Jeff Gundlach is widely considered to be one of the top bond fund managers out there. He is also well-known for calling an Apple Inc. (NASDAQ: AAPL) short selling opportunity a couple hundred dollars ago. His fund was created after he and others left Trust Company of the West, and Team Gundlach has been raising funds and performing rather well. Now there is a new closed-end bond fund hitting the market that is being managed by DoubleLine.

The new fund is called DoubleLine Income Solutions Fund (NYSE: DSL). What is interesting here is the sheer size of the fund’s initial public offering (IPO) at a whopping $2.3 billion. If you are wondering how that ranks, it is one of the largest IPOs for a closed-end bond fund in history. Some 92 million common shares priced at $25 per share.

DoubleLine Income Solutions Fund initially intends to invest a large portion of its assets in securities of issuers domiciled or organized in emerging market countries. That allocation can change through time. The new fund is also allowed to invest in high-yield bonds (junk bonds) under investment grade, non-Agency mortgage-backed securities, and bank loans.

UBS, BofA/Merrill Lynch, Citigroup, Morgan Stanley and Wells Fargo Securities were the lead underwriters in connection with the offering. An overallotment was granted to the underwriting group.

New investors should note that the fund intends to use leverage here. That leverage is initially being set at about one-third over the assets brought in, but it also says that the fund has the versatility to increase, decrease or eliminate its leverage over time and based on market conditions. Here is the fund’s own description:

The Fund’s primary investment objective is to seek high current income; its secondary objective is to seek capital appreciation. The Fund will seek to achieve its investment objectives by investing in a portfolio of investments selected for their potential to provide high current income, growth of capital, or both. DoubleLine expects that the Fund will normally invest at least 80% of its net assets (plus any borrowings for investment purposes) in debt securities and other income-producing investments anywhere in the world, including emerging markets. The Fund may invest in mortgage-backed securities of any kind and may invest without limit in securities rated below investment grade (commonly referred to as “high yield” securities or “junk bonds”). There is no guarantee that the Fund will achieve its investment objectives. Investing in the Fund involves the risk of principal loss.

This marks the second such closed-end fund offering from DoubleLine. The first was the DoubleLine Opportunistic Credit (NYSE: DBL) fund, and its monthly payout rate appears to generate a yield of about 7.5%. At $26.50, its 52-week range is $25.07 to $28.06. The CEFA.com website shows that the first fund trades with a 6.27% premium over its net asset value, with a 14% gain over the past year. Its assets were listed as almost $363 million.

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