DEFC14A: Saba Capital Launches Proxy Fight to Shake Up Neuberger Berman Municipal Fund

Saba Capital is seeking shareholder support to elect its nominee, Paul Kazarian, to the board of Neuberger Berman Municipal Fund in an effort to address the fund's trading discount.

Summary

• Saba Capital Management is soliciting proxies to elect its nominee, Paul Kazarian, to the board of directors of Neuberger Berman Municipal Fund Inc.
• Saba believes that the fund's board needs fresh perspectives to address the fund's trading discount to net asset value.
• The annual meeting is scheduled to be held at 1290 Avenue of the Americas, New York, New York 10104, but the exact date and time have not yet been disclosed by the Fund.
• Saba intends to supplement the proxy statement with the date and time of the Annual Meeting and the record date for determining shareholders entitled to vote once the Fund publicly discloses such information.
• As of May 29, 2024, Saba may be deemed to beneficially own 2,111,484 common shares of the Fund, representing 7.13% of the outstanding common shares.
• The election of directors requires the affirmative vote of a majority of the outstanding shares of the Fund entitled to vote at the annual meeting.
• Saba is asking shareholders to vote FOR its nominee on the GOLD proxy card.
• Campaign Management has been retained to provide solicitation and advisory services in connection with this solicitation for a fee not to exceed $20,000.
• The estimated cost of the proxy solicitation is approximately $90,000, which will be borne by Saba.
• Saba is not seeking reimbursement of these costs from the Fund.

Sentiment

Score: 7

Explanation: The document is assertive and confident in its approach to improving the fund's performance. While it highlights a problem (the trading discount), it presents a clear solution (electing their nominee) and expresses optimism about the potential for positive change. The tone is professional and persuasive, suggesting a positive outlook for shareholders if Saba's plan is implemented.

Positives

• Saba Capital's involvement could lead to a reduction in the Fund's trading discount, potentially increasing shareholder value.
• Paul Kazarian has extensive experience in closed-end funds and investment management, which could benefit the Fund's governance and investment strategies.
• Saba is bearing the costs of the proxy solicitation, not the Fund.

Negatives

• There is no assurance that Kazarian will be able to implement changes without the support of other board members.
• The Fund's management may resist Saba's efforts, leading to a protracted and costly proxy fight.
• The outcome of the vote is uncertain, and Saba's nominee may not be elected.

Risks

• The Fund's management may take actions to thwart Saba's efforts, such as delaying the annual meeting or changing the voting rules.
• The proxy fight could distract management from focusing on the Fund's investment performance.
• If Kazarian is elected but unable to effect change, shareholder disappointment could lead to further discount widening.

Future Outlook

Saba intends to supplement the proxy statement with the date and time of the Annual Meeting and the record date for determining shareholders entitled to vote once the Fund publicly discloses such information. Saba intends to deliver this Proxy Statement and the accompanying Form of GOLD Proxy Card to holders of at least the percentage of the Funds voting Shares required under applicable law to elect the Nominee at the Annual Meeting and otherwise intends to solicit proxies or votes from shareholders of the Fund in support of the nominations of the Nominee.

Management Comments

• We believe that the board of directors of the Fund (the Board) needs fresh ideas and perspectives to address the Funds trading discount; we have therefore nominated a highly qualified and independent Nominee for election to the Board, whose election, we believe, will send a strong message that the Funds shareholders are not satisfied with the Funds management and their inability to address the Funds significant discount to net asset value.
• We are convinced that NOW is the time to take action to close the Funds discount and we urge shareholders to elect the Nominee, who we believe, if elected, would serve the best interests of all shareholders.

Industry Context

Activist investors like Saba Capital often target closed-end funds trading at a discount to their net asset value, seeking to unlock value through board representation, fund restructuring, or other strategic changes. This proxy fight is part of a broader trend of increased shareholder activism in the investment management industry.

Comparison to Industry Standards

• Saba Capital's strategy of targeting closed-end funds with discounts is common in the activist investing world; similar campaigns have been launched by firms like Bulldog Investors and Karpus Management.
• The estimated cost of $90,000 for the proxy solicitation is relatively standard for this type of campaign; costs can vary depending on the size of the fund and the intensity of the solicitation efforts.
• Saba's beneficial ownership of 7.13% is a significant stake, providing them with a strong base of support for their nominee.

Stakeholder Impact

• Shareholders could benefit from a reduction in the Fund's trading discount.
• The Fund's existing board and management may face pressure to address the trading discount.
• The outcome of the proxy fight could impact the Fund's investment strategy and overall direction.

Next Steps

• Shareholders need to vote using the GOLD proxy card.
• Saba will supplement the proxy statement with the date and time of the Annual Meeting and the record date once the Fund discloses them.
• The Annual Meeting will be held where shareholders will vote on the election of directors.

Key Dates

Keywords

proxy solicitation, Saba Capital, Neuberger Berman Municipal Fund, board of directors, Paul Kazarian, trading discount, annual meeting, shareholder vote, closed-end fund, investment management