Stock Analysis & Valuation Destra Multi-Alternative Fund (DMA)

• Previous Close: $8.96
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	44.21	393
Intrinsic value (DCF)		n/a
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Destra Multi-Alternative Fund (NYSE: DMA) is a closed-end, multi-strategy growth and income fund managed by Pinhook Capital, LLC. Launched in 2011, DMA employs a diversified investment approach, targeting public equity and fixed income markets in the U.S. with a focus on real estate investment trusts (REITs) and structured credit instruments. The fund combines fundamental and quantitative analysis to seek high income, capital appreciation, and low volatility. DMA's strategy includes direct investments, derivatives like options, and exposure to asset-backed securities, making it a flexible vehicle for investors seeking balanced risk-adjusted returns. Operating in the competitive asset management sector, DMA stands out for its multi-alternative approach, catering to income-oriented investors while maintaining a defensive posture with a beta of 0.53. With a market cap of ~$80.6M and a dividend yield of ~5.5%, DMA is positioned as a niche player in the alternatives space.

Investment Summary

Destra Multi-Alternative Fund offers a compelling yield-focused proposition with a diversified, low-volatility strategy, as evidenced by its beta of 0.53 and consistent dividend payouts (~$0.54/share). The fund’s net income of $6.9M (FY 2024) and EPS of $0.98 reflect efficient capital allocation, though its small market cap (~$80.6M) and limited liquidity pose risks. The fund’s reliance on REITs and structured credit exposes it to interest rate sensitivity, while its negligible cash position ($888K) against $15M in debt raises leverage concerns. Investors may find DMA attractive for its hybrid equity-fixed income approach, but its niche focus and operational scale warrant caution compared to larger multi-strategy peers.

Competitive Analysis

DMA’s competitive edge lies in its multi-alternative strategy, blending REIT equity exposure with structured credit to deliver income and growth. Its low correlation to broader markets (beta 0.53) appeals to risk-averse investors, while active management by Pinhook Capital adds tactical flexibility. However, DMA faces stiff competition from larger closed-end funds and ETFs with similar mandates but greater scale and liquidity. The fund’s small AUM limits its ability to negotiate favorable terms on derivatives or structured products, and its concentrated real estate tilt may underperform during sector downturns. Unlike pure-play REIT funds, DMA’s fixed income sleeve provides downside cushion, but its debt-heavy balance sheet (debt-to-equity ~1.86x) could amplify risks in a rising-rate environment. Competitors with broader asset pools or institutional backing may offer lower fees and more robust distribution networks.

Major Competitors

• Cohen & Steers Quality Income Realty Fund (RQI): RQI is a larger ($1.8B AUM) closed-end fund focused on REITs and real estate debt, offering higher liquidity and a more established track record than DMA. Its global diversification and lower leverage (debt/equity ~0.3x) reduce risk, but its pure-play real estate focus lacks DMA’s multi-strategy buffer.
• PIMCO Dynamic Income Fund (PDI): PDI ($5.3B AUM) dominates the multi-sector income space with PIMCO’s credit expertise, offering higher yield (~14%) and scale. However, its aggressive use of leverage and non-transparent portfolio holdings contrast with DMA’s simpler structure and REIT transparency.
• Cohen & Steers Infrastructure Fund (UTF): UTF ($1.4B AUM) competes in alternatives with infrastructure/utilities exposure, providing lower volatility but less income potential than DMA. Its fee structure is comparable, though DMA’s REIT focus may appeal more to investors bullish on real estate.