DEFA14A: Nuveen Preferred & Income Term Fund (JPI) Faces Shareholder Vote on Term Elimination

Nuveen is seeking shareholder approval to eliminate the term and convert the Nuveen Preferred & Income Term Fund (JPI) to a perpetual fund, offering shareholders the option to remain invested or tender their shares at NAV.

Summary

• Nuveen is soliciting shareholder votes for the Nuveen Preferred & Income Term Fund (JPI).
• A key proposal involves eliminating the fund's term, currently scheduled to end on August 31, 2024, and converting it into a perpetual fund.
• If approved, shareholders can either remain invested in JPI or tender their shares at NAV on or before August 31, 2024.
• If the fund continues as perpetual and remaining assets exceed $70 million, Nuveen will waive 50% of its net management fees for the first year.
• Nuveen encourages financial professionals to inform advisors and clients about the proposal and its implications.

Sentiment

Score: 7

Explanation: The document presents a balanced view, outlining both the benefits and risks of the proposed changes. The sentiment is moderately positive due to the potential for continued income and liquidity options for shareholders.

Positives

• Shareholders gain liquidity at NAV if the proposal passes.
• Shareholders can continue to invest in preferreds and earn high levels of QDI-eligible income if they choose to remain invested.
• Nuveen will waive 50% of its net management fees for the first year if the fund continues as perpetual with assets greater than $70 million.

Risks

• Closed-end fund shares are subject to investment risk, including the possible loss of the entire principal amount.
• Common shares frequently trade at a discount to their NAV.
• Historical distribution sources have included net investment income, realized gains, and return of capital.

Future Outlook

If the proposal passes, JPI will become a perpetual fund, offering shareholders continued investment in preferreds or the option to tender shares at NAV.

Management Comments

• Nuveen recommends and JPI's Board has approved a proposal to eliminate the term and convert the fund to perpetual giving shareholders the choice to remain invested or seek liquidity at NAV.
• Nuveen emphasizes that clients will have liquidity at NAV even if the proposal passes.

Industry Context

This announcement reflects a trend in the investment management industry where closed-end funds are considering converting to perpetual structures to provide ongoing investment options and manage fund size.

Comparison to Industry Standards

• Other closed-end funds managed by firms like BlackRock, PIMCO, and Eaton Vance have also considered or implemented similar term elimination proposals.
• The 50% management fee waiver is a competitive incentive, as other firms have offered similar concessions to gain shareholder approval for fund restructuring.

Stakeholder Impact

• Shareholders: Impacted by the choice to remain invested or tender shares at NAV.
• Advisors: Need to inform clients about the proposal and its implications.
• Nuveen: Potential for continued management of the fund as a perpetual entity.

Next Steps

• Shareholder vote on the proposal to eliminate the term and convert JPI to a perpetual fund.
• Shareholders to decide whether to remain invested or tender their shares at NAV on or before August 31, 2024.

Key Dates

Keywords

Nuveen Preferred & Income Term Fund, JPI, shareholder vote, term elimination, perpetual fund, NAV, liquidity, preferreds, QDI-eligible income, management fees