Mobius rebuts City of London criticism

NEW YORK (Reuters) - Mark Mobius on Monday defended an emerging markets fund he manages from criticism by its largest shareholder, saying closed end funds frequently trade at a discount.

The City of London Investment Management Co. Ltd. has complained to the board of directors about the returns and discount to the net asset value of Templeton Emerging Markets Investment Trust Plc TEM.L, the Financial Times reported last week.

A discount that an emerging markets investment trust is trading at is a fact of closed-end funds, Mobius said.

City of London, which owns 13 percent of the trust, said it would consider share buybacks, tender offers, changes to the board and new management, among other options, the FT said.

"This fund is one of our best-performing. I'm not ashamed of the performance of this fund at all. It's just a fact that these closed-end funds go to discount from the net asset value," Mobius said in an interview, via telephone from Dubai, to the Reuters Investment Outlook Summit in New York.

The City of London also questioned succession planning at the trust. Mobius oversees about $33 billion in emerging market assets as managing director of Templeton Asset Management, a unit of Franklin Resources Inc. (BEN.N: Quote, Profile, Research, Stock Buzz).

"There are 10 people ready to take over, and they all are fighting it out," he said.

Mobius, 70, one of the biggest proponents of investing in emerging markets, is often considered the face of emerging markets because of his extensive travels and investment acumen.