-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pz6gPXspEJqApPOWLM1jhiHyv1wvN/NIgjv05ws80GqjCS/5BtPGBP2iO2/qy3XU ebh/OFrc3coTMjMKyAn9+w== 0001048703-06-000292.txt : 20061205 0001048703-06-000292.hdr.sgml : 20061205 20061205164114 ACCESSION NUMBER: 0001048703-06-000292 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20061205 DATE AS OF CHANGE: 20061205 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MUNICIPAL ADVANTAGE FUND INC CENTRAL INDEX KEY: 0000897951 IRS NUMBER: 133703018 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-47776 FILM NUMBER: 061257756 BUSINESS ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2125041652 MAIL ADDRESS: STREET 1: 1345 AVE. OF THE AMERICAS, 46TH FL CITY: NEW YORK STATE: NY ZIP: 10105 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Karpus Management, Inc. CENTRAL INDEX KEY: 0001048703 IRS NUMBER: 161290550 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 183 SULLY'S TRAIL CITY: PITTSFORD STATE: NY ZIP: 14534 BUSINESS PHONE: 5855864680 MAIL ADDRESS: STREET 1: 183 SULLY'S TRAIL CITY: PITTSFORD STATE: NY ZIP: 14534 FORMER COMPANY: FORMER CONFORMED NAME: KARPUS MANAGEMENT INC DATE OF NAME CHANGE: 19971029 SC 13D/A 1 maf120506.htm UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Amendment No. 1
Under the Securities Exchange Act of 1934

Municipal Advantage Fund Inc. (MAF)

(Name of Issuer)

Common Stock

(Title of Class of Securities)

626189104

(CUSIP Number)

George W. Karpus, President
Karpus Management, Inc.,
d/b/a Karpus Investment Management
183 Sully's Trail
Pittsford, New York 14534
(585) 586-4680

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

December 5, 2006

(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 that is the subject of this Schedule 13D,
and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box.

CUSIP No.: 626189104

1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).

Karpus Management, Inc., d/b/a Karpus Investment Management
I.D. #16-1290558

2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b) X

3. SEC Use Only

4. Source of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

N/A

6. Citizenship or Place of Organization

New York

Number of Shares Beneficially Owned by Each reporting Person With:

7. Sole Voting Power

8. Shared Voting Power

9. Sole Dispositive Power

10. Shared Dispositive Power

11. Aggregate Amount Beneficially Owned by Each Reporting Person

335,645

12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

N/A

13. Percent of Class Represented by Amount in Row (11)

4.63%

14. Type of Reporting Person (See Instructions)

Item 1. Security and Issuer.

Common Stock
Municipal Advantage Fund Inc.
1345 Avenue of the Americas
New York, New York 10105

Item 2. Identity and Background.

(a) Karpus Management, Inc., d/b/a Karpus Investment Management (“KIM”), George W. Karpus, President, Director, and controlling stockholder, Jo Ann Van Degriff, Vice-President and Director, and Sophie Karpus, Director.

(b) The address of KIM’s principal place of business and principal office is: 183 Sully’s Trail, Pittsford, New York 14534.

(c) Principal business and occupation - Investment management for individuals, pension plans, profit sharing plans, corporations, endowments, trusts and others.

(d) None of George W. Karpus, Jo Ann Van Degriff or Sophie Karpus (the “Principals”) or KIM has been convicted in the past 5 years of any criminal proceeding (excluding traffic violations).

(e) During the last 5 years none of the Principals or KIM has been a party to a civil proceeding as a result of which any of them is 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) Each of the Principals is a United States citizen. KIM is a New York corporation.

Item 3. Source and Amount of Funds or Other Considerations.

KIM, an independent investment advisor, has accumulated 335,645 shares of MAF on behalf of accounts that are managed by KIM (the “Accounts”) under limited powers of attorney, which represents 4.63% of the outstanding shares. All funds that have been utilized in making such purchases are from such Accounts.

Item 4. Purpose of Transaction.

KIM has purchased Shares for the Accounts for investment purposes. However, KIM reserves the right to contact management with regard to concerns that they have with respect to the Fund. This may include letters to the Board and/or other communications with Fund management. Being an independent registered investment advisor, with a specialty focus in closed end funds, the profile of MAF fit the investment guidelines for various Accounts. Shares have been acquired since December 22, 2000.

Item 5. Interest in Securities of the Issuer.

(a) As of the date of this Report, KIM represents beneficial ownership of 335,645 shares or 4.63% of the outstanding shares. Jo Ann Van Degriff presently owns 600 shares. Mrs. Van Degriff purchased shares on November 11, 2005 at $12.29 (150 shares) and on December 7, 2005 at $12.31 (1,000 shares). Ms. Van Degriff sold shares on September 15, 2006 at $12.80 (100 shares), September 18, 2006 at $12.82 (50 shares), September 19, 2006 at $12.83 (50 shares), September 20, 2006 at $12.85 (100 shares), September 21, 2006 at $12.86 (200 shares) and September 25, 2006 at $13.02 (50 shares). George W. Karpus presently owns 9,600 shares. Mr. Karpus purchased shares on May 11, 2004 at $12.17 (2,100 shares), December 14, 2005 at $12.30 (2,000 shares), November 27, 2006 at $13.28 (3,000 shares) and on November 30, 2006 at $13.31 (4,500 shares). Mr. Karpus sold shares on December 29, 2004 at $13.05 (50 shares), September 7, 2006 at $12.72 (50 shares), September 12, 2006 at $12.76 (50 shares), September 13, 2006 at $12 .81 (50 shares), September 15, 2006 at $12.79 (250 shares), September 18, 2006 at $12.80 (250 shares), September 19, 2006 at $12.82 (100 shares), September 20, 2006 at $12.84 (400 shares), September 21, 2006 at $12.85 (700 shares) and September 25, 2006 at $13.01 (100 shares). Karpus Investment Management, Inc. presently owns 2,150 shares. Karpus Investment Management, Inc. purchased shares on November 10, 2004 at $12.87 (1,400 shares), November 27, 2006 at $13.28 (500 shares) and on December 4, 2006 at $13.46 (1,000 shares). Kaprus Investment Management, Inc. sold shares on December 29, 2004 at $13.05 (50 shares), September 7, 2006 at $12.72 (50 shares), September 15, 2006 at $12.80 (100 shares), September 18, 2006 at $12.81 (100 shares), September 19, 2006 at $12.83 (50 shares), September 20, 2006 at $12.84 (150 shares), September 21, 2006 at $12.86 (200 shares) and September 25, 2006 at $13.02 (50 shares). Urbana Partners L.P. is a hedge fund managed by Karpus Investment Management, of which George W. Karpus owns 7.66%. Urbana Partners L.P. currently owns 1,900 shares of MAF. None of the other principals of KIM presently own shares of MAF.

(b) KIM has the sole power to dispose of and to vote all of such Shares under limited powers of attorney.

(c) Open market purchases for the last 60 days for the Accounts. There have been no dispositions and no acquisitions, other than by such open market purchases:


	Date		Shares	Price Per Share

	10/12/2006		-400	 $13.10
	10/26/2006		-170	 $13.00
	10/27/2006		-150	 $13.04
	11/9/2006		-1,550	 $13.10
	11/22/2006		2,000	 $13.22
	11/24/2006		100	 $13.19
	11/27/2006		38,300	 $13.22
	11/29/2006		13,200	 $13.23
	11/30/2006		21,100	 $13.25
	12/4/2006		50,500	 $13.40

The Accounts have the right to receive all dividends from, and any proceeds from the sale of the Shares. None of the Accounts has an interest in Shares constituting more than 5% of the Shares outstanding.

Item 6. Contracts, Arrangements, Understandings, or Relationships with Respect to Securities of the Issuer.

Except as described above, there are no contracts, arrangements, understandings or relationships of any kind among the Principals and KIM and between any of them and any other person with respect to any of the MAF securities.

Item 7. Materials to be Filed as Exhibits.

Two letter have been sent by Karpus to MAF pursuant to Item 4, above, expressing concerns that it currently has with the Fund. A copy of the letters are attached as Exhibits 1 and 2.

SIGNATURE

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.

Karpus Management, Inc.


By:  	/s/
Name:  	Sharon L. Thornton
Title:  	Director of Investment Personnel and Senior Analyst
Date:  	December 5, 2006

EXHIBIT 1
Letter to the Fund
Transmitted October 31, 2006


October 31, 2006

Brian S. Shlissel
President & Chief Executive Officer
Municipal Advantage Fund, Inc.
1345 Avenue of the Americas, 19th Floor
New York, New York 10105

Dear Mr. Schlissel:

Karpus Investment Management represents beneficial ownership of 212,345 shares of the Municipal Advantage Fund, Inc. (approximately 3% of the outstanding shares). It is my hope that management and the Board of Directors will address the persistent discount of MAF.

The original prospectus of the fund states: "The Board of Directors may, from time to time, take actions to reduce or eliminate discounts from net asset value which may develop. The Board will annually review any further open market purchases and/or tender offers. In addition, if at any time following the second year after the initial public offering the common stock publicly trades for a substantial period of time at a substantial discount from the net asset value, the Board will consider at its next regularly scheduled meeting, taking various actions designed to eliminate the discount, which may include recommending converting the fund to an open-end investment company."

According to Bloomberg over the last 12 years MAF has traded at a significant discount to its net asset value.



Calendar	Average Daily
Year	Discount


1995	-14.42
1996	-15.02
1997	-11.1
1998	-9.05
1999	-10.16
2000	-14.31
2001	-11.47
2002	-10.05
2003	-9.03
2004	-10.77
2005	-13.24
2006	-13.15

Lifeboat provisions that are written into an original prospectus must be followed. Over the last 12 years, no action of the Board has caused the discount to net asset value of MAF to narrow.

The shareholder base of closed-end funds has changed radically over the last few years. Various hedge funds, in seeking return, have invested in this format and have been quite successful in corporate actions.

Karpus Investment Management believes that the closed-end format is superior to the open-end format, however, discounts must be managed. Various methods may be employed to manage discounts and I would appreciate the opportunity to explore these different ideas with management.

The Board of Directors should publicly address the persistent discount of the fund and disclose any type of methodology considered to close the discount before the next meeting of shareholders.

Sincerely,

/s/

Sharon L. Thornton
Senior Analyst/Portfolio Manager

\ca

cc:  	Robert E. Connor, Chairman of the Board of Directors
       	Thomas J. Fuccillo, Esq.,  Secretary and Chief Legal Officer

EXHIBIT 2
Letter to the Fund
Transmitted December 4, 2006


Mr. Brian S. Shlissel							December 4, 2006
Executive Vice President, Municipal Advantage Fund, Inc.
c/o Allianz Global Investors Fund Management LLC
1345 Avenue of the Americas
New York, New York 10105-4800

Re:	Municipal Advantage Fund, Inc.

Dear Mr. Schlissel:

I am the Senior Analyst at Karpus Investment Management for the tax-advantaged investments and the party that directed the letter regarding Municipal Advantage Fund Inc. of October 31, 2006. Furthermore, I am aware of the proposed change in the sub-advisor from Oppenheimer Capital LLC to PIMCO.

It greatly disturbs me that the Board languished in their decision to change sub-advisors until they felt pressure from shareholders. It is also particularly troubling that the Board is considering substantially lowering the investment quality of the fund and allowing esoteric securities to be included in the portfolio mix. This appears to be simply an attempt to increase the dividend yield of the fund, while ignoring the fundamental investment policies that caused shareholders to purchase the fund originally.

It is our firm's belief that fundamental investment policies should not be meddled with, absent an exit strategy for those who do not wish to own the lower quality fund. The suggestion of being able to invest up to 20% in "junk" type and non-rated municipal bonds should not be tolerated by the shareholders. "Mom & Pop" investors may not be able to understand the increased credit risks and risk of principle caused by the proposed changes to the investment policies. Recommending such changes without recognition of receiving net asset value from the fund should not be tolerated by shareholders.

Karpus Investment Management represents beneficial ownership of a significant amount of the Municipal Advantage Fund Inc. As such, we can understand the proposed change in the sub-advisor to PIMCO (although we are suspect on timing at which it was announced). We cannot, however, support the proposed fundamental investment changes to the fund.

When fundamental changes are proposed for a fund, an exit must be provided for shareholders that do not agree with the proposed changes. Absent this exit, we will encourage fellow shareholders to join us in expressing our displeasure.

Sincerely,

/s/

Sharon L. Thornton
Director of Investment Personnel
Senior Analyst, Tax-Advantaged Fixed Income

cc:	Robert Connor, Chairman of the Board of Directors

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