Regions Boots Morgan Asset Management from Seven Funds
After being targeted by FINRA, the SEC and numerous shareholder lawsuits, Regions bank has removed its in-house manager, Morgan Asset Management, and portfolio manager James Kelsoe from seven of its bond funds. In Tuesday's WSJ FundTrack, Shefali Anand reports that Regions has tapped Hyperion Brookfield Asset Management, a unit of New York City-based Hyperion Brookfield, to manage the funds. Brookfield had been serving as an independent valuation consultant for the funds.
Additionally, if the proposed change is approved by shareholders, new boards of directors will be nominated for all the funds. The press release issued by Regions can be found below.
When asked if the funds, which had been known as the RMK (Regions Morgan Keegan) Funds, would be changing names following their being taken over by Hyperion, a spokesman for Morgan Keegan told the MFWire that the company can't speculate what will happen when the new subadvisor takes over.
Company Press Release
MEMPHIS, Tenn.--(BUSINESS WIRE)--Morgan Asset Management, Inc. (“MAM”), the investment adviser for RMK Advantage Income Fund, Inc. (NYSE: RMA), RMK High Income Fund, Inc. (NYSE: RMH), RMK Multi-Sector High Income Fund, Inc. (NYSE: RHY) and RMK Strategic Income Fund, Inc. (NYSE: RSF) (each a “Fund” and collectively, the “Funds”), announced today that on April 18, 2008, it entered into an agreement with Hyperion Brookfield Asset Management, Inc. (“HBAM”) under which HBAM, an investment adviser that is registered with the Securities and Exchange Commission, would be supported by MAM to become the new investment adviser of the Funds and of Regions Morgan Keegan Select Short Term Bond Fund, Regions Morgan Keegan Select Intermediate Bond Fund and Regions Morgan Keegan Select High Income Fund, three open-end funds also managed by MAM (the “Transaction”). MAM represented to the Fund Board that MAM believes that the proposed Transaction is in the best interest of fund shareholders.
The agreement contemplates that, following the approval of new investment advisory agreements by shareholders of the Funds, HBAM would become the investment adviser for the Funds, and that MAM would no longer serve as the Funds’ investment adviser after the Transaction. The agreement also contemplates that new Boards of Directors of the Funds, which would consist of individuals proposed by HBAM, would be nominated by the current Boards and elected by shareholders of the Funds, and that the current members of the Funds’ Boards of Directors would no longer serve as directors following shareholder approval of HBAM as the Funds’ investment adviser, the election of the new Boards of Directors and the consummation of the Transaction.
In anticipation of the consummation of the Transaction, the current Boards of Directors of the Funds have unanimously approved new investment advisory agreements with HBAM and the nomination of five new directors of the Funds. The appointment of HBAM as investment adviser of any of the Funds and the election of that Fund’s new Board of Directors must be approved by the shareholders of that Fund. If the new investment advisory agreements are approved and the Transaction is consummated, the existing investment advisory agreements between the Funds and MAM will be terminated.
Joint Special and Annual Shareholder Meetings of the Funds are scheduled for July 11, 2008, to vote on the proposed new investment advisory agreements and the election of directors, respectively. Although there is no assurance that the Transaction will be completed, as of this date it is anticipated that, subject to shareholder approval of the proposed new investment advisory agreements, the election of the new directors, and the completion of certain other terms and conditions, the Transaction will close on or about July 14, 2008.
Additional information about the proposed new investment advisory agreements and nominees will be sent to shareholders of the Funds as part of proxy solicitation materials.
About Hyperion Brookfield Asset Management, Inc.:
Formed as a registered investment adviser in 1989, HBAM manages more than $21 billion in fixed income assets for institutional and retail investors, such as pension funds, financial institutions, insurance companies, and foundations. HBAM’s expertise is centered on providing relative value driven fixed income investment strategies, such as core fixed income, high yield, and specialized mortgage-backed securities and asset-backed securities markets. HBAM currently serves as an independent valuation consultant for the Funds.
About Morgan Asset Management:
Morgan Asset Management, Inc. is the investment advisory arm of Regions Financial Corporation (NYSE: RF). Morgan Asset Management is the investment adviser to Regions Morgan Keegan Trust, Regions Morgan Keegan Select Funds, Morgan Keegan Select Fund, Inc., RMK Advantage Income Fund, Inc., RMK High Income Fund, Inc., RMK Multi-Sector High Income Fund, Inc. and RMK Strategic Income Fund, Inc. With locations throughout the South, Morgan Asset Management, an affiliate of Morgan Keegan & Co. Inc., manages more than $28 billion for institutions and high net worth individuals. Additional information about Morgan Asset Management, Morgan Keegan and Regions—a member of the S&P 100 Index—can be found at www.morgankeegan.com and www.regions.com.
For Additional Information:
Additional information about the Funds, including the Funds’ annual and semi-annual reports to stockholders, may be obtained by visiting the Funds’ website at www.rmkfunds.com or by calling 800-564-2188.