DEFA14A: Proxy Battle Looms for NYLI CBRE Global Infrastructure Fund

NYLI CBRE Global Infrastructure Megatrends Term Fund faces a proxy contest from activist investor Saba Capital Management over board elections and a declassification proposal.

Summary

• NYLI CBRE Global Infrastructure Megatrends Term Fund is facing a proxy contest initiated by Saba Capital Management, L.P., which has taken a position in the Fund and intends to elect its nominee, Paul Kazarian, to the Board of Trustees.
• The Fund's Board of Trustees unanimously opposes Saba's nominee and urges shareholders to vote for its recommended Class II and Class III Trustee nominees using the WHITE proxy card.
• Shareholders are asked to vote on the election of two Class II Trustees (Alan R. Latshaw and Karen Hammond) to serve until the 2027 annual meeting, and three Class III Trustees (Nam Abou-Jaoud, David H. Chow, and Richard S. Trutanic) to serve until the 2028 annual meeting.
• The Board also recommends voting AGAINST Saba's non-binding proposal to declassify the Board of Trustees, citing stability benefits and the fact that only shareholders, not the Board, have the power to declassify the Board.
• In the 2024 annual meeting, no Class II Nominee received the required votes, leading to Ms. Hammond and Mr. Latshaw serving as holdover Trustees and standing for re-election.

Sentiment

Score: 5

Explanation: The filing describes a defensive posture by the Board against an activist investor. While the Board presents its arguments for stability and continuity, the existence of a proxy contest and the need to defend against a declassification proposal indicate a challenge to the current management and governance, creating uncertainty. The fact that Class II nominees failed to get elected in 2024 also suggests some underlying shareholder discontent.

Positives

• The Board emphasizes that its nominated Trustees are experienced in overseeing an investment company and are familiar with the Fund, its manager, and subadvisor.
• The Board believes its classified structure provides stability, continuity, and independence, enhancing long-term planning for the Fund.
• The Board Service Policy for Independent Trustees ensures regular review and potential rotation of long-serving trustees, with Mr. Latshaw required to tender resignation by December 31, 2026, and Mr. Trutanic by December 31, 2027, due to age or tenure limits.

Negatives

• The Fund is engaged in a proxy contest, which can be costly and distracting for management.
• Saba Capital Management, L.P. is described by the Board as regularly seeking actions that can result in adverse consequences for long-term investors in closed-end funds.
• No Class II Nominee received the required votes at the September 27, 2024, annual meeting, indicating some level of shareholder dissatisfaction or lack of consensus regarding board composition.

Risks

• The proxy contest could lead to a change in board composition that the current Board believes is not in the Fund's best interests.
• Saba's proposed declassification, if pursued by shareholders through a Declaration of Trust amendment, could alter the Fund's governance structure, which the Board argues would reduce stability and long-term planning benefits.
• Shareholder confusion due to multiple proxy cards (WHITE vs. GOLD) could lead to unintended voting outcomes.

Future Outlook

The Fund anticipates continued oversight by its Board, with a focus on stability and long-term planning, assuming the Board's nominees are elected and the declassification proposal is rejected. The Board expects to maintain its classified structure, which it believes is beneficial for the Fund's operations and investment strategy.

Management Comments

• "The Board is unanimously OPPOSED to the nomination of the Dissident Nominee."
• "Saba regularly seeks to cause closed-end funds to engage in actions which can result in adverse consequences for long-term investors."
• "The Board has reviewed the qualifications and backgrounds of the Class II and Class III Trustee nominees and believes that they are experienced in overseeing an investment company, are familiar with the Fund and its manager and subadvisor and that their election is in the Funds best interests."
• "Because classified boards are a common feature of closed-end funds about which shareholders had knowledge when purchasing shares of the Fund, and the Trustees do not have the power to declassify the Funds Board, the Board of Trustees recommends shareholders vote the WHITE proxy card AGAINST Proposal II."
• "Classified board structures are a common feature of closed-end funds, intended to provide stability, continuity, and independence, and to enhance long-term planning."
• "Only the Funds shareholders have the authority to amend the relevant provisions of the Funds Amended and Restated Agreement and Declaration of Trust necessary to implement a declassified board structure."

Industry Context

This filing highlights a common dynamic in the closed-end fund industry where activist investors, like Saba Capital Management, target funds to push for governance changes, often including declassification or liquidity events. Closed-end funds frequently employ classified boards to provide stability and deter hostile takeovers, a practice that activist investors often challenge to increase shareholder influence or unlock perceived discounts to net asset value.

Comparison to Industry Standards

• The Fund's classified board structure is explicitly stated as a "common feature of closed-end funds," aligning with a prevalent governance model in the sector.
• The Board Service Policy, requiring Independent Trustees to tender resignation by age 75 or after 15 years of service, is a governance best practice aimed at ensuring board refreshment and independence, comparable to policies seen in well-governed investment companies.
• The proxy contest itself is a standard mechanism for shareholder activism, similar to those seen at other closed-end funds targeted by Saba Capital Management, L.P. (e.g., BlackRock, Nuveen, or Eaton Vance closed-end funds), where activists seek to influence board composition or strategic direction.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders are directly impacted by the proxy vote, determining board composition and potentially the governance structure (classified vs. declassified board). The outcome could affect the Fund's long-term strategy and stability.
• Management and the Board are actively defending their positions and governance philosophy against an activist challenge.
• The Investment Manager and Subadvisor may experience continuity if the Board's slate is elected, as the Board's nominees are described as familiar with their operations.

Next Steps

• Shareholders are urged to vote using the WHITE proxy card by the Meeting Date of October 1, 2025.
• The Annual Meeting will be held on October 1, 2025, at 2 PM (Eastern Time) at the offices of New York Life Investment Management LLC.
• If the Saba Declassification Proposal is approved, shareholders seeking to amend the Declaration of Trust to declassify the Board may need to request a special meeting for that purpose.

Key Dates

Recommendation

The Fund is currently embroiled in a proxy contest with an activist investor, Saba Capital Management, L.P., over board composition and a proposal to declassify the board. This situation introduces significant uncertainty regarding the Fund's future governance and strategic direction. While the current Board emphasizes stability and long-term planning, the activist's push for declassification could lead to increased shareholder influence or potential changes in the Fund's structure, which may or may not be beneficial for all shareholders. Given the ongoing contest and the lack of immediate financial performance data in this filing, a "hold" recommendation is prudent. Investors should await the outcome of the vote and further clarity on the Fund's strategic path before making definitive buy or sell decisions. The previous failure to elect Class II trustees in 2024 also suggests some underlying shareholder sentiment that needs to be monitored.

Keywords

Proxy contest, Closed-end fund, Board of Trustees, Corporate governance, Shareholder activism, Saba Capital Management, NYLI CBRE Global Infrastructure Megatrends Term Fund, Declassification, Investment fund, SEC filing