DEFA14A: NYLI CBRE Global Infrastructure Megatrends Term Fund Defends Trustee Nominees Amidst Challenging Market

NYLI CBRE Global Infrastructure Megatrends Term Fund (MEGI) argues against changes to its trustees, citing their experience, active oversight, and commitment to enhancing shareholder value despite a challenging market environment.

Summary

• The document is a proxy statement defending the current board of trustees of the NYLI CBRE Global Infrastructure Megatrends Term Fund (MEGI) against proposed changes.
• It highlights the board's confidence in its ability and the investment manager's ability to deliver attractive returns and income.
• MEGI was launched into a difficult market for high-yielding infrastructure assets, but has maintained a competitive distribution rate compared to its peers.
• The fund's structure is designed to provide liquidity to shareholders at NAV at the end of its term, potentially eliminating market price discounts.
• The fund's total operating expenses and management fees are competitive.
• The board has taken actions to narrow the discount to NAV, including increasing the monthly distribution by 15% and renaming the fund to emphasize its limited-term structure.
• The board nominees have extensive experience in asset management and public accounting.
• The board has established committees to oversee various aspects of the fund's operations, including investments, risk oversight, and compliance.
• The board removed control share provisions to allow all shareholders to fully participate at shareholder meetings.
• The Nominating & Governance Committee has a policy against nominating officers and employees of shareholder groups to ensure trustees represent all shareholders' interests.
• MEGI has delivered consistent distributions since its inception in October 2021 and offers higher distribution rates than its peers.
• The fund's discount to NAV has narrowed by 7.7% from its low in December 2022 and is trading in-line with the peer group average.
• The fund's management fee and total net expenses are in-line with the peer group.
• The independent trustees are highly engaged and have significant industry experience.
• Each of MEGI's independent trustees is significantly invested in the NYLI Group of Funds, with each independent trustee committing to investing in excess of $100,000 across the fund family.

Sentiment

Score: 7

Explanation: The document presents a positive outlook on the fund's performance and governance, emphasizing the board's commitment to shareholder value and the fund's competitive position within its peer group. However, it acknowledges the challenging market environment and the fund's short operating history, which tempers the overall sentiment.

Positives

• MEGI has a limited-term structure designed to benefit long-term shareholders.
• The fund offers competitive total expenses.
• MEGI has a dedicated investor relations team actively engaging with shareholders.
• The fund increased its monthly distribution by 15% in August 2023.
• MEGI's discount to NAV has narrowed.
• The board has taken anti-entrenchment actions to allow all shareholders to fully participate at shareholder meetings.
• MEGI has delivered consistent distributions since its inception in October 2021 and offers higher distribution rates than its peers.
• Each of MEGI's independent trustees is significantly invested in the NYLI Group of Funds, with each independent trustee committing to investing in excess of $100,000 across the fund family.

Negatives

• MEGI was launched into a challenging market environment for high-yielding infrastructure assets.
• The fund's short operating history is not representative of its long-term potential.

Risks

• Market volatility could impact the fund's performance and discount to NAV.
• The fund's success depends on the ability of the investment manager to deliver attractive returns.
• The fund's discount to NAV could widen if market conditions worsen or investor sentiment changes.

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 maintains confidence in its ability and the investment managers ability to deliver attractive total returns and income over the life of the Fund.
• 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.

Industry Context

The document references peer funds and industry analysts, suggesting that the fund's performance and expenses are being evaluated in the context of the broader closed-end fund industry.

Comparison to Industry Standards

• The document compares MEGI's performance, distribution rates, and expenses to a peer group of infrastructure funds, including Aberdeen Global Infrastructure Income Fund (ASGI), BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI), and Cohen & Steers Infrastructure Fund (UTF).
• MEGI's distribution rate is higher than its peers, and its expenses are in-line with the peer group.
• The document also references the ClearBridge MLP & Midstream Fund Inc. (CEM) and its experience with Saba Capital's activism and a subsequent tender offer, using it as a case study to illustrate the potential impact of such events on a fund's discount to NAV.

Stakeholder Impact

• The document emphasizes the board's commitment to enhancing shareholder value.
• The fund's distribution policy and limited-term structure are designed to benefit shareholders.
• The board's oversight of the fund's operations aims to protect the interests of all stakeholders.

Key Dates

Keywords

MEGI, NYLI CBRE Global Infrastructure Megatrends Term Fund, Trustees, Board of Directors, Shareholder Value, Discount to NAV, Distributions, Corporate Governance, Closed-End Fund, Infrastructure