DEFC14A: MainStay CBRE Global Infrastructure Megatrends Term Fund Faces Proxy Contest at Upcoming Annual Meeting

MainStay CBRE Global Infrastructure Megatrends Term Fund is holding its Annual Meeting of Shareholders on September 27, 2024, amidst a proxy contest initiated by Saba Capital.

Summary

• The MainStay CBRE Global Infrastructure Megatrends Term Fund will hold its Annual Meeting of Shareholders on September 27, 2024.
• Shareholders will vote on the election of two Class II Trustees and the ratification of KPMG LLP as the independent registered public accounting firm for the fiscal year ending May 31, 2025.
• Saba Capital Master Fund, Ltd. has nominated Paul Kazarian for election to the Board of Trustees, leading to a proxy contest.
• The Board of Trustees recommends voting FOR the Fund's nominees and AGAINST the Dissident's nominee.
• The Board has fixed July 19, 2024, as the record date for determining shareholders entitled to vote at the meeting.
• The Fund's name will change to NYLI CBRE Global Infrastructure Megatrends Term Fund effective August 28, 2024.
• The Fund has engaged Computershare Fund Services to assist in the distribution and solicitation of proxies, with estimated total costs between $275,000 and $325,000, plus expenses.
• As of July 19, 2024, the outstanding shares of the fund were 52,047,534.

Sentiment

Score: 6

Explanation: The document is primarily informational, outlining the details of the upcoming annual meeting and the proxy contest. The tone is professional and neutral, although there is an underlying sense of concern regarding the potential impact of Saba Capital's involvement. The Board's recommendation to vote for its nominees suggests a desire to maintain the current course of the Fund.

Positives

• The Board is actively engaged in overseeing the Fund's operations and protecting long-term investor interests.
• The Fund has a robust committee structure to oversee various aspects of its operations, including audit, contracts, investments, nominating and governance, and risk and compliance.
• The Board is recommending experienced candidates for the Class II Trustee positions.
• The Fund is providing shareholders with multiple avenues to vote, including mail, internet, phone, and in-person at the meeting.
• The Fund is waiving control share restrictions to allow shareholders to exercise full voting rights.

Negatives

• Saba Capital's involvement and nomination of a trustee could lead to actions that have adverse consequences for long-term investors.
• The proxy contest introduces uncertainty and requires the Fund to expend resources on proxy solicitation.
• The Fund is facing a contested election for the election of trustees.

Risks

• Saba Capital's actions could potentially disrupt the Fund's strategy and negatively impact shareholder value.
• The outcome of the proxy contest is uncertain and could result in changes to the Board's composition.
• The Fund's performance could be affected by the distraction and uncertainty caused by the proxy contest.

Future Outlook

The document does not provide specific forward-looking statements regarding the Fund's financial performance or investment strategy, but focuses on the upcoming Annual Meeting and the proxy contest.

Management Comments

• Kirk C. Lehneis, President: 'This Meeting is very important as Saba Capital Master Fund, Ltd. have taken a position in the Fund and the Dissident announced its intention to nominate Paul Kazarian for election to the Board of Trustees of the Fund.'
• Kirk C. Lehneis, President: 'Saba regularly seeks to cause closed-end funds to engage in actions which can result in adverse consequences for long-term investors.'
• Kirk C. Lehneis, President: 'The Board recommends that you vote FOR the Class II Trustee nominees in the enclosed WHITE proxy card.'
• J. Kevin Gao, Chief Legal Officer and Secretary: 'The Board urges you NOT to sign or return or vote any other color proxy cards sent to you by the Dissident.'

Industry Context

The proxy contest reflects a broader trend of activist investors targeting closed-end funds to unlock value or influence fund strategy. Saba Capital is known for its activism in the closed-end fund space.

Comparison to Industry Standards

• The Fund's Board structure, with a majority of independent trustees, aligns with industry best practices for corporate governance in investment companies.
• The Fund's committee structure, including Audit, Contracts, Investment, Nominating and Governance, and Risk and Compliance Oversight Committees, is typical of well-governed investment companies.
• The fees paid to KPMG for audit services appear to be within a reasonable range for a fund of this size and complexity, based on industry benchmarks.
• The Fund's engagement of a proxy solicitation firm is a common practice in contested proxy situations, similar to actions taken by other funds facing activist challenges.

Stakeholder Impact

• Shareholders will be directly impacted by the outcome of the trustee election and the ratification of the independent auditor.
• The proxy contest could affect the Fund's strategy and performance, potentially impacting shareholder returns.
• The Fund's management and employees are involved in the proxy solicitation process.
• The Fund's service providers, such as the investment manager, subadvisor, custodian, and transfer agent, are indirectly affected by the proxy contest.

Next Steps

• Shareholders should review the proxy statement and vote using the WHITE proxy card.
• The Fund will continue to solicit proxies to achieve a quorum and ensure shareholder participation.
• The Board will monitor the proxy contest and respond to any developments as necessary.
• The Fund will hold the Annual Meeting on September 27, 2024, and announce the results of the voting.

Key Dates

Keywords

proxy contest, annual meeting, Saba Capital, Board of Trustees, trustees, KPMG, shareholders, Fund