RENN Global Entrepreneurs Fund, Inc.
2008 Annual Report

Dear Fellow Shareholder,

 

The old saying “May you live in interesting times,” certainly applies to the past year.  As you know, we have had an almost total collapse of the US financial system.  I do not have to tell you the effect on the stock market.  But we must remember, “This, too, shall pass.”

 

The major question for investors is what should we do now?  We believe that once the “dust settles,” investors will be looking for growth with reasonable risk.  After the last big market drop (1973-1974) small growing companies led the market with the NASDAQ index advancing considerably more than the Dow Jones Industrial Average over the next five years.  Therefore, we believe that investors will want to be in companies led by entrepreneurial management.

 

The best entrepreneurial companies are related to the US and to China.  It is clear to us that the growth of China, due mainly to entrepreneurship, must be taken into account by investors.  Fortunately, there are a number of companies related to China trading in the US.  This is one of the reasons we are asking investors in RENN Global Entrepreneurs Fund, Inc. to approve the change from a Business Development Company to a registered non-diversified closed-end fund.  Your investment advisor needs more flexibility in selecting investments.  The advisor believes in this enough to give up an incentive fee, and your Board believes this move is in the best interest of shareholders.

 

Enclosed is a proxy outlining this proposal along with the election of a director and other business.  This Form 10-K annual report, provides detailed financial and other information on the Fund.  The RENN annual meeting will take place on May 15, 2009 beginning at 8:00 AM at the Anatole Hotel in Dallas, Texas.  I hope you can join in person.  Please be sure to respond and vote your proxy, as this important matter requires a majority of shareholders.

 

A brief history of our Fund:  RENN Global Entrepreneurs Fund, Inc. was incorporated in 1994 as a Business Development Company with an offering price of $10.00 per share and began publicly trading in 1996.  Beginning with $39 million in net capital, the Fund has distributed $83.4 million in cash and deemed dividends ($68.9 million after consideration of taxes and the amounts retained from the deemed dividends).  On a per-share basis, this would be $19.19 and $15.95 on gross and net bases, respectively.  If RENN Global Entrepreneurs Fund, Inc. had retained these dividends, the NAV per share would now be $20.14 ($4.19 as of February 27, 2009 plus $15.95).

 

We appreciate your continued support, and we will do our best to meet the challenges of this period.  We will close by stating one of the best quotes of all time, “Whenever there is a problem, there is also an opportunity.”

 

Sincerely,

 

Russell Cleveland  

President