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

NYLI CBRE Global Infrastructure Megatrends Term Fund urges shareholders to vote using the WHITE proxy card to support the current board and reject Saba Capital's nominee.

Summary

• The NYLI CBRE Global Infrastructure Megatrends Term Fund (MEGI) is facing a proxy fight from Saba Capital Management, L.P.
• MEGI's Board of Trustees recommends shareholders vote on the WHITE proxy card to support the current board.
• The board highlights its efforts to close the discount between the fund's market price and Net Asset Value (NAV).
• These efforts include approving a 15% increase to the fund's monthly distribution and renaming the fund.
• The fund was initially structured as a term trust to ensure long-term investors receive NAV upon termination.
• The board believes it can deliver attractive total returns and income.
• The fund's discount to NAV has narrowed by 42% from its low of -18.25% on December 28th, 2022, to -10.53% as of August 30, 2024.
• The board argues that adding Saba's nominee could disrupt MEGI's operations and potentially lead to a liquidity event that could adversely impact the fund.
• Shareholders who have already voted using a gold proxy card from Saba can change their vote by signing and returning the WHITE proxy card.

Sentiment

Score: 6

Explanation: The document conveys a mixed sentiment. While highlighting positive developments like the narrowing discount to NAV and increased distribution, it also expresses concern about the potential disruption from Saba Capital's involvement. The overall tone is defensive and proactive in urging shareholders to support the current board.

Positives

• The fund's discount to NAV has significantly narrowed.
• The board has approved a 15% increase to the fund's monthly distribution.
• The fund was structured as a term trust to ensure long-term investors receive NAV upon termination.

Negatives

• The fund is under attack by Saba Capital, which the board believes acts in its own self-interest.
• Adding Saba's nominee could disrupt the fund's operations.
• Saba's nominee may propose a liquidity event that could adversely impact the fund.

Risks

• The proxy fight with Saba Capital could create uncertainty and potentially disrupt the fund's operations.
• Saba's nominee may propose actions that could negatively impact long-term shareholders.
• Infrastructure market conditions could change, affecting demand for fund shares.

Future Outlook

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 and 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

• MEGI's board has been proactive in efforts to close the discount.
• Sabas proposed change to the Funds Independent trustee is not warranted.
• 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

Closed-end funds often trade at a discount to their NAV, and activist investors like Saba Capital frequently target these funds to unlock value. This proxy fight is a common occurrence in the closed-end fund space.

Comparison to Industry Standards

• The document mentions a peer group including (Tickers): ASGI, BUI, UTF, DPG, TEAF, MFD, UTG.
• The Fund's discount to NAV is trading in-line with the peer group average.

Stakeholder Impact

• Shareholders are directly impacted by the outcome of the proxy vote, which will determine the composition of the board and potentially the fund's strategy.
• The fund's investment manager is indirectly impacted as the proxy fight could influence the fund's direction and investment approach.

Next Steps

• Shareholders need to vote on the proxy proposals by the date of the Annual Meeting on September 27, 2024.

Key Dates

Keywords

proxy fight, Saba Capital, discount to NAV, term fund, infrastructure, shareholder value, MEGI, NYLI CBRE Global Infrastructure Megatrends Term Fund