News Americas, New York, NY, March 12, 2025: The Herzfeld Caribbean Basin Fund Inc. (NASDAQ: CUBA) has announced a significant shift in its investment strategy, moving away from its traditional focus on the Caribbean Basin, including Cuba, to concentrate on Collateralized Loan Obligations (CLOs). This decision comes in response to the enduring U.S. embargo against Cuba and the recent re-designation of Cuba as a state sponsor of terrorism by the Trump administration.
Impact of U.S. Policy on Investment Strategy
The fund was originally established with the anticipation of capitalizing on investment opportunities that would arise from normalized U.S.-Cuba relations. However, the longstanding embargo and recent policy shifts have limited these prospects. In January 2025, the Trump administration reinstated Cuba’s designation as a state sponsor of terrorism, citing the country’s alleged support for international terrorism and harboring of fugitives.
This re-designation imposes additional economic sanctions on Cuba, further restricting the fund’s ability to invest in the region. In light of these developments, the fund’s Board of Directors has approved a transition to a CLO Equity Strategy, aiming to enhance shareholder value by focusing on assets less affected by geopolitical uncertainties.
Rebranding and Future Outlook
As part of this strategic shift, the fund will undergo rebranding to reflect its new investment focus. Despite the pivot, the fund’s management remains attentive to future changes in U.S.-Cuba relations and retains the option to revisit its original investment objectives should the geopolitical landscape evolve favorably.
For more information on the fund’s new direction, visit herzfeld.com/cuba.
