DEF: Advent Fund Schedules Virtual 2025 Shareholder Meeting

Advent Convertible and Income Fund announces its 2025 Annual Meeting of Shareholders will be held virtually to elect Class I Trustees and address other business.

Summary

• Advent Convertible and Income Fund (AVK) will hold its Annual Meeting of Shareholders on September 24, 2025, at 10:00 a.m. Eastern time.
• The meeting will be conducted solely via telephone conference call, with no in-person attendance or voting.
• Shareholders of record as of August 1, 2025, are eligible to vote.
• The primary purpose of the meeting is to elect three Class I Trustee nominees: Mr. Randall C. Barnes, Mr. Derek Medina, and Mr. Gerald L. Seizert, to serve until the Fund's 2028 annual meeting.
• The Board of Trustees unanimously recommends voting FOR all nominated Trustees.
• As of August 1, 2025, 44,148,745 shares were outstanding.
• Sit Investment Associates, Inc. is a principal shareholder, owning 9.9% of common shares (4,355,074 shares) as of August 1, 2025.
• The Fund's investment advisor, Advent Capital Management, LLC, managed $8.0 billion in assets as of July 31, 2025.
• PricewaterhouseCoopers LLP (PWC) served as the independent auditor, billing $120,000 for audit services and $19,260 for tax services in both fiscal years ended October 31, 2023, and October 31, 2024.

Sentiment

Score: 6

Explanation: The filing is a routine proxy statement for an annual meeting, indicating stable governance and adherence to regulatory requirements. The unanimous board recommendation for trustee re-election and the strong independent board structure are positive. However, the virtual-only meeting format and the noted lower attendance of one interested trustee are minor drawbacks. The discussion of the Delaware Control Share Statute introduces a potential, albeit currently unactivated, risk related to corporate control, but this is a disclosure rather than an immediate negative event.

Positives

• The Board of Trustees unanimously recommends voting for the re-election of experienced Class I Trustees.
• The Board is composed of a supermajority of Independent Trustees (7 out of 8), enhancing independent oversight.
• The Board has established two standing committees, Audit and Nominating and Governance, both composed solely of Independent Trustees.
• The virtual meeting format provides expanded access, reduced environmental impact, and cost savings for shareholders and the Fund.
• The Fund maintains physical, electronic, and procedural safeguards to protect shareholders' non-public personal information.
• All Section 16(a) filings for officers and Trustees were completed and filed in a timely manner for the fiscal year ended October 31, 2024.

Negatives

• The Annual Meeting will be held solely as a telephone conference call, preventing shareholders from attending or voting in person.
• One Interested Trustee, Mr. Tracy Maitland, attended only 50% of regular quarterly Board meetings and 43% of all Board meetings during the fiscal year ended October 31, 2024.

Risks

• The Board identifies and oversees various risks including investment risks, credit risks, liquidity risks, valuation risks, operational risks, reputational risks, regulatory risks, risks related to potential legislative changes, and the risk of conflicts of interest affecting affiliates of Advent and Guggenheim Funds.
• Uncertainty exists around the general application of state control share statutes under the 1940 Act due to recent federal and state court decisions.
• Uncertainty may also exist in how to enforce control share restrictions against beneficial owners holding shares through financial intermediaries.
• The Delaware Control Share Statute, applicable to the Fund, could limit voting rights of shareholders acquiring shares above certain thresholds (e.g., 10%, 15%, 20%, 25%, 30%, or a majority) unless approved by two-thirds of non-interested shareholders.

Future Outlook

The filing primarily details the upcoming Annual Meeting and governance matters, with no explicit forward-looking financial guidance or strategic outlook beyond the routine election of trustees and the continuation of current board structure and risk oversight practices. The Board intends to continue monitoring developments related to the Delaware Control Share Statute.

Management Comments

• The Board of Trustees (the Board) of the Fund, including the Independent Trustees, unanimously recommends that you vote FOR the nominees of the Board of the Fund.
• The Board has reviewed the qualifications and backgrounds of the Boards nominees for the Fund and believes that they are experienced in overseeing investment companies and are familiar with the Fund, their investment strategies and operations and the investment advisor of the Fund.
• Holding the Annual Meeting virtually by telephone conference call provides expanded access, reduced environmental impact and cost savings for shareholders and the Fund.
• The Fund intends for the telephone conference call meeting format to provide shareholders a similar level of transparency to the traditional in person meeting format.

Industry Context

The decision to hold the Annual Meeting virtually via telephone conference call aligns with a broader industry trend among publicly traded companies to leverage technology for shareholder meetings, driven by factors such as cost efficiency, environmental considerations, and expanded accessibility. This approach has become more common, particularly since the COVID-19 pandemic, though some investors still prefer in-person engagement for direct interaction. The discussion of the Delaware Control Share Statute highlights ongoing legal and regulatory complexities within the closed-end fund industry regarding corporate control and shareholder rights, reflecting a dynamic landscape where state laws and federal regulations (like the 1940 Act) intersect.

Comparison to Industry Standards

• The Fund's board structure, with a supermajority of Independent Trustees (7 out of 8), aligns with or exceeds best practices for corporate governance in the investment fund industry, which often recommend a strong independent board presence to ensure shareholder interests are prioritized.
• The establishment of dedicated Audit and Nominating and Governance Committees, composed solely of Independent Trustees, is a standard governance practice for publicly traded funds, comparable to structures seen in other closed-end funds and investment companies.
• The compensation for Independent Trustees, ranging from $94,500 to $99,500 for the fiscal year ended October 31, 2024, is within the typical range for board members of similar-sized closed-end funds, reflecting compensation for oversight responsibilities without direct involvement in investment management.
• The virtual meeting format, while offering benefits, contrasts with some industry preferences for hybrid or in-person meetings that allow for more direct shareholder engagement, as seen with companies like BlackRock or Vanguard funds which may offer more varied meeting formats.
• The disclosure of the Delaware Control Share Statute and the Board's stance on not exempting acquisitions is a specific regulatory compliance point relevant to Delaware-domiciled closed-end funds, distinguishing it from funds domiciled in other states or those that have opted out of such statutes.

Corporate Governance

Related Party Transactions

• Mr. Tracy V. Maitland is an Interested Trustee due to his position as an officer of Advent Capital Management, LLC (the Fund's investment advisor) and its affiliates. He receives no compensation from the Fund but is compensated by Advent.
• PWC did not bill any non-audit fees to Advent or its affiliates providing ongoing services to the Fund for the fiscal years ended October 31, 2023, and October 31, 2024.

Stakeholder Impact

• Shareholders will participate in the annual meeting virtually to elect trustees and vote on other matters. Their voting rights are subject to the Delaware Control Share Statute, which could impact large acquisitions. The virtual format offers expanded access but removes in-person interaction.
• Management and the Board will see continuity in governance and oversight with the re-election of trustees, maintaining the current board structure and committee functions.
• The Investment Advisor (Advent Capital Management, LLC) continues its role in managing the Fund's assets.
• The Auditors (PWC) continue to provide audit and tax services to the Fund.

Next Steps

• Shareholders are urged to submit proxy voting instructions prior to the Annual Meeting.
• Shareholders must register for the telephonic Annual Meeting by September 22, 2025, to participate.
• The Fund will hold its Annual Meeting on September 24, 2025, to elect Class I Trustees and transact other business.
• The Board intends to continue monitoring developments relating to the Delaware Control Share Statute.
• Shareholder proposals for the 2026 annual meeting must be submitted by specific deadlines (April 17, 2026, for Rule 14a-8 inclusion; April 27, 2026, to May 27, 2026, for other proposals).

Key Dates

Recommendation

This filing is a routine definitive proxy statement for an annual meeting, primarily focused on the re-election of existing trustees and standard corporate governance disclosures. It does not contain any new financial performance data, strategic shifts, or material events that would typically drive significant share price movement. The governance structure appears sound with a strong independent board. The re-election of trustees is a standard procedural item. Therefore, the filing provides no new information to warrant a change in investment stance, suggesting a 'hold' recommendation for existing investors.

Keywords

Advent Convertible and Income Fund, AVK, Proxy Statement, Annual Meeting, Trustee Election, Corporate Governance, SEC Filing, Closed-End Fund, Investment Fund, Shareholder Meeting, Board of Trustees, Risk Management, Control Share Statute