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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
(Amendment__)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
CENTRAL EUROPE & RUSSIA FUND, INC.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
153436100
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(CUSIP Number)
Barry M. Olliff
c/o City of London Investment Management Company Limited
77 Gracechurch Street, London, UK EC3V 0AS
+44 207 711 0771
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 27, 2009
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(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 the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), (f) or (g), check the following box |_| .
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act.
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(Page 1 of 10 Pages)
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CUSIP NO. 153436100 13D PAGE 2 of 10
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
City of London Investment Group PLC, (CLIG) a company incorporated
under the laws of England and Wales.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e)
|_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
England and Wales
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NUMBER OF 7 SOLE VOTING POWER
SHARES 3,833,372
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 3,833,372
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PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,833,372
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.17%
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14 TYPE OF REPORTING PERSON*
HC
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CUSIP NO. 153436100 13D PAGE 3 of 10
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
City of London Investment Management Company Limited (CLIM), a company
incorporated under the laws of England and Wales.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
England and Wales
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NUMBER OF 7 SOLE VOTING POWER
SHARES 3,833,372
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 3,833,372
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PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,833,372
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.17%
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14 TYPE OF REPORTING PERSON*
IA
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CUSIP NO. 153436100 13D PAGE 4 of 10
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ITEM 1. SECURITY AND ISSUER.
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This statement relates to the shares of common stock, par value $.01
per share (the "Shares"), of Central Europe & Russia Fund, Inc, (the
"Fund"). The principal executive offices of the Fund are located at
Central Europe & Russia Fund, Inc. c/o Deutsche Asset Management,
Deutsche Funds, 345 Park Avenue, New York, NY 10154 - 0004 Attn: David
Goldman, Secretary (212-454-6778)
ITEM 2. IDENTITY AND BACKGROUND.
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(a). This statement is being filed by City of London Investment Group
PLC ("CLIG") and City of London Investment Management Company Limited
("CLIM," and together with CLIG, the "Reporting Persons").
(b). The business address and principal executive offices of CLIG are
77 Gracechurch Street London, EC3V 0AS England. The directors and
executive officers of CLIG, their business addresses and present
principal occupation or employment are set forth on Annex A attached to
this Schedule 13D. The business address and principal executive offices
of CLIM are 77 Gracechurch Street London, EC3V 0AS England. The
directors and executive officers of CLIM, their business addresses and
present principal occupation or employment are set forth on Annex A
attached to this 13D.
(c). The principal business of CLIG is serving as the parent holding
company for the City of London group of companies, including CLIM. CLIM
is an emerging markets fund manager which specializes in investing in
closed-end investment companies and is a registered investment adviser
under Section 203 of the Investment Advisers Act of 1940. CLIM is
controlled by CLIG. CLIM is principally engaged in the business of
providing investment advisory services to various public and private
investment funds, including The Emerging World Fund ("EWF"), a Dublin,
Ireland-listed open-ended investment company, Emerging Markets Country
Fund ("GEM"), a private investment fund organized as a Delaware
business trust, Investable Emerging Markets Country Fund ("IEM"), a
private investment fund organized as a Delaware business trust,
Emerging Free Markets Country Fund ("FREE"), a private investment fund
organized as a Delaware business trust, The EM Plus CEF Fund ("PLUS"),
a private investment fund organized as a Delaware business trust, GFM
(Institutional) Emerging Markets Country Fund ("GFM"), an open-ended
fund organized under the laws of the Province of Ontario, Global
Emerging Markets Country Fund Cayman ("CEM"), an open-ended fund
organized under the laws of Cayman Monetary Authority and fifteen
unaffiliated third-party segregated accounts over which CLIM exercises
discretionary voting and investment authority (the "Segregated
Accounts"). EWF, GEM, IEM, FREE, PLUS, GFM and, CEM, are collectively
referred to herein as the "City of London Funds."
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CUSIP NO. 153436100 13D PAGE 5 of 10
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(d). None of the Reporting Persons has, during the last five years,
been convicted in any criminal proceeding.
(e). None of the Reporting Persons has, during the last five years,
been a party to any civil proceeding commenced before a judicial or
administrative body of competent jurisdiction as a result of which it
or he was or is now 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). City of London Investment Group PLC, (CLIG) and City of London
Investment Management Company Limited (CLIM) are companies incorporated
under the laws of England and Wales.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS.
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Beneficial ownership of the Shares to which this statement relates was
acquired by the Reporting Persons with invested capital of the City of
London Funds and the Segregated Accounts. The aggregate purchase price
of the 3,833,372 Shares beneficially owned by the Reporting Persons was
$175,561,555, inclusive of brokerage commissions. The aggregate
purchase price of the 451,069 Shares owned directly by EWF was
$22,194,928, inclusive of brokerage commissions. The aggregate purchase
price of the 481,017 Shares owned directly by GEM was $27,521,858,
inclusive of brokerage commissions. The aggregate purchase price of the
480,144 Shares owned directly by IEM was $23,956,235, inclusive of
brokerage commissions. The aggregate purchase price of the 67,057
Shares owned directly by GFM was $2,997,539, inclusive of brokerage
commissions. The aggregate purchase price of the 480,874 Shares owned
directly by FREE was $23,948,659, inclusive of brokerage commissions.
The aggregate purchase price of the 14,160 Shares owned directly by
PLUS was $192,871, inclusive of brokerage commissions. The aggregate
purchase price of the 1,859,051 Shares owned directly by the Segregated
Accounts was $74,749,465, inclusive of brokerage commissions.
ITEM 4. PURPOSE OF TRANSACTION.
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The Reporting Persons contend that the Fund's Board of Directors has
failed, over an extended period, to take meaningful action to address
the Fund's persistently wide discount to NAV. We undertake this filing
to communicate our concerns to fellow shareholders.
In a letter dated December 18, 2008, we expressed our belief that the
share buyback program instituted by the Fund had not effectively
narrowed the Fund's discount to NAV. The foregoing description of the
letter is not intended to be complete and is qualified in its entirety
by the complete text of the letter, which is filed as Exhibit B hereto
as incorporated herein by reference.
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CUSIP NO. 153436100 13D PAGE 6 of 10
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In a prior letter dated August 23, 2007, the Reporting Persons
expressed concerns regarding the Fund's very large undistributed
capital gains. The foregoing description of the letter is not intended
to be complete and it is qualified in its entirety by the complete text
of the letter, which is filed as Exhibit A hereto as incorporated
herein by reference.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER.
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and (b). As of the date hereof, CLIG, through its control of CLIM, and
CLIM, in its capacity as investment adviser to the City of London Funds
and the Segregated Accounts, have voting and dispositive power with
respect to all 3,833,372 Shares owned directly by the City of London
Funds and the Segregated Accounts, representing approximately 24.17% of
the 15.861 million Shares outstanding as of December 30, 2008, as
reported by the Fund. As of the date hereof, EWF, GEM, IEM, GFM, FREE,
PLUS, and the Segregated Accounts owned directly 451,069, 481,017,
480,144, 67,057, 480,874, 14,160 and 1,859,051 Shares, respectively,
representing approximately 2.84%, 3.03%, 3.03%, 0.42%, 3.03%, 0.09% and
11.72%, respectively, of the 15.861 million Shares outstanding as of
December 30, 2008, as reported by the Fund. The resulting ownership in
excess of 3% of the outstanding voting shares of the Fund by GEM, IEM,
and FREE, respectively, resulted from a share buy-back program
instituted by the Fund which had the effect of reducing the total
amount of the Fund's voting shares outstanding, and not as a result of
a direct purchase or acquisition of Fund shares by GEM, IEM, and FREE.
Such ownership in excess of 3% of the Fund's shares by GEM, IEM and
FREE is therefore specifically exempted from Section 12(d)(1)(A) of the
Investment Company Act of 1940.
(c). Information with respect to all transactions in the Shares
beneficially owned by the Reporting Persons that were effected during
the past 60 days is set forth below:
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TRADE NUMBER TRANSACTION CLIG TRADE
DATE OF SHARES TYPE FUND PRICE
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2/18/2009 5,000 BUY ACCOUNT 12.6062
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3/10/2009 67,400 SELL ACCOUNT 12.8661
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3/11/2009 5,000 BUY ACCOUNT 13.1000
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3/13/2009 29,700 BUY ACCOUNT 14.0101
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3/13/2009 5,300 BUY PLUS 14.0101
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3/17/2009 56,500 SELL ACCOUNT 15.3884
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3/18/2009 13,000 SELL ACCOUNT 14.6805
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3/23/2009 19,900 SELL ACCOUNT 15.8512
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3/23/2009 30,000 SELL EWF 15.8512
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(d). Other than disclosed herein, no other person is known to have the
right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, such Shares.
(e). Not applicable.
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CUSIP NO. 153436100 13D PAGE 7 of 10
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
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TO SECURITIES OF THE ISSUER.
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Except as set forth in Item 4 of this Schedule 13D, none of the
Reporting Persons has any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to any
securities of the Fund including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or
the voting of any securities of the Fund, joint ventures, loan or
option arrangements, puts or calls, guaranties of profits, division of
profits or losses, or the giving or withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
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See Letter dated August 23, 2007 attached hereto as Exhibit A.
See Letter dated December 16, 2008 attached hereto as Exhibit B.
SIGNATURE
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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.
Dated: March 27, 2009 CITY OF LONDON INVESTMENT GROUP PLC
/s/ Barry M. Olliff
---------------------------------
Name: Barry M. Olliff
Title: Director
CITY OF LONDON INVESTMENT MANAGEMENT
COMPANY LIMITED
/s/ Barry M. Olliff
---------------------------------
Name: Barry M. Olliff
Title: Director
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CUSIP NO. 153436100 13D PAGE 8 of 10
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ANNEX A
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DIRECTORS AND EXECUTIVE OFFICERS
The names of the directors and executive officers of CLIG and their business
addresses and present principal occupation or employment are set forth below. If
no business address is given, the business address of such director or executive
officer is c/o City of London Investment Group PLC, 77 Gracechurch Street,
London EC3V 0AS, England.
Andrew Davison Chairman
Barry Olliff Chief Executive Officer
Douglas Allison Finance Director
Omar Ashur Non-Executive Director
Allen Bufferd Non-Executive Director
David Cardale Non-Executive Director
Thomas Griffith Chief Operating Officer
George Robb Non-Executive Director
Carlos Yuste Business Development Director
The names of the directors and executive officers of CLIM and their business
addresses and present principal occupation or employment are set forth below. If
no business address is given, the business address of such director or executive
officer is c/o City of London Investment Management Company Limited, 77
Gracechurch Street, London EC3V 0AS, England.
Barry Olliff Chief Investment Officer
Douglas Allison Finance Director
Jeremy Banister Director
Martin Garzaron Director
Clayton Gillece Director
Thomas Griffith Director
Michael Russell Director
Valerie Tannahill Director
Christopher Weaver Director
Carlos Yuste Director
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CUSIP NO. 153436100 13D PAGE 9 of 10
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EXHIBIT A
23rd August 2007
Mr. Christian Strenger
Chairman
Central Europe & Russia Fund
345 Park Avenue
New York, NY 10154
Dear Mr. Strenger,
City of London Investment Management Company Limited ("City of London") are
shareholders of Central Europe and Russia Fund (CEE) on behalf of our Clients'
portfolios. In reviewing the recently filed semi-annual report we noted with
interest the level of the unrealised capital gain component of the CEE
portfolio.
The Board will be aware of the issues faced by Korea Fund Inc. and Brazil Fund
Inc. in recent years and the risks of the cascade effect, caused by having a
large unrealised capital gain component. The cascade effect can prove to be
terminal to a fund's life as in the unfortunate case of the latter.
In addition, City of London would question whether carrying such a large
unrealised gain has an adverse effect on the ability of the manager to perform.
By carrying such a large unrealised capital gain it also would seem to be
creating an inherent risk to taxable investors by potentially one day passing on
a significant tax liability which might not be possible to offset.
Please confirm whether the decision to allow the unrealised capital gain
component of the fund to increase is a decision of the Board or whether it is a
policy of the manager. We would be interested to know if and how the board
monitors the level of the unrealised capital gains and whether the impact of a
potential cascade effect has been an issue discussed.
Yours sincerely,
Michael Sugrue
Fund Manager
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CUSIP NO. 153436100 13D PAGE 10 of 10
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EXHIBIT B
Mr. Christian Strenger
Chairman
Central Europe & Russia Fund
345 Park Avenue
New York, NY 10154
18 December 2008
Dear Mr. Strenger,
City of London Investment Management Company Limited ("CoL") represents in
excess of 24% of shares outstanding of the Central Europe and Russia Fund (the
"Fund" or "CEE") for its clients and is concerned with the wide discount at
which the shares of the Fund trade.
The Fund's discount has averaged close to 11% during the past 12 months. We
would suggest that this is unacceptable. During November 2008 however, the
Fund's discount averaged over 16%. On 15 December, the Fund's shares traded at a
discount wider than 26%. In our opinion, wide discounts do not positively
contribute to shareholder value. We would like to know what plans the Board has
to reduce the discount.
On 23 August 2007 we outlined a number of issues of concern including the
significant retained capital gains position. In its response the Board indicated
its commitment to maximizing long-term shareholder value in a letter to CoL
dated 11 September 2007. That long-term value is at present being substantially
undermined due to the significant discount at which the Fund's shares trade. We
believe this value would be enhanced by taking steps to address the wide
discount, including but not limited to a share buyback or distribution of assets
at or around NAV.
We look forward in hearing your response on this issue within seven days, at
which point we would otherwise consider approaching shareholders directly.
Yours sincerely,
Ghahre Pascale
Corporate Governance
Cc: Mr. Michael Clark, President