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...............Latin America Growth Fund, Inc................................
(Name of Registrant as Specified In Its Charter)
...............Christine P. Ritch, Secretary..........................
(Name of Person(s) Filing Proxy Statement)
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LATIN AMERICA GROWTH FUND, INC.
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From the Chairman
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Dear Shareholders:
It is my pleasure to take this opportunity to inform you of recent decisions
made by the Board of Directors for the Latin America Growth Fund, Inc. (the
"Fund"). In an effort to provide the Fund with a higher profile to stimulate
ongoing investor interest, whilst providing up-to-date information to
shareholders, the Board is taking the actions outlined below.
1. The Board is recommending to shareholders to vote in favor of a change in
the Fund's name to Latin America Smaller Companies Fund, Inc. It is the
objective and the Fund's policy to invest, under normal market conditions, at
least 80% of its total assets in the equity securities of Latin American issuers
that at the time of purchase have a market capitalization of less than U.S. $500
million. The change to the Fund's name will explicitly reflect the objective of
the Fund and will help clarify its characteristics, whilst more properly
distinguishing the Fund from regional peers, which should result in increasingly
informative industry comparisons.
2. The Board has decided to enroll the Fund for membership in The Club. This
service provides an indication of membership in prominent financial publications
with an 800 number through which potential investors can easily request
literature and obtain the latest financial reports.
3. Starting in 1998 quarterly reporting will be made available to provide
shareholders and prospective investors with more timely information.
These actions are the result of discussions during which the Board of
Directors has considered the fact that the Fund's common stock has been trading
at a discount. Whilst noting that the Fund's discount is in the range
experienced by similar closed-end funds, the Board has considered possible
actions to take in an effort to reduce or eliminate the discount. An independent
expert was retained to assist in an analysis of possible actions. The analysis
reflected that the discount dilemma has been creatively tackled by closed-end
funds over the years with most actions initiating only short-term if any
positive results on the discount. Although the action of open ending a fund
would have a long-term effect it would present implications that may compromise
the current investment strategy.
The Fund chose the closed-end structure because of the flexibility it can
provide to an investment strategy. An open-end fund requires maintenance of a
cash reserve and/or increased trading activity of fund investments in order to
meet the cash flows generated by the purchases and redemptions of fund shares.
As a closed-end fund, the Fund is able to stay fully invested in stocks
consistent with its investment objectives. We believe that the object of the
Fund to seek growth through investment in shares in relatively small
capitalization Latin American companies can only be achieved effectively through
a closed-end structure. It would be difficult to buy and sell less liquid
securities at efficient prices on short notice to meet the constant cash flow
requirements of an open-end fund. These factors were carefully considered by the
Board as they evaluated potential actions.
The Board's fiduciary obligation is to act in the best interest of the Fund
and all of its shareholders. Thus far, the Board has concluded that, at this
time, it is not in the best interest of the Fund or its shareholders to
undertake any strategy which would significantly alter the fundamental structure
of the Fund. The Board will continue to monitor the Fund's market price and
evaluate what, if any, additional actions may be appropriate.
Sincerely,
/s/ Peter Lamaison
PETER LAMAISON
Chairman of the Board
