DEFA14A: Neuberger Berman Municipal Fund Inc. Urges Stockholders to Vote White Proxy Card Amidst Saba Capital's Director Nomination

Neuberger Berman Municipal Fund Inc. is urging stockholders to vote for the re-election of its current directors using the white proxy card, amidst a challenge from Saba Capital, which has nominated its own candidate for the board.

Summary

• Neuberger Berman Municipal Fund Inc. is urging its stockholders to vote for the re-election of its current directors, Marc Gary and Martha Goss.
• The fund's board believes that Saba Capital, a hedge fund, is attempting to disrupt the fund's oversight for its own gain by nominating a director.
• The board argues that electing Saba's nominee could harm the fund and hinder its ability to generate competitive investment returns.
• Stockholders are advised to only vote using the white proxy card and disregard any gold proxy cards sent by Saba Capital.
• The fund has retained EQ Fund Solutions as its proxy solicitor to assist with the voting process.
• The board emphasizes the importance of every vote and warns that not voting will negatively impact the long-term prospects of the fund.

Sentiment

Score: 6

Explanation: The document expresses a defensive stance against activist investor Saba Capital, highlighting potential risks while reaffirming commitment to stockholders. The sentiment is neutral to slightly positive, focusing on protecting existing value rather than announcing new growth.

Positives

• The Board of Directors is committed to safeguarding stockholders' investments and protecting their interests.
• The current directors offer specialized expertise and a comprehensive perspective on closed-end fund management issues.
• The incumbent Board nominees are experienced, knowledgeable, and independent of management.
• The fund has retained EQ Fund Solutions as its proxy solicitor.

Negatives

• Saba Capital's nomination of a director is viewed as a potential disruption to the fund's oversight.
• The board believes that Saba's nominee would only serve its own interests and could harm the fund.
• Not voting is seen as potentially benefiting Saba and negatively impacting the fund's long-term prospects.

Risks

• Electing Saba's nominee could jeopardize the balance of skills across the board and undermine the performance of the fund.
• Saba's influence on the board could lead to decisions that prioritize its own interests over those of all stockholders.
• Failure to vote or returning Saba's proxy card could inadvertently support Saba's nominee.

Future Outlook

The Board of Directors is committed to creating sustainable, long-term performance in pursuit of the Fund's stated investment objective for all stockholders.

Management Comments

• 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.
• Your Funds Board believes that if Sabas nominee is elected, he will harm the Fund and may hinder its ability to generate competitive investment returns in the future.

Industry Context

Hedge fund activism in closed-end funds is a common strategy where firms like Saba Capital seek to influence fund management for potential short-term gains, often leading to proxy contests and potential board changes.

Comparison to Industry Standards

• Proxy fights are a common occurrence in the investment management industry, particularly with closed-end funds.
• Activist investors like Saba Capital often target funds they believe are undervalued or poorly managed, seeking to implement changes that could increase shareholder value.
• Similar situations have occurred with other funds managed by firms like BlackRock and PIMCO, where activist investors have sought board representation or changes in investment strategy.

Stakeholder Impact

• The outcome of the proxy vote will directly impact the composition of the board and potentially influence the fund's investment strategy.
• Stockholders' investments could be affected by the board's decisions and the fund's performance.
• Employees may be indirectly affected by changes in the fund's management or strategy.

Next Steps

• Stockholders are urged to vote using the WHITE proxy card.
• The Fund will continue to defend its current board composition.

Keywords

proxy vote, Neuberger Berman Municipal Fund, Saba Capital, board of directors, director nomination, stockholders, proxy solicitor, white proxy card, gold proxy card, fund governance