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Date Filed: |
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The Asia Tigers Fund, Inc.
345 Park Avenue
New York, New York 10154
Dear Stockholder:
In the enclosed proxy statement, the Fund is requesting your vote to change the Funds current policy regarding periodic share repurchases. The Fund is seeking stockholder approval to amend its current policy of repurchasing shares on a quarterly basis to instead require share repurchases on a semi-annual basis. The reasons for amending the policy are as follows:
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Quarterly Repurchases Increase the Per-Share Cost of Managing the Fund |
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It is important to recognize that quarterly repurchases drive up the cost of managing the Fund for all stockholders. Quarterly repurchases decrease the assets of the Fund, resulting in the Funds expenses being spread over an ever-decreasing asset base. This has contributed to an increase in the Funds expense ratio from 1.6% for the fiscal year ended October 31, 2001 to 2.2% for the most recent fiscal year ended October 31, 2006. Changing to semi-annual repurchases will slow the decline in the Funds assets and the resulting increase in the Funds expense ratio while continuing to provide liquidity to stockholders. |
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Quarterly Repurchases Interfere with the Management of the Funds Investment Portfolio |
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Quarterly share repurchases also interfere with the management of the Funds investment portfolio by requiring the portfolio manager to raise large amounts of cash four times a year when it may not be advantageous to do so. This can be especially frustrating when Asian markets are in the middle of a strong upturn, as being required to have substantial cash on hand detracts from returns. Reducing the number of repurchase offers per year from four to two would help mitigate this problem by reducing the number of times each year that the portfolio manager would have to raise cash. |
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Quarterly Repurchases Are Not the Industry Norm |
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To the best of our knowledge, the Fund is the only interval fund with an international focus that is required to make quarterly repurchase offers. Hence, the Funds current quarterly repurchase scheme is quite unusual among interval funds with an international focus. |
Back to Contents
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Some Stockholders Participate in Repurchase Offers Even When Participation Is Not in Their Best Interest |
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In three of the past four repurchase offers, the Funds share price on the New York Stock Exchange has actually been at or higher than the effective share repurchase price (net asset value less a 2% repurchase fee). However, in each of these three offers some stockholders tendered their shares for repurchase. When the Funds shares are trading at a premium to, at or even at a slight (under 2%) discount to the Funds net asset value per share, it does not make financial sense for stockholders to tender their shares for repurchase. Nevertheless, many stockholders do tender their shares, as a result of confusion over the cost/benefit trade-off to tendering. |
Enclosed with this letter is the Funds proxy statement, which provides a thorough description of this proposal, including a three-page question-and-answer piece designed to help answer any questions you might have, as well as a proxy card. Whether or not you plan to attend the Funds annual meeting, and regardless of the number of shares you own, we urge you to review this proposal carefully and to promptly vote FOR the proposal on the enclosed proxy card.
As always, we thank you for your
confidence and support. If you need any assistance or have any questions
regarding the Funds proposal or how to vote your shares, please call
Georgeson Inc. at 1-877-847-1383.
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Sincerely, |
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Prakash A. Melwani |
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Director and President |