DEFA14A: MainStay CBRE Global Infrastructure Megatrends Term Fund Urges Shareholders to Reject Saba's Proxy and Vote White Card

MainStay CBRE Global Infrastructure Megatrends Term Fund is urging shareholders to reject Saba Capital's proxy and vote using the white card to maintain the fund's long-term stability and investment approach.

Summary

• MainStay CBRE Global Infrastructure Megatrends Term Fund (MEGI) has scheduled its 2024 Annual Meeting of Shareholders for September 27, 2024.
• The Fund's Board of Trustees recommends shareholders vote in favor of all proposals on the WHITE card.
• The recommendation is to reject Saba Capital's (Saba) proxy, as Saba is described as a hedge fund focused on short-term profits.
• The Fund believes Saba's initiatives could impede the Fund's ability to deliver income and long-term performance.
• The Fund warns that if Saba's solicitation is successful, it could disrupt MEGI's operation and lead to a liquidity event that could adversely impact the Fund.
• The Fund argues that Saba offers no long-term plan and its nominee is likely to propose a liquidity event that could necessitate negative changes in the Fund's investment approach and create negative tax implications.
• The Fund believes a liquidity event would likely reduce the Fund's returns to the detriment of long-term shareholders, based on CBRE's global infrastructure equity market outlook and expectations of stable or declining interest rates.
• The Fund emphasizes the existing Board's experience and warns that replacing any Trustees will jeopardize the balance of skills and undermine the performance of the Board and the Fund's management.
• Shareholders who have already voted using a gold proxy card can change their vote by signing and returning the WHITE proxy card.
• Shareholders are encouraged to vote their proxy, and questions can be directed to EQ Fund Solutions at XXX-XXX-XXXX.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly negative. While the fund is actively defending its position, the announcement highlights potential risks associated with Saba's involvement.

Positives

• The existing Board offers years of pertinent fund governance, investment management, and closed-end fund experience.
• The Fund is actively communicating with shareholders to ensure they understand the implications of the proxy vote.
• The Fund is providing a clear recommendation to vote the WHITE card.

Negatives

• Saba's involvement could lead to a disruptive liquidity event.
• Saba's short-term focus may conflict with the Fund's long-term goals.
• Potential negative tax implications for shareholders if Saba's nominee is successful.

Risks

• The risk of Saba's solicitation being successful and disrupting the Fund's operations.
• The risk of a liquidity event being proposed that could adversely impact the Fund and its shareholders.
• The risk of negative tax implications and reduced distributions to shareholders.

Future Outlook

The document expresses concern that Saba's involvement could negatively impact the fund's future performance and shareholder returns.

Management Comments

• The Funds Board of Trustees recommends that you vote in favor of all proposals on the WHITE card from MEGI.
• Saba is a hedge fund that has a history of implementing initiatives that are intended to generate short-term profits to the benefit of Saba and its investors.
• If Sabas solicitation is successful, it could disrupt MEGIs operation and it is likely their nominee would propose a liquidity event that could adversely impact the Fund.
• Based upon CBREs global infrastructure equity market outlook and their expectations of stable or declining interest rates, we believe a liquidity event would likely reduce the Funds returns to the detriment of long-term shareholders.
• Replacing any of the existing Trustees will jeopardize the balance of skills that the overall Board possesses and will likely undermine the performance of the Board and the Funds management.

Industry Context

This announcement reflects the ongoing activist investor activity in the closed-end fund space, where hedge funds like Saba Capital often target funds to unlock value through various strategies, sometimes at the expense of long-term investors.

Comparison to Industry Standards

• Activist investors targeting closed-end funds is a common occurrence.
• Saba Capital has a history of engaging with closed-end funds to push for changes that they believe will increase shareholder value, such as tender offers, liquidations, or changes in investment strategy.
• The fund's defense against Saba's proxy fight is typical, emphasizing the board's experience and the potential disruption caused by the activist investor's proposals.

Stakeholder Impact

• Shareholders could be impacted by changes to the Fund's investment strategy or potential tax implications.
• The Fund's management and employees could be affected by potential disruptions to the Fund's operations.

Next Steps

• Shareholders need to vote on the proxy proposals by September 27, 2024.
• The Fund will likely continue to communicate with shareholders to advocate for their position.

Key Dates

Keywords

proxy, shareholder, Saba, MEGI, MainStay CBRE Global Infrastructure Megatrends Term Fund, vote, liquidity event, Board of Trustees, investment management, infrastructure