DEFA14A: FINS: Proxy Advisors Back New Investment Advisory Agreement

Leading independent proxy advisory firms ISS, Glass Lewis, and Egan-Jones unanimously recommend Angel Oak Financial Strategies Income Term Trust shareholders approve the new investment advisory agreement.

Summary

• All three leading independent proxy advisory firms—Institutional Shareholder Services Inc. (ISS), Glass Lewis & Co (Glass Lewis), and Egan-Jones Proxy Services (Egan-Jones)—unanimously recommend that shareholders vote FOR the new investment advisory agreement.
• The proxy advisors also recommend voting FOR any adjournments of the Special Meeting if necessary to gather more votes or establish a quorum.
• The Special Meeting of shareholders is scheduled for September 26, 2025.
• Shareholders as of the record date of August 20, 2025, are entitled to vote.
• The Board of Directors recommends that shareholders vote FOR both proposals.
• The new agreement is a consequence of Brookfield's planned acquisition of a majority interest in Angel Oak Companies, LP, the parent of Angel Oak Capital Advisors, LLC (the Adviser).
• The Brookfield transaction is expected to close by September 30, 2025.
• The transaction is not expected to result in any material change in the day-to-day management and operations of the Fund or any increase in fees.
• The closing of the Brookfield transaction would be deemed a change of control under the Investment Company Act of 1940, automatically terminating the existing advisory agreement.
• Following the transaction, the existing management team of the Angel Oak Companies will continue to independently manage the day-to-day business of the Angel Oak Companies and the Adviser.

Sentiment

Score: 7

Explanation: The unanimous recommendation from all three major independent proxy advisory firms (ISS, Glass Lewis, Egan-Jones) for the new investment advisory agreement is a strong positive signal for the Fund's proposed corporate action. The associated change of control due to Brookfield's acquisition is framed as having no material impact on management, operations, or fees for the Fund.

Positives

• Unanimous recommendation from all three leading independent proxy advisory firms (ISS, Glass Lewis, Egan-Jones) to vote FOR the new investment advisory agreement.
• The new investment advisory agreement is not expected to result in any material change in the day-to-day management and operations of the Fund.
• No increase in fees is expected as a result of the new agreement or the underlying Brookfield transaction.
• The existing management team will continue to independently manage the Angel Oak Companies and the Adviser post-acquisition, ensuring continuity.

Risks

• The closing of the Brookfield acquisition is subject to certain conditions, and there is no assurance that the transaction will be completed as planned or that the necessary conditions will be satisfied.
• Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or level of performance to be materially different from those expressed or implied.
• Risks include the performance of the portfolio of securities the Fund holds, the price at which the Fund's securities trade in the public markets, and other factors discussed in the Fund's periodic SEC filings.

Future Outlook

The Brookfield acquisition of a majority interest in Angel Oak Companies, LP is expected to close by September 30, 2025. This transaction is not anticipated to materially alter the day-to-day management and operations of the Fund or lead to any fee increases. The existing management team is expected to continue independently managing the Angel Oak Companies and the Adviser.

Management Comments

• The Board recommends that shareholders vote FOR Proposal 1, which is the proposal to approve the new investment advisory agreement, and vote FOR Proposal 2, which is the proposal to approve any adjournments of the Special Meeting, if necessary or appropriate, for the purpose of soliciting additional proxies.
• YOUR VOTE IS IMPORTANT.

Industry Context

The unanimous recommendation from leading proxy advisory firms (ISS, Glass Lewis, Egan-Jones) is a significant endorsement, often influencing institutional investors and retail shareholders in corporate governance matters. Such recommendations are standard practice for major corporate actions like changes in investment advisory agreements, especially those triggered by a change of control. The acquisition by Brookfield, a major global asset manager, reflects ongoing consolidation and strategic partnerships within the financial services and asset management industry.

Corporate Governance

Related Party Transactions

• Approval of a new investment advisory agreement with Angel Oak Capital Advisors, LLC, necessitated by the acquisition of a majority interest in Angel Oak Companies, LP (parent of the Adviser) by Brookfield, which constitutes a change of control.

Stakeholder Impact

• Shareholders: Asked to vote on a critical agreement; continuity of investment management services and fee structure is expected.
• Employees (of Adviser): Existing management team will continue to independently manage the Angel Oak Companies and the Adviser.
• Customers (Fund investors): Expected continuity of investment strategy and management without fee increases.

Next Steps

• Shareholders are to vote on the new investment advisory agreement and potential adjournments at the Special Meeting on September 26, 2025.
• Completion of Brookfield's acquisition of a majority interest in Angel Oak Companies, LP is expected by September 30, 2025.

Key Dates

Keywords

Angel Oak Financial Strategies Income Term Trust, FINS, Investment Advisory Agreement, Proxy Vote, ISS, Glass Lewis, Egan-Jones, Brookfield, SEC Filing, Closed-End Fund, Financial Sector Debt, Corporate Governance