DEFA14A: Neuberger Berman Funds Urges Stockholders to Vote White Proxy Card, Rejecting Saba Capital's Nominee

Neuberger Berman Municipal Fund Inc. is urging stockholders to vote for the re-election of its current directors and to reject the nominee proposed by Saba Capital Master Fund Ltd., a hedge fund.

Summary

• Neuberger Berman Municipal Fund Inc. is in a proxy battle with Saba Capital Master Fund Ltd., a hedge fund.
• The fund's board is urging stockholders to vote the WHITE proxy card to re-elect current directors Marc Gary, Martha Goss, and Michael M. Knetter.
• The board believes Saba's nominee would harm the fund and hinder its ability to generate competitive investment returns.
• The board highlights the experience and expertise of the current directors, emphasizing their independence and commitment to the best interests of all stockholders.
• The board has taken actions to enhance stockholder value, including managing distribution rates, approving discount mitigation measures, approving fund mergers, actively managing leverage structures, and making changes to investment strategies.
• The fund has retained EQ Fund Solutions as its proxy solicitor.
• Stockholders are urged not to return the GOLD proxy card sent by Saba, as it may cancel any prior vote for the fund's nominees.

Sentiment

Score: 6

Explanation: The document is defensive, aiming to persuade shareholders to vote against an activist investor's nominee. While promoting the board's experience, it also expresses concern about potential disruption, resulting in a neutral to slightly positive sentiment.

Positives

• The current directors have extensive experience and expertise in fund governance.
• The board has a history of safeguarding investments and protecting the interests of all stockholders.
• The current directors are independent of management and act in the best interests of all stockholders.
• The board has taken actions to enhance stockholder value, including managing distribution rates and approving discount mitigation measures.

Negatives

• Saba Capital's nomination of a director has created a proxy battle.
• The board believes Saba's nominee would harm the fund's performance.
• Saba is described as an opportunistic hedge fund manager focused only on its own interests.

Risks

• The election of Saba's nominee could disrupt the board's oversight and harm the fund's performance.
• The proxy battle could distract management from focusing on the fund's investment objectives.
• There is a risk that stockholders may be confused by the two proxy cards and inadvertently vote for Saba's nominee.

Future Outlook

The document focuses on the immediate proxy vote and does not provide specific forward-looking financial guidance.

Management Comments

• Your Funds Board strongly encourages you to vote the WHITE proxy card FOR your current director nominees.
• Your Funds Board believes that Saba seeks to disrupt the experienced and reliable oversight provided by your Funds Board for its own gain and does not care about impairing your Fund and limiting its long-term investment potential.
• The Board of Directors of the Fund (the Board) is unanimously urging you to vote: FOR the re-election of your Boards highly qualified and experienced current Directors.

Industry Context

This announcement reflects a common scenario in the investment management industry where activist investors like Saba Capital seek to influence the direction of closed-end funds. Proxy battles are a tool used to try and force changes in fund management, strategy, or governance.

Comparison to Industry Standards

• Proxy fights are not uncommon in the closed-end fund space, with firms like Saba Capital, Bulldog Investors, and Karpus Management frequently engaging in such activities.
• The issues raised, such as discount mitigation and fund performance, are standard concerns in the industry.
• The board's defense strategy, highlighting the experience and independence of its directors, is a typical response in these situations.

Stakeholder Impact

• The outcome of the proxy vote will impact the fund's governance and potentially its investment performance, affecting shareholders.
• The proxy battle could create uncertainty for employees of the fund manager.

Next Steps

• Stockholders need to vote on the director nominees.
• The fund will continue to solicit votes in favor of its nominees.

Keywords

proxy, directors, Saba Capital, Neuberger Berman, stockholders, fund, nominee, vote, board