SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Real Estate Income Fund, Inc.
(RIT)
(Name of Issuer)
Common Stock
(Title of Class of Securities)
755881109
(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)
September 15, 2005
(Date of Event which requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is subject of this Schedule 13D, and if filing
this schedule because of Rule 13d-1(b) (3) or (4), check the following box. [ ]
(Page 1 of 9 pages)
There is One Exhibit
ITEM 1 Security and Issuer
Common Stock
Real Estate Income Fund, Inc.
Citi Fund Management Inc.
125 Broad Street
New York, NY 10004
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
By virtue of that certain Joint Filing and Solicitation Agreement by and
among KIM and Western Investment LLC, Western Investment Hedged
Partners L.P., Western Investment Activism Partners LLC, Western
Investment Institutional Partners LLC and Arthur D. Lipson (collectively,
the ?Western Parties?), as described in further detail in Item 6, KIM
affirms that it is a member of a ?group? with the Western Parties for
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the ?Act?). KIM expressly disclaims beneficial ownership of
the securities held by the Western Parties.
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, Jo Ann Van Degriff or Sophie Karpus
(?the Principals?) or KIM has been convicted in the past 5 years
of any criminal proceeding (excluding traffic violations).
e) During the last 5 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 110,002
shares of RIT on behalf of accounts that are managed by KIM (?the
Accounts?) under limited powers of attorney, which represents .99%
of the outstanding shares. 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
conservative, fixed income manager, with a specialty focus in the
closed end fund sector, the profile of RIT fit the investment guidelines
for various Accounts. Shares have been acquired since January 19, 2005.
b) KIM purchased the Shares based on its belief that the Shares, when
purchased, were undervalued and represented an attractive investment
opportunity. Depending upon overall market conditions, other investment
opportunities available to KIM, and the availability of Shares at prices that
would make the purchase of additional Shares desirable, KIM may
endeavor to increase its position in the Issuer through, among other things,
the purchase of Shares on the open market or in private transactions or
otherwise, on such terms and at such times as KIM may deem advisable.
KIM believes the current management and the Board of Directors of the
Issuer have not taken adequate measures to close the discount to net asset
value that the Issuer has historically maintained. On August 25, 2005,
KIM filed a preliminary proxy statement with the Securities and Exchange
Commission to solicit proxies against the approval of a new Management
Agreement and Subadvisory Agreement for the Issuer at a special meeting
of shareholders scheduled to be held on October 11, 2005 (the ?Special
Meeting?) which would take effect when the Issuer?s investment manager,
Citi Fund Management Inc., becomes a subsidiary of Legg Mason, Inc.
pursuant to a deal between Legg Mason, Inc. and Citigroup Inc. On
September 14, 2005, KIM and the Western Parties formed a ?group? for
the purpose of soliciting proxies in opposition to the Issuer?s proposals to
approve the new Management Agreement and Subadvisory Agreement for
the Issuer and for the purpose of voting against such proposals at the
Special Meeting.
KIM does not have any present plan or proposal which would relate to or
result in any of the matters set forth in subparagraphs (a) - (j) of Item
4 of
Schedule 13D except as set forth herein or such as would occur upon
completion of any of the actions discussed above. KIM intends to review
its investment in the Issuer on a continuing basis and engage in
discussions with management and the Board of Directors of the Issuer
concerning the business, operations and future plans of the Issuer.
Depending on various factors including, without limitation, the Issuer?s
financial position and investment strategy, the price levels of the
Shares,
conditions in the securities markets and general economic and industry
conditions, KIM may in the future take such actions with respect to its
investment in the Issuer as it deems appropriate including, without
limitation, seeking Board representation, making proposals to the Issuer
concerning changes to the capitalization, ownership structure or operations
of the Issuer, purchasing additional Shares, selling some or all of its
Shares, engaging in short selling of or any hedging or similar transaction
with respect to the Shares or changing its intention with respect to any and
all matters referred to in Item 4. (Exhibit 1)
ITEM 5 Interest in Securities of the Issuer
a) As of the date of this Report, KIM owns 110,002 shares, which represent
.99%
of the outstanding shares. George Karpus presently owns 4,900 shares
purchased
August 8, 2005 at $17.61 per share (3500 shares)
and August 10 at $18.11 (1400 shares). Dana Consler presently owns 160
shares purchased January 19, 2005 at $17.38. None of the other Principals
of KIM currently owns shares of RIT.
b) KIM has the sole power to dispose of and to vote all such Shares
under limited powers of attorney.
c) Below are the open market purchases in the last 60 days for the
Accounts. There have been no dispositions and no acquisition, other than
by such open market purchases, during such period.
DATE
SHARES
PRICE PER
DATE
SHARES
PRICE PER
SHARE
SHARE
7/7/2005
-1350
18.60
8/1/2005
560
19.26
7/18/2005
100
18.65
8/2/2005
3400
19.25
7/19/2005
3000
18.65
8/3/2005
6120
19.24
7/20/2005
2700
18.71
8/4/2005
12400
19.10
7/21/2005
5800
18.75
8/5/2005
5000
18.50
7/22/2005
6100
18.62
8/8/2005
3500
17.61
7/25/2005
5400
18.72
8/9/2005
8900
17.91
7/26/2005
2000
18.93
8/10/2005
7040
18.07
7/27/2005
4200
18.92
8/11/2005
3230
17.95
7/28/2005
5200
19.05
8/12/2005
4000
18.02
8/15/2005
150
18.09
8/16/2005
775
18.33
8/17/2005
6100
18.29
The Accounts have the right to receive all dividends from, and any
proceeds from the sale of the 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
a) Except as described above (Item 4 (b)), there are no contracts,
arrangement, 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 the RIT securities.
b) On September 14, 2005, KIM and the Western Parties entered into a
Joint Filing and Solicitation Agreement in which, among other things, (a)
the parties agreed to the filing on behalf of each of them of statements on
Schedule 13D with respect to the securities of the Issuer to the extent
required under applicable securities laws, (b) the parties agreed not to,
directly or indirectly, sell, dispose of, transfer or hypothecate any
securities of the Issuer without the prior written consent of each of the
parties, (c) the parties agreed to form a group for the purpose of soliciting
proxies in opposition to the Issuer?s proposals to approve a new
Management Agreement and Subadvisory Agreement for the Issuer at the
Special Meeting, and voting against and soliciting proxies against such
proposals, and (d) KIM and the Western Parties agreed to split on a pro
rata basis, all expenses incurred in connection with the group?s
activities in connection with the solicitation. (Exhibit 1)
ITEM 7 Materials to be Filed as Exhibits
Exhibit One ? Joint Agreement.
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.
September 15, 2005 By: _________________________
Date Signature
Sharon L. Thornton, Director of Investment Personnel
Name /Title
Exhibit One
JOINT FILING AND SOLICITATION AGREEMENT
WHEREAS, certain of the undersigned are stockholders, direct or beneficial,
of Real Estate Income Fund, Inc., a Maryland corporation ( the ?Company?);
WHEREAS, Karpus Management, Inc. (?Karpus?) on the one hand, and
Western Investment LLC, Western Investment Hedged Partners L.P.,
Western Investment Activism Partners LLC, Western Investment Institutional
Partners LLC and Arthur D. Lipson (collectively, ?Western?) wish to form a
group for the purpose of voting against and soliciting proxies against
proposals to approve a new management agreement and subadvisory
agreement for the Company (the ?Company Proposals?) to be submitted
to a vote of the shareholders at a special meeting of shareholders scheduled
to be held on October 21, 2005 and any adjournments, postponements,
reschedulings or continuations thereof (the ?Special Meeting?) and taking
all other action necessary to achieve the foregoing.
NOW, IT IS AGREED, this 14th day of September 2005 by the parties hereto:
1. In accordance with Rule 13d-1(k)(2) under the Securities
Exchange Act of 1934, as amended (the ?Exchange Act?), each of the
undersigned (collectively, the ?Group?) agrees to file individually a
statement on Schedule 13D with respect to the securities of the Company
to the extent required under applicable securities laws reflecting the
formation of a group, such individual filings to be undertaken cooperatively
so as to be consistent in form and substance. Each of the undersigned further
agrees to file any necessary amendments to their respective filings on
Schedule 13D and to cooperate with each other in preparing such filings.
Each member of the Group shall be responsible for the accuracy and
completeness of his/its own disclosure in his/its respective filings and is
not
responsible for the accuracy and completeness of the information concerning
the other members, unless such member knows or has reason to know that
such information is inaccurate.
2. While this Agreement is in effect and up until the Special Meeting,
none of the undersigned shall be permitted to, directly or indirectly, sell,
dispose of, transfer or hypothecate any securities of the Company without
the prior written consent of each of the undersigned, however, nothing herein
contained shall limit the undersigned from purchasing additional securities of
the Company. Neither party shall withhold consent to the sale of securities
if such sale is precipitated by directions of a client of the selling party in
connection with the the termination of liquidation of all or part of an account.
3. So long as this Agreement is in effect, each of the undersigned
shall provide written notice to Kavinoky Cook LLP (?Kavinoky?) and Olshan
Grundman Frome Rosenzweig & Wolosky LLP (?Olshan?) of: (a) any of their
purchases or sales of securities of the Company or (b) any securities of the
Company over which they acquire or dispose of beneficial ownership. Notice
shall be given no later than 24 hours after each acquisition transaction.
4. Each of the undersigned agrees to form a group for the purpose
of voting against and soliciting proxies against the Company Proposals at
the Special Meeting and taking all other action necessary to achieve the
foregoing.
5. Karpus and Western agree to share the expenses incurred by
the members of the Group in soliciting proxies for the Special Meeting
pro rata based upon their respective percentage ownership of shares of the
Fund as of the date of the Special Meeting (or any Special Meeting
held following an adjournment). Notwithstanding the foregoing, Karpus
and Western shall not be required to reimburse any party for (i)
out-of-pocket expenses (which shall include items such as incidental
mailing, telephone, travel and courier service) incurred by a party in the
aggregate in excess of $3,000 without Karpus? and Western?s prior
written approval; (ii) the value of the time of any party; (iii) legal fees
incurred without Karpus? and Western?s prior written approval; or (iv)
the costs of any counsel employed in connection with any pending or
threatened litigation without Karpus? and Western?s prior written approval.
6. Each of the undersigned agrees that any SEC filing, press
release or shareholder communication proposed to be made or issued by
the Group in connection with the Group?s activities set forth in Section 4
shall be first approved by Kavinoky and Olshan, which approval shall
not be unreasonably withheld.
7. The relationship of the parties hereto shall be limited to
carrying on the business of the Group in accordance with the terms
of this Agreement. Such relationship shall be construed and deemed
to be for the sole and limited purpose of carrying on such business as
described herein. Nothing herein shall be construed to authorize any
party to act as an agent for any other party, or to create a joint venture
or partnership, or to constitute an indemnification. Nothing herein shall
restrict any party?s right to purchase securities of the Company, as he/it
deems appropriate, in his/its sole discretion.
8. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute but one and the same instrument, which may be sufficiently
evidenced by one counterpart.
9. In the event of any dispute arising out of the provisions of
this Agreement, the parties hereto consent and submit to the exclusive
jurisdiction of the Federal and State Courts in the State of New York.
10. Each of the undersigned parties hereby agrees that this
Agreement shall be filed as an exhibit to the Schedule 13D pursuant
to Rule 13d-1(k)(1)(iii) under the Exchange Act.
11. Any party hereto may terminate his/its obligations under
this Agreement only after the earlier of the first business day following
the conclusion of the Special Meeting or any adjournments of the Special
Meeting, on 24 hours? written notice to all other parties, with a copy by
fax to Steven Wolosky at Olshan, Fax No. (212) 451-2222 and
Jonathan Gardner at Kavinoky, Fax No. (716) 845-6474.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
KARPUS MANAGEMENT, INC.
By: /s/ Sharon L. Thornton
Name: Sharon L. Thornton
Title: Director Investment Personnel
Senior Analyst
WESTERN INVESTMENT LLC
By: /s/ Arthur D. Lipson
Name: Arthur D. Lipson
Title: Sole Member
WESTERN INVESTMENT HEDGED PARTNERS L.P.
By: Western Investment LLC
its General Partner
By: /s/ Arthur D. Lipson
Name: Arthur D. Lipson
Title: Managing Member
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
By: Western Investment LLC
its Managing Member
By: /s/ Arthur D. Lipson
Name: Arthur D. Lipson
Title: Managing Member
WESTERN INVESTMENT INSTITUTIONAL PARTNERS LLC
By: Western Investment LLC
its Managing Member
By: /s/ Arthur D. Lipson
Name: Arthur D. Lipson
Title: Managing Member
/s/ Arthur D. Lipson
ARTHUR D. LIPSON