DEFR14A: MainStay CBRE Global Infrastructure Megatrends Term Fund Faces Proxy Contest from Saba Capital

MainStay CBRE Global Infrastructure Megatrends Term Fund is holding its annual shareholder meeting on September 27, 2024, amidst a proxy contest initiated by Saba Capital, who is seeking to elect their own nominee to the Board of Trustees.

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, leading to a proxy contest.
• The Board of Trustees recommends voting FOR the Fund's nominees and AGAINST the Dissident's nominee.
• The Board is opposed to the nomination of the Dissident Nominee as it does not believe the nomination is in the best interest of the Fund or its shareholders.
• The fund will change its name to NYLI CBRE Global Infrastructure Megatrends Term Fund effective August 28, 2024.
• The Board has fixed July 19, 2024 as the record date for the determination of shareholders entitled to notice of, and to vote at, the Meeting.
• The Board has taken action to allow shareholders to exceed ownership thresholds that would typically trigger restrictions under the Delaware Control Share Statute.

Sentiment

Score: 6

Explanation: The document is primarily informational, outlining the details of the upcoming shareholder meeting and the proxy contest. The tone is professional and neutral, although the Board clearly expresses its opposition to the Dissident's nominee. The presence of a proxy contest introduces some uncertainty, but the overall sentiment is moderately positive due to the Board's proactive approach to governance.

Positives

• The Board of Trustees is actively engaged in overseeing the Fund's operations and protecting shareholder interests.
• The Board is recommending experienced and qualified nominees for election as Class II Trustees.
• The Board is recommending the ratification of a well-established independent registered public accounting firm.
• The Board has taken action to allow shareholders to exceed ownership thresholds that would typically trigger restrictions under the Delaware Control Share Statute.

Negatives

• Saba Capital's proxy contest introduces uncertainty and potential disruption to the Fund's operations.
• Saba regularly seeks to cause closed-end funds to engage in actions which can result in adverse consequences for long-term investors.
• The Fund is incurring significant expenses related to the proxy solicitation.

Risks

• The outcome of the proxy contest could result in changes to the Board of Trustees and potentially alter the Fund's investment strategy.
• Actions by Saba Capital could lead to adverse consequences for long-term investors.
• Failure to achieve a quorum at the Annual Meeting could necessitate adjournment and additional solicitation efforts.

Future Outlook

The document outlines the upcoming Annual Meeting and the matters to be voted on, but does not provide specific forward-looking statements regarding the Fund's performance or future strategy beyond the election of trustees and ratification of the auditor.

Management Comments

• The Board believes that the Class II Trustee nominees are experienced in overseeing an investment company and are familiar with the Fund and its manager and subadvisor.
• The Board recommends that shareholders vote FOR the Class II Trustee nominees.
• The Board is unanimously OPPOSED to the nomination of the Dissident Nominee as it does not believe the nomination is in the best interest of the Fund or its shareholders.

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 engaging in such activities across 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 fund governance.
• The use of an audit committee and other specialized committees is standard practice for overseeing fund operations and risk management.
• The disclosure of trustee compensation and beneficial ownership is consistent with regulatory requirements and industry norms.
• The engagement of a proxy solicitation firm is common in contested situations to ensure adequate shareholder participation.

Stakeholder Impact

• Shareholders will be directly impacted by the outcome of the trustee election.
• The Fund's investment advisor and subadvisor could be affected by changes in the Board's composition.
• Employees of the Fund and its service providers may experience uncertainty during the proxy contest.

Next Steps

• Shareholders should review the Proxy Statement and vote using the WHITE proxy card.
• The Fund will hold its Annual Meeting on September 27, 2024.
• The Board will continue to oversee the Fund's operations and address any issues arising from the proxy contest.

Key Dates

Keywords

proxy contest, annual meeting, Saba Capital, Board of Trustees, trustees, KPMG, shareholders, investment fund, MainStay, nominees