On Tuesday, Alpine Global Premier (AWP) announced a monthly dividend increase for the March-to-May period. I believe the 10% monthly dividend increase is best characterized as a small first step onto a very relevant path. The fund is still paying shareholder dividends at a much slower pace than the earned income for eventual shareholder distributions accumulates. The slower the start, the bigger the future dividends in June-to-December 2010 would be. This path infers a larger eventual 2010 premium, in my view.

My thesis is that AWP will trade at a premium in 2010. Before discussing the extent to which Tuesday’s announcement and follow-up verbal color serve as milestones, I want to point out an erroneous speculation on my own part. I speculated that Alpine would normalize its monthly dividend in one fell swoop. While AWP did begin raising dividends in the exact period I expected, and while the allocation of less income to early months merely leaves more income for later months, my speculation as to how the dividend increases would be carried out was still wrong.