased November 6, 2002 at $8.00 per
share. None of the other Principals of KIM presently owns shares of
MVC.
b) KIM has the sole power to dispose of and to vote all of such
Shares under limited powers of attorney.
c) Open market purchases for the last 60 days for the Accounts.
There have been no dispositions and no acquisitions, other than
by such open market purchases,
DATE
SHARES
PRICE PER
DATE
SHARES
PRICE PER
SHARE
SHARE
1/7/2003
-475
8.45
2/3/2003
7300
8.51
1/13/2003
850
8.32
2/4/2003
950
8.51
1/13/2003
600
8.29
2/5/2003
525
8.54
1/15/2003
200
8.29
2/6/2003
500
8.55
1/17/2003
1000
8.31
2/6/2003
5000
8.54
1/22/2003
150
8.31
2/12/2003
-250
8.13
1/24/2003
100
8.23
2/19/2003
35
8.23
1/27/2003
3200
8.26
1/28/2003
12000
8.25
1/28/2003
100
8.24
1/29/2003
6900
8.26
1/29/2003
3000
8.25
1/29/2003
2300
8.24
1/30/2003
300
8.26
1/31/2003
400
8.46
The Accounts have the right to receive all dividends from, any
proceeds from the sale of the Shares. KIM reserves the right to
further accumulate or sell shares. None of the Accounts has an
interest in shares constituting more than 5% of the Shares
outstanding.
ITEM 6 Contracts, Arrangements, Understandings, or Relationships
with Respect to Securities of the Issuer.
Except as described above, there are no contracts,
arrangements, understandings or relationships of any kind
among the Principals and KIM and between any of them and any
other person with respect to any of MVC Securities.
ITEM 7 Materials to be Filed as Exhibits
Not applicable.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete,
and correct.
Karpus Management, Inc.
March 7, 2003 By:________________________
Date Signature
Scott D. Nasca, Vice President
Name/Title
Exhibit 1
Proposal Submitted to the Fund on October 4, 2002
OCTOBER 4, 2002
MR. JOHN M. GRILLOS, CHAIRMAN
MEVC DRAPER FISHER JURVETSON FUND I
991 FOLSOM STREET
SAN FRANCISCO, CA 94107
DEAR MR. GRILLOS,
Karpus Management, Inc. d/b/a Karpus Investment Management (KIM), is
the beneficial owner as of August 31, 2002, of 497,266 shares of the common
stock of meVC Draper Fisher Jurvetson Fund I (MVC) (the Fund). KIM has
beneficially owned in excess of one percent of the outstanding shares of the
Fund for at least one year or more as attested by Schedule 13D filings with the
Securities and Exchange Commission. KIM?s first purchase of shares began on
October 31, 2000. All such purchases have been made in the open market.
Pursuant to Rule 14-28(b)(2)(ii) of the Securities Exchange Act of 1934, we
(KIM) are hereby submitting the following proposal and supporting statement
for inclusion in any and all proxy materials at the next meeting of
shareholders. Attached is our Schedule 13D as electronically filed with the
Securities and Exchange Commission.
PROPOSAL
Karpus Investment Management proposes: In each year where the fund
discount averages over ten percent, meVC Draper Fisher Jurvetson Fund I
(MVC) will conduct a tender offer for 25 percent of the outstanding shares
at an amount equal to 95 percent of the NAV.
SUPPORTING STATEMENT
KIM believes current Fund Management of MVC is not making significant
efforts to close the wide discount at which the fund trades. From May 26,
2000 through August 30, 2002, the Fund traded at an average discount of
34.95%.
KIM believes a reasonable way for shareholders to recognize their investment
value is through a tender offer of 25% of the outstanding shares. If this
occurred, shareholders would increase the value of tendered shares by 49.47%
(based on the August 30, 2002 NAV).
It is KIM?s opinion the Fund failed to address the persistently wide discount.
As of September 17, 2002, the Fund held 72.6% of its assets in cash,
charging an exorbitant 2.5% fee. Current low short-term rates are causing
a negative return on almost 73% of the portfolio. If cash remains in the Fund,
it will dwindle away as it performs at rates below fees.
The Fund began trading on 5/26/00 at a market price of $18.99. On 9/17/02
the Fund closed at $7.76, a 59% LOSS. This abysmal performance occurred
despite the 70% cash position. While shareholders were economically harmed,
Management collected over $7,000,000 in fees on cash balances (since
inception).
Management consoles shareholders by incorrectly comparing performances
of MVC and the Nasdaq Index (CCMP) using uneven time periods.
Management compares the performance of CCMP from March 31, 2000 to
July 31, 2002 (-70.76%) to the performance of MVC from May 26, 2000 to
July 31, 2002 (-60.48%). When comparing CCMP performance from May 26,
2000 to July 31, 2002, the disparity narrows significantly.
It is questionable that the Fund compares the 35%-invested MVC to the
fully-invested CCMP. Assuming cash earned 0%, a fund that was 35%
invested in CCMP and 65% invested in cash during the time period from
May 26, 2000 to July 31, 2002 would have lost only 21.1% while MVC lost 60.48%.
KIM believes conducting tender offers is a proven method for shareholders to
recognize their investment value. Considering the Fund currently trades at a
price lower than cash per share, a tender offer is a reasonable method to
return value to shareholders. With a 25% tender of MVC at 95% of NAV,
shareholders would recognize an immediate return of approximately 49.47%
on tendered shares (based on price of $7.85 and NAV of $12.35 as of 8/30/02).
If these tender offers are conducted yearly, shareholders will continue to
increase their investment value.
Sincerely,
Scott D. Nasca
Corporate VP & Director of Equity Investments
SDN/rl
EXHIBIT 2
LETTER SENT TO THE CHIEF OPERATING OFFICIER ON OCTOBER 2, 2002
October 2, 2002
Ms. Ann E. Oglanian
Acting Chief Operating Officer
meVC Draper Fisher Jurvetson Fund
991 Folsom Street
San Francisco, California 94107
Dear Ms. Oglanian:
I am writing to express my disappointment with the recent actions taken by
the directors of the Fund. In the October 1, 2002, press release you outline
plans ?designed to enhance shareholder value?. I believe these plans are a
weak attempt to pacify the many disgruntled MVC shareholders.
A buyback of up to $20 million of shares is less than 10% of the net assets of
the Fund while approximately 72.5% of the fund?s assets are in cash on which
shareholders are paying exorbitant fees (as of 10/1/02, according to your
website). I believe that over the long-term, share buyback programs do not
have a significant impact in reducing the discount and MVC?s wide discount
will fail to narrow significantly.
Additionally, there is no guarantee that the buyback of $20 million of shares
will even occur. Management?s conditions for buying back shares only when
the market price is below the cash amount per share alleviate them from
fulfilling this goal if they choose to invest more of the funds. Based on
management?s poor company selection thus far, I believe shareholders
deserve a guaranteed return on their investment rather than continued
depletion of the net assets of the fund.
Tender offers are a proven method for shareholders to recognize some of
their investment value. Considering the Fund trades at a price lower than
the cash amount per share, a tender offer is a reasonable method to return
value to the shareholders. With a 25% tender of the outstanding shares at 95%
of NAV, shareholders would recognize an immediate return of approximately
45.7% on tendered shares (based on price of $8.04 and NAV of $12.33 as of
10/1/02).
I am also disappointed in your plan to keep MVC?s portfolio 100% invested
in technology-related companies. I believe this limited exposure has
contributed to the fund?s poor performance. In the press release, you state
that ?valuations appear to be at a cyclical bottom?. In my telephone
conversation with management nine months ago, I was told the exact same
thing. Will I hear this again next year?
Finally, I believe the appointment of John Grillos as Chief Investment Officer,
while retaining his position as Chief Executive Officer and Chairman of the
Board is questionable and has contributed to my loss of confidence in the Fund.
I sincerely hope that the board is not undermining shareholder rights to
Approve managers through the appointment of Grillos.
I encourage you to contact me at (585)586-4680 to discuss this matter further.
Sincerely,
Scott D. Nasca
Corporate Vice President
EXHIBIT 3
PROPOSAL RESUBMITTED ON DECEMBER 10, 2002
DECEMBER 10, 2002
MR. JOHN M. GRILLOS, CHAIRMAN
MEVC DRAPER FISHER JURVETSON FUND I
991 FOLSOM STREET
SAN FRANCISCO, CA 94107
DEAR MR. GRILLOS,
Karpus Management, Inc. d/b/a Karpus Investment Management (KIM),
is the beneficial owner as of August 31, 2002, of 497,266 shares of the common
stock of meVC Draper Fisher Jurvetson Fund I (MVC) (the Fund). KIM has
beneficially owned in excess of one percent of the outstanding shares of the
Fund for at least one year or more as attested by Schedule 13D filings with the
Securities and Exchange Commission. We have been the beneficial owner of
the shares valued at more than $2,000 for more than one year and expect to
continue ownership through the date of the Fund's next shareholder meeting.
KIM?s first purchase of shares began on October 31, 2000. All such purchases
have been made in the open market.
Pursuant to Rule 14-28(b)(2)(ii) of the Securities Exchange Act of 1934, we
(KIM) are hereby submitting the following proposal and supporting statement
for inclusion in any and all proxy materials at the next meeting of
shareholders. Attached is our Schedule 13D as electronically filed with the
Securities and Exchange Commission.
PROPOSAL
Karpus Investment Management proposes: In each year where the fund
discount averages over ten percent, meVC Draper Fisher Jurvetson Fund I
(MVC) will conduct a tender offer for 25 percent of the outstanding shares
at an amount equal to 95 percent of the NAV.
SUPPORTING STATEMENT
KIM believes current Fund Management of MVC is not making significant
efforts to close the wide discount at which the fund trades. From May 26,
2000 through August 30, 2002, the Fund traded at an average discount of 34.95%.
KIM believes a reasonable way for shareholders to recognize their investment
value is through a tender offer of 25% of the outstanding shares. If this
occurred, shareholders would increase the value of tendered shares by 49.47%
(based on the August 30, 2002 NAV).
It is KIM?s opinion the Fund failed to address the persistently wide discount.
As of September 17, 2002, the Fund held 72.6% of its assets in cash, charging
an exorbitant 2.5% fee. Current low short-term rates are causing a negative
return on almost 73% of the portfolio. If cash remains in the Fund, it will
dwindle away as it performs at rates below fees.
The Fund began trading on 5/26/00 at a market price of $18.99. On 9/17/02
the Fund closed at $7.76, a 59% LOSS. This abysmal performance occurred
despite the 70% cash position. While shareholders were economically harmed,
Management collected over $7,000,000 in fees on cash balances (since
inception).
Management consoles shareholders by incorrectly comparing performances of
MVC and the Nasdaq Index (CCMP) using uneven time periods. Management
compares the performance of CCMP from March 31, 2000 to July 31, 2002
(-70.76%) to the performance of MVC from May 26, 2000 to July 31, 2002
(-60.48%). When comparing CCMP performance from May 26, 2000 to July 31,
2002, the disparity narrows significantly.
It is questionable that the Fund compares the 35%-invested MVC to the
fully-invested CCMP. Assuming cash earned 0%, a fund that was 35% invested
in CCMP and 65% invested in cash during the time period from May 26, 2000 to
July 31, 2002 would have lost only 21.1% while MVC lost 60.48%.
KIM believes conducting tender offers is a proven method for shareholders to
recognize their investment value. Considering the Fund currently trades at a
price lower than cash per share, a tender offer is a reasonable method to return
value to shareholders. With a 25% tender of MVC at 95% of NAV,
shareholders would recognize an immediate return of approximately 49.47%
on tendered shares (based on price of $7.85 and NAV of $12.35 as of 8/30/02).
If these tender offers are conducted yearly, shareholders will continue to
increase their investment value.
Sincerely,
Scott D. Nasca
Corporate VP & Director of Equity Investments
SDN/rl