DEFA14A: Nuveen Preferred & Income Term Fund Urges Shareholders to Vote for Term Proposal

Nuveen Preferred & Income Term Fund is urging shareholders to vote FOR the Term Proposal to eliminate the fund's scheduled termination date and provide shareholders with the option to continue their investment or exit at net asset value.

Summary

• Nuveen Preferred & Income Term Fund (JPI) is asking shareholders to vote for the Term Proposal at the Annual Meeting on April 12, 2024.
• The Term Proposal aims to eliminate the fund's term structure and the scheduled termination date of August 31, 2024.
• Voting for the proposal allows shareholders to either continue investing in the fund with a management fee discount or exit up to 100% of their investment via a tender offer at net asset value.
• A dissident shareholder opposes the Term Proposal, which the fund believes threatens shareholders' choice to maintain their investment.
• The board recommends voting FOR the Term Proposal on the WHITE proxy card to protect shareholders' options.

Sentiment

Score: 7

Explanation: The document conveys a positive sentiment towards the Term Proposal, emphasizing the benefits for shareholders. However, the mention of a dissident shareholder introduces an element of uncertainty.

Positives

• Shareholders gain the option to continue investing in JPI as a perpetual fund.
• A management fee discount will be applied if the fund converts to a perpetual fund.
• Shareholders have the option to exit their investment at net asset value via a tender offer.
• The Term Proposal provides flexibility for shareholders to choose the best path for their financial goals.

Negatives

• A dissident shareholder is opposing the Term Proposal, potentially limiting shareholder choice.
• If the Term Proposal is not approved, the fund will terminate on or before August 31, 2024.

Risks

• Failure to approve the Term Proposal will result in the fund's termination on or before August 31, 2024.
• The dissident shareholder's opposition could influence the outcome of the vote.

Future Outlook

The future of the fund depends on the outcome of the shareholder vote on the Term Proposal. If approved, the fund will convert to a perpetual fund with a management fee discount. If not approved, the fund will terminate on or before August 31, 2024.

Management Comments

• The board recommends voting FOR the Term Proposal to protect shareholders' options.
• The proposal is a clear win-win for all shareholders.

Industry Context

Term funds are designed to liquidate after a set period, returning capital to investors. The trend to remove the term structure is becoming more common as fund managers seek to retain assets and continue generating fees. Dissident shareholders often oppose such changes if they believe they can extract more value through other means, such as forcing a liquidation at a premium to the current market price.

Comparison to Industry Standards

• Several closed-end funds have considered or implemented similar proposals to eliminate their term structure.
• BlackRock and Eaton Vance have sponsored similar proposals for their term funds.
• The management fee discount offered as part of the Term Proposal is a common incentive to encourage shareholder approval.

Stakeholder Impact

• Shareholders will be impacted by the outcome of the vote, either gaining the option to continue investing or receiving net asset value for their shares.
• The fund's management will be impacted by the decision to continue managing the fund as a perpetual entity or overseeing its termination.

Next Steps

• Shareholders need to vote on the Term Proposal before the Annual Meeting on April 12, 2024.
• The fund will proceed with either converting to a perpetual fund or terminating based on the outcome of the vote.

Key Dates

Keywords

Term Proposal, Nuveen Preferred & Income Term Fund, Shareholder Vote, Tender Offer, Net Asset Value, Perpetual Fund, Management Fee Discount, Termination Date, Proxy, JPI