Saba is Waging a Self-Serving Campaign
Targeting the Wrong Fund at the Wrong Time
Saba is an Activist Investor with a Long and
Very Public History of Opportunistically Targeting
Closed-End Funds Without Regard for the Goals of Long-Term
Investors
Saba’s Proposal to Terminate the Fund’s
Investment Advisory Agreement Could Leave the Fund
“Orphaned” With No Investment Adviser and No Viable Future
Vote on the WHITE Proxy Card Today “FOR ALL” the Fund’s Highly
Qualified Nominees and “AGAINST” Saba’s Potentially
Devastating Proposal to Terminate the Fund’s Investment
Adviser
Pioneer Floating Rate Trust (NYSE: PHD), a registered closed-end
investment fund (the “Fund”), today announced that, in connection
with its upcoming 2020 Annual Meeting of Shareholders to be held on
September 16, 2020, the Fund is sending the following letter to
shareholders:
August 7, 2020
Dear Pioneer Floating Rate Trust Shareholder,
We are writing to you regarding this year’s upcoming Annual
Meeting of Shareholders, which as we noted in our last letter, will
be a critical one for the future of the Fund and your vote could
have a significant impact on your investment and the ability of the
Fund to remain viable and meet its investment objective.
Saba Capital Management (“Saba”), an activist investor with a
long and very public history of targeting closed-end funds to
opportunistically profit from the discount between the fund’s
trading price and its net asset value (“NAV”),1 is seeking to
replace three highly qualified, experienced, and valued members of
your Board with Saba’s hand-picked, all-male slate of proposed
nominees. In contrast to the Board’s nominees, each whom has proven
experience in overseeing the Fund as it continues to fulfill its
stated investment objective, Saba’s proposed nominees are
unfamiliar with the Fund and its investment strategies and, coming
from Saba’s nominee “bullpen,” have a history of serving as Saba’s
nominees in other proxy contests against closed-end funds. One of
Saba’s nominees serves on the boards of trustees of two of the
Fund’s competitors as a result of recent proxy contests by
Saba.
Saba is also seeking to terminate the Fund’s investment advisory
agreement with Amundi Pioneer Asset Management, Inc. Your Board
believes that such a proposal is irresponsible and potentially
devastating since it would force the Fund to initiate a costly,
risky, and uncertain process to identify and seek shareholder
approval for a qualified replacement. In addition, your Board
believes that Saba has failed to provide any credible reason why
the investment advisory agreement should be terminated and Saba’s
proposal, made without any replacement adviser being identified,
could result in the Fund being “orphaned” with no investment
adviser and no viable future.
Don’t be fooled by Saba and its attempt to have you believe its
proxy contest is intended to improve the Fund and its returns. We
believe that Saba’s proxy contest is a transparent tactic intended
to facilitate Saba’s ability to opportunistically reap a quick
profit from the temporary discount widening that occurred in
response to the financial markets’ heightened concerns about the
ongoing COVID-19 pandemic. Toward that end, we also believe that,
consistent with Saba’s past history targeting other closed-end
funds, ultimately, Saba would like to “hijack” your fund and force
a liquidity event, possibly even a complete liquidation of the
Fund, that results in all of Saba’s shares being cashed-out at a
per share price that approximates NAV, an outcome that may make the
Fund less viable and less able to meet its investment objective of
providing investors with a high level of current income.
Your Board unanimously recommends and strongly encourages you to
vote the WHITE proxy card “FOR
ALL” the Fund’s highly qualified and very experienced nominees and
“AGAINST” Saba’s proposal to terminate the Fund’s investment
advisory agreement with Amundi Pioneer.
In making these important voting decisions that could have a
critical impact on the Fund’s future and its viability, we urge you
to consider the following:
SABA HAS TARGETED THE WRONG FUND AT THE WRONG TIME
We believe that Saba’s proxy contest ignores that, across all
relevant and applicable time periods (5-yr, 3-yr, 1-yr, YTD), when
measured against its closed-end fund peers, the Fund has performed
well in executing its investment objective and mitigating its
discount to NAV.
We believe that Saba’s proxy contest, and what we believe to be
its ultimate objective, ignores the Fund’s stated investment
objective and why our long-term shareholders invested in the Fund.
The Fund’s stated investment objective is to provide investors with
a high level of current income and, as its secondary objective, the
preservation of capital to the extent consistent with its
investment objective of high current income. The Fund has
outperformed against this stated investment objective over multiple
time periods, producing income competitive with peers and superior
to those available from various other asset classes and product
structures. The Fund has also provided better downside protection
during periods of market turbulence.
As of June 30, 2020, the Fund is trading at an 8.8% discount to
its NAV, which is the total value of a fund’s assets minus the
total value of its liabilities. This discount is lower than the
Fund’s closed-end fund peers, and over longer time periods the
Fund’s discount has been in line with its peers. Additionally, your
Board not only monitors the Fund’s discount to NAV, but also takes
an active approach in considering initiatives to deliver value to
shareholders and potentially narrow the Fund’s discount.
Given the Fund’s strong execution against its investment
objective and the Board’s efforts to monitor and mitigate the
Fund’s discount, we believe that any claims from Saba that change
is needed are baseless and only intended to distract investors from
Saba’s ultimate objective – to force the Fund to pursue a liquidity
event that provides Saba with the ability to tender or liquidate
its shares at a per share price that is close to NAV.
As Saba has consistently demonstrated in dozens of campaigns
targeting other closed-end funds, it has taken advantage of a
market dislocation to build a significant position in the Fund.
Through its proxy contest, and consistent with its past history at
other funds, we believe Saba is attempting to eventually force the
Fund to pursue a liquidity event that would allow Saba to extract a
substantial short-term profit from such a position, even if such an
event could adversely impact the future viability of the Fund and
its ability to meet its investment objective.
Despite the Fund’s current competitive performance, we believe
that Saba is waging its campaign to advance its own short-term
interests that stand in stark contrast to those of the Fund’s
long-term investors. Saba has a long, publicly disclosed history of
targeting closed-end investment funds to opportunistically reap
profits from a temporary widening of a fund’s NAV discount. Unlike
most long-term investors in the Fund, Saba can hedge its exposure
to the portfolio and, therefore, Saba may not care about the Fund’s
performance at all. We have little doubt that Saba, through its
proxy contest, is not seeking to enhance the Fund’s performance or
the ability of the Fund to meet its stated investment
objective.
Saba’s founder, Boaz Weinstein, even said he sees funds’
early-2020 declines, which were, in numerous cases, largely driven
by the COVID-19 pandemic, as an opportunity to be exploited as he
believes it “will change investor behavior in terms of
voting.2”
When Saba has been able to push through its demands at other
closed-end funds, it often resulted in those funds pursuing tender
offers, open-end conversions, or other liquidity events. Almost
every publicly-disclosed settlement agreement into which Saba has
entered with a closed-end fund since 2016 contemplated some form of
liquidity event such as a tender offer or a liquidation of the fund
that resulted in Saba getting its shares cashed-out at a price
approximating NAV.3
We believe that Saba’s demands for a fund to pursue a liquidity
event are designed solely to provide Saba with a quick, one-time
payout, while leaving the fund’s remaining investors with a
weakened and less viable fund that is saddled with higher expenses.
It is important to bear in mind that, in past situations where Saba
achieved its goal of profiting from a fund’s NAV discount, it
almost always substantially reduced its investment or sold-out
completely thereafter, further proving our belief that Saba is only
concerned about its own investment returns, not the investment
goals or returns of a fund’s long-term investors.
We have little doubt that Saba is once again taking a page from
its activist investor playbook and is seeking to force the Fund to
pursue a liquidity event that provides Saba with the ability to
tender or liquidate its shares at a per share price that is close
to NAV, without any regard for the investment goals and/or returns
of the Fund’s long-term investors.
If Saba forces the Fund to pursue a liquidity event, the Fund
may be significantly weakened and no longer a viable vehicle for
investors seeking high current income.
If, consistent with its past history, Saba forces the Fund to
pursue a liquidity event such as a tender offer or a liquidation of
the Fund, this course of action could require the Fund to sell
assets into a dislocated market and incur substantial expenses.
This forced sale could leave remaining investors with a Fund that
is a shell of its former self and not able to provide investors
with the benefits of a market recovery, or with the high current
income, all while interrupting capital preservation, which the Fund
has reliably delivered. A substantial forced sale would run the
risk to the Fund and its shareholders of the Fund having to sell
assets into a dislocated and depressed market, while also incurring
the opportunity cost of not being able to fully benefit from a
market recovery in the years ahead.
Given current market conditions, we believe that Saba’s agenda
could be especially detrimental to the interests of long-term
investors in the Fund and that it is simply the wrong time to allow
an opportunistic activist investor such as Saba to pressure the
Fund to pursue some form of liquidity event just so Saba can
extract a quick, one-time payout, a payout that could adversely
impact the future viability of the Fund and its ability to meet its
stated investment objective.
Preserve your Fund’s future and its viability as a vehicle
for those investors seeking a high level of current income by
opposing Saba’s self-serving proxy contest, the three candidates
Saba handpicked from its nominee “bullpen,” and Saba’s potentially
devastating proposal to terminate the Fund’s investment advisory
agreement.
Your vote is important, no matter how many shares you
own. Your Board unanimously recommends that shareholders vote
on the WHITE proxy card “FOR
ALL” the Fund’s highly qualified and very experienced nominees, all
of whom are valued members of your Board, and “AGAINST” Saba’s
proposal to terminate the Fund’s investment advisory agreement with
Amundi Pioneer. You may also vote by phone or Internet by following
the instructions on the enclosed WHITE proxy card. Your Board encourages you to
vote each WHITE proxy card you
receive.
If you hold shares through a broker, bank, or other custodian,
you will receive voting materials from that firm. You can complete
the WHITE voting instruction
form by internet, telephone, or mail. The voting instruction form
will contain instructions on how to access and utilize those voting
methods. Since this is a contested proxy solicitation, if you do
not give voting instructions to your broker, bank, or other
custodian, pursuant to the rules of the New York Stock Exchange,
your broker, bank, or other custodian will not be able to vote your
shares with respect to the election of trustees or Saba’s proposal
to terminate the Fund’s investment advisory agreement. We urge you
to instruct your broker, bank, or other custodian to vote your
shares on the WHITE proxy
card.
If you have any questions or need assistance in voting your
WHITE proxy card or voting
instruction form, we encourage you to contact our proxy solicitor,
Okapi Partners LLC, at +1 877- 566-1922 (Toll Free).
Please do not return or otherwise vote any other proxy card
or voting instruction form sent to you by Saba—even as a protest
vote against Saba as this may cancel your prior vote for your
Board’s nominees and your vote against Saba’s proposal to terminate
the Fund’s investment advisory agreement. If you have
previously returned a proxy card or voting instruction form sent to
you by Saba, you can change your vote (i) by signing, dating and
returning the enclosed WHITE
proxy card or voting instruction form in the postage-paid envelope
provided herewith; (ii) by recording your voting instructions via
telephone or the internet following the instructions on the
enclosed WHITE proxy card or
voting instruction form; or (iii) by voting at the Annual Meeting.
Only your latest-dated vote will count.
On behalf of your Board, we thank you for your continued
support. We look forward to communicating further with you in the
coming weeks.
Sincerely,
Thomas J. Perna
Chairman of the Board of Trustees
__________________________________
1 Source: Factset Research, Inc. as of July 31, 2020
2 Boaz Weinstein Is Making Bank. He’s Not Happy That You Know
About It., Institutional Investor, Richard Teitelbaum, June 17,
2020; emphasis added
3 Source: Factset Research, Inc. as of July 31, 2020.
If you have any questions, or need
assistance
voting your WHITE proxy card, please contact:
OKAPI Partners
1212 Avenue of the Americas, 24th Floor
New York, NY 10036
Telephone for Banks, Brokers, and International
Shareholders: +1 212-297-0720
Shareholders may call toll-free (from the U.S.
and Canada): +1 877-566-1922
Email: info@okapipartners.com
About Pioneer Floating Rate Trust
Pioneer Floating Rate Trust is an NYSE listed closed-end fund
that seeks a high level of current income. It also seeks capital
preservation as a secondary objective to the extent consistent with
its primary objective.
About Amundi Pioneer Asset Management
Amundi Pioneer is the U.S. business of Amundi, Europe’s largest
asset manager by assets under management and ranked among the ten
largest globally[1]. Boston is one of Amundi’s six main global
investment hubs and offers a broad range of fixed-income, equity,
and multi-asset investment solutions in close partnership with
wealth management firms, distribution platforms, and institutional
investors across the Americas, Europe, and Asia-Pacific. Our long
history of proprietary research, robust risk management,
disciplined investment processes, and strong client relationships
has made Amundi Pioneer an investment adviser of choice among
leading institutional and individual investors worldwide. Amundi
Pioneer had approximately $85 billion in assets under management as
of June 30, 2020.
[1]
Source IPE “Top 400 asset managers”
published in June 2020 and based on AUM as of December 31,
2019.
Forward Looking Statements
This press release is not an offer to purchase nor a
solicitation of an offer to sell shares of the Fund. This press
release may contain statements regarding plans and expectations for
the future that constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
(the “PSLRA”), and such statements are intended to qualify for the
safe harbors from liability established by the PSLRA. All
statements other than statements of historical fact are
forward-looking and can sometimes be identified as such by the
context of the statements, including words such as “believe,”
“could,” “expect,” “anticipate,” “plan,” “may,” “will,” “would,”
“should,” “intend,” “possible,” “continue” “project,” “estimate,”
“guidance” and other similar terms and phrases, whether in the
negative or affirmative, although not all forward-looking
statements include these words. Similarly, statements that describe
the objectives, plans, or goals of the Fund or its investment
adviser are forward-looking. Such forward-looking statements
include, but are not limited to, statements regarding the proxy
contest by Saba and the other participants in its solicitation of
proxies from the Fund’s shareholders in connection with the matters
to be considered at the Fund’s 2020 Annual Meeting of Shareholders,
the potential impact to the Fund if Saba’s three proposed nominees
are elected to the Fund’s Board of Trustees in lieu of the three
incumbent trustees recommended for re-election by the Fund’s Board
of Trustees, the potential impact to the Fund if Saba is successful
in having its proposal to terminate the Fund’s investment adviser
terminated and the Fund is left without a replacement investment
adviser, the Fund’s efforts to drive investment returns and
continue to create shareholder value, the ability of the Fund to
continue to perform well against it peers and its benchmark index,
the ability of the Fund to mitigate the gap between its net asset
value per share and the Fund’s per share trading price, the
potential impact to the Fund if it pursues a liquidity event as a
result of Saba’s proxy contest, the viability of the Fund as an
investment vehicle, taking into consideration its stated investment
objective, if it was to pursue a liquidity event as a result of
Saba’s proxy contest, the impact on the Fund if it needed to sell
assets to fund a liquidity event, the ability of the Fund to
generate attractive multi-year returns as the economy recovers, and
the ability of the Fund to continue to execute against its stated
investment objective. These forward-looking statements are based on
current plans, expectations, estimates, forecasts, and projections
and management’s current beliefs and assumptions and are subject to
various risks and uncertainties that could cause actual results,
performance, and events to differ materially from those described
in the Fund’s forward-looking statements. Additionally, past
performance is no guarantee of future results. Additional
information concerning such risks and uncertainties are or will be
contained in the Fund’s filings with the SEC, including the Fund’s
Annual Report to Shareholders on Form N-CSR for the fiscal year
ended November 30, 2019, and its subsequent filings with the SEC.
These factors should be considered carefully and readers are
cautioned not to place undue reliance on such forward-looking
statements. Except as required by applicable law, the Fund
undertakes no obligation to revise these statements, whether to
reflect new information or the occurrence of unanticipated events
or otherwise, following the date of this press release.
Important Additional Information And Where To Find It
The Fund’s trustees, executive officers, and certain persons
associated with the Fund’s investment adviser and its parent
company are deemed participants in the solicitation of proxies from
the Fund’s shareholders in connection with the matters to be
considered at the 2020 Annual Meeting of Shareholders. On August 3,
2020, the Fund filed a definitive proxy statement and an
accompanying definitive WHITE
proxy card with the SEC in connection with the solicitation of
proxies from the Fund’s shareholders in connection with the matters
to be considered at the Fund’s 2020 Annual Meeting of Shareholders.
Information regarding the names of the Fund’s trustees, executive
officers, and certain persons associated with the Fund’s investment
adviser and its parent company and their respective direct or
indirect interests in the Fund by security holdings or otherwise
can be found in such definitive proxy statement, including the
schedules and appendices thereto. INVESTORS AND SHAREHOLDERS ARE
STRONGLY ENCOURAGED TO READ ANY SUCH PROXY STATEMENT AND THE
ACCOMPANYING WHITE PROXY CARD AND
OTHER DOCUMENTS FILED BY THE FUND WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN
IMPORTANT INFORMATION. Shareholders may obtain the definitive
proxy statement, any amendments or supplements to the proxy
statement, the accompanying WHITE proxy card, and other documents filed by
the Fund with the SEC for no charge at the SEC’s website at
www.sec.gov. Copies will also be available free of charge at the
Fund’s website at https://www.amundipioneer.com/us, by writing to
the Fund’s Secretary at Pioneer Floating Rate Trust, 60 State
Street, Boston, Massachusetts 02109, or by contacting the Fund’s
investor relations department at 1.800.859.8508.
Disclaimer
The Fund has neither sought nor obtained the consent from any
third party to use any statements or information contained in this
press release that have been obtained or derived from statements
made or published by any such third party. Any such statements or
information should not be viewed as indicating the support of any
such third party for the views expressed herein.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200807005078/en/
Media: Prosek Partners Brian Schaffer (646) 818-9229
bschaffer@prosek.com
Josh Clarkson (646) 818-9259 jclarkson@prosek.com
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