Management is just plain dumb to add leverage to UrbanaUrbana has been using debt to buy back shares and add to investments, which has now run up to over $22MM and counting , or $.45 per share. This is really dumb and further shows either that management has no understanding of investor preferences and that the company lacks knowledgeable governance.
Urbana, becasue of its portfolio and low liquidity, is a vehicle that would normally target long-term investors who would lean towards conservatism. Leverage, even a modest amount, is not a feature that would be attractive to that segment of investor, especially at a time when markets are at elevated valuations. Bearing in mind that Urbana already has a number of other detractions that turn people away ( Caldwell's rep. with the OSC, the recent increase in fees, mediocre returns, opaque investments ), adding leverage reduces what is an already small investor segment. The near 50% discount speaks for itself about investor confidence in management.
Management should manage its investments within the assets available and eliminate any debt to avoid any issue of being categorized by the investment community as a levered fund.