Guggenheim Partners Investment Management to Replace Carey Credit Advisors at Carey Credit Income Fund
August 16, 2017 | James Sprow | Blue Vault
In connection with the recent announcement by W. P. Carey Inc., the parent of Carey Credit Income Fund’s investment advisor Carey Credit Advisors, LLC (the “Advisor”), of its decision to exit retail fundraising and to focus on its core real estate business, the Advisor has decided to resign as investment advisor to the Master Fund. At a Board Meeting held on August 10, 2017, the Master Fund’s Board of Trustees accepted the resignation of the Advisor as the Master Fund’s investment advisor to become effective on September 11, 2017 and appointed Guggenheim Partners Investment Management, LLC (“GPIM”) as the Master Fund’s interim advisor to become effective on that date.
The Interim Advisor Appointment will terminate upon the earlier to occur of (i) 150 days from the Advisor Resignation Date or (ii) the date Master Fund shareholders approve the New Advisory Agreement. At the Board Meeting, the Board set a shareholder meeting date of October 13, 2017 and a record date of August 25, 2017 for Master Fund shareholders to consider the approval of the New Advisory Agreement. At the Board Meeting, the Master Fund’s Board of Trustees also approved the assignment of the Dealer Manager Agreement from Carey Financial, LLC to Guggenheim Funds Distributors, LLC effective immediately.
The Amended and Restated Expense Support and Conditional Reimbursement Agreements, Amended and Restated Organization and Offering Expense Agreements, and the Administrative Services Agreement with GPIM are materially unchanged from the prior forms of such agreements.
There are no material differences between the terms of the Interim Investment Advisory Agreement between the Master Fund and GPIM approved in connection with the Interim Advisory Appointment and the terms of the prior Investment Advisory Agreement, except for a lower management fee (1.75% of average gross assets) and the inclusion of provisions in the Interim Investment Advisory Agreement which are necessary to comply with the requirements of Rule 15a-4 under the Investment Company Act of 1940, as amended.
In making the Interim Advisor Appointment and approving the New Advisory Agreement, the Board of Trustees, including all of the Independent Trustees, considered a number of factors, including, but not limited to: (i) the Master Fund’s and GPIM’s performance; (ii) the ability of GPIM to maintain continuity in the investment advisory services that have been provided by the Advisor and GPIM to the Master Fund, including GPIM’s expectation that the key personnel of the Advisor who currently provide services to the Master Fund (and the Feeder Funds) will continue to provide those services as employees of GPIM after the Advisor Resignation Date; (iii) GPIM’s representations that it intends to provide the same or greater scope and quality of investment advisory services to the Master Fund that it and the Advisor currently provide; (iv) the estimated fees and expenses of the Master Fund (and, as relevant, the Feeder Funds), including a lower annual management fee of 1.75% of the Master Fund’s average gross assets and continued expense support by GPIM with respect to the Feeder Funds’ distributions to shareholders; and (v) GPIM’s longer-term business goals with regard to the business and operations of the Master Fund and Feeder Funds. The Board also considered that the Funds’ shareholders will not bear any costs associated with the Interim Advisor Appointment and the proposal to shareholders to approve the New Advisory Agreement. Additional information about the Board’s considerations will be provided in the Master Fund’s proxy materials that will be distributed in connection with the shareholder meeting to consider the approval of the New Advisory Agreement.
Learn more about W. P. Carey Inc. on the Blue Vault Sponsor Focus Page.
Our firm has been using Blue Vault from the first year it was available.
We have found it to be a valuable tool to verify what wholesalers tell us and to dig deep into how the reported investments are really performing.
We appreciate that Blue Vault has expanded its services from initially covering REIT's to now also including BDC's.
Our clients also appreciate that we conduct this additional due diligence on their behalf.