But closed-end funds tend to trade below the asset value, called a discount. Many analysts say this situation is due to fees paid to fund managers that drain value from the fund.

In the past, HMC has proposed various plans to raise share prices, including displacing management and liquidating the fund. Its latest proposal is to merge the China and Dragon funds into an interval fund, in which Templeton would slowly liquidate the fund by gradually buying back shares, preventing share prices from dropping.

HMC has also proposed making the funds open-ended to raise their share price, according to Templeton. However, HMC reversed that position in the January letter.

Templeton said this about-face is characteristic of what they call Harvard’s deception.

“They have not been truthful about their intentions,” Gallegos said.

She added this action fits into the pattern of aggressive investing employed by HMC described in the Templeton complaint.

“This is a continuation of Harvard’s predatory pattern of buying large stakes of closed-end funds at steep discounts for the sole purpose of liquidating for short-term profit,” she said. “That’s a tactic that we believe could jeopardize the future of the closed-end fund vehicle.”

HMC declined to comment for this story.

—Staff writer Stephen M. Marks can be reached at marks@fas.harvard.edu.