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I recently invested in GFMRX but have now received information that they have agreed to be taken over by People's Securities that I must have missed during my fund investigation. Nothing "is expected" to change per the proxy data that seeks my vote to affirm this takeover. While I look for information on People's Securities I wondered if anyone had comments on this transaction.
I am puzzled by the transaction as well. A Connecticut regional bank is taking over G-F, but the articles I saw say nothing about preserving the management of the MF's. Here's one announcement:
This is a not-uncommon occurrence, and realistically, there's little one can do but approve the new contract.
Mutual funds legally do not "belong" to fund families. They are "independent" companies ("registered investment companies") that "hire" the management company (fund family) to manage them. The contract between the fund and the management company automatically terminates when the management company is sold.
What usually happens is that the new owners of the management company (here, People's United Bank) offers a new management contract, where the same people continue on as managers. The contract usually says that for some period of time, nothing will change.
Your choices are to accept the contract, in which case little will change in the short term, and possibly nothing or a lot in the long term, or to reject the contract. Reject it, and the fund is left with no managers. It will either have to try again to get approval for that contract, find another management company (and new fund managers), or dissolve the fund. Rock and hard place.
There's a current ER limit in place (1%) through March 2017. The new agreement seems to be promising to keep this in place for two years. On a quick skim of the proxy, I didn't see anything said about whether the managers committed to staying on with the new company, and if so for how long.
Edit: forgot to add - it looks like People's United Bank offers free coin counting (for account holders). Nice to know since TDBank got rid of their machines.
"Item 2: Material Changes Pending Transition. Gerstein Fisher has entered into a definitive agreement to be acquired by People's Securities, Inc., an SEC registered investment adviser and broker-dealer, and subsidiary of People's United Bank, NA. The transaction is expected to close during the fourth quarter of 2016, subject to regulatory approvals and other customary closing conditions."
Comments
http://www.prnewswire.com/news-releases/peoples-united-bank-na-announces-the-acquisition-of-new-york-based-investment-management-firm-gerstein-fisher-300301789.html
Mutual funds legally do not "belong" to fund families. They are "independent" companies ("registered investment companies") that "hire" the management company (fund family) to manage them. The contract between the fund and the management company automatically terminates when the management company is sold.
What usually happens is that the new owners of the management company (here, People's United Bank) offers a new management contract, where the same people continue on as managers. The contract usually says that for some period of time, nothing will change.
Your choices are to accept the contract, in which case little will change in the short term, and possibly nothing or a lot in the long term, or to reject the contract. Reject it, and the fund is left with no managers. It will either have to try again to get approval for that contract, find another management company (and new fund managers), or dissolve the fund. Rock and hard place.
There's a current ER limit in place (1%) through March 2017. The new agreement seems to be promising to keep this in place for two years. On a quick skim of the proxy, I didn't see anything said about whether the managers committed to staying on with the new company, and if so for how long.
Edit: forgot to add - it looks like People's United Bank offers free coin counting (for account holders). Nice to know since TDBank got rid of their machines.
http://gersteinfisher.com/wp-content/uploads/2016/08/Gerstein_Fisher_Brochure_ADV2AB-08_11_16.pdf
"Item 2: Material Changes
Pending Transition. Gerstein Fisher has entered into a definitive agreement to be acquired by People's Securities, Inc., an SEC registered investment adviser and broker-dealer, and subsidiary of People's United Bank, NA. The transaction is expected to close during the fourth quarter of 2016, subject to regulatory approvals and other customary closing conditions."