MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Wednesday, August 7, 2024 An $8B-AUM AM Preps a 3-Fund Transformation The folks at an $8-billion-AUM (as of July 31) asset manager are preparing to launch a new ETF by combining three of their closed-end funds. Yesterday, Tom Florence, CEO of Tortoise Capital Advisors, LLC [profile], revealed that the Tortoise Capital Plan plans to launch a new, active ETF by transforming one closed-end fund and merging it with two others. The transforming CEF is the Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ on the NYSE), the new ETF will be called the Tortoise Power and Energy Infrastructure ETF (the ticker has not yet been revealed), and the two other CEFs merging in are the Tortoise Pipeline & Energy Fund, Inc. (TTP) and the Tortoise Energy Independence Fund, Inc. (NDP). The CEFs' board has approved the merger, which is now pending fund shareholder approval. The Tortoise team expects the transformation and mergers to close next quarter (i.e. Q4). The three merging CEFs had a total of $313.3 million in AUM as of July 31. That includes: $133.9 million in TPZ, $101.5 million in TTP, and $77.9 million in NDP. TPZ, which IPOed on July 28, 2009, has a management fee of 95 basis points. TTP, which IPOed on October 26, 2011, and NDP, which IPOed on July 26, 2012, both have management fees of 110bps. The planned ETF's expense ratio will be 85bps. The Tortoise team plans to power the new ETF with something similar to TPZ's current investment strategy, which focuses on bonds and dividend-paying stocks from companies involved in energy infrastructure. "We believe these actions are in the best interest of fund shareholders, providing them greater liquidity without a potential discount to net asset value," Florence states. "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 Advisors serves as investment advisor to NDP, TTP, and TPZ. The CEFs' other service providers include: Computershare Trust Company, N.A. as dividend paying agent and transfer agent; Ernst & Young LLP as independent accounting firm; U.S. Bancorp Fund Services, LLC as administrator and fund accountant; and U.S. Bank National Association as custodian. Editor's Note: A prior version of this story mischaracterized the fees related to the three transforming CEFs. Their fees listed above are management fees. Printed from: MFWire.com/story.asp?s=67750 Copyright 2024, InvestmentWires, Inc. All Rights Reserved |