Tortoise Capital Advisors Plans Merger of Three Closed-End Funds into Active ETF
Tortoise Capital Advisors has announced plans to merge three closed-end funds into a new actively managed ETF called Tortoise Power and Energy Infrastructure ETF. The funds involved are Tortoise Power and Energy Infrastructure Fund (NYSE: TPZ), Tortoise Pipeline & Energy Fund (NYSE: TTP), and Tortoise Energy Independence Fund (NYSE: NDP). TPZ will be the surviving strategy, with the ETF adopting its accounting and performance history.
The combined assets of the three funds, including leverage, totaled $313.3 million as of July 31, 2024. The expected management fee for the new ETF is 85 basis points. Tortoise Capital aims to provide shareholders with greater liquidity at net asset value through this merger. The transactions are expected to close in Q4 2024, subject to shareholder approvals and regulatory requirements.
Tortoise Capital Advisors ha annunciato piani per fondere tre fondi chiusi in un nuovo ETF attivamente gestito chiamato Tortoise Power and Energy Infrastructure ETF. I fondi coinvolti sono il Tortoise Power and Energy Infrastructure Fund (NYSE: TPZ), il Tortoise Pipeline & Energy Fund (NYSE: TTP) e il Tortoise Energy Independence Fund (NYSE: NDP). TPZ sarà la strategia sopravvissuta, con l'ETF che adotterà la sua storia contabile e di rendimento.
Il valore totale degli attivi dei tre fondi, compreso il leverage, ammontava a $313,3 milioni al 31 luglio 2024. La commissione di gestione prevista per il nuovo ETF è di 85 punti base. Tortoise Capital mira a fornire agli azionisti maggiore liquidità al valore patrimoniale netto attraverso questa fusione. Le transazioni sono previste per chiudere nel quarto trimestre del 2024, soggette ad approvazioni degli azionisti e requisiti normativi.
Tortoise Capital Advisors ha anunciado planes para fusionar tres fondos cerrados en un nuevo ETF gestionado activamente llamado Tortoise Power and Energy Infrastructure ETF. Los fondos involucrados son el Tortoise Power and Energy Infrastructure Fund (NYSE: TPZ), el Tortoise Pipeline & Energy Fund (NYSE: TTP) y el Tortoise Energy Independence Fund (NYSE: NDP). TPZ será la estrategia sobreviviente, con el ETF adoptando su historial contable y de rendimiento.
Los activos combinados de los tres fondos, incluido el apalancamiento, totalizaron $313,3 millones a partir del 31 de julio de 2024. La tarifa de gestión esperada para el nuevo ETF es de 85 puntos base. Tortoise Capital tiene como objetivo proporcionar a los accionistas mayor liquidez al valor neto de los activos a través de esta fusión. Se espera que las transacciones se cierren en el cuarto trimestre de 2024, sujeto a aprobaciones de los accionistas y requisitos regulatorios.
Tortoise Capital Advisors는 세 개의 클로즈드 엔드 펀드를 새로운 능동 관리 ETF인 Tortoise Power and Energy Infrastructure ETF로 병합할 계획을 발표했습니다. 관련된 펀드는 Tortoise Power and Energy Infrastructure Fund (NYSE: TPZ), Tortoise Pipeline & Energy Fund (NYSE: TTP), Tortoise Energy Independence Fund (NYSE: NDP)입니다. TPZ가 생존 전략으로 남으며 ETF는 TPZ의 회계 및 성과 기록을 채택할 것입니다.
세 개의 펀드의 총 자산은 레버리지를 포함해 2024년 7월 31일 기준으로 3억 1천 3백만 달러에 달했습니다. 새로운 ETF의 예상 관리 수수료는 85 베이시스 포인트입니다. Tortoise Capital은 이번 합병을 통해 주주들에게 순 자산 가치에서 더 큰 유동성을 제공하는 것을 목표로 하고 있습니다. 거래는 주주 승인 및 규제 요건을 조건으로 2024년 4분기에 마감될 것으로 예상됩니다.
Tortoise Capital Advisors a annoncé des plans pour fusionner trois fonds fermés en un nouvel ETF géré activement appelé Tortoise Power and Energy Infrastructure ETF. Les fonds concernés sont le Tortoise Power and Energy Infrastructure Fund (NYSE: TPZ), le Tortoise Pipeline & Energy Fund (NYSE: TTP) et le Tortoise Energy Independence Fund (NYSE: NDP). TPZ sera la stratégie héritée, l'ETF adoptant son historique comptable et de performance.
Les actifs combinés des trois fonds, y compris le levier, totalisaient 313,3 millions de dollars au 31 juillet 2024. Les frais de gestion prévus pour le nouvel ETF sont de 85 points de base. Tortoise Capital vise à offrir aux actionnaires une plus grande liquidité à la valeur nette des actifs grâce à cette fusion. Les transactions devraient se clôturer au quatrième trimestre 2024, sous réserve des approbations des actionnaires et des exigences réglementaires.
Tortoise Capital Advisors hat Pläne angekündigt, drei geschlossene Fonds in einen neuen aktiv verwalteten ETF, den Tortoise Power and Energy Infrastructure ETF, zu fusionieren. Die beteiligten Fonds sind der Tortoise Power and Energy Infrastructure Fund (NYSE: TPZ), der Tortoise Pipeline & Energy Fund (NYSE: TTP) und der Tortoise Energy Independence Fund (NYSE: NDP). TPZ wird die überlebende Strategie sein, wobei der ETF dessen Buchhaltung und Leistungshistorie übernimmt.
Die kombinierten Vermögenswerte der drei Fonds, einschließlich Hebel, beliefen sich zum 31. Juli 2024 auf 313,3 Millionen USD. Die erwartete Verwaltungsgebühr für den neuen ETF beträgt 85 Basispunkte. Tortoise Capital zielt darauf ab, den Aktionären größere Liquidität zum Nettoinventarwert durch diese Fusion zu bieten. Die Transaktionen werden voraussichtlich im 4. Quartal 2024 abgeschlossen, vorbehaltlich der Genehmigungen der Aktionäre und regulatorischen Anforderungen.
- Merger aims to provide greater liquidity for shareholders
- ETF structure eliminates potential discount to net asset value
- Combined assets of $313.3 million as of July 31, 2024
- Continuity in investment strategy and management team
- Potential tax-free reorganization for federal income tax purposes
- Merger subject to shareholder approvals and regulatory requirements
- Potential integration challenges during the merger process
- Possible changes in fund structure may affect some investors' preferences
Insights
This merger of closed-end funds into an actively managed ETF is a significant strategic move for Tortoise Capital Advisors. The transition to an ETF structure offers increased liquidity for investors, potentially addressing the common issue of closed-end funds trading at a discount to NAV. With
The 85 basis point management fee is competitive for an actively managed ETF in this sector. However, investors should monitor how this compares to the current expense ratios of the closed-end funds. The tax-free reorganization aspect is favorable for existing shareholders. This strategic shift, along with the recent sale of Ecofin Advisors and private credit business, indicates Tortoise's renewed focus on its core competencies in traditional energy and power infrastructure investing.
Tortoise's decision to merge these funds into an ETF aligns with broader market trends. Actively managed ETFs are gaining traction, offering the benefits of active management with the transparency and liquidity of ETFs. This move could potentially attract new investors who prefer the ETF structure over closed-end funds.
The energy and power infrastructure sector has been volatile and this structure may provide better flexibility for portfolio management. However, it's important to note that while the ETF structure eliminates the discount/premium issue of closed-end funds, it doesn't guarantee performance. Investors should closely watch how the new ETF performs compared to its closed-end fund predecessors, especially in terms of yield and total return.
Actively Managed ETF Aims to Offer Investors Greater Liquidity at Net Asset Value
The three similar funds merging into an active ETF are Tortoise Power and Energy Infrastructure Fund, Inc. (NYSE: TPZ), Tortoise Pipeline & Energy Fund, Inc. (NYSE: TTP), and Tortoise Energy Independence Fund, Inc. (NYSE: NDP), with TPZ as the surviving strategy. Tortoise Capital expects the ETF to adopt the accounting and performance history of TPZ as well as maintain a similar investment strategy, investing primarily in fixed income and dividend-paying equity securities of power and energy infrastructure companies.
This merger of the closed-end funds was approved by the board of directors and is consistent with its efforts to provide shareholder value through strategic initiatives.
Tortoise Capital, the manager of TPZ, TTP, and NDP, will continue as manager of Tortoise Power and Energy Infrastructure ETF with the same investment team that has been in place at the closed-end funds. The combined assets in the three funds to be merged, including leverage, totaled
"We believe these actions are in the best interest of fund shareholders, providing them greater liquidity without a potential discount to net asset value," said Tom Florence, CEO of Tortoise Capital. "Actively managed ETFs will play an ever-growing role in fund investing and we will continue to evaluate the structure for our other products."
Tortoise Capital expects the transactions will close in the fourth quarter, subject to requisite fund shareholder approvals, satisfaction of applicable regulatory requirements and approvals, and customary closing conditions. Each merger is intended to qualify as a tax-free reorganization for federal income tax purposes. No merger is contingent upon any other merger. There is no assurance when or whether such approvals, or any other approvals required for the transactions, will be obtained. More information on the proposed transactions will be contained in proxy materials and registration statement materials that TPZ, TTP, and NDP and the newly created ETF anticipate filing in the coming weeks.
The company recently announced a strategic restructuring through which it will sell its Ecofin Advisors Limited business and its private credit business to focus on traditional energy and power infrastructure investing.
About Tortoise Capital Advisors
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Media Contacts:
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FORWARD-LOOKING STATEMENTS
Certain statements in this press release may be forward-looking. Actual future events may differ significantly from those expressed in forward-looking statements for a variety of reasons, which may include, without limitation, the ability to obtain requisite shareholder approvals or to satisfy other conditions for the proposed mergers; changes in market conditions; changes in applicable legal, regulatory or tax considerations; and other risks and uncertainties.
Investors should not place undue reliance on forward-looking statements, as they speak only as of the date they are made. Tortoise Capital Advisors and the funds it manages do not undertake to update or revise any forward-looking statements. The annual and semi-annual reports of TPZ, TTP and NDP and other regulatory filings with the Securities and Exchange Commission (SEC) are accessible at www.sec.gov and at https://cef.tortoiseadvisors.com/. The information contained on the funds' website is not a part of this press release.
IMPORTANT INFORMATION
In connection with the proposed mergers discussed in this press release, the funds and the new ETF expect to file with the SEC solicitation materials in the form of a joint proxy statement/prospectus that will be included in a registration statement on Form N-14. After the registration statement is filed with the SEC, it may be amended or withdrawn, and the joint proxy statement/prospectus will not be distributed to fund shareholders unless and until the registration statement is declared effective by the SEC. Investors are urged to read the joint proxy statement/prospectus and any other relevant documents when they become available because they will contain important information about the proposed mergers and the new ETF. Once filed, copies of the joint proxy statement/prospectus and other materials will be available free of charge at www.sec.gov.
This press release is for informational purposes only and is not a solicitation of a proxy from any fund shareholder and does not constitute an offer of any securities for sale. No offer of securities will be made except pursuant to a prospectus meeting the requirements of Section 10 of the Securities Act of 1933. However, Tortoise Capital Advisors, the funds and certain of their respective directors, officers and affiliates may be deemed under the rules of the SEC to be participants in the solicitation of proxies from fund shareholders in connection with the proposed mergers discussed in this press release. Information about the directors and officers of the funds may be found in their annual reports previously filed with the SEC.
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SOURCE Tortoise Capital
FAQ
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