Services for Mutual Funds and Exchange Traded Funds (ETFs) - Di Costa Partners

Di Costa Partners (DCP), a leading provider of solicitation services for mutual funds and ETFs, brings to Morrow Sodali more than 30 years of experience dealing with the special requirements of the funds industry. Working alongside Morrow Sodali’s corporate services, DCP offers mutual fund and ETF clients its trademark full-service program of market analysis, strategic planning, governance advice, ownership profiling, solicitation mechanics and oversight of shareholder campaigns.

Capabilities

Analysis and preparation

Distribution of proxy material

The solicitation campaign

Telephone call centers

Tabulation

Reporting

DCP’s one-stop, single-source solution for mutual funds and ETFs is organized around the following service structure:

  • Review of market conditions and issues
  • Data analysis, ownership profiling and vote projections
  • Governance and policy review
  • Strategic consulting to manage shareholder expectations
  • Review of proxy solicitation documents
  • Printing of proxy statements and proxy cards
  • Mailing of proxy material to registered shareholders
  • Oversight and management of the solicitation campaign, with periodic progress reports
  • Call centers for solicitation of votes and response to shareholder inquiries
  • Tabulation of proxies, internet votes, and votes cast via IVR (interactive voice response, i.e. telephone voting)
  • Information Agent for extraordinary transactions
  • Post-meeting review and lessons for the future.

These services are adapted to the particular requirements of open-end funds, closed-end funds and exchange traded funds. The specifics of an assignment will vary depending on the client’s circumstances, objectives and challenges, which may range from the appointment of directors and trustees, amendments to the investment advisor agreement, changes in governance policies, compensation and other controversial agenda items, activist initiatives, or election contests.

Analysis and preparation

Prior to the preparation of proxy materials, DCP conducts a thorough analysis of the client’s proposed agenda items, ownership profile, vote requirements and market factors that may affect the shareholder vote. The analysis also covers issues relating to the client’s corporate governance, financial performance and voting policies. It forms the basis for a preliminary vote projection and informs decisions relating to the content and communication of agenda items. About 45 to 60 days before the mailing date DCP conducts an additional review of the shareholder base to update the vote projection, feasibility analysis and solicitation strategy. These analytical and preparatory steps are the basis for a timeline and metrics that serve as a guide and checklist during course of the solicitation.

Distribution of proxy material

In addition to careful preparation and planning, DCP takes responsibility for oversight and execution of the solicitation campaign. Our three decades of experience make a critical difference in our ability to work within the proxy system’s complex back-office infrastructure. Morrow Sodali handles the day-to-day mechanics of printing, packaging and mailing proxy materials to registered shareholders. Morrow Sodali coordinates with the many layers of custodians, intermediaries and advisors to ensure that records are accurate and distribution to street name accounts is timely.

The solicitation campaign

DCP works in close coordination with clients every step of the way during the solicitation campaign. Our goal is to meet or exceed our predicted voting results. This requires careful attention to developing strategies for the different categories of shareholders whose participation is essential to maximize voting support. The categories of owners include the following:

  1. Retail shareholders Historically, registered and beneficial retail shareholders are supportive but passive, with low voting participation. Morrow Sodali implements strategies to motivate these shareholders, facilitate voting mechanics and increase participation.

  2. Institutional Investors Institutions require special attention. Stewardship codes and fiduciary standards mandate responsible voting, but decisions are most often made by internal corporate governance teams or with input from proxy advisory firms such as ISS and Glass Lewis. DCP guides clients through the process of engaging and communicating with institutional investors and proxy advisors. Morrow Sodali then monitors the activities of intermediaries and advisors to verify that voting instructions are transmitted fully and accurately.

  3. Insurance Companies Insurance companies are an increasing presence in the ownership of mutual funds and ETFs. In these cases DCP takes on the labor-intensive task of communicating directly with the insurance companies to ascertain underlying record date accounts, balance the files, mail to the accounts and tabulate the vote results.

  4. Financial Advisors DCP offers an innovative and highly effective program to identify and reach large retail and institutional shareholders whose beneficial ownership is concealed in bank or broker accounts. This is a group that has traditionally preferred to conceal its identify and has been the least likely to issue voting instructions. For clients with a high concentration of these accounts, DCP’s identification and outreach program can be critical to a successful vote outcome.
 

During the course of a solicitation DCP monitors all these categories of shareholders closely and provides clients with periodic reports of voting responses to ascertain whether we are meeting or exceeding expectations. This process enables us to amend solicitation strategies in real time, on a daily basis if necessary.

Telephone call centers

DCP’s call centers, managed and manned by trained professionals, play an important role in every proxy solicitation campaign. Both registered and beneficial retail shareholders often need help in deciphering voting mechanics. Morrow Sodali works closely with clients and legal counsel to prepare scripts and question-and-answer outlines to ensure the accuracy of information provided to shareholders.

Tabulation

DCP’s tabulation monitoring and batch control programs are designed to ensure that all votes are accurately recorded, whether in the form of scanned proxy cards, touch-tone votes, internet votes, verbal telephone votes or broker/bank votes received through transmissions from custodians, intermediaries, or proxy advisors.

Reporting

DCP provides clients with daily tabulation reports, revised vote projections and, if requested, itemized lists of voted/unvoted accounts. After the conclusion of the solicitation Morrow Sodali conducts a post-meeting review of procedures and results that can serve as a guide to the conduct of future campaigns.

Capabilities

Analysis and preparation

Distribution of proxy material

The solicitation campaign

Telephone call centers

Tabulation

Reporting

Services for Mutual Funds and Exchange Traded Funds (ETFs) - Di Costa Partners

Di Costa Partners (DCP), a leading provider of solicitation services for mutual funds and ETFs, brings to Morrow Sodali more than 30 years of experience dealing with the special requirements of the funds industry. Working alongside Morrow Sodali’s corporate services, DCP offers mutual fund and ETF clients its trademark full-service program of market analysis, strategic planning, governance advice, ownership profiling, solicitation mechanics and oversight of shareholder campaigns.

DCP’s one-stop, single-source solution for mutual funds and ETFs is organized around the following service structure:

  • Review of market conditions and issues
  • Data analysis, ownership profiling and vote projections
  • Governance and policy review
  • Strategic consulting to manage shareholder expectations
  • Review of proxy solicitation documents
  • Printing of proxy statements and proxy cards
  • Mailing of proxy material to registered shareholders
  • Oversight and management of the solicitation campaign, with periodic progress reports
  • Call centers for solicitation of votes and response to shareholder inquiries
  • Tabulation of proxies, internet votes, and votes cast via IVR (interactive voice response, i.e. telephone voting)
  • Information Agent for extraordinary transactions
  • Post-meeting review and lessons for the future.

These services are adapted to the particular requirements of open-end funds, closed-end funds and exchange traded funds. The specifics of an assignment will vary depending on the client’s circumstances, objectives and challenges, which may range from the appointment of directors and trustees, amendments to the investment advisor agreement, changes in governance policies, compensation and other controversial agenda items, activist initiatives, or election contests.

Analysis and preparation

Prior to the preparation of proxy materials, DCP conducts a thorough analysis of the client’s proposed agenda items, ownership profile, vote requirements and market factors that may affect the shareholder vote. The analysis also covers issues relating to the client’s corporate governance, financial performance and voting policies. It forms the basis for a preliminary vote projection and informs decisions relating to the content and communication of agenda items. About 45 to 60 days before the mailing date DCP conducts an additional review of the shareholder base to update the vote projection, feasibility analysis and solicitation strategy. These analytical and preparatory steps are the basis for a timeline and metrics that serve as a guide and checklist during course of the solicitation.

Distribution of proxy material

In addition to careful preparation and planning, DCP takes responsibility for oversight and execution of the solicitation campaign. Our three decades of experience make a critical difference in our ability to work within the proxy system’s complex back-office infrastructure. Morrow Sodali handles the day-to-day mechanics of printing, packaging and mailing proxy materials to registered shareholders. Morrow Sodali coordinates with the many layers of custodians, intermediaries and advisors to ensure that records are accurate and distribution to street name accounts is timely.

The solicitation campaign

DCP works in close coordination with clients every step of the way during the solicitation campaign. Our goal is to meet or exceed our predicted voting results. This requires careful attention to developing strategies for the different categories of shareholders whose participation is essential to maximize voting support. The categories of owners include the following:

  1. Retail shareholders Historically, registered and beneficial retail shareholders are supportive but passive, with low voting participation. Morrow Sodali implements strategies to motivate these shareholders, facilitate voting mechanics and increase participation.

  2. Institutional Investors Institutions require special attention. Stewardship codes and fiduciary standards mandate responsible voting, but decisions are most often made by internal corporate governance teams or with input from proxy advisory firms such as ISS and Glass Lewis. DCP guides clients through the process of engaging and communicating with institutional investors and proxy advisors. Morrow Sodali then monitors the activities of intermediaries and advisors to verify that voting instructions are transmitted fully and accurately.

  3. Insurance Companies Insurance companies are an increasing presence in the ownership of mutual funds and ETFs. In these cases DCP takes on the labor-intensive task of communicating directly with the insurance companies to ascertain underlying record date accounts, balance the files, mail to the accounts and tabulate the vote results.

  4. Financial Advisors DCP offers an innovative and highly effective program to identify and reach large retail and institutional shareholders whose beneficial ownership is concealed in bank or broker accounts. This is a group that has traditionally preferred to conceal its identify and has been the least likely to issue voting instructions. For clients with a high concentration of these accounts, DCP’s identification and outreach program can be critical to a successful vote outcome.
 

During the course of a solicitation DCP monitors all these categories of shareholders closely and provides clients with periodic reports of voting responses to ascertain whether we are meeting or exceeding expectations. This process enables us to amend solicitation strategies in real time, on a daily basis if necessary.

Telephone call centers

DCP’s call centers, managed and manned by trained professionals, play an important role in every proxy solicitation campaign. Both registered and beneficial retail shareholders often need help in deciphering voting mechanics. Morrow Sodali works closely with clients and legal counsel to prepare scripts and question-and-answer outlines to ensure the accuracy of information provided to shareholders.

Tabulation

DCP’s tabulation monitoring and batch control programs are designed to ensure that all votes are accurately recorded, whether in the form of scanned proxy cards, touch-tone votes, internet votes, verbal telephone votes or broker/bank votes received through transmissions from custodians, intermediaries, or proxy advisors.

Reporting

DCP provides clients with daily tabulation reports, revised vote projections and, if requested, itemized lists of voted/unvoted accounts. After the conclusion of the solicitation Morrow Sodali conducts a post-meeting review of procedures and results that can serve as a guide to the conduct of future campaigns.