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AllianzGI Diversified Income & Convertible Fund Closes its Initial Public Offering

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AllianzGI Diversified Income & Convertible Fund (the “Fund”) has completed the closing of its initial public offering. The Fund raised $280,000,000 in its common share offering (before deduction of the sales load and offering expenses), excluding any exercise of the underwriters’ option to purchase additional common shares. If the underwriters were to exercise their option to purchase additional common shares in full, which may not occur, the Fund would raise $322,000,000 (before deduction of the sales load and offering expenses). The underwriters may exercise their option to purchase additional common shares up to 45 days after the initial public offering. Assuming the use of leverage of approximately 28% of the Fund’s managed assets and assuming the exercise of a portion of the underwriters’ option to purchase additional common shares, the Fund’s managed assets may exceed $400,000,000. The Fund’s common shares are listed on the New York Stock Exchange under the symbol “ACV.”

The Fund is a diversified, limited term closed-end fund. The Fund’s investment objective is to provide total return through a combination of current income and capital appreciation, while seeking to provide downside protection against capital loss.

“We believe that today’s world of low yields, price fluctuations and fear of rising long-term rates presents special challenges for some income-oriented investors,” said Douglas Forsyth, lead portfolio manager on ACV and CIO Fixed Income US at Allianz Global Investors. “The AllianzGI Diversified Income & Convertible Fund takes a dynamic approach to seeking to provide income that looks at various segments of a company’s capital structure and finds what we believe to be attractive investment opportunities, be it convertibles, high-yield or equity securities.”

Under normal market conditions, the Fund will seek to achieve its investment objective by investing in a combination of convertible securities, debt and other income-producing instruments and common stocks and other equity securities. The Fund will normally invest at least 80% of its net assets (plus any borrowings for investment purposes) in a diversified portfolio of convertible securities, income-producing equity securities and income-producing debt and other instruments of varying maturities. It is expected that substantially all of the Fund’s debt instruments and a substantial portion of its convertible securities will consist of securities rated below investment grade or unrated but determined by Allianz Global Investors U.S. LLC (“AGI U.S.”), the Fund’s sub-adviser, to be of comparable quality (sometimes referred to as “high yield securities” or “junk bonds”). The Fund also expects to normally employ a strategy of writing (selling) covered call options on the stocks held in the equity portion of the portfolio (the “Option Strategy”). The Option Strategy is designed to generate gains from option premiums in an attempt to enhance amounts available for distributions payable to the Fund’s shareholders. The Fund currently anticipates that it will utilize leverage as part of its investment strategy.

The Fund includes a term limit provision, which provides that the Fund will terminate on its 15th anniversary in 2030, unless the term is extended by the Fund’s Board of Trustees for up to one year or shareholders elect to extend the term.

The Fund’s Board of Trustees has approved a Repurchase Plan (the “Repurchase Plan”) with respect to the Fund’s common shares for a defined period following the Fund’s initial public offering in an attempt to provide additional liquidity in the marketplace for the Fund’s common shares. Pursuant to the Repurchase Plan, the Fund may repurchase its common shares in the open market on any trading day when the Fund’s common shares are trading at a discount of 2% or more from the common shares’ closing net asset value (“NAV”) on the prior trading day. Any repurchases will be made through a single broker-dealer who was not an underwriter in the initial public offering of the common shares acting as the Fund’s agent and will be subject to Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and other applicable laws. In addition to providing potential additional liquidity in the marketplace, any repurchases under the Repurchase Plan will be made by the Fund at a discount to then current NAV of the Fund’s common shares and therefore would be accretive to the NAV of the remaining common shares following the repurchases, and the Repurchase Plan may also have the effect of preventing or reducing a significant decline in the market price of the Fund’s common shares in comparison to their NAV. However, there can be no assurance that repurchases of the Fund’s common shares under the Repurchase Plan will cause the common shares to trade at a price equal to or in excess of NAV or prevent or reduce any trading discount.

The Fund’s intends to make monthly distributions at rates that reflect the past and projected net income of the Fund. The Fund’s initial distribution is expected to be paid approximately 60 to 90 days from the completion of this offering.

The Fund will be managed by an experienced investment manager that has a long track record in closed-end fund management.

AGI U.S. is an integrated investment management organization that provides solutions across equity, fixed income, multi-asset and alternative asset classes. The hallmark of AllianzGI U.S. is entrepreneurial, autonomous investment teams supported by common infrastructure. With a focus on clients, AllianzGI U.S. strives for investment innovation, efficient execution and quality service.

Allianz Global Investors Fund Management LLC (“AGIFM”) is the Fund’s investment manager, responsible for managing the investment activities of the Fund and the Fund’s business affairs and other administrative matters. AGIFM is an indirect, wholly-owned subsidiary of Allianz Asset Management of America L.P. and is a member of Munich-based Allianz Group. As noted above, AllianzGI U.S., an AGIFM affiliate, is the Fund’s sub-adviser and is responsible for managing the Fund’s portfolio investments.

BofA Merrill Lynch and Wells Fargo Securities were lead underwriters in connection with the offering.

About Allianz Global Investors

Allianz Global Investors is a diversified active investment manager with a strong parent company and a culture of risk management. With 24 offices in 18 countries, we provide global investment and research capabilities with consultative local delivery. We have more than USD 488 billion in AUM1 for individuals, families and institutions worldwide and employ over 500 investment professionals.

At Allianz Global Investors, we follow a two-word philosophy: Understand. Act. It describes how we look at the world and how we behave. We aim to stand out as the investment partner our clients trust by listening closely to understand their challenges, then acting decisively to provide them with solutions that meet their needs.

The Fund’s daily New York Stock Exchange closing prices, NAV per share, as well as other information, including updated portfolio statistics and performance will be available at or by calling the Fund’s shareholder servicing agent at (800) 254-5197.


The Fund is a newly organized, diversified, limited term registered closed-end management investment company with no operating history. Shares of closed-end investment companies, such as the Fund, usually trade on a national stock exchange, and these shares frequently trade at a significant discount from their NAV, which may increase risk of loss for investors.

Because of the risks associated with investing in high yield securities and other risks associated with the Fund’s principal investment strategies, including, without limitation, limited term risk and risks associated with the Repurchase Plan, the Option Strategy and the use of leverage, an investment in the Fund involves a high degree of risk and should be considered speculative. Investors should consider their investment goals, time horizons and risk tolerance before investing in the Fund. An investment in the Fund is not appropriate for all investors, and the Fund is not intended to be a complete investment program. Investors should consider the Fund’s investment objective, risks, fees and expenses carefully before investing, which are disclosed in the prospectus.

The prospectus, which contains this and other information about the Fund, should be read carefully before investing. There can be no assurance that the Fund will achieve its investment objective or be able to structure its investment portfolio as anticipated.

This document is not an offer to sell securities and is not a solicitation of an offer to buy securities, nor will there be any sales of securities in any jurisdiction where the offer or sale is not permitted.

An investment in the Fund involves risk, including loss of principal.

Convertible securities generally offer lower interest or dividend yields than non-convertible debt securities of similar quality. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. Investments in debt securities typically decline in value when interest rates rise. This risk is usually greater for longer-term debt securities. The Fund may invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. Investments in lower rated and unrated securities present a greater risk of loss to principal and interest than higher rated securities. Debt securities of below investment grade quality are regarded as having predominantly speculative characteristics with respect to capacity to pay interest and to repay principal, and are commonly referred to as “high yield” securities or “junk bonds.”

Past performance is no guarantee of future results.

This material may include statements that constitute “forward-looking statements” under the U.S. securities laws. Forward-looking statements include, among other things, projections, estimates and information about possible or future results related to the Fund, market or regulatory developments. The views expressed herein are for informational purposes only and are not guarantees of future performance or economic results and involve certain risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially from the views expressed herein. The views expressed herein are subject to change at any time based upon economic, market, or other conditions and the Fund undertakes no obligation to update the views expressed herein. While we have gathered this information from sources believed to be reliable, the Fund cannot guarantee the accuracy of the information provided. The views expressed herein do not constitute a recommendation by AGI U.S. to buy, sell or hold any security. The views expressed herein (including any forward-looking statement) may not be relied upon as investment advice or as an indication of the Fund’s trading intent. Information included herein is not an indication of the Fund’s future portfolio composition or the extent to which the Fund may utilize leverage.

1 Combined worldwide assets as of 31 March 2015.

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