DEFA14A: MainStay CBRE Global Infrastructure Megatrends Term Fund Faces Proxy Fight with Saba Capital

NYL Investments urges shareholders to vote for its nominees Alan Latshaw and Karen Hammond amidst a proxy battle with Saba Capital, who are seeking to replace an experienced Trustee with their own nominee at the September shareholder meeting.

Summary

• NYL Investments and Saba Capital will be distributing proxy materials to shareholders of MainStay CBRE Global Infrastructure Megatrends Term Fund (MEGI) for the September shareholder meeting.
• The Board of Trustees is seeking the re-election of Alan Latshaw and Karen Hammond.
• Saba Capital is attempting to replace one of the Fund's Trustees with their own nominee.
• The Board opposes Saba's nominee, believing it is not in the best interest of the Fund or its shareholders.
• The Board highlights its actions to protect shareholder investments, including a 15% increase to the Fund's annual distribution rate in August 2023, raising it from $1.30 to $1.50 per share.
• The Board emphasizes that its nominees are independent and have a fiduciary duty to act in the best interest of all shareholders.
• Saba's nominee is an officer of Saba and represents Saba's interests, without a fiduciary duty to the Fund's shareholders.
• The Board claims Saba regularly seeks actions that can adversely affect long-term investors in closed-end funds.
• Shareholders are asked to vote FOR the Fund's nominees on the WHITE proxy card.
• The Board and Fund management are committed to enhancing long-term shareholder value and improving the relationship between the Fund's Net Asset Value (NAV) and its market price.

Sentiment

Score: 6

Explanation: The document presents a defensive stance against activist pressure, highlighting positive actions taken by the board while cautioning against the potential negative impacts of the activist's involvement. The sentiment is neutral to slightly positive, focusing on protecting shareholder value.

Positives

• The Board has taken actions to protect shareholder investments, including increasing the annual distribution rate by 15% in August 2023.
• The Fund has delivered high current income by paying monthly distributions since its inception in 2021.
• The Board's nominees are independent and have a fiduciary duty to act in the best interest of all shareholders.
• The Board and Fund management are committed to enhancing long-term shareholder value.

Negatives

• Saba Capital is attempting to replace one of the Fund's Trustees with their own nominee, potentially disrupting the Fund's strategy.
• The Board believes Saba's nominee is not in the best interest of the Fund or its shareholders.
• Saba regularly seeks to cause closed-end funds to engage in actions which can result in adverse consequences for long-term investors.

Risks

• The proxy fight with Saba Capital could create uncertainty and potentially impact the Fund's strategy.
• Saba's actions could lead to adverse consequences for long-term investors.
• Failure to re-elect the Board's nominees could result in a change in the Fund's direction.

Future Outlook

The Board and Fund management are committed to continued thoughtful actions designed to enhance long-term shareholder value and improving the relationship between the Funds Net Asset Value (NAV) and its market price.

Management Comments

• The Board is unanimously OPPOSED to the nomination of Saba's Nominee as it does not believe the nomination is in the best interest of the Fund or its shareholders.
• We ask shareholders to join us in protecting their investment in the Fund by voting FOR the Funds nominees on the WHITE proxy card.

Industry Context

Activist hedge funds like Saba Capital often target closed-end funds to unlock value through various strategies, such as forcing tender offers or liquidations. This proxy fight is another example of such activity in the investment management industry.

Comparison to Industry Standards

• Closed-end funds are frequently targeted by activist investors seeking to narrow the discount between the market price and the net asset value (NAV).
• Saba Capital's involvement is consistent with its history of engaging in activist campaigns within the closed-end fund space, similar to actions taken against funds managed by Nuveen and BlackRock.
• The 15% increase in the distribution rate is a proactive measure by the Board to potentially appease shareholders and demonstrate a commitment to delivering value, a strategy often seen in response to activist pressure.

Stakeholder Impact

• Shareholders are directly impacted by the outcome of the proxy vote, which will determine the composition of the Board of Trustees.
• The Board's actions aim to protect and enhance shareholder value.
• The proxy fight could create uncertainty for shareholders.

Next Steps

• Shareholders will receive proxy materials from both NYL Investments and Saba Capital.
• Shareholders are asked to vote on the election of Trustees at the September shareholder meeting.

Key Dates

Keywords

proxy fight, Saba Capital, MainStay CBRE Global Infrastructure Megatrends Term Fund, Board of Trustees, shareholder, nominee, distribution rate, NYL Investments, MEGI, fund