Stone Harbor Emerging Markets Total Income Fund to offer shares

By Toni Weeks

San Diego, Oct. 29 - Stone Harbor Investment Partners LP announced it is offering shares of its new fund, the Stone Harbor Emerging Markets Total Income Fund, through a syndicate of underwriters led by Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and UBS Securities LLC.

According to a 497 filing with the Securities and Exchange Commission, the new organized, non-diversified, closed-end management investment company will seek to maximize total return consisting of income and capital appreciation from investments in emerging markets securities.

Under normal conditions, the fund will invest at least 80% of its net assets, plus borrowings for investment purposes, in emerging markets debt. Investments will focus on fixed-income securities and other instruments, including derivatives, that are economically tied to emerging market countries, that are denominated in the predominant currency of the local market of an emerging market country or whose performance is linked or otherwise related to those countries' markets, currencies, economies or ability to repay loans.

Up to 20% of the net assets may be invested in emerging markets equity, including common stocks, preferred stocks, exchange-traded funds and derivates that are economically tied to the equity markets of emerging market countries. The fund may invest up to 25% of its assets in a single country.

The portfolio will be managed by a team including Peter J. Wilby, Pablo Cisilino, James E. Craige, David Griffiths, Agnus Halkett, David A. Oliver, William Perry, David Scott and Christopher M. Wilder.

The fund plans to sell 9.6 million shares (NYSE: EDI) at $25.00 per share. The underwriters have been granted a 45-day option to purchase up to 1.44 million additional shares to satisfy over-allotments.

Shareholder transaction expenses consist of a 4.5% sales load and offering expenses of 0.2%. Assuming the fund will borrow one-third of the fund's total managed assets, management fees will be 1.5%, with total annual expenses expected to be 2.66%.

Without leverage, management fees would be around 1%, with total annual expenses estimated at 1.58%.

Stone Harbor Investment Partners is the investment manager to the fund.

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