United States
Securities and Exchange Commission
Washington D.C. 20549
SCHEDULE 14C (RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934 (Amendment No. __ )
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Brinker Capital Destinations Trust
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BRINKER CAPITAL DESTINATIONS TRUST
1055 Westlakes Drive, Suite 250
Berwyn, Pennsylvania 19312
DESTINATIONS MULTI STRATEGY ALTERNATIVES FUND
April 3, 2019
IMPORTANT NOTICE OF INTERNET AVAILABILITY OF INFORMATION
STATEMENT REGARDING RECENT SUB-ADVISER CHANGE
An Information Statement regarding a recent sub-adviser change related to the Destinations Multi Strategy Alternatives Fund (the “Fund”), a series of Brinker Capital Destinations Trust (the “Trust”), is now available online for your review and information. We encourage you to access and review the Information Statement online, using the instructions included in this Notice.
At an in-person meeting held on March 6, 2019, the Board of Trustees of the Trust (the “Board”) approved the selection of LMCG Investments, LLC (“LMCG”) as a sub-adviser for the Destinations Multi Strategy Alternatives Fund (the “Sub-Adviser”). Over the coming weeks, the new Sub-Adviser will be allocated assets within the Fund by Brinker Capital, Inc. (the “Adviser”), the Fund’s overall investment adviser. The Adviser will continuously monitor the new Sub-Adviser’s performance with respect to the allocated portion of the Fund’s assets, in addition to monitoring the Fund as a whole and the other sub-advisers. Information about the new Sub-Adviser was also included in a Supplement to the Trust’s Prospectus and Statement of Additional Information, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) at the beginning of March and mailed to shareholders shortly thereafter.
This Notice is being provided to you in lieu of a paper copy of the Information Statement, as permitted under the terms of an exemptive order granted to the Adviser and the Trust by the SEC.
This Notice presents only a brief overview of the changes – the online Information Statement provides more complete information. The Information Statement will be available on the Trust’s website atwww.destinationsfunds.com for at least 90 days after you receive this Notice.
A paper copy of the full Information Statement or other Fund related information may be obtained, without charge, by calling (877) 771-7979 or by writing to the Brinker Capital Destinations Funds, P.O. Box 2175, Milwaukee, WI 53201.
INFORMATION STATEMENT
BRINKER CAPITAL DESTINATIONS TRUST
1055 Westlakes Drive, Suite 250
Berwyn, Pennsylvania 19312
DESTINATIONS MULTI STRATEGY ALTERNATIVES FUND
April 3, 2019
Dear Shareholder,
This Information Statement is being made available to shareholders of the Destinations Multi Strategy Alternatives Fund (the “Fund”), a portfolio of Brinker Capital Destinations Trust (the “Trust”), to notify shareholders of a recent portfolio management change for the Fund. The Trust operates pursuant to an order of exemption from the U.S. Securities and Exchange Commission issued on March 16, 2017 (the “SEC Order”) that permits Brinker Capital, Inc. (the “Adviser”), the investment adviser of the Fund, to enter into, change or terminate agreements with investment sub-advisers with the approval of the Trust’s Board of Trustees, but without obtaining Fund shareholder approval. As a condition of the SEC Order, the Adviser is required to make available to shareholders information about any new sub-adviser or new sub-advisory agreement and to notify Fund shareholders when the information becomes available.
We are not asking you for a proxy and you are not required to send us a proxy.
Please take a few minutes to review this Information Statement, and thank you for investing in the Fund.
Sincerely,
/s/ Jason B. Moore | |
President | |
Brinker Capital Destinations Trust |
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DESTINATIONS MULTI STRATEGY ALTERNATIVES FUND
Appointment of the New Sub-Adviser
At a meeting of the Board of Trustees (the “Board”) of Brinker Capital Destinations Trust (the “Trust”) held on March 6, 2019 (the “Meeting”), Brinker Capital, Inc. (the “Adviser”) recommended and the Board, including all of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (the “1940 Act”), approved LMCG Investments, LLC (“LMCG”) as a sub-adviser to the Destinations Multi Strategy Alternatives Fund (the “Fund”).
Under the terms of the sub-advisory agreement, LMCG makes investment decisions for the portion of the assets of the Fund allocated to it by the Adviser, and continuously reviews, supervises and administers the Fund’s investment program with respect to those assets.LMCG also serves as a sub-adviser to the Destinations Small-Mid Cap Equity Fund pursuant to the terms of a sub-advisory agreement dated January 18, 2017 and makes investment decisions for the portion of the assets of the Destinations Small-Mid Cap Equity Fund allocated to it by the Adviser.
Adviser’s Recommendation and the Board’s Consideration
The Adviser recommended LMCG as a sub-adviser because it believes that LMCG is suited to help the Fund meet its overall investment objectives. LMCG seeks to achieve attractive total returns with a volatility level similar to that of investments in high yield securities, by focusing on investment opportunities in the markets for structured credit securities, including non-agency residential mortgage-backed securities, credit risk transfer bonds, collateralized loan obligations, instruments tied to portions of credit indices, and related instruments.
In considering LMCG, the Board received written and oral information from the Adviser and LMCG. The Board also met with representatives of the Adviser and LMCG and considered information provided by LMCG and the Adviser about LMCG’s portfolio managers, investment philosophies, strategies and processes, as well as other factors. In approving LMCG as a sub-adviser to the Fund, the Board evaluated the information provided by the Adviser and LMCG regarding: (i) the nature and quality of the services expected to be rendered to the Fund; (ii) the investment objectives and policies of the Fund; (iii) the history, reputation, qualifications and background of LMCG’s personnel and LMCG’s financial condition; (iv) the performance record of LMCG; and (v) other factors deemed relevant. The Board also reviewed the fees to be paid by the Adviser to LMCG, including any benefits to be received by LMCG in connection with soft dollar arrangements or other than from its sub-advisory fees. The Board used the foregoing information, as well as other information it deemed relevant, in making its decision to approve LMCG as a sub-adviser to the Fund and reached the following conclusions:
Nature, Extent and Quality of Services.
The Board concluded, based on the information provided by the Adviser and LMCG, that the nature, extent and quality of the investment advisory services expected to be provided by LMCG were adequate and appropriate in light of the experience and the qualifications of LMCG and its investment personnel, LMCG’s portfolio management and research resources to be applied in managing the portion of the Fund’s assets allocated to it, how LMCG would complement the Fund’s existing sub-advisers, the adequacy and scope of LMCG’s compliance program and the Adviser’s recommendation to engage LMCG.
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Investment Performance.
The Board discussed with representatives of the Adviser the investment strategy to be employed by LMCG in the management of its portion of the Fund’s assets. The Board took into account the Adviser’s experience and reputation in selecting, evaluating and overseeing investment advisers.
Sub-Advisory Fee, Expense Ratio and Economies of Scale.
The Board reviewed and considered the proposed sub-advisory fee that, under terms of the sub-advisory agreement, would be payable by the Adviser to LMCG, and, thus, should not directly impact the overall fees paid by the Fund. The Board concluded, with respect to LMCG, that the proposed fee payable to LMCG by the Adviser with respect to the Fund assets allocated to LMCG was reasonable and appropriate. The Board recognized that, because LMCG’s fee would be paid by the Adviser, and not the Fund, an analysis of profitability was more appropriate in the context of the Board’s consideration of the management agreement between the Trust and the Adviser. The Board received and considered a profitability analysis of the Adviser with respect to the addition of LMCG as an additional sub-adviser for the Fund and determined that the Adviser’s profitability was not excessive in light of the nature, extent and quality of the services to be provided to the Fund by the Adviser and LMCG, noting in particular the existence of an ongoing contractual fee waiver that limits the total amount of advisory fees capable of being retained by the Adviser to 39 basis points of the Fund’s assets. Similarly, the Board recognized that, because LMCG’s fee would be paid by the Adviser, and not the Fund, an analysis of economies of scale with respect to LMCG was more appropriate in the context of the Board’s consideration of the management agreement between the Trust and the Adviser. Accordingly, consideration of economies of scale with respect to LMCG was not considered relevant at the time to the Board’s determination to approve the sub-advisory agreement with LMCG. The Board also concluded that any other benefits that could be expected to accrue to LMCG by virtue of its relationship with the Fund were reasonable.
Other Considerations.
After full consideration of the factors discussed above, with no single factor identified as being of paramount importance, the Board, with the advice of Fund counsel, resolved to approve the sub-advisory agreement with LMCG, having determined that such agreement would be in the best interests of the Fund.
Following the Board’s approval, the Adviser entered into a sub-advisory agreement with LMCG, whereby LMCG began managing the assets of the Fund allocated to it by the Adviser on March 18, 2019. The Adviser determined that the target percentage of the Fund’s assets to be allocated to LMCG would be approximately 12 percent.
The Sub-Advisory Agreement
The terms of the sub-advisory agreement with LMCG are substantially similar to the terms of the agreements with the other sub-advisers to the Fund, except for the sub-advisory fee rate payable by the Adviser to LMCG.
Under the sub-advisory agreement, LMCG makes all investment decisions for the portion of the Fund’s assets allocated to it, and continuously reviews, supervises and administers the Fund’s investment program with respect to those assets. LMCG discharges its responsibilities under the sub-advisory agreement subject to the supervision of the Adviser and the Board, and has agreed to do so in a manner consistent with the Fund’s investment objective, policies and limitations. The sub-advisory agreement is dated January 17, 2017 and was amended on March 6, 2019 to include LMCG’s management of the Fund. The sub-advisory agreement was renewed by the entire Board for a one-year period at a meeting called for that purpose on March 5, 2019. Thereafter, the continuance of the sub-advisory agreement requires the annual approval of the Board, including a majority of the trustees who are not “interested persons,” as defined in the 1940 Act.
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For its services to the Fund under the sub-advisory agreement, LMCG receives a sub-advisory fee based on the average daily net asset value of the assets of the Fund allocated to LMCG. As a result of the addition of LMCG as a sub-adviser to the Fund, the total sub-advisory fees paid by the Adviser with respect to the Fund increased by 6 basis points from 63 basis points to 69 basis points and the portion of the total advisory fee retained by the Adviser remained equal to 39 basis points. The total advisory fee retained by the Adviser continues to be limited by a contractual fee waiver that shall remain in effect until at least June 30, 2019.
Additional Information about LMCG
LMCG is located at 200 Clarendon Street, 28th Floor, Boston, MA 02116. LMCG is registered with the SEC as an investment adviser. LMCG is a board-managed limited liability company owned directly by its employees and indirectly by Royal Bank of Canada (“RBC”), a publicly-held Canadian Bank. RBC indirectly owns more than 25% of LMCG. LMCG operates independently of RBC and does not conduct joint operations or provide investment advice that is formulated, in whole or in part, with RBC or any of its affiliates.
Listed below are the names and principal occupations of the senior personnel of LMCG responsible for the day-to-day management of the Fund’s assets allocated to LMCG. The principal business address of each person, as it relates to his duties at LMCG, is the same as that of LMCG.
Name | Title | |
David Weeks | Chief Investment Officer of Relative Value Credit team | |
Ajit Kumar, CFA | Portfolio Manager | |
Edwin Tsui, CFA | Portfolio Manager | |
Andreas Eckner, PhD | Portfolio Manager | |
Guillaume Horel, PhD | Portfolio Manager |
Comparable Funds
LMCG currently does not manage the assets of other investment companies or accounts having similar investment objectives and strategies as the Destinations Multi Strategy Alternatives Fund.
Payments of Commissions to Affiliated Brokers
During the Fund’s most recently completed fiscal year ended February 28, 2019, the Fund did not pay brokerage commissions to affiliated brokers.
Purchases of LMCG’s Securities by the Trustees
As of February 28, 2019 no trustee of the Trust has purchased or sold any securities of the current or former parent entities of LMCG.
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OTHER INFORMATION
Adviser
Brinker Capital, Inc. serves as Adviser of the Fund and is located at 1055 Westlakes Drive, Suite 250, Berwyn, Pennsylvania, 19312.
Distributor
The Trust’s distributor, Foreside Fund Services, LLC, is located at Three Canal Plaza, Suite 100, Portland, Maine 04101.
Administrator
Brown Brothers Harriman & Co. serves as the administrator to the Fund and is located at 50 Post Office Square, Boston, Massachusetts, 02110.
Householding
To the extent you have requested a paper copy of this Information Statement, only one copy will be mailed to a single household, even if more than one person in a household is a Fund shareholder of record, unless the Fund has received instructions to the contrary. To make any changes to your householding arrangement, please contact the Fund by calling 1-877-771-7979 or by writing to the Fund at Brinker Capital Destinations Funds, P.O. Box 2175, Milwaukee, WI 53201.
Annual/Semi-Annual Reports
Shareholders can obtain a copy of the Trust’s most recent Annual Report and Semi-Annual Report on the same website on which this Information Statement is available, or by calling 1-877-771-7979 or by writing to the Brinker Capital Destinations Funds, P.O. Box 2175, Milwaukee, WI 53201. Paper copies of such reports will be provided free of charge.
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