UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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ADVANCED SERIES TRUST
AST Academic Strategies Asset Allocation Portfolio
655 Broad Street
Newark, New Jersey 07102
April 1, 2021
Dear Shareholder:
Enclosed is a notice and proxy statement relating to a Special Meeting of Shareholders (the “Meeting”) of the Academic Strategies Asset Allocation Portfolio (the “Portfolio”), a series of Advanced Series Trust (the “Trust” or “AST”). The Meeting is scheduled to be held on May 11, 2021, at 11:45 a.m. Eastern Time. Generally, we hold special meetings in person. However, we are sensitive to the public health and travel concerns our shareholders may have, and recommendations that public health officials may issue, relating to the evolving coronavirus (“COVID-19”) situation. As a result, the Meeting will be conducted solely by means of remote communication. Shareholders will not be able to attend the Meeting in person. Any shareholders wishing to participate in the Meeting by means of remote communication can do so at https://www.viewproxy.com/pru/ASTPortfolio/broadridgevsm/.
At the Meeting, shareholders will be asked to:
1. Approve an amended investment management agreement for the Portfolio in connection with the implementation of a new principal investment strategy for the Portfolio; and
2. Transact such other business as may properly come before the Meeting and any adjournments thereof.
We believe that the proposal is in the best interest of the Portfolio and its shareholders for several reasons:
· The Potential for Improved Performance: The proposed changes will permit the Portfolio subadvisers, each of which has strong performance records, to directly invest the Portfolio’s assets in securities that are expected to improve the Portfolio’s performance.
· Increased Liquidity: The proposed changes will result in an increase in the Portfolio’s overlay sleeve during normal market conditions in an attempt to improve liquidity.
· Reduced Expenses: The proposed changes are expected to decrease the Portfolio’s net operating expense ratio. While the proposal will result in an increase in the management fee paid by the Portfolio, the increase in management fee will be offset by the decrease in acquired fund fees and expenses that the Portfolio currently pay as a result of its fund-of-funds structure.
Additional detail regarding the proposal you are being asked to approve is set forth below:
Proposal. Under the proposal, the investment management agreement would be amended to reflect the change to the Portfolio’s principal investment strategy to move from a fund-of-funds structure that normally invests greater than 50% of its assets in underlying funds, with the remainder of the assets invested using direct investments, to a structure using primarily direct investments through multiple sleeves managed by subadvisers. As a result of the Portfolio’s new principal investment strategy, the oversight and other responsibilities of PGIM Investments LLC and AST Investment Services, Inc. (together, the “Manager”) will increase. The Manager will have additional responsibilities and duties in the areas of investment oversight, compliance, legal and fund administration. Those responsibilities include oversight of subadviser performance and compliance, oversight and implementation of complex investments, legal documentation for derivatives, and additional accounting and valuation work responsibilities. The addition of subadvisers and the change from a fund-of-funds structure that normally invests greater than 50% of its assets in underlying funds will also result in an increase in subadvisory fees that the Manager will have to pay to the subadvisers to manage the Portfolio. Under the current structure, Portfolio shareholders pay fees for those services indirectly through the Portfolio’s investment in underlying AST portfolios.
As detailed above, the changes to the Portfolio’s principal investment strategy and the related proposed amendment to the Management Agreement are intended to increase the potential for improved performance, increased liquidity and reduced net operating expenses for the Portfolio. Although the Manager proposes an increase in the management fee for the Portfolio, the net operating expense ratio for the Portfolio is expected to decrease. This decrease is primarily because the Portfolio will directly pay the costs of certain investment management services through the investment management fee, rather than indirectly paying the management and other fees through the acquired fund fees and expenses of each underlying portfolio. Information on the proposed principal investment strategy including the proposed investment management fee, contractual fee waiver and expense cap, and overall expenses (both current and proposed) is included in the accompanying Q&A and proxy statement.
If the proposal is not approved by the Portfolio’s shareholders, the new principal investment strategy will not be implemented for the Portfolio and the shareholders of the Portfolio will not receive the expected benefits from the changes.
As an owner of a variable annuity contract with an interest in the Portfolio as of the close of business on February 12, 2021, you are entitled to instruct the insurance company that issued your contract or policy how to vote the Portfolio shares. The attached Notice of Special Meeting of Shareholders and Proxy Statement concerning the Meeting describe the matters to be considered at the Meeting.
The Board of Trustees of the Trust has approved the proposal and recommends that you vote “FOR” the proposal. Although the Board has determined that the proposal is in your best interest, the final decision is yours.
You are cordially invited to participate in the Meeting. Since it is important that your vote be represented whether or not you are able to participate, you are urged to consider these matters and to exercise your voting instructions by completing, dating, signing, and returning the enclosed voting instruction card in the accompanying return envelope at your earliest convenience, or by providing your voting instructions by telephone or over the Internet by following the enclosed instructions. Voting instruction cards must be received by the day before the Meeting. Voting instructions submitted by telephone or over the Internet must be submitted by 11:59 p.m. Eastern Time on the day before the Meeting. Please respond promptly in order to save additional costs of solicitation and in order to make sure you are represented.
Sincerely,
Timothy S. Cronin
President, Advanced Series Trust
IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSAL
Please read the enclosed proxy statement for a complete description of the proposal. However, as a quick reference, the following questions and answers provide a brief overview of the proposal.
Q1. WHY AM I RECEIVING THIS PROXY STATEMENT?
A. You have received these proxy materials and are being asked to provide voting instructions to your insurance company on the proposal because you are the beneficial owner of shares of the AST Academic Strategies Asset Allocation Portfolio (the “Portfolio”).
The Portfolio is a series of the Advanced Series Trust (“AST” or the “Trust”). The Portfolio is seeking shareholder consideration and approval of an important proposal.
Q2. WHAT PROPOSAL AM I BEING ASKED TO VOTE ON?
A. The purpose of the proxy is to ask you to vote to approve an amended investment management agreement for the Portfolio in connection with the implementation of a new principal investment strategy for the Portfolio.
Q3. WHAT IS THE NEW PRINCIPAL INVESTMENT STRATEGY THAT WOULD BE IMPLEMENTED IF THE PROPOSAL IS APPROVED?
A. Currently, the Portfolio operates under a fund-of-funds structure that normally invests greater than 50% of its assets in underlying funds (primarily composed of other AST portfolios), with the remainder of its assets using direct investments in multiple sleeves managed by the Portfolio’s current subadvisers. As part of the new investment strategy, the Portfolio will no longer invest primarily in other funds. Instead, the Portfolio will primarily invest in direct investment through multiple sleeves managed by subadvisers.
Q4. WHY IS THE PROPOSAL IN THE BEST INTEREST OF SHAREHOLDERS?
A. The Board of Trustees of the Trust determined that the proposal was in the best interest of the Portfolio and its shareholders for several reasons.
· Seeking improved performance - The move from a fund-of-funds structure that normally invests greater than 50% of its assets in underlying funds would further allow affiliated and unaffiliated subadvisers with strong performance records to directly invest the Portfolio’s assets, using a core/satellite approach. The Portfolio’s managers, PGIM Investments LLC and AST Investment Services, Inc. (together, the “Manager”), believe, and the Board concurred, that the moving to a primary direct investment approach would enhance the Portfolio’s opportunities for strong performance going forward.
· Increased liquidity - The Manager believes that the move to a structure using primarily direct investments through multiple sleeves managed by subadvisers and an increased allocation to the Portfolio’s overlay sleeve during normal market conditions permits greater flexibility to efficiently manage asset allocation and provide improved liquidity in times of market stress. The Manager believes these changes will potentially benefit the Portfolio through a full market cycle.
· Reduced expenses - The Portfolio’s net operating expense ratios are expected to decrease. This decrease is primarily because the Portfolio will directly pay the costs of certain investment management services through the investment management fee, rather than indirectly paying the management and other fees through the acquired fund fees and expenses of each underlying fund.
Q5. HOW WILL THE PROPOSAL IMPACT FEES AND EXPENSES?
A. The net operating expense ratios for the Portfolio are expected to decrease because the Portfolio will directly pay the costs of certain investment management services through the investment management fee, rather than indirectly paying the management and other fees through the acquired fund fees and expenses of each underlying fund. Notwithstanding the decrease in net operating expense ratios for the Portfolio, under the proposal, the investment management fee paid directly by the Portfolio will increase.
Q6. IF THE PROPOSAL IS APPROVED, WHEN WILL THE PROPOSED CHANGES GO INTO EFFECT?
A. If approved, the proposed changes are currently expected to go into effect on or about July 26, 2021.
Q7. WHO IS PAYING FOR THE COSTS OF THIS PROXY STATEMENT?
A. All costs incurred in entering into and carrying out the proposal, regardless of whether approved by shareholders, including (without limitation) costs incurred in connection with the printing and mailing of this proxy statement and related materials, will be paid by Prudential Annuities Distributors, Inc. or its affiliates, not the Portfolio. These costs are expected to be approximately $143,000.
Transaction costs, including spreads and brokerage commissions, will be paid by the Portfolio.
Q8. WHEN WILL THE SHAREHOLDER MEETING TAKE PLACE?
A. The shareholder meeting (the “Meeting) is scheduled to take place on May 11, 2021, at 11:45 a.m. Eastern Time. Generally, we hold special meetings in person. However, we are sensitive to the public health and travel concerns our shareholders may have, and recommendations that public health officials may issue, relating to the evolving coronavirus (“COVID-19”) situation. As a result, the Meeting will be conducted solely by means of remote communication. Shareholders will not be able to attend the Meeting in person. Any shareholders wishing to participate in the Meeting by means of remote communication can do so at https://www.viewproxy.com/pru/ASTPortfolio/broadridgevsm/.
Q9. HOW DO I VOTE?
A. Your vote is very important. You can vote in the following ways:
· Registering to attend the Meeting via remote communication at https://www.viewproxy.com/pru/ASTPortfolio/broadridgevsm/.
· Please visit the Meeting website no later than 11:59 p.m. Eastern Time on the day before the Meeting to register. Shareholders will need to register for the Meeting by entering the control number found on the proxy card or voting instruction form on the Meeting website;
· Completing and signing the enclosed voting instruction card, and mailing it in the enclosed postage paid envelope. Voting instruction cards must be received by the day before the Meeting;
· Calling toll-free 800-690-6903 and following the instructions. Voting instructions submitted by telephone must be submitted by 11:59 p.m., Eastern Time on the day before the Meeting; or
· Online at www.proxyvote.com and following the instructions. Voting instructions submitted over the Internet must be submitted by 11:59 p.m. Eastern Time on the day before the Meeting.
Q10. HOW CAN I CHANGE MY VOTING INSTRUCTIONS?
A. Previously submitted voting instructions may be revoked or changed by any of the voting methods described above, subject to the voting deadlines also discussed above. Please see the Voting Information section of the proxy statement for additional information.
Q11. CAN THE PROXY STATEMENT BE VIEWED ONLINE?
A. Yes, the proxy statement can be viewed at www.prudential.com/variableinsuranceportfolios.
Q12. WHAT IF I HAVE QUESTIONS ABOUT THE PROXY STATEMENT?
A. If you require assistance or have any questions regarding the proxy statement, please call 1-800-752-6342 between the hours of 8:00 a.m. and 7:00 p.m. Eastern Time, Monday-Thursday, or between the hours of 8:00 a.m. and 6:00 p.m. Eastern Time on Fridays.
ADVANCED SERIES TRUST
AST Academic Strategies Asset Allocation Portfolio
655 Broad Street
Newark, New Jersey 07102
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 11, 2021
To the Shareholders of the AST Academic Strategies Asset Allocation Portfolio, a series of the Advanced Series Trust:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the “Meeting”) of the AST Academic Strategies Asset Allocation Portfolio (the “Portfolio”), a series of Advanced Series Trust (the “Trust” or “AST”), will be held on May 11, 2021 at 11:45 a.m. Eastern Time.
Generally, we hold special meetings in person. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving coronavirus (“COVID-19”) situation. As a result, the Meeting will be conducted solely by means of remote communication. Shareholders will not be able to attend the Meeting in person. Any shareholders wishing to participate in the Meeting by means of remote communication can do so at https://www.viewproxy.com/pru/ASTPortfolio/broadridgevsm/.
The purpose of the Meeting is to consider and act upon:
1. Approving an amended investment management agreement for the Portfolio in connection with the implementation of a new principal investment strategy for the Portfolio.
We believe that the proposal is in the best interest of the Portfolio and its shareholders for several reasons:
· The Potential for Improved Performance: The proposed changes will permit the Portfolio subadvisers, each of which has strong performance records, to directly invest the Portfolio’s assets in securities that are expected to improve the Portfolio’s performance.
· Increased Liquidity: The proposed changes will result in an increase in the Portfolio’s overlay sleeve during normal market conditions in an attempt to improve liquidity.
· Reduced Expenses: The proposed changes are expected to decrease the Portfolio’s net operating expense ratio. While the proposal will result in an increase in the management fee paid by the Portfolio, the increase in management fee will be offset by the decrease in acquired fund fees and expenses that the Portfolio currently pay as a result of its fund-of-funds structure.
The amended investment management agreement (the “Management Agreement”) would increase the fee paid directly by the Portfolio to PGIM Investments LLC and AST Investment Services, Inc. (collectively the “Manager”) to enable the following changes:
· Changing the Portfolio’s principal investment strategy to move from a fund-of-funds structure that normally invests greater than 50% of its assets in underlying funds to a structure using primarily direct investments through multiple sleeves managed by subadvisers; and
· Adding affiliated and non-affiliated subadvisers to the Portfolio to manage sleeves of the Portfolio.
While the Manager proposes to increase the management fee for the Portfolio, the net operating expense ratio for the Portfolio is expected to decrease. While the proposal will result in an increase in the management fee paid by the Portfolio, the increase in management fee will be offset by the decrease in acquired fund fees and expenses that the Portfolio currently pay as a result of their fund-of-funds structure.
Your Board unanimously recommends that you vote in favor of the proposal.
Please note that owners of variable annuity contracts who have allocated account value to separate accounts investing in the Portfolio may instruct their insurance company how to vote the shares related to their investment. Contract owners should consider themselves shareholders for purposes of these proxy materials.
You should read the proxy statement attached to this notice prior to completing your voting instruction card. The record date for determining the number of shares outstanding, the shareholders entitled to vote and the Contract owners entitled to provide voting instructions at the relevant Meeting and any adjournments or postponements thereof has been fixed as the close of business on February 12, 2021. If you had an interest in a Portfolio as of the record date, you are entitled to give voting instructions. If you participate in the relevant Meeting, you may give your voting instructions via remote communication.
YOUR VOTE IS IMPORTANT
PLEASE RETURN YOUR VOTING INSTRUCTION CARD PROMPTLY
Regardless of whether you plan to participate in the Meeting, you are requested to promptly complete, date, sign, and return the enclosed voting instruction card in the enclosed postage-paid envelope. Alternatively, you may vote by telephone or over the Internet as described in the enclosed proxy statement. Voting instruction cards must be received by the day before the Meeting. Voting instructions submitted by telephone or over the Internet must be submitted by 11:59 p.m. Eastern Time on the day before the Meeting.
By order of the Board of Trustees
Andrew French, Secretary of Advanced Series Trust
Dated: April 1, 2021
ADVANCED SERIES TRUST
AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO
VOTING INFORMATION
FOR THE SPECIAL MEETING OF SHAREHOLDERS
OF ADVANCED SERIES TRUST
TO BE HELD ON MAY 11, 2021
Dated: April 1, 2021
GENERAL
This voting information is being furnished by the following insurance companies (each, an “Insurance Company” and together, the “Insurance Companies”), to owners of variable annuity contracts (the “Contracts”) who, as of February 12, 2021 (the “Record Date”), had account values allocated to the sub-accounts of one or more separate accounts of the Insurance Companies (the “Separate Accounts”) that invest in shares of the AST Academic Strategies Asset Allocation Portfolio (the “Portfolio”) of Advanced Series Trust (“AST” or the “Trust”).
Prudential Annuities Life Assurance Corporation
Pruco Life Insurance Company of New Jersey
Pruco Life Insurance Company
Prudential Retirement Insurance and Annuity Company
Allstate Life Insurance Company
Allstate Life Insurance Company of New York
Each Insurance Company is required to offer Contract owners the opportunity to instruct it, as the record owner of all of the shares of beneficial interest in the Portfolio (the “Shares”) held by its Separate Accounts, as to how the Insurance Company should vote on the proposal that will be considered at the Special Meeting of Shareholders referred to in the preceding Notice and at any adjournments or postponements (the “Meeting”). The enclosed proxy statement, which you should retain for future reference, sets forth concisely information about the proposal that a Contract owner should know before completing the enclosed voting instruction card.
Prudential Financial, Inc. is the parent company of each of the Prudential Annuities Life Assurance Corporation, Pruco Life Insurance Company of New Jersey, Pruco Life Insurance Company and Prudential Retirement Insurance and Annuity Company.
This voting information and the accompanying voting instruction card are being mailed to Contract owners on or about April 1, 2021, and will be available on the Portfolio’s website at www.prudential.com/variableinsuranceportfolios on or about April 1, 2021.
HOW TO INSTRUCT AN INSURANCE COMPANY
To instruct an Insurance Company as to how to vote the Shares held in its Separate Accounts, Contract owners are asked to promptly complete their voting instructions on the enclosed voting instruction card(s); and sign, date and mail the voting instruction card(s) in the accompanying postage-paid envelope. Contract owners also may provide voting instructions by phone at 1-800-690-6903, or over the Internet at www.proxyvote.com. Voting instruction cards must be received by the day before the Meeting. Voting instructions submitted by telephone or the Internet must be submitted by 11:59 p.m. Eastern Time on the day before the Meeting.
If a voting instruction card is not marked to indicate voting instructions for the proposal but is signed, dated and timely returned, it will be treated as an instruction to vote the Shares in favor of the proposal.
The number of Shares held in the sub-account of a Separate Account corresponding to the Portfolio for which a Contract owner may provide voting instructions was determined as of the Record Date by dividing (i) the Contract’s account value allocable to that sub-account by (ii) the net asset value of one Share of the Portfolio. Each whole share is entitled to one vote as to each matter with respect to which it is entitled to vote and each fractional share is entitled to a proportionate fractional vote. At any time prior to an Insurance Company’s voting at the Meeting, a Contract owner may revoke his or her voting instructions by providing the Insurance Company with a properly executed written revocation of such voting instructions, properly executing later-dated voting instructions by a voting instruction card, telephone or the Internet, or submitting your voting instructions at the Meeting.
HOW AN INSURANCE COMPANY WILL VOTE
Each Insurance Company will vote the Shares for which it receives timely voting instructions from Contract owners in accordance with those instructions. Shares in each sub-account of a Separate Account that is invested in the Portfolio for which an Insurance Company receives a voting instruction card that is signed, dated and timely returned but is not marked to indicate voting instructions will be treated as an instruction to vote the Shares in favor of the proposal. Shares in each sub-account of a Separate Account that is invested in the Portfolio for which an Insurance Company receives no timely voting instructions from Contract owners, or that are attributable to amounts retained by an Insurance
Company, will be voted by the Insurance Company either “FOR” or “AGAINST” approval of the proposal, or as an abstention, in the same proportion as the Shares for which Contract owners have provided voting instructions to the Insurance Company. As a result of such proportional voting by the Insurance Companies, it is possible that a small number of Contract owners could determine whether the proposal is approved.
OTHER MATTERS
The Insurance Companies are not aware of any matters, other than the specified proposal, to be acted on at the Meeting. If any other matters come before the Meeting, an Insurance Company will vote the Shares upon such matters in its discretion. Voting instruction cards may be solicited by employees of PGIM Investments and AST Investment Services, Inc., the Portfolio’s investment manager, or their affiliates as well as officers and agents of the Trust. The principal solicitation will be by mail and electronic delivery but voting instructions may also be solicited by telephone, fax, personal interview, or over the Internet.
It is expected that the presence at the Meeting of the Insurance Companies will be sufficient to constitute a quorum. If the vote required to approve or reject a proposal is not obtained at the Meeting, the officers of the Trust may propose one or more adjournments of the Meeting in accordance with applicable law and the Trust’s governing documents to permit further solicitation of voting instructions.
It is important that you vote. Please promptly mark your voting instructions on the enclosed voting instruction card; then sign, date and mail the voting instruction card in the accompanying postage-paid envelope. You also may provide your voting instructions by telephone at 1-800-690-6903, or over the Internet at www.proxyvote.com. Voting instruction cards must be received by the day before the Meeting. Voting instructions submitted by telephone or over the Internet must be submitted by 11:59 p.m. Eastern Time on the day before the Meeting. You may also participate at the Meeting via remote communication and submit your voting instructions.
ADVANCED SERIES TRUST
AST Academic Strategies Asset Allocation Portfolio
655 Broad Street
Newark, New Jersey 07102
COMBINED PROXY STATEMENT DATED APRIL 1, 2021 FOR THE
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 11, 2021
This Proxy Statement relates to the solicitation by the Board of Trustees of Advanced Series Trust (“AST” or the “Trust”) of proxies for the Special Meeting of Shareholders of the AST Academic Strategies Asset Allocation Portfolio, a series of the Trust (the “Meeting”) to be held on May 11, 2021 at 11:45 a.m. Eastern Time.
Generally, we hold special meetings in person. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving coronavirus (“COVID-19”) situation. As a result, the Meeting will be conducted solely by means of remote communication. Shareholders will not be able to attend the Meeting in person. Any shareholders wishing to participate in the Meeting by means of remote communication can do so at https://www.viewproxy.com/pru/ASTPortfolio/broadridgevsm/.
This Proxy Statement is being furnished to owners of variable annuity contracts (the “Contracts”) issued by Pruco Life Insurance Company of New Jersey, Pruco Life Insurance Company, Prudential Annuities Life Assurance Corporation, Prudential Retirement Insurance and Annuity Company and Allstate Life Insurance Company and Allstate Life Insurance Company of New York (each, an “Insurance Company” and together, the “Insurance Companies”) who, as of February 12, 2021 (the “Record Date”), had account values allocated to the sub-accounts of an Insurance Company’s separate account or accounts (the “Separate Accounts”) that invest in shares of the Portfolio.
Owners of the Contracts are being provided the opportunity to instruct the applicable Insurance Company to approve the proposal contained in this Proxy Statement in connection with the solicitation by the Board of Trustees of the Trust of proxies for the Meeting. This Proxy Statement is also being furnished to the Insurance Companies as the record owners of Shares.
The Trust is a Massachusetts business trust that is registered with the U.S. Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust’s shares of beneficial interest are referred to herein as “Shares.” The Insurance Companies are the shareholders of record of the Shares. Because Contract owners are being asked to provide voting instructions to the Insurance Companies, Contract owners should consider themselves shareholders for purposes of these proxy materials. The Trust’s Board of Trustees may be referred to herein as the “Board,” and its members may be referred to herein as “Trustees.”
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on May 11, 2021.
This Proxy Statement, which you should retain for future reference, contains important information regarding the proposal that you should know before providing voting instructions. Additional information about the Trust has been filed with the SEC and is available upon oral or written request. This Proxy Statement will be available at www.prudential.com/variableinsuranceportfolios on or about April 1, 2021. Distribution of this Proxy Statement to the Insurance Companies and to Contract owners is scheduled to begin on or about April 1, 2021. It is expected that one or more representatives of each Insurance Company will participate in the Meeting via remote communication or by proxy and will vote shares held by the Insurance Company in accordance with voting instructions received from its Contract owners and in accordance with voting procedures established by the Trust.
PGIM Investments LLC (“PGIM Investments”) and AST Investment Services, Inc. (“ASTIS” and, with PGIM Investments, the “Manager”) are the investment managers of the Portfolio. Prudential Annuities Distributors, Inc. (“PAD”), an affiliate of the Manager and the Insurance Companies, is the principal underwriter of the Portfolio’s Shares. The mailing address for PGIM Investments’ and the Trust’s principal offices is 655 Broad Street, Newark, New Jersey 07102. The mailing address for ASTIS’ and PAD’s principal offices is One Corporate Drive, Shelton, Connecticut 06484.
Contract owners who have allocated account values to the Portfolio as of the close of business on the Record Date are entitled to give voting instructions at the Meeting. Additional information regarding outstanding Shares, submitting your voting instruction cards and participating in the Meeting is included at the end of this Proxy Statement in the section entitled “Voting Information.”
PROPOSAL
TO APPROVE AN AMENDED INVESTMENT MANAGEMENT AGREEMENT
Under the proposal, the Portfolio shareholders are being asked to approve an amended Management Agreement for the Portfolio in connection with the implementation of a new principal investment strategy for the Portfolio. The Board, including all of the Independent Trustees, have approved the amended Management Agreement and recommend that you approve the amended Management Agreement.
Board Approval and Recommendation
At meeting of the Board held on January 26-27, 2021, the Trustees, including the Trustees who are not “interested persons” (as that term is defined in the 1940 Act) of the Trust (the “Independent Trustees”), unanimously approved the amended Management Agreement for the Portfolio and recommended that the Portfolio’s shareholders approve the amended Management Agreement.
Background: Existing Management Agreement & Subadvisory Arrangements
The Manager serves as the manager of the Portfolio under the existing Management Agreement. Pursuant to the agreement, the Manager provides investment advisory and related management and administrative services to the Portfolio. The existing Management Agreement was most recently approved by shareholders of the Portfolio at a special meeting of the initial Portfolio shareholders that was held on May 1, 2003. The existing Management Agreement was most recently renewed by the Board, including all of the Independent Trustees, at Board meetings held on June 15-16, 2020.
Pursuant to the Management Agreement, the Manager, subject to the supervision of the Board and in conformity with the stated policies of the Trust, manages both the investment operations of the Portfolio and the composition of its investment holdings, including the purchase, retention, disposition and loan of securities and other assets. In connection therewith, the Manager is obligated to keep certain books and records of the Portfolio. The Manager is authorized to enter into subadvisory agreements for investment advisory services in connection with the management of the Portfolio. The Manager continues to have responsibility for all investment advisory services performed pursuant to any such subadvisory agreements.
The Manager is specifically responsible for overseeing and managing the Portfolio and any subadvisers. In this capacity, the Manager reviews the performance of the Portfolio and any subadvisers and makes recommendations to the Board with respect to the retention or addition of investment subadvisers, the renewal of contracts, and the reorganization and merger of portfolios, and other legal and compliance matters. The Manager takes on the entrepreneurial and other risks associated with the launch of each new portfolio and its ongoing operations. The Strategic Investment Research Group (SIRG), a unit of PGIM Investments, regularly evaluates and supervises the Portfolio and any subadvisers, including with respect to investment performance. SIRG is a centralized research department of PGIM Investments that comprises a group of highly experienced analysts. SIRG utilizes proprietary processes to analyze large quantities of industry data, both on a qualitative and quantitative level, in order to effectively oversee the Portfolio and any subadvisers. The Manager utilizes this data in directly supervising the Portfolio and any subadvisers. SIRG provides reports to the Board and presents to the Board at special and regularly scheduled Board meetings. The Manager bears the cost of the oversight program maintained by SIRG.
The Trust has obtained an exemption from the Securities and Exchange Commission (“SEC”) that generally permits the Manager, with Board approval, to enter into or amend agreements with subadvisers without obtaining shareholder approval. This exemption (which is similar to exemptions granted to other investment companies that are organized in a manner similar to the Trust) is intended to facilitate the efficient supervision and management of subadvisers by the Manager and the Trustees.
In addition, the Manager generally provides or supervises all of the administrative functions necessary for the organization, operation and management of the Trust and its portfolios. The Manager administers the Trust’s corporate affairs and, in connection therewith, furnishes the Trust with office facilities, together with those ordinary clerical and bookkeeping services, which are not being furnished by, the Trust’s custodian or transfer agent. The Manager is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Trust. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Trust, including, but not limited to, the custodian, transfer agent, and accounting agent. The management services of the Manager to the Trust are not exclusive under the terms of the Management Agreement and the Manager is free to, and does, render investment management services to other pooled investment vehicles.
The primary administrative services furnished by the Manager are more specifically detailed below:
· furnishing of office facilities;
· paying salaries of all officers and other employees of the Manager who are responsible for managing the Trust and the Portfolio;
· monitoring financial and shareholder accounting services provided by the Trust’s custodian and transfer agent;
· providing assistance to the service providers of the Trust and the Portfolio, including, but not limited to, the custodian, transfer agent, and accounting agent;
· monitoring, together with any subadvisers, the Portfolio’s compliance with its investment policies, restrictions, and with federal and state laws and regulations, including federal and state securities laws, the Internal Revenue Code and other relevant federal and state laws and regulations;
· preparing and filing all required federal, state and local tax returns for the Trust and the Portfolio;
· preparing and filing with the SEC on Form N-CSR the Trust’s annual and semi-annual reports to shareholders, including supervising financial printers who provide related support services;
· preparing and filing with the SEC required monthly reports of portfolio holdings on Form N-PORT;
· preparing and filing the Trust’s registration statement with the SEC on Form N-1A, as well as preparing and filing with the SEC supplements and other documents, as applicable;
· preparing compliance, operations and other reports required to be received by the Trust’s Board and/or its committees in support of the Board’s oversight of the Trust; and
· organizing regular and any special meetings of the Board of the Trust, including preparing Board materials and agendas, preparing minutes, and related functions.
In connection with its management of the corporate affairs of the Trust, the Manager bears certain expenses, including, but not limited to:
· the salaries and expenses of all of its and the Trust’s personnel, except the fees and expenses of Trustees who are not affiliated persons of the Manager or any subadvisers;
· all expenses incurred by the Manager or the Trust in connection with managing the ordinary course of a Trust’s business, other than those assumed by the Trust, as described below;
· the fees, costs and expenses payable to any subadvisers pursuant to subadvisory agreements; and
· with respect to the compliance services provided by the Manager, the cost of the Trust’s Chief Compliance Officer, the Trust’s Deputy Chief Compliance Officer, and all personnel who provide compliance services for the Trust, and all of the other costs associated with the Trust’s compliance program, which includes the management and operation of the compliance program responsible for compliance oversight of the Portfolio and any subadvisers.
The Management Agreement provides that the Manager will not be liable for any error of judgment by the Manager or for any loss suffered by the Trust in connection with the matters to which the Management Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case, any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or loss resulting from willful misfeasance, bad faith or gross negligence or reckless disregard of duties. The Management Agreement provides that it will terminate automatically, if assigned (as defined in the 1940 Act), and that it may be terminated without penalty by either the Manager or the Trust by a vote of the Board or of a majority of the outstanding voting securities of the Trust (as defined in the 1940 Act) upon not more than 60 days’, nor less than 30 days’, written notice. The Management Agreement will continue in effect for a period of more than two years from the date of execution, only so long as such continuance is specifically approved at least annually in accordance with the requirements of the 1940 Act.
Set forth below is information about the management fees paid directly by the Portfolio to the Manager under the existing Management Agreement, management fees paid indirectly through investments in underlying AST portfolios, subadvisory fees paid by the Manager directly to Portfolio’s current subadvisers and to subadvisers for the underlying AST portfolios:
Under the existing Management Agreement, the Portfolio pays directly an investment management fee based on a schedule of rates and the Portfolio’s average daily net assets. Since the Portfolio operates partially as a “fund-of-funds,” the Portfolio also indirectly pays investment management fees on its investments in each underlying AST portfolio. Based on the Portfolio’s net assets and holdings as of November 30, 2020, the annualized effective investment management fee rate, net of waivers paid directly and indirectly by the Portfolio was approximately 0.96%, which comprises: (i) the net effective investment management fee paid directly to the Manager by the Portfolio (0.61%), plus (ii) the weighted average of the investment management fees paid to the Manager by the underlying AST portfolios (0.35%).
The Manager, in turn, pays the Portfolio’s current subadvisers contractual subadvisory fees for the Portfolio. In addition to directly paying subadvisory fees to the current subadvisers of the Portfolio, the Manager also pays subadvisory fees to the subadvisers of each underlying AST portfolio in which the Portfolio invests. Based on the Portfolio’s investments in the underlying AST portfolios net assets and holdings as of November 30, 2020, the estimated effective subadvisory fee rate for the Portfolio was approximately 0.41%, which comprises: (i) the effective contractual subadvisory fee paid by the Manager directly to Portfolio’s current subadvisers (0.26%), plus (ii) the estimated weighted average of the subadvisory fees paid by the Manager to the subadvisers of the underlying AST portfolios (0.15%).
The annualized investment management fee, net of waiver, paid by the Portfolio to the based on the Portfolio’s net assets and holdings as of November 30, 2020 was approximately $26,075,061. The Manager, in turn, paid approximately $11,203,888 to the current subadvisers of the Portfolio for providing subadvisory services during that period. Because the Manager pays subadvisory fees out of the investment management fees it receives from the Portfolio, the net investment management fee retained by the Manager based on net assets and holdings as of November 30, 2020 was approximately $14,871,173. The estimated investment management fees paid to the Manager by the underlying AST portfolios based on net assets and holdings as of November 30, 2020 was approximately $15,141,083. The Manager, in turn, paid a portion of these investment management fees received from the underlying AST portfolios to the subadvisers of each underlying AST portfolio. The estimated subadvisory fees paid by the Manager to the subadvisers of the underlying AST portfolios based on the Portfolio’s net assets and holdings as of November 30, 2020 was approximately $6,577,684. The estimated net investment management fee retained by the Manager for the underlying AST portfolios based on the Portfolio’s net assets and holdings as of November 30, 2020 was approximately $8,563,399.
Proposed Amendment to Management Fee Schedule
If shareholders approve the proposal, the fee schedule for the Management Agreement will be revised to provide that the Portfolio will pay the Manager an investment management fee at the following annual rates:
Portfolio |
| Fee Rate* |
AST Academic Strategies Asset Allocation Portfolio |
| 0.9325% of average daily net assets to $300 million; |
* The Manager will aggregate assets with the AST Academic Strategies Asset Allocation Portfolio, AST Balanced Asset Allocation Portfolio, AST Capital Growth Asset Allocation Portfolio, and AST Preservation Asset Allocation Portfolio for the purpose of calculating the management fee for each Portfolio.
The Management Agreement is attached to this Proxy Statement as Exhibit A.
With the exception of the investment management fee rate, all other terms of the Management Agreement will remain unchanged.
As under the current arrangement, the investment management fee will be computed daily, and will be paid to the Manager on a monthly basis. To the extent that the Manager invests Portfolio assets in other AST portfolios, the Manager will waive its investment management fee and any 12b-1 fees to ensure no duplicative fees.
The Manager has also agreed to a new contractual management fee waiver that will be guaranteed through at least June 30, 2022 and an expense cap that will be guaranteed through at least June 30, 2023. The fee waiver and expense cap are contingent upon shareholder approval of the proposal.
Reasons for Proposed Amendment to Management Fee Schedule
As a result of the new principal investment strategies, the oversight and other responsibilities of the Manager will increase. The addition of subadvisers and the change from the fund-of-funds structure will also result in an increase in subadvisory fees that the Manager will have to pay to the subadvisers to manage the Portfolio. For these reasons, the Manager and the Board have proposed increasing the investment management fee rate.
The Manager and the Board believe that the proposal is in the best interests of the Portfolio and its shareholders for several reasons:
· Seeking improved performance - The move from a fund-of-funds structure that normally invests greater than 50% of its assets in underlying funds would further allow affiliated and unaffiliated subadvisers with strong performance records to directly invest the Portfolio’s assets, using a core/satellite approach. The Manager believes, and the Board concurred, that the moving to a primary direct investment approach would enhance the Portfolio’s opportunities for strong performance going forward.
· Increased liquidity - The Manager believes that the move to a structure using primarily direct investments through multiple sleeves managed by subadvisers and an increased allocation to the Portfolio’s overlay sleeve during normal market conditions permits greater flexibility to efficiently manage asset allocation and provide improved liquidity in times of market stress. The Manager believes these changes will potentially benefit the Portfolio through a full market cycle.
· Reduced expenses - The Portfolio’s net operating expense ratios are expected to decrease. This decrease is primarily because the Portfolio will directly pay the costs of certain investment management services through the investment management fee, rather than indirectly paying the management and other fees through the acquired fund fees and expenses of each underlying fund.
Board Considerations
At a meeting of the Board of Trustees held on January 26-27, 2021, the Board considered presentations made by the Manager concerning proposed changes to the Portfolio’s principal investment strategy, subadvisory arrangements, investment management fee rate, and secondary benchmark (these changes are collectively referred to herein from time to time as the “Portfolio Repositioning”, and the Portfolio resulting from the Portfolio Repositioning is referred to herein from time to time as a “Repositioned Portfolio”).
At such meeting, the Board, including a majority of the Independent Trustees, approved amending the Management Agreement to increase the investment management fee rate payable by the Portfolio. The Board also approved new subadvisory agreements with J.P. Morgan Investment Management, Inc. (“J.P. Morgan”), Massachusetts Financial Services Company (“MFS”), PGIM, Inc. (“PGIM”), and Wellington Management Company LLP (“Wellington,” and collectively, the “New Subadvisers”), and with First Quadrant, L.P. (“First Quadrant”), Jennison Associates LLC (“Jennison”), Morgan Stanley Investment Management Inc. (“Morgan Stanley”), QMA LLC (“QMA”), and Western Asset Management Company, LLC and Western Asset Management Company Limited (together, “Western Asset,” and collectively with First Quadrant, Jennison, Morgan Stanley, and QMA, the “Existing Subadvisers”). The Existing Subadvisers and the New Subadvisers are referred to herein from time to time as the “Subadvisers.”
The material factors and conclusions that formed the basis for the Trustees’ determination to approve the amendment to the Management Agreement are discussed separately below.
Nature, Quality, and Extent of Services
The Board received and considered information regarding the nature and extent of services provided to the Portfolio by the Manager and the Existing Subadvisers under the existing Management Agreement and the existing subadvisory agreements, respectively, and the nature and extent of services to be provided to the Repositioned Portfolio by the Manager and the Subadvisers under the proposed amended Management Agreement and the new subadvisory agreements.
The Board considered the proposed change to the Portfolio’s principal investment strategy from a fund-of-funds structure that invests greater than 50% of its assets in underlying funds, with the remainder of the assets invested using direct investments to a structure using primarily direct investments through multiple sleeves managed by subadvisers, and noted that the proposed amended Management Agreement and the new subadvisory agreements were intended to facilitate the strategy change. The Board received and considered information regarding each Subadviser’s role as subadviser to a Portfolio. The Board noted that each Subadviser would be required to provide day-to-day portfolio management services and to comply with all Portfolio policies, and all applicable legal and regulatory requirements.
The Board considered the Manager’s representation that the nature and extent of services to be provided by the Manager under the proposed amended Management Agreement would likely be greater than those provided by the Manager under the existing Management Agreement due to the increased oversight and other responsibilities under the proposed direct investment structure. The Board concluded that, based on the nature and extent of the services to be provided to each Portfolio by the Manager and Subadvisers, the background information that it had reviewed regarding the Manager and each of the Subadvisers, and its prior experience of each with regard to other AST portfolios, it was reasonable to expect that the Board would be satisfied with the nature, extent and quality of investment subadvisory services to be provided to each Portfolio by the Manager and each of the Subadvisers. The Board concluded that it was satisfied with the nature, extent, and quality of the investment services expected to be provided to the Portfolio by the Manager and the Subadvisers under the proposed amended Management Agreement and the new subadvisory agreements.
Investment Performance
The Board received and considered information regarding the investment performance of the Portfolio. The Board also received and considered hypothetical performance information of the Repositioned Portfolio, as well as a comparison of such performance information against the Portfolio’s benchmark indexes and peer universes. The Board concluded that it was satisfied with the performance information it received.
The Board noted that it would consider performance information as part of future annual reviews of the Portfolio’s management and subadvisory agreements.
Management and Subadvisory Fees
The Board considered the proposed management fee under the amended Management Agreement and the subadvisory fee rates payable by the Manager to each of the Subadvisers under the new subadvisory agreements. The Board noted that the Manager proposed an increase in the investment management fee rate for the Portfolio in order to effect the Portfolio Repositioning. The Board considered that the proposed management fee reflects the increased oversight and other responsibilities by the Manager as a result of the Portfolio Repositioning as compared to the Manager under the current management agreement. The Board considered that the proposed subadvisory fee rates under the new subadvisory agreements reflect the operational and investment management responsibilities and corresponding costs to be incurred under the existing subadvisory agreements.
The Board further noted that while the Portfolio’s management fee will increase, the net operating expense ratio of the Portfolio is expected to decrease. The Board noted that the decrease is primarily because the Portfolio will directly pay the costs of certain investment management services through its investment management fee, rather than indirectly paying those costs through the acquired fund fees and expenses of each underlying fund. In addition, the Board noted that the Manager would contractually waive a portion of its investment management fee through June 30, 2022 and will cap expenses for the Portfolio through at least June 30, 2023.
In light of the above, the Board concluded that the proposed management and subadvisory fee rates were reasonable.
Profitability
The Board noted that although the management fee to be paid by the Portfolio to the Manager would increase, the Manager does not expect its profitability to increase solely as a result of the increased management fee rate. However, the Board noted that the appointment of affiliated subadvisers was expected to increase the assets under management for those affiliated subadvisers, and would result in an overall increase in the profitability of the Manager and Prudential.
The Board noted that it would consider profitability information as part of future annual reviews of the management and subadvisory agreements.
Economies of Scale
The Board considered the potential for the Manager to experience economies of scale as the Portfolio grows in size. The Board considered that the proposed amended Management Agreement would include breakpoints that would reduce that fee rates if the Portfolio increases in size. The Board considered that most of the proposed subadvisory agreements also include breakpoints. The Board noted that it would consider economies of scale information as part of future annual reviews of the management and subadvisory agreements.
Other Benefits to the Manager and Subadvisers
The Board considered potential “fall-out” or ancillary benefits anticipated to be received by the Manager and each of the Subadvisers, and their respective affiliates, in connection with the Portfolio Repositioning. The Board concluded that any potential benefits to be derived by the Manager and each of the Subadvisers, and their respective affiliates, were consistent with those generally derived by advisers to other mutual funds and to other AST portfolios.
The Board also concluded that any potential benefits to be derived by the Manager and the Subadvisers were similar to the benefits derived by the Manager and each of the Subadvisers in connection with their management of other AST portfolios, which are reviewed on an annual basis, and which were considered at the June 2020 Board meeting in connection with the renewal of the management and subadvisory agreements for the other AST portfolios for which the Manager and the Subadvisers provide advisory services. The Board also concluded that any potential benefits to be derived by the Manager and the Subadvisers included potential access to additional research resources, larger assets under management and reputational benefits, which were consistent with those generally derived by advisers and subadvisers to mutual funds.
The Board noted that it would review ancillary benefits in connection with future annual reviews of the management and subadvisory agreements.
Conclusion
After full consideration of these factors, the Board approved the proposed amended Management Agreement and the new subadvisory agreements with the Subadvisers upon concluding that such approvals were in the best interests of the Portfolio and its beneficial shareholders.
Comparative Fee and Expense Information
The Portfolio does not charge any front-end or back end sales charges or loads on purchases (including reinvested dividends). The Portfolio does not charge any fees upon redemption of shares, and does not charge an exchange fee.
The following fee table provides: (i) historical information about the fees and expenses of shares of the Portfolio for the twelve-month period ended December 31, 2020 based on the current contractual investment management and subadvisory arrangements and (ii) estimated pro forma information about the fees and expenses attributable to shares of the Repositioned Portfolio for the twelve-month period ended December 31, 2020 assuming the increased contractual investment management fee rate and the new subadvisory arrangements had been in effect during that period.
Future fees and expenses may be greater or less than those indicated below.
ANNUAL PORTFOLIO OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your investment)
AST Academic Strategies Asset Allocation Portfolio
|
| Current Portfolio |
| Pro Forma Operating |
|
Management Fee |
| 0.62 | % | 0.81 | % |
Distribution and/or Service Fees (12b-1 fees) |
| 0.13 | % | 0.25 | % |
Other Expenses |
| 0.08 | % | 0.06 | % |
Acquired Fund Fees and Expenses |
| 0.48 | % | 0.03 | % |
Total Annual Portfolio Operating Expenses |
| 1.31 | % | 1.15 | % |
Fee Waiver and/or Expense Reimbursement |
| (0.01 | )%* | (0.05 | )%** |
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement |
| 1.30 | % | 1.10 | % |
* The Manager has contractually agreed to waive 0.007% of its investment management fees through June 30, 2022. This arrangement may not be terminated or modified without the prior approval of the Trust's Board of Trustees. Additionally, the Manager has voluntarily agreed to waive a portion of the Portfolio’s investment management fee based on the aggregate assets of the Portfolio of the Trust managed as a fund of funds. Because the voluntary waiver is not contractual and may be withdrawn at any time, it is not shown in the Portfolio’s fee table under applicable SEC rules for mutual fund prospectuses.
**If the proposal is implemented, the Manager has contractually agreed to waive 0.02% of its investment management fee through June 30, 2022. The Manager has also contractually agreed to waive a portion of their investment management fee and distribution fee, respectively, equal to the amount of the management and distribution fee received from other portfolios of the Trust due to the Portfolio's investment in any such portfolios. In addition, the Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.13% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. These arrangements may not be terminated or modified without the prior approval of the Trust’s Board of Trustees.
Comparative Management Fee Information
The following provides actual and pro forma information about the contractual investment management fee attributable to shares of the current Portfolio and the Repositioned Portfolio for the twelve-month period ended December 31, 2020.
· The aggregate amount of the contractual investment management fees, net of waivers, including the annualized approximate investment management fees paid to the Manager by the underlying AST Portfolios, for the twelve-month period ended December 31, 2020 was $37,456,117 (0.95%);
· If the proposed increased contractual investment management fees, net of waivers, including the annualized approximate investment management fees to be paid to the Manager by the underlying AST Portfolios, had been in effect for the twelve-month period ended December 31, 2020 would have been $30,505,415 (0.78%); and
· The difference between the aggregate amounts during the twelve-month period ended December 31, 2020 was $6,950,702 (0.18%).
EXPENSE EXAMPLES
Because shares of the Portfolio may be purchased only through Contracts, the prospectus of the relevant Contract should be carefully reviewed for information on the charges and expenses of those Contracts. The Expense Examples below do not reflect Contract charges; and the expenses shown would be higher if Contract charges were reflected.
The Expense Examples below are intended to help you compare the cost of investing in the Portfolio under the current investment management fee and subadvisory arrangements during the twelve-month period ended December 31, 2020 with the cost of investing in the Repositioned Portfolio assuming the increased investment management fee and new First Quadrant, J.P. Morgan, Jennison, MFS, Morgan Stanley, PGIM, QMA, Wellington, and Western Asset subadvisory arrangements were in effect for the twelve-month period ended December 31, 2020. These Expense Examples assume that you invest $10,000 in the Portfolio for the time periods indicated. The Expense Examples also assume that your investment has a 5% return each year, that the Portfolio’s total operating expenses remain the same, and that no expense waivers and reimbursements are in effect. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Expense Example Based on Operating Expenses for AST Academic Strategies Asset Allocation Portfolio:
1 Year |
| 3 Years |
| 5 Years |
| 10 Years |
| ||||
$ | 132 |
| $ | 414 |
| $ | 717 |
| $ | 1,578 |
|
Expense Example Based on Estimated Pro Forma Operating Expenses for AST Academic Strategies Asset Allocation Portfolio:
1 Year |
| 3 Years |
| 5 Years |
| 10 Years |
| ||||
$ | 112 |
| $ | 360 |
| $ | 628 |
| $ | 1,393 |
|
Additional Fee Information
The proposed new and current contractual subadvisory fee rates are set forth below:
Current Subadvisory |
| Current |
| Proposed Subadvisory |
| Proposed |
|
Jennison Associates LLC |
| Applies only to assets attributable to Global Infrastructure investment category 0.60% of average daily net assets to $100 million; 0.55% of average daily net assets over $100 million |
| Jennison Associates LLC* |
| 0.35% of average daily net assets to $100 million; 0.30% of the next $100 million of average daily net assets; 0.275% of the next $300 million of average daily net assets; 0.25% of the next $2.5 billion of average daily net assets; and 0.23% of average daily net assets over $3 billion. |
|
QMA LLC |
| Applies only to overall asset allocation and direct |
| QMA LLC**
|
| For Asset Allocation Services 0.075% of average daily net assets |
|
Current Subadvisory |
| Current |
| Proposed Subadvisory |
| Proposed |
|
|
| management of Overlay investment strategy 0.075% of average daily net assets of entire Portfolio
Applies to Long/Short Market Neutral investment category 1.00% of average daily net assets |
|
|
| For Quantitative Equity and Overlay Management (including the overlay sleeve): 0.32% of average daily net assets to $1 billion; 0.27% of average daily net assets on next $5 billion; and 0.245% of average daily net assets over $6 billion |
|
AlphaSimplex Group, LLC |
| 0.80% of average daily net assets to $100 million; 0.65% of average daily net assets over $100 million |
| PGIM, Inc.*** |
| PGIM Fixed Income: 0.17% of average daily net assets to $750 million; 0.16% of the next $750 million of average daily net assets; and 0.14% of average daily net assets over $1.5 billion
PGIM Real Estate: 0.38% of average daily net assets |
|
AQR Capital Management, LLC |
| 0.80% of average daily net assets |
| First Quadrant, L.P. |
| 0.65% of average daily net assets to $100 million; 0.55% of average daily net assets from $100 million to $200 million; 0.50% of average daily net assets over $200 million |
|
First Quadrant, L.P. |
| 0.65% of average daily net assets to $100 million; 0.55% of average daily net assets from $100 million to $200 million; 0.50% of average daily net assets over $200 million |
| J.P. Morgan Investment Management, Inc.+ |
| 0.20% of average daily net assets to $500 million; 0.18% of the next $500 million of average daily net assets; and 0.17% of average daily net assets over $1 billion |
|
CoreCommodity Management, LLC |
| Applies only to assets attributable to Commodities investment category 0.60% of average daily net assets to $750 million; 0.55% of average daily net assets from $750 million to $1 billion; 0.50% of average daily net assets over $1 billion |
| Morgan Stanley Investment Management Inc. |
| 0.55% of average daily net assets to $50 million; 0.525% of average daily net assets over $50 million to $200 million; 0.50% of average daily net assets over $200 million. |
|
Morgan Stanley Investment Management Inc. |
| 0.55% of average daily net assets to $50 million; 0.525% of average daily net assets over $50 million to $200 million; 0.50% of average daily net assets over $200 million. |
| Massachusetts Financial Services Company++ |
| 0.30% of average daily net assets to $100 million; 0.285% of the next $150 million of average daily net assets; 0.27% of the next $250 million of average daily net assets; 0.25% of average daily net assets over $500 million. |
|
Current Subadvisory |
| Current |
| Proposed Subadvisory |
| Proposed |
|
Pacific Investment Management Company LLC |
| Applies to Inflation-Indexed Securities investment category 0.25% of average daily net assets
Applies to International Fixed income (Hedged) investment category 0.25% of average daily net assets |
| Western Asset Management Company, LLC/ Western Asset Management Company Limited |
| Applies to Emerging Markets Fixed Income investment category 0.40% of average daily net assets to $100 million; 0.20% of average daily net assets over $100 million
Applies to Macro Opportunities investment category 0.60% of average daily net assets to $100 million; 0.40% of average daily net assets over $100 million |
|
Western Asset Management Company, LLC/ Western Asset Management Company Limited |
| Applies to Emerging Markets Fixed Income investment category 0.40% of average daily net assets to $100 million; 0.20% of average daily net assets over $100 million
Applies to Macro Opportunities investment category 0.60% of average daily net assets to $100 million; 0.40% of average daily net assets over $100 million |
| Wellington Management Company LLP
|
| 0.19% of average daily net assets |
|
* QMA: For purposes of calculating the advisory fee payable to QMA, not including the asset allocation services, the assets managed by QMA in the Portfolio will be aggregated with the assets managed by QMA in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Preservation Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.
** Jennison: For purposes of calculating the advisory fee payable to Jennison, the assets managed by Jennison in the Portfolio will be aggregated with the assets managed by Jennison in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Preservation Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.
*** PGIM Fixed Income: For purposes of calculating the advisory fee payable to PGIM Fixed Income, the assets managed by PGIM Fixed Income in the Portfolio will be aggregated with the assets managed by PGIM Fixed Income in: (i) AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Preservation Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.
+ J.P. Morgan: For purposes of calculating the advisory fee payable to J.P. Morgan, the assets managed by J.P. Morgan in the Portfolio will be aggregated with the assets managed by J.P. Morgan in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Preservation Asset Allocation Portfolio; and (iv) the AST Large-Cap Core Portfolio.
++ MFS: For purposes of calculating the advisory fee payable to MFS, the assets managed by MFS in the Portfolio will be aggregated with the assets managed by MFS in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; and (iii) the AST Preservation Asset Allocation Portfolio.
Based on the Portfolio’s holdings and net assets as of November 30, 2020, the effective contractual subadvisory fee rate for Portfolio was 0.26%. Since a portion of the Portfolio operates as a fund-of-funds, the Manager also pays subadvisory fees to the subadvisers of each underlying AST portfolio based upon the Portfolio’s investments in each underlying AST portfolio. Based on the Portfolio’s average daily net assets and holdings for the twelve-month period ended November 30, 2020, the estimated effective subadvisory fee rate for the Portfolio was approximately 0.41%, which comprises: (i) the 0.26% effective contractual subadvisory fee paid by the Manager to Portfolio plus (ii) the estimated weighted average of the subadvisory fees paid by the Manager to the subadvisers of each underlying AST portfolio (0.15%) based upon the Portfolio’s average holdings in the underlying AST portfolios for the twelve-month period ended November 30, 2020. If the First Quadrant, J.P. Morgan, Jennison, MFS, Morgan Stanley, PGIM, QMA, Wellington, and Western Asset subadvisory agreements had been in effect during this time period, the effective contractual subadvisory fee rates would have been as follows:
Subadviser |
| Effective Contractual Fee Rate |
|
First Quadrant |
| 0.62% |
|
J.P. Morgan |
| 0.19% |
|
Jennison |
| 0.25% |
|
MFS |
| 0.28% |
|
Morgan Stanley |
| 0.53% |
|
PGIM |
| PGIM Fixed Income: |
|
QMA |
| 0.075% on all assets |
|
Wellington |
| 0.19% |
|
Western Asset |
| 0.54% |
|
The information above illustrates that based on the proposed allocations as of November 30, 2020, the effective contractual subadvisory fee rate that would have been paid by the Manager was 0.32%:
If the proposed increased contractual investment management fee rate and proposed allocations had been in effect during as of November 30, 2020, the Manager would have:
· received approximately $34,707,231 in investment management fees from the Repositioned Portfolio;
· paid approximately $13,600,441 in subadvisory fees to First Quadrant, J.P. Morgan, Jennison, MFS, Morgan Stanley, PGIM, QMA, Wellington, and Western Asset; and
· had net retained investment management fees of approximately $21,016,790 in connection with the Repositioned Portfolio.
Investment Objective and Principal Investment Strategies of the Portfolio
The investment objective of the Portfolio is to seek long term capital appreciation. The investment objective of the Portfolio will not change as a result of the proposal.
The Portfolio is a multi-asset class fund. Under normal circumstances, approximately 60% of the Portfolio’s assets are allocated to traditional asset classes and investment strategies, and approximately 40% of the Portfolio’s assets are allocated to non-traditional asset classes and investment strategies. The traditional asset classes include US and foreign equity and fixed income securities. The non-traditional asset classes include real estate, commodities-related, and global infrastructure. The non-traditional investment strategies may from time to time include long/short market neutral, global macro, hedge fund replication, and global tactical asset allocation strategies.
The Portfolio gains exposure to these traditional and non-traditional asset classes and investment strategies by investing in varying combinations of: (i) other pooled investment vehicles, including, other portfolios of the Trust, other open-end or closed-end investment companies, exchange-traded funds (ETFs), unit investment trusts, and domestic or foreign private investment pools (collectively referred to as Underlying Portfolios); (ii) securities such as common stocks, preferred stocks, bonds, bond and interest rate futures, options on bonds, options on bond and interest rate futures, interest rate options, interest rate swaps, credit default swaps (on individual securities and/or baskets of securities), commodity and commodity index futures, options (including options on credit default swaps), other futures, swaps and options (including on equities and equity indices), forwards, options on swaps, options on forwards and mortgage-backed securities; and (iii) certain financial and derivative instruments. Under normal circumstances, the Portfolio will invest greater than 50% of its assets in Underlying Portfolios and the remainder of the Portfolio’s assets will be directly managed by subadvisers to the Portfolio.
Description of the Proposed Portfolio Repositioning
Current and Proposed Investment Objective. The investment objective of the Portfolio is to seek long term capital appreciation. The investment objective of the Portfolio will not change as a result of the proposal.
Description of Principal Investment Strategies Changes
General. The Portfolio is a multi-asset class fund. Under normal circumstances, approximately 60% of the Portfolio’s assets in Underlying Portfolios, and approximately 40% of the Portfolio’s assets in direct purchase and sale of equity and debt securities and the use of other financial instruments. As a result of the Portfolio Repositioning, the Portfolio will instead implement its investment strategies through the direct purchase and sale of equity and debt securities and the use of other financial instruments, which will be approximately 75% of its assets. In addition, as a result of Portfolio Repositioning, the Portfolio will continue to invest approximately 25% of its assets in the Underlying Portfolios.
Currently, the asset allocation strategy is determined by the Manager and QMA, the subadviser to the Portfolio. As a general matter, QMA is generally responsible for determining the Portfolio’s target asset allocation among the various asset classes (i.e. equities, debt, and cash/money market) and selecting the direct security investments to gain exposure in other investment categories. The Manager is responsible for selecting the Underlying Portfolios to be used as the fulfillment options for the Portfolio’s asset allocation decisions, conducting cash management activities, and otherwise handling the actual day-to-day investment management of the Portfolio, including the purchase, retention, and sale of all portfolio securities and instruments, including the Underlying Portfolios and direct security investments. As a result of the Portfolio Repositioning, the Portfolio will no longer invest approximately 60% of its assets in Underlying Portfolios. Instead, the Portfolio will use a core/satellite approach. The core/satellite approach consists of pairing benchmark centric, style neutral, moderate alpha seeking strategies (the core) with opportunistic, style centric, high alpha seeking strategies. As a result, the proposed subadvisers will be responsible for asset allocation, security selection, and overall day-to-day investment management.
Currently, the Portfolio allocates approximately 10% of its net assets to a liquidity strategy. The liquidity strategy is invested primarily in (i) derivative instruments; and (ii) cash, money market equivalents, short-term debt instruments, money market funds, and short-term debt funds to satisfy all applicable margin requirements for the futures contracts and to provide additional portfolio liquidity to satisfy large-scale redemptions. The liquidity strategy may also invest in ETFs for additional exposure to relevant markets. As a result of the Portfolio Repositioning, the Portfolio will allocate approximately 15-25% of its net assets to a liquidity strategy. The liquidity strategy may temporarily deviate from the allocation indicated due to redemptions in the Portfolio or other circumstances relevant to the Portfolio’s overall investment process.
Description of Secondary Benchmark Changes. The proposed changes to the Portfolio’s secondary benchmark are summarized below.
Current Secondary Benchmark |
| Proposed Secondary Benchmark |
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Russell 3000 Index: 20% |
| Russell 3000 Index: 20% |
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Principal Risks of Investing in Repositioned Portfolio. The risks identified below are the principal risks of investing in the Portfolio. All investments have risks to some degree and it is possible that you could lose money by investing in the Portfolio. An investment in the Portfolio is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. While the Portfolio makes every effort to achieve its objective, it can’t guarantee success.
Asset Allocation Risk. The Portfolio’s overall allocations to stocks and bonds, and the allocations to the various asset classes and market sectors within those broad categories, could cause the Portfolio to underperform other funds with a similar investment objective. As a fund that has a larger allocation to equity securities relative to its fixed income allocation, the Portfolio’s risk of loss and share price fluctuation (and potential for gain) will tend to be more closely aligned with funds investing a greater portion of assets in equity securities and notably more than funds investing primarily in fixed income securities. Additionally, both equity and fixed income securities may decline in value.
Asset-Backed and/or Mortgage-Backed Securities Risk. Asset-backed and mortgage-backed securities are fixed income securities that represent an interest in an underlying pool of assets, such as credit card receivables or, in the case of mortgage-backed securities, mortgage loans. Like fixed income securities, asset-backed and mortgage-backed securities are subject to interest rate risk, liquidity risk, and credit risk, which may be heightened in connection with investments in loans to “subprime” borrowers. Certain asset-backed and mortgage-backed securities are subject to the risk that those obligations will be repaid sooner than expected or later than expected, either of which may result in lower than expected returns. Mortgage-backed securities, because they are backed by mortgage loans, are also subject to risks related to real estate, and securities backed by private-issued mortgages may experience higher rates of default on the underlying mortgages than securities backed by government-issued mortgages.
Asset Transfer Program Risk. Pre-determined, non-discretionary mathematical formulas used by Prudential to manage the guarantees offered in connection with certain benefit programs under the Contracts may result in systematic transfers of assets among the investment options under the Contracts, including the Portfolio. These formulas may result in large-scale asset flows into and out of the Portfolio, which, in certain instances, could adversely affect the Portfolio, including its risk profiles, expenses and performance. For example, the asset flows may adversely affect performance by requiring the Portfolio to purchase or sell securities at inopportune times, by otherwise limiting the subadvisers’ ability to fully implement the Portfolio’s investment strategies, or by requiring the Portfolio to hold a larger portion of its assets in highly liquid securities than it otherwise would hold. The asset flows may also result in relatively low asset levels and relatively high operating expense ratios for the Portfolio. The efficient operation of the asset flows depends on active and liquid markets, and if market liquidity is strained the assets flows may not operate as intended which in turn could adversely affect performance. These formulas may also adversely affect the Portfolio’s returns by requiring the purchase or sale of securities at inopportune times and by otherwise limiting the subadviser’s ability to fully implement the Portfolio’s investment strategies.
Commodity Risk. The value of a commodity-linked investment is affected by, among other things, overall market movements and changes in interest and exchange rates and may be more volatile than traditional equity and debt securities.
Derivatives Risk. A derivative is a financial contract, the value of which depends upon, or is derived from, the value of an underlying asset, reference rate, or index. The use of derivatives involves a variety of risks, including the risk that: the party on the other side of a derivative transaction will be unable to honor its financial obligation; leverage created by investing in derivatives may result in losses to the Portfolio; derivatives may be difficult or impossible for the Portfolio to buy or sell at an opportune time or price, and may be difficult to terminate or otherwise offset; derivatives used for hedging may reduce or magnify losses but also may reduce or eliminate gains; and the price of commodity-linked derivatives may be more volatile than the prices of traditional equity and debt securities.
Equity Securities Risk. The value of a particular stock or equity-related security held by the Portfolio could fluctuate, perhaps greatly, in response to a number of factors, such as changes in the issuer’s financial condition or the value of the equity markets or a sector of those markets. Such events may result in losses to the Portfolio.
Expense Risk. The actual cost of investing in the Portfolio may be higher than the expenses shown in the “Annual Portfolio Operating Expenses” table above for a variety of reasons, including, for example, if the Portfolio’s average net assets decrease.
Fixed Income Securities Risk. Investment in fixed income securities involves a variety of risks, including that: an issuer or guarantor of a security will be unable to pay obligations when due; the Portfolio may be unable to sell its securities holdings at the price it values the security or at any price; the income generated by and the market price of a fixed income security may decline due to a decrease in interest rates; and the price of a fixed income security may decline due to an increase in interest rates.
Foreign Investment Risk. Investments in foreign securities generally involve more risk than investing in securities of U.S. issuers, including: changes in currency exchange rates may affect the value of foreign securities held by the Portfolio; foreign markets generally are more volatile than, and generally are not subject to regulatory requirements comparable to, U.S. markets; foreign financial reporting standards usually differ from those in the U.S.; foreign exchanges are often less liquid than U.S. markets; political developments may adversely affect the value of foreign securities; and foreign holdings may be subject to special taxation and limitations on repatriating investment proceeds.
Fund of Funds Risk. In addition to the risks associated with the investment in the underlying portfolios, the Portfolio is exposed to the investment objectives, investment risks, and investment performance of the underlying portfolios. The Portfolio is also subject to a potential conflict of interest between the Portfolio and its investment manager(s) and subadviser(s), which could impact the Portfolio. Moreover, the Portfolio will incur its pro rata share of the underlying portfolios’ expenses, which will reduce the Portfolio’s performance.
Liquidity Allocation Risk. The Portfolio’s liquidity strategy will result in a decrease in the amount of the Portfolio’s assets held in individual securities and an increase in the amount invested in derivatives (e.g., futures and options) and in short-term money market instruments. Under certain market conditions, performance may be adversely affected as a result of this strategy.
Liquidity and Valuation Risk. The Portfolio may hold one or more securities for which there are no or few buyers and sellers or the securities are subject to limitations on transfer. The Portfolio may be unable to sell those portfolio holdings at the desired time or price, and may have difficulty determining the value of such securities for the purpose of determining the Portfolio’s net asset value. In such cases, investments owned by the Portfolio may be valued at fair value pursuant to guidelines established by the Trust’s Board of Trustees. No assurance can be given that the fair value prices accurately reflect the value of the security. The Portfolio is subject to a liquidity risk management program, which limits the ability of the Portfolio to invest in illiquid investments.
Market and Management Risk. Markets in which the Portfolio invests may experience volatility and go down in value, and possibly sharply and unpredictably. The investment techniques, risk analysis and investment strategies used by a subadviser in making investment decisions for the Portfolio may not produce the intended or desired results.
Recent Events Risk. Events in the financial markets have caused, and may continue to cause, increased volatility and a significant decline in the value and liquidity of many securities. As a result, identifying investment risks and opportunities may be especially difficult. There is no
assurance that steps taken by governments, and their agencies and instrumentalities, to support financial markets will continue, and the impact of regulatory changes on the markets may not be known for some time.
Regulatory Risk. The Portfolio is subject to a variety of laws and regulations which govern its operations. The Portfolio is subject to regulation by the SEC and the CFTC. Similarly, the businesses and other issuers of the securities and other instruments in which the Portfolio invests are also subject to considerable regulation. Changes in laws and regulations may materially impact the Portfolio, a security, business, sector or market.
Information About the New Subadvisers
J.P. Morgan. J.P. Morgan is an indirect wholly-owned subsidiary of J.P. Morgan Chase Co., a publicly held bank holding company and global financial services firm. J.P. Morgan manages assets for governments, corporations, endowments, foundations and individuals worldwide. As of December 31, 2020, J.P. Morgan and its affiliated companies had approximately $2.3 trillion in assets under management worldwide. J.P. Morgan’s address is 383 Madison Avenue, New York, NY 10179.
Set forth below are the names, titles and principal occupations of the principal executive officers of J.P. Morgan. The address of each individual is 383 Madison Avenue, New York, NY 10179. None of the officers or directors of J.P. Morgan are also officers or directors of the Manager.
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MFS. MFS is the oldest US mutual fund organization. MFS and its predecessor organizations have managed money since 1924 and founded the first mutual fund in the United States. MFS is a subsidiary of Sun Life of Canada (U.S.) Financial Services Holdings, Inc., which in turn is an indirect majority-owned subsidiary of Sun Life Financial Inc. (a diversified financial services company). The principal address of MFS is 111 Huntington Avenue, Boston, Massachusetts 02199. Net assets under management of the MFS organization were approximately $608 billion as of December 31, 2020.
Set forth below are the names, titles and principal occupations of the principal executive officers of MFS. The address of each individual is 111 Huntington Avenue, Boston, Massachusetts 02199. None of the officers or directors of MFS are also officers or directors of the Manager.
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PGIM. PGIM is an indirect, wholly-owned subsidiary of Prudential Financial, Inc. PGIM was formed in June 1984 and was registered with the SEC as an investment adviser in December 1984. As of September 30, 2020, PGIM had approximately $1.4 trillion in assets under management. PGIM’s address is 655 Broad Street, Newark, New Jersey 07102.
PGIM Fixed Income is the primary public fixed-income asset management unit of PGIM, with $946.1 billion in assets under management as of September 30, 2020, and is the unit of PGIM that provides investment advisory services.
PGIM Fixed Income is organized into groups specializing in different sectors of the fixed income market: US and non-US government bonds, mortgages and asset-backed securities, US and non-US investment grade corporate bonds, high-yield bonds, emerging markets bonds, municipal bonds, and money market securities.
Set forth below are the names, titles and principal occupations of the principal executive officers of PGIM Fixed Income. The address of each individual is 655 Broad Street, Newark, New Jersey 07102. None of the officers or directors of PGIM Fixed Income are also officers or directors of the Manager.
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PGIM Real Estate is a business unit of PGIM, which in turn is an indirect wholly-owned subsidiary of Prudential Financial, Inc., with $182 billion in gross assets under management as of September 30, 2020, and is the unit of PGIM that provides a broad range of real estate and investment opportunities investment advisory services.
Set forth below are the names, titles and principal occupations of the principal executive officers of PGIM Real Estate. The address of each individual is 655 Broad Street, Newark, New Jersey 07102. None of the officers or directors of PGIM Real Estate are also officers or directors of the Manager.
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Wellington. Wellington is a Delaware limited liability partnership. Wellington is a professional investment counseling firm which provides investment services to investment companies, employee benefit plans, endowments, foundations, and other institutions. Wellington and its predecessor organizations have provided investment advisory services for over 80 years. Wellington is owned by the partners of Wellington Management Group LLP, a Massachusetts limited liability partnership. As of December 31, 2020, Wellington and its investment advisory affiliates had investment management authority with respect to approximately $1.29 trillion in assets. The address of Wellington is 280 Congress Street, Boston, Massachusetts 02210.
Set forth below are the names, titles and principal occupations of the principal executive officers of Wellington. The address of each individual is 280 Congress Street, Boston, Massachusetts 02210. None of the officers or directors of Wellington are also officers or directors of the Manager.
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Portfolio Managers for Repositioned Portfolio
The Repositioned Portfolio will be managed by a team of portfolio managers and other investment professionals. Information about the portfolio managers who will be responsible for the day-to-day management of the Repositioned Portfolio is set forth below:
Jennison
Ubong “Bobby” Edemeka is a Managing Director and income and infrastructure portfolio manager. Before joining Jennison in 2002, Bobby was a sell-side research analyst on the US Power & Utilities team at Goldman Sachs. Previously, he served as an analyst on the global utilities team of SSB Citi Asset Management Group, a division of Citigroup. Bobby began his career as an analyst for the Prudential Utility Fund (now Prudential Jennison Utility Fund) at Prudential Investments (now PGIM Investments). He graduated from Harvard University with a BA in government.
Shaun Hong, CFA is a Managing Director and income and infrastructure portfolio manager. He joined Jennison in 2000 when Prudential’s (now PGIM) public equity asset management capabilities were transferred to Jennison. As a Prudential analyst, Shaun covered the power, natural gas, and telecommunications industries. He holds a BS in industrial management from Carnegie Mellon University.
Mark Baribeau is a Managing Director, Head of Global Equity, and a global equity portfolio manager. He joined Jennison in 2011. He was previously with Loomis Sayles for more than 21 years, where he was a global equity and large cap growth portfolio manager. Prior to Loomis, he was an economist at John Hancock Financial Services. Mark received a BA in economics from the University of Vermont and an MA in economics from the University of Maryland.
Thomas Davis is a Managing Director and joined Jennison in 2011 as a global equity portfolio manager. He was previously with Loomis Sayles for 11 years, most recently as a co-portfolio manager of global equity portfolios. He began his tenure at Loomis as a research analyst. Prior to Loomis, Tom was a global equity research analyst at Putnam Investments. Tom received a BA in economics from Dartmouth College and an MBA from Duke University.
Blair A. Boyer is a Managing Director, Co-Head of Large Cap Growth Equity, and a large cap growth equity portfolio manager. He joined Jennison in 1993 as an international equity analyst and portfolio manager. He joined the large cap growth team as a portfolio manager in 2003. Prior to Jennison, Blair managed international equity portfolios for five years at Bleichroeder. Before that, he was a research analyst and then a senior portfolio manager at Verus Capital. Blair received a BA in economics from Bucknell University and an MBA from New York University’s Stern School of Business.
Warren Koontz, Jr., CFA is a Managing Director, Head of Value Equity, and a large cap value portfolio manager. Warren came to Jennison in 2014, following a 19-year tenure with Loomis Sayles, where he managed diversified and concentrated value strategies. In the previous decade, Warren worked at Comerica Bank, the Jeffrey Company, a private investment firm, and the Public Employees’ Retirement System of Ohio. Warren earned a BS in finance and an MBA from Ohio State University.
Kathleen A. McCarragher is a managing director, Head of Growth Equity, and Large Cap Growth Equity portfolio manager. She joined Jennison Associates as an executive vice president and portfolio manager in May 1998, and was appointed Head of Growth Equity in 2003. Prior to Jennison, Kathleen spent six years with Weiss, Peck & Greer where she was a managing director and the Director of large cap growth equities. In addition, she spent 10 years with State Street Research and Management Company, initially as a research analyst responsible for healthcare, transports, and financials, and then as a portfolio manager and member of the Investment Committee. Kathleen graduated summa cum laude from the University of Wisconsin with a B.B.A. and received an M.B.A. from Harvard Business School. She is a member of the Board of Advisors for the Appalachian Mountain Club and the Board of Trustees for The Gateway School.
Natasha Kuhlkin, CFA, is a Managing Director, large cap growth equity portfolio manager, and research analyst. She joined Jennison in 2004. Prior to Jennison, she was an equity research analyst for five years, first at Evergreen Investment Management then at Palisade Capital Management. Natasha received a BS, magna cum laude, in accounting from Binghamton University.
Joseph C. Esposito, CFA, is a Managing Director and large cap value portfolio manager. He came to Jennison in 2014, following seven years with Loomis Sayles as a senior equity analyst. Prior to his tenure with Loomis, Joe served as a business systems analyst at AXA Financial. He holds a BA in philosophy from the College of New Jersey and an MBA from Columbia Business School.
Spiros “Sig” Segalas is the president and chief investment officer. As one of the founders of Jennison in 1969, Sig has built the firm into an institutional investment manager with a range of equity and fixed income investment strategies and assets under management of more than $175 billion. He has managed Jennison client portfolios over the past half century. Sig began his investment career at Bankers Trust as a research analyst, before managing client assets. Prior to Bankers Trust, he worked in the shipping and construction industries and served as an officer in the US Navy. Sig received a BA in economics from Princeton University
JP Morgan
Scott B. Davis, managing director, is a portfolio manager in the U.S. Equity Group. An employee since 2006, Scott was previously a media and internet analyst in the U.S. Equity Research Group. Prior to joining J.P. Morgan, Scott was an analyst at Jennison Associates, First Union, and Schroder Wertheim. He holds a B.S. from Drexel University and an M.B.A. from Columbia Business School. Scott Davis, lead portfolio manager, only manages assets in the J.P. Morgan Large Cap Core Strategy.
MFS
Jed Stocks, an Investment Officer of MFS, is the lead portfolio manager of the Portfolios. He has been employed in the investment area of MFS since 2001.
Jim Fallon, an Investment Officer of MFS, is a portfolio manager of the Portfolios. He has been employed in the investment area of MFS since 1999.
Matt Krummell, an Investment Officer of MFS, is a portfolio manager of the Portfolios. He has been employed in the investment area of MFS since 2001.
Jonathan Sage, an Investment Officer of MFS, is a portfolio manager of the Portfolios. He has been employed in the investment area of MFS since 2000.
PGIM Fixed Income
Gregory Peters is a Managing Director and Head of PGIM Fixed Income’s Multi-Sector and Strategy. Mr. Peters is a senior portfolio manager for Core, Long Government/Credit, Core Plus, Absolute Return, and other multi-sector Fixed Income strategies, in addition to having oversight of the firm’s investment strategy function. Prior to joining the Firm in 2014, Mr. Peters was the Chief Global Cross Asset Strategist at Morgan Stanley, responsible for the Firm’s macro research and asset allocation strategy. In addition, he was Morgan Stanley’s Global Director of Fixed Income & Economic Research. Earlier, he worked at Salomon Smith Barney and the Department of U.S. Treasury. He received a BA in Finance from The College of New Jersey and an MBA from Fordham University. Mr. Peters is a member of the Fixed Income Analyst Society and the Bond Market Association. Mr. Peters was named a 2018 and 2019 winner of the Pension and Investment Provider Award for Global Multi-Asset Credit.
Michael J. Collins, CFA, is a Managing Director and Senior Portfolio Manager for Core, Core Plus, Absolute Return, and other Multi-Sector Fixed Income strategies. Previously, Mr. Collins was a High Yield Portfolio Manager and Fixed Income Investment Strategist. Earlier he was a credit research analyst, covering investment grade and high yield corporate credits. Additionally, he developed proprietary quantitative international interest rate and currency valuation models for our global bond unit. Mr. Collins began his career at the Firm in 1986 as a software applications designer. He received a BS in Mathematics and Computer Science from Binghamton University and an MBA in Finance from New York University. Mr. Collins holds the Chartered Financial Analyst (CFA) designation and is a Fellow of the Life Management Institute (FLMI). He is currently the Chairman of the Board of CEA, a non-profit that provides education and employment for people with disabilities. Mr. Collins was named a 2018 winner of the Pension and Investment Provider Award for Global Multi-Asset Credit.
Richard Piccirillo is a Managing Director and senior portfolio manager for PGIM Fixed Income’s Core, Long Government/Credit, Core Plus, Absolute Return, and other multisector Fixed Income strategies. Mr. Piccirillo had specialized in mortgage-and assetbacked securities since joining the Firm in 1993. Before joining the Firm, Mr. Piccirillo was a fixed income analyst with Fischer Francis Trees & Watts. Mr. Piccirillo started his career as a financial analyst at Smith Barney. He received a BBA in Finance from George Washington University and an MBA in Finance and International Business from New York University. Mr. Piccirillo was named a 2018 winner of the Pension and Investment Provider Award for Global Multi-Asset Credit.
Robert Tipp, CFA, is a Managing Director, Chief Investment Strategist, and Head of Global Bonds for PGIM Fixed Income. In addition to co-managing the global multi-sector strategies, Mr. Tipp is responsible for global rates positioning for Core Plus, Absolute Return, and other portfolios. Mr. Tipp has worked at the Firm since 1991, where he has held a variety of senior investment manager and strategist roles. Prior to joining the firm, he was a Director in the Portfolio Strategies Group at the First Boston Corporation, where he developed, marketed, and implemented strategic portfolio products for money managers. Before that, Mr. Tipp was a Senior Staff Analyst at the Allstate Research & Planning Center, and managed fixed income and equity derivative strategies at Wells Fargo Investment Advisors. He received a BS in Business Administration and an MBA from the University of California, Berkeley. Mr. Tipp holds the Chartered Financial Analyst (CFA) designation.
Matthew Angelucci, CFA, is a Principal and co-senior portfolio manager for PGIM Fixed Income’s Global Bond Team. In addition to co-managing the Global Bond Strategies, Mr. Angelucci is responsible for country and sector allocation, term structure positioning, and issue selection within sovereign securities and derivatives across global bond portfolios and relative value hedge strategies. Prior to assuming his current position, he was a financial analyst in the Portfolio Analysis Group of PGIM Fixed Income where he was responsible for performance attribution and providing daily risk analysis and analytic support to the Global Government portfolio management team. Mr. Angelucci joined the Firm in 2005. He received a BS in Corporate Finance and Accounting from Bentley University. Mr. Angelucci holds the Chartered Financial Analyst (CFA) designation.
Craig Dewling is the Deputy Chief Investment Officer and Head of Multi-Sector, Liquidity and Strategy at PGIM Fixed Income. As Deputy CIO, Mr. Dewling has broad oversight related to trading processes and policies for the firm. In addition, he has portfolio management oversight for multi-sector, core conservative, Japan core bond, global rates, mortgages, insurance strategies, money market strategies and liability-driven investing. Mr. Dewling is also responsible for management of the firm’s macroeconomic research and oversees the firm’s chief investment strategist. He has specialized in mortgage-backed securities since 1991. Earlier, he was a taxable bond generalist for the Firm’s proprietary accounts, specializing in U.S. Treasuries and agencies. Mr. Dewling joined the Firm in 1987 in the Securities Systems Group. He received a BS in Quantitative Business Analysis from The Pennsylvania State University and an MBA in Finance from Rutgers University.
Erik Schiller, CFA, is a Managing Director and Head of Liquidity. Mr. Schiller is responsible for developed market rates for PGIM Fixed Income’s Multi-Sector and Liquidity Team, specializing in government securities, futures, interest rate swaps/derivatives, and agency debentures. Mr. Schiller holds a senior portfolio management role where he develops portfolio strategy, performs quantitative analysis, and designs and implements risk positions within the liquidity relative value strategy portfolios, multi-sector fixed income portfolios, liability-driven portfolios, and government securities focused mutual funds. In addition, he has oversight of agency mortgages for the firm. Formerly, Mr. Schiller was a Vice President for PGIM Fixed Income’s U.S. Liquidity Sector Team, and previously a hedge fund analyst within the Portfolio Analysis Group. Mr. Schiller joined the Firm in 2000 as an operations associate in the mortgage-backed securities group. He received a BA with high honors in Economics from Hobart College and holds the Chartered Financial Analyst (CFA) designation.
Gary Wu, CFA, is a Principal and a U.S. government portfolio manager for PGIM Fixed Income’s Multi-Sector and Liquidity Team. He has been responsible for managing U.S. Treasury products since joining the Team in 2000. Previously, Mr. Wu was a portfolio manager on PGIM Fixed Income’s Money Markets Desk. From 1997 to 1999, Mr. Wu was a risk analyst in PGIM Fixed Income’s quantitative research group. Mr. Wu joined the Firm in 1994 in the Guaranteed Products Unit, where he was responsible for annuity pricing. Mr.Wu received a BS in Business Administration and Mathematics from The State University of New York, at Albany. He holds the Chartered Financial Analyst (CFA) designation.
QMA
Edward L. Campbell, CFA, is a Managing Director and Portfolio Manager for QMA working within the Global Multi-Asset Solutions team. As the Director of Dynamic Asset Allocation, he is responsible for portfolio management, analysis, and economic and market valuation research, and he oversees a team of investment professionals. Ed also represents the firm through appearances in major media outlets, most notably as a regular guest on CNBC’s Squawk Box. Prior to joining QMA, Ed served as a Portfolio Manager and Senior Analyst for PGIM Investments’ Strategic Investment Research Group (SIRG). Previously, Ed was a Partner and Vice President at Trilogy Advisors. He earned a BS in economics and international business from the City University of New York and an MBA in finance, global business and organizational leadership from the New York University Stern School of Business.
Rory Cummings, CFA, is a Vice President and Portfolio Manager for QMA working within the Global Multi-Asset Solutions team. In this capacity, he is responsible for portfolio management, analysis, and economic and market valuation research. Prior to his current role, Rory served as a Client Relations Specialist covering a variety of institutional clients. He earned a BA in finance from Seton Hall University and an MBA in financial markets and corporate finance from the New York University Stern School of Business.
Marco Aiolfi, PhD, is a Managing Director and Portfolio Manager for QMA working within the Global Multi-Asset Solutions team. As the Director of Systematic Multi-Asset Strategies, he is responsible for the research, development and portfolio management of systematic total and absolute return investment solutions. He is also an investment lead for our global solutions efforts. Prior to joining QMA, Marco was a Lead Portfolio Manager and Researcher for GTAA and volatility strategies for the Quantitative Investment Strategies team at Goldman Sachs Asset Management, and a Principal at Platinum Grove Asset Management. Previously, Marco was a research scholar at the University of California, San Diego, and a visiting scholar at the International Monetary Fund. Marco’s articles have appeared in the Journal of Econometrics, Journal of Financial Econometrics, Journal of Development Economics, Journal of Forecasting, “Oxford Handbook of Economic Forecasting” and “Essays in Nonlinear Time Series Econometrics.” He earned a BA in economics and a PhD in economics from Bocconi University in Italy.
Devang Gambhirwala is a Principal and Portfolio Manager for QMA working within the Quantitative Equity team. In this capacity, he is responsible for portfolio management, analysis and research. Prior to joining QMA, Devang worked as a Quantitative Research Analyst and Assistant Portfolio Manager for PGIM, Inc. He earned a BS in computer and information sciences from the New Jersey Institute of Technology and an MBA from Rutgers University.
Wen Jin, PhD, CFA, is a Managing Director and Portfolio Manager for QMA working within the Quantitative Equity team. In this capacity, he is responsible for portfolio management, analysis and research. Prior to joining QMA, Wen was a Portfolio Manager and the Head of Quantitative Strategy and Trading at Aristeia Capital Management, where he oversaw derivatives valuation, quantitative trading strategy development and portfolio management. Previously, Wen was a Senior Quantitative Strategist in the options trading group at Citadel Investment Group, where he was responsible for the development of equity option arbitrage and volatility arbitrage strategies. Wen’s articles have appeared in the Journal of Accounting Research and Wall Street Horizon, among other leading publications. He earned a BS in physics from University of Sciences and Technology of China, and an MA and PhD in physics from Columbia University.
Joel M. Kallman, CFA, is a Vice President and Portfolio Manager for QMA working within the Global Multi-Asset Solutions team. In this capacity, he is responsible for portfolio management, analysis, and economic and market valuation research. Prior to joining QMA, Joel held various positions for PGIM Fixed Income that involved high-yield credit analysis and performance reporting. He earned a BS and MBA in finance from Rutgers University. Joel is a member of the New York Society of Security Analysts.
Edward F. Keon, Jr. is a Managing Director and Chief Investment Strategist for QMA’s Global Multi-Asset Solutions team. In this capacity, he is responsible for portfolio management, analysis, and economic and market valuation research. He also represents the firm through appearances in major media outlets, most notably as a regular guest on CNBC’s Squawk Box. Prior to joining QMA, Ed served as Chief Investment Strategist and Director of Quantitative Research at Prudential Equity Group, LLC, where he was repeatedly voted onto Institutional Investor’s All-American Research Team, and as a Senior Vice President at I/B/E/S International Inc. Ed is a board member of the Chicago Quantitative Alliance, where he heads the committee to develop sound practices in quantitative investment management. He earned a BS in industrial management from the University of Massachusetts Lowell and an MBA in finance and marketing from the Massachusetts Institute of Technology Sloan School of Management.
Stacie L. Mintz, CFA, is a Managing Director, Co-Head of the Quantitative Equity team and Portfolio Manager for QMA. In this capacity, she leads the portfolio managers on the Quantitative Equity team. She is responsible for enhancements to the Quantitative Equity models and portfolio analytic tools. Prior to her current role, she served as the Head of Equity Portfolio Management for QMA. Previously, Stacie was a
member of the former Asset Allocation team where she was responsible for several retail and institutional portfolios. During that time, she was also responsible for managing the overall asset allocation for the Prudential Pension Plan. She earned a BA in economics from Rutgers University and an MBA in finance from the New York University Stern School of Business.
Marcus M. Perl is a Principal and Portfolio Manager for QMA working within the Global Multi-Asset Solutions team. In this capacity, he is responsible for portfolio management, research, strategic asset allocation and portfolio construction. Prior to joining QMA, Marcus was a Vice President and Portfolio Manager at PGIM Investments and a Vice President at FX Concepts Inc. Marcus holds an MA in economics from the University of Southern California.
Vladik Shutoy is a Principal and Portfolio Manager for QMA working within the Quantitative Equity team. In this capacity, he is responsible for portfolio management, analysis and research, and he oversees a team of investment professionals. Prior to joining QMA, Vlad worked at Bloomberg, LP, where he led a team responsible for building predictive equity models for top-tier institutional investors. Previously, Vlad worked as a Quantitative Analyst for the Quantitative Investment Strategies team at Goldman Sachs Asset Management, where he developed proprietary equity models for short-term trading strategies, and at ING Investment Management. He earned a BS in computer engineering and an MS in computer science and financial engineering from the New York University Tandon School of Engineering.
Yesim Tokat-Acikel, PhD, is a Managing Director, Director of Multi-Asset Research and Portfolio Manager for QMA working within the Global Multi-Asset Solutions team. In this capacity, she is responsible for the research, development, and portfolio management of systematic total and absolute return investment solutions. She is also an investment lead for our global solutions efforts. Prior to QMA, Yesim worked as a Senior Quantitative Analyst developing GTAA strategies at AllianceBernstein, and as a Senior Investment Analyst for the Vanguard Group, where she built tactical and strategic asset allocation models for retirement and private client markets. Yesim’s articles have appeared in the Journal of Investment Management, Journal of Investing, Mathematical Methods of Operations Research, the Journal of Economic Dynamics and Control, the Strategic Management Journal, the Journal of Financial Planning and the Journal of Wealth Management, among other leading publications. She earned a BS in industrial engineering from Bilkent University in Turkey, an MS in industrial engineering from the University of Arizona, Tucson, and a PhD in economics from the University of California, Santa Barbara.
Wellington
Edward L. Meyi, FRM, Managing Director and Fixed Income Portfolio Manager. Ed is a portfolio manager and member of Wellington Management’s Global Bond Team. He manages global fixed income portfolios for clients worldwide, including central bank, sovereign wealth fund, pension fund, and mutual fund clients of the firm. Prior to joining the firm in 2002, Ed worked at Putnam, BlackRock, Scudder Kemper, and Investors Bank & Trust. Ed earned his BA in history from Middlebury College (1996) and is certified by the Global Association of Risk Professionals as a Financial Risk Manager (FRM).
Mark H. Sullivan, CFA, CMT, Senior Managing Director, Fixed Income Portfolio Manager, and Head of Alternatives. Mark is the team leader and a portfolio manager for the Global Macro and Fixed Income Team. As portfolio manager, he focuses on manager selection, allocation, and risk management across the team’s multi-strategy investment process. As the manager of portfolio managers, he oversees the aggregate risk and investment results within portfolios. In addition, he focuses on business and talent management as the leader of the investment team. As head of Alternatives, he is responsible for driving the long-term investment performance of Wellington Management’s liquid alternative strategies. Mark joined Wellington Management in 1999 as a project analyst in Global Relationship Management before becoming a quantitative analyst in the Fixed Income Group. He has been a member of the Global Bond Team since 2002. Mark received his BA from Colgate University (1999). In addition, he holds the Chartered Financial Analyst and Chartered Market Technician designations.
John Soukas, Senior Managing Director and Fixed Income Portfolio Manager. John is a portfolio manager and a senior member of the Global Bond Team. He specializes in systematic interest-rate strategies, with a specific focus on developed market (DM) government bond markets. He has been a member of the team since 2006 and is based in our Boston office. He also serves as a risk advisor to the team leader, Mark Sullivan. In addition to contributing to our broader investment platform, John is a specialist portfolio manager in our flagship global macro hedge fund. Prior to joining Wellington in 2006, John was a managing partner at Fairlane Asset Management in Toronto, where he was responsible for global fixed income (2003 – 2006). Earlier in his career, he was a government bond portfolio manager focusing on relative value strategies at West End Capital Management (2002 – 2003), head of Canadian Government Bond Trading at Deutsche Bank Securities (1997 – 2002), and senior economist at RBC Capital Markets (1994 – 1997). John earned his MA in economics with a focus on econometrics and international finance from the University of Toronto (1993) and his BA from the University of Western Ontario (1991).
Information About PGIM Investments and ASTIS
The Trust is managed by PGIM Investments, 655 Broad Street, 17th Floor, Newark, NJ 07102 and ASTIS, One Corporate Drive, Shelton, Connecticut 06484.
As of December 31, 2020, PGIM Investments served as investment manager to all of the Prudential US and offshore open-end investment companies, and as administrator to closed-end investment companies, with aggregate assets of approximately $361.6 billion. PGIM Investments is a wholly-owned subsidiary of PIFM Holdco, LLC, which is a wholly-
owned subsidiary of PGIM Holding Company LLC, which is a wholly-owned subsidiary of Prudential Financial, Inc. (Prudential). PGIM Investments has been in the business of providing advisory services since 1996.
As of December 31, 2020, ASTIS served as investment manager to certain Prudential US and offshore open-end investment companies with aggregate assets of approximately $177.1 billion. ASTIS is a subsidiary of Prudential Annuities Holding Company, Inc., which is a subsidiary of Prudential Annuities, Inc., a subsidiary of Prudential. ASTIS has been in the business of providing advisory services since 1992.
Set forth below is the name, title and principal occupation of the principal executive officer of PGIM Investments. There are no directors of PGIM Investments. The address of the principal executive officer of PGIM Investments is 655 Broad Street, 17th Floor, Newark, New Jersey 07102. None of the officers or directors of PGIM Investments are also officers or directors of QMA, Jennison, PGIM, ClearBridge, J.P. Morgan, MFS or Wellington.
Name |
| Position with PGIM Investments |
| Principal Occupations |
|
Stuart S. Parker |
| Chief Executive Officer, Chief Operating Officer, Officer-in-Charge, President |
| President of PGIM Investments LLC (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011). |
|
Set forth below are the names, titles and principal occupations of the principal executive officer and the directors of ASTIS. Unless otherwise indicated, the address of each individual is One Corporate Drive, Shelton, Connecticut 06484. None of the officers or directors of ASTIS are also officers or directors of First Quadrant, J.P. Morgan, Jennison, MFS, Morgan Stanley, PGIM, QMA, Wellington, or Western Asset.
Name |
| Position with ASTIS |
| Principal Occupations |
|
Scott E. Benjamin* |
| Director and Executive Vice President |
| Executive Vice President (since May 2009) of PGIM Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Executive Vice President (since June 2019) of Prudential Trust Company; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006). |
|
Timothy S. Cronin |
| Director, President, Chief Executive Officer, Chief Operating Officer, Officer-in-Charge |
| President, Chief Executive Officer, Chief Operating Officer, Officer-In-Charge (since March 2006), Director (since June 2005) of AST Investment Services, Inc.; Senior Vice President of PGIM Investments LLC (since May 2009); Vice President (since July 2006) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Senior Vice president (since May 2006) of Prudential Annuities Life Assurance Corporation; Vice President of Prudential Annuities, Inc. (since May 2003). |
|
Dylan J. Tyson |
| Director and Executive Vice President |
| Director, President, and Chief Executive Officer (since December 2019) of Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, Prudential Annuities Holding Company, Inc., Prudential Annuities Information Services & Technology Corporation, Prudential Annuities Life Assurance Corporation, Prudential Annuities, Inc. and Prudential Life Insurance Company of Taiwan Inc.; Senior Vice President, Annuities (since December 2019) of Prudential Financial, Inc. and The Prudential Insurance Company of America. |
|
* Mr. Benjamin’s principal address is 655 Broad Street, 17th Floor, Newark, NJ 07102.
Set forth below is a list of the officers of the Trust who are also officers or directors of PGIM Investments and/or ASTIS.*
Name |
| Position with Trust |
| Position with PGIM Investments |
| Position with ASTIS |
|
Timothy S. Cronin |
| President |
| Senior Vice President |
| Director, President, Chief Executive Officer, Chief Operating Officer, Officer-in-Charge |
|
Ken Allen |
| Vice President |
| Vice President |
| Vice President |
|
Claudia DiGiacomo |
| Chief Legal Officer and Assistant Secretary |
| Assistant Secretary and Vice President |
| N/A |
|
Andrew R. French |
| Secretary |
| Assistant Secretary and Vice President |
| N/A |
|
Melissa Gonzalez |
| Assistant Secretary |
| Assistant Secretary and Vice President |
| N/A |
|
Patrick McGuinness |
| Assistant Secretary |
| Assistant Secretary and Vice President |
| N/A |
|
Dino Capasso |
| Chief Compliance Officer |
| Chief Compliance Officer and Vice President |
| Chief Compliance Officer |
|
Christian J. Kelly |
| Treasurer & Principal Financial and Accounting Officer |
| Assistant Treasurer and Vice President |
| Vice President |
|
* Includes Mr. Cronin, who also serves as an interested trustee of the Trust.
Substantially Similar Funds or Portfolios Managed by PGIM Investments or ASTIS
ASTIS and PGIM Investments do not manage another fund or portfolio that has investment objectives, policies, and strategies that are substantially similar to the proposed investment objective, policies, and strategies for the Repositioned Portfolio.
Substantially Similar Funds or Portfolios Advised by the Subadvisers
First Quadrant, J.P. Morgan, Jennison, MFS, Morgan Stanley, PGIM, QMA, Wellington, or Western Asset do not manage another fund or portfolio that has investment objectives, policies, and strategies that are substantially similar to the proposed investment objective, policies, and strategies for the Repositioned Portfolio.
Implementation
As explained in more detail above, the Manager and the Board are proposing the amended Management Agreement, including an increase in the fee rate, in order to enable the Manager to retain J.P. Morgan, MFS, PGIM, and Wellington as new subadvisers for the Portfolio and, alongside First Quadrant, Jennison, Morgan Stanley, QMA, and Western Asset, the Portfolio’s current subadvisers, to implement the new principal investment strategy for the Portfolio.
If the amended Management Agreement is approved by the shareholders, the revised fee schedule will become effective and J.P. Morgan, MFS, PGIM, and Wellington will be added as new subadvisers to the Portfolio. The appointment of J.P. Morgan, MFS, PGIM, and Wellington are expected to occur on or about July 1, 2001. First Quadrant, Jennison, Morgan Stanley, QMA, and Western Asset will continue to serve as subadvisers to the Repositioned Portfolio.
THE BOARD OF TRUSTEES OF ADVANCED SERIES TRUST, INCLUDING ALL OF THE INDEPENDENT TRUSTEES, RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL.
VOTING INFORMATION
Voting Rights
Shareholders as of the Record Date are entitled to vote. Contract owners who have allocated account values to Separate Accounts investing in the Portfolio as of the Record Date may instruct their Insurance Company how to vote the shares related to their investment. Contract owners should consider themselves shareholders for purposes of these proxy materials. The Record Date is February 12, 2021.
Each whole Share of a Portfolio is entitled to one vote as to the proposal with respect to which it is entitled to vote, and each fractional share is entitled to a proportionate fractional vote. The table in Exhibit C shows the number of outstanding shares of the Portfolio as of the Record Date that are entitled to vote at each meeting. Together, the Insurance Companies owned of record more than [ ] of those shares.
Required Shareholder Vote
If an Insurance Company receives a voting instruction card that is signed, dated and timely returned but is not marked to indicate voting instructions, it will be treated as an instruction to vote the Shares in favor of the proposal. Shares in each sub-account of a Separate Account that is invested in a Portfolio for which an Insurance Company receives no timely voting instructions from Contract owners, or that are attributable to amounts retained by an Insurance Company as surplus or seed money, will be voted by the Insurance Company either “FOR” or “AGAINST” approval of the proposal, or as an abstention, in the same proportion as the Shares for which Contract owners have provided voting instructions to the Insurance Company. As a result of such proportional voting by the Insurance Companies, it is possible that a small number of Contract owners could determine whether the proposal is approved.
With respect to the proposal, “voting securities” refers to the Shares of the Portfolio. The implementation of the new principal investment strategy is contingent on the Portfolio’s shareholders approving the proposal. If shareholders of the Portfolio do not approve the proposal, the Management Agreement will not be amended and the new principal investment strategy will not be implemented for the Portfolio.
The presence, via remote communication or by proxy, of at least one-third of the shares of the Portfolio entitled to vote at the Meeting will constitute a quorum for the transaction of business at the Meeting with respect to the Portfolio. It is expected that the presence at the Meeting of the Insurance Companies will be sufficient to constitute a quorum. If a voting instruction card is not marked to indicate voting instructions but is signed, dated and returned, it will be treated as an instruction to vote the shares in favor of the proposal. If a Contract owner abstains from voting as to any matter, the shares represented by the abstention will be deemed present at the Meeting for purposes of determining a quorum but will not be voted and, therefore, will have the effect of a vote against the proposal.
To the knowledge of the Trust, as of the Record Date, the current Trustees and officers owned, individually and as a group, less than 1% of the shares of the Trust and the Portfolio. Broker-dealers affiliated with the Manager received no commissions from the Trust with respect to the Portfolio during the twelve-month period ended December 31, 2020.
Solicitation of Proxies and Voting Instructions
Solicitation of voting instructions is being made by the Trust primarily by distribution of this Notice and Proxy Statement by mail. In addition to the solicitation of proxies and voting instructions by mail, officers and agents of the Trust and employees of the Manager, and its affiliates, without additional compensation, may solicit proxies and voting instructions in person or by telephone, fax, the Internet, personal interview or other permissible means. In lieu of executing a voting instruction card, you may attend the Meeting via remote communication.
The Trust has retained Broadridge Financial Solutions, Inc. (Broadridge) for the purpose of responding to questions and requests for assistance from Contract owners. Broadridge may also provide services for the solicitation of voting instructions from Contract owners through any of the means described above. The solicitation services to be provided by Broadridge may include, but are not limited to mailing services, outbound calling, vote recording and vote tabulation. Estimated cost for Broadridge’s services is $124,500 which will be covered by the Manager or its affiliates.
To instruct an Insurance Company as to how to vote the Shares held in its Separate Accounts, Contract owners are asked to promptly complete their voting instructions on the enclosed voting instruction card; and sign, date and mail the voting instruction card in the accompanying postage-paid envelope. Contract owners may also provide voting instructions by telephone by calling 1-800-690-6903, or over the Internet by visiting www.proxyvote.com.
The number of Shares held in the sub-account of a Separate Account corresponding to a Portfolio for which a Contract owner may provide voting instructions was determined as of the Record Date by dividing (i) the Contract’s account value allocable to that sub-account by (ii) the net asset value of one Share of the Portfolio. Each whole share is entitled to one vote on the proposal and each fractional share is entitled to a proportionate fractional vote.
At any time prior to an Insurance Company’s voting at the Meeting, a Contract owner may revoke his or her voting instructions with respect to a proposal by providing the Insurance Company (as noted on each Contract owner’s voting instruction card) with a properly executed written revocation of such voting instructions, properly executing later-dated voting instructions by a voting instruction card, telephone at 1-800-690-6903 or over the Internet at www.proxyvote.com, or participating and providing voting instructions via remote communication at a Meeting.
Proxy Solicitation Costs
Contract owners will not bear any of the costs or expenses associated with this Proxy Statement. The cost of the Proxy Statement and the Meeting, including the cost of solicitation of voting instructions with respect to the proposal will be borne by the Manager and/or its affiliates. The principal solicitation will be by mail, but voting instructions also may be solicited by telephone, fax, personal interview by officers or agents of the Manager or its affiliates, over the Internet, or other permissible means. Contract owners can provide voting instructions by mail with the enclosed voting instruction card, or by telephone by calling 1-800-690-6903, or over the Internet by visiting www.proxyvote.com. Voting instruction cards must be received by the day before the Meeting. Voting instructions submitted by telephone or over the Internet must be submitted by 11:59 p.m. Eastern Time on the day before the Meeting.
Transition Expenses
In order for the Subadvisers to implement the new investment strategies on behalf of the Repositioned Portfolio, it is expected that a substantial amount of shares of the underlying AST portfolios held by the Portfolio will be liquidated and that equity securities, fixed-income securities, money market instruments, and other financial instruments selected by the Subadvisers will be purchased on behalf of the Portfolio. Brokerage commissions and other transaction-related expenses will be directly incurred on behalf of the Portfolio in connection with the liquidation of the underlying AST portfolios and the purchase of equity securities, fixed-income securities, money market instruments, and other financial instruments selected by the Subadvisers. Such direct brokerage commissions and other transaction-related expenses are expected to equal approximately as follows and will be borne by the Portfolio and its shareholders:
Portfolio |
| Direct Brokerage Commissions and Other Transaction- |
|
AST Academic Strategies Asset Allocation Portfolio | $1.5 million (or 0.035%) |
|
Adjournment
If sufficient votes in favor of the proposal are not received by the time scheduled for the Meeting, the officers of the Trust may propose one or more adjournments or postponements of the Meeting to permit further solicitation of voting instructions. The costs of any additional solicitation and any adjourned session will be paid by the Manager and/or its affiliates.
Other Matters
The Trust is not aware of any matters to be presented at the Meeting other than the proposal described in this Proxy Statement. If other business properly comes before the Meeting, the Insurance Companies will vote thereon in their discretion and in accordance with their best judgment.
The Trust is not required to hold regular shareholder meetings and, in order to minimize its costs, does not intend to hold meetings of shareholders unless so required by applicable law, regulation or regulatory policy or if otherwise deemed advisable by the Trust’s management. Shareholders will be given notice of any meeting of shareholders not less than ten days, and not more than ninety days, before the date of the meeting. In order for a shareholder proposal to be incorporated in the Trust’s proxy statement for a meeting of shareholders, the proposal must be submitted in accordance with the Trusts’ governing documents and must be received a reasonable time (generally at least 150 days) before the Trust begins to print and send its proxy materials to shareholders. Any notice of a shareholder proposal that is not submitted in accordance with the Trusts’ governing documents or not received by the Trust within a reasonable time before the Trust sends its proxy materials relating to a particular meeting will be considered untimely and will not be considered.
Prompt execution and return of the enclosed voting instruction card is requested. A self-addressed, postage-paid envelope is enclosed for your convenience. If executed but unmarked voting instructions are received, an Insurance Company will vote those unmarked voting instructions in favor of a proposal.
* * * * *
Copies of the Trust’s most recent annual and semi-annual reports, including financial statements, previously have been delivered to shareholders. Shareholders may request additional copies of the Trust’s annual or semi-annual reports, free of charge, by writing to the Trust at 655 Broad Street, Newark, New Jersey 07102 or by calling 877-522-5035.
WE NEED YOUR VOTE. IT IS IMPORTANT THAT YOU EXECUTE AND RETURN ALL OF YOUR VOTING INSTRUCTION CARDS PROMPTLY.
INDEX TO EXHIBITS TO PROXY STATEMENT
|
|
|
| PAGE |
Exhibit A |
| Investment Management Agreement for the Portfolio |
| A-1 |
Exhibit B |
| Outstanding Shares of the Portfolio |
| B-1 |
ATTACHMENT TO PROXY STATEMENT
Form of Voting Instruction Card
[ ]
EXHIBIT A
ADVANCED SERIES TRUST
INVESTMENT MANAGEMENT AGREEMENT
Agreement made this 1st day of May, 2003, between Advanced Series Trust, a Massachusetts trust (the Fund), and each of Prudential Investments LLC, a New York limited liability company (PI) and American Skandia Investment Services, Inc. (ASISI).
W I T N E S S E T H
WHEREAS, the Fund is a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act); and
WHEREAS, the Fund desires to retain PI and ASISI jointly to render or contract to obtain as hereinafter provided investment advisory services to the Fund and the Fund also desires to avail itself of the facilities available to PI and ASISI with respect to the administration of its day-to-day business affairs, and both PI and ASISI are willing to render such investment advisory and administrative services; and
WHEREAS, the Fund desires to retain PI and ASISI to act as co-managers (in such joint capacity the Co-Managers) with respect to the Fund; it being understood that PI, except as otherwise provided herein, shall oversee, supervise and assist with ASISI’s provision of investment advisory services to the Fund;
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints the Co-Managers to act as manager of the Fund and each series thereof set forth on Schedule A hereto (each a Portfolio) and as administrator of its business affairs for the period and on the terms set forth in this Agreement. The Co-Managers accept such appointment and agree to render the services herein described, for the compensation herein provided. Subject to the approval of the Board of Trustees of the Fund, the Co-Managers are authorized to enter into one or more subadvisory agreements with any subadviser, whether or not affiliated with the Manager (including, to the extent legally permissible, Prudential Investment Management, Inc. and Jennison Associates LLC) (each, a Subadviser), pursuant to which such Subadviser shall furnish to the Fund and each Portfolio investment advisory services in connection with the management of the Fund and such Portfolio (each, a Subadvisory Agreement). Subject to the approval of the Board of Trustees of the Fund, the Co-Managers are authorized to retain more than one Subadviser for each Portfolio, and if any Portfolio has more than one Subadviser, the Co-Managers are authorized to allocate and reallocate the assets of such Portfolio among the Subadvisers to such Portfolio. The Co-Managers will continue to have joint and several responsibility to the Fund and each Portfolio for all investment advisory services furnished to the Fund and such Portfolio pursuant to any Subadvisory Agreement. The Fund and Co-Managers understand and agree that the Co-Managers may manage the Fund and each Portfolio in a “manager-of-managers” style with either a single Subadviser or multiple Subadvisers for such Portfolio, which contemplates that the Co-Managers will, among other things and pursuant to an Order issued by the Securities and Exchange Commission (SEC): (i) continually evaluate the performance of each Subadviser to such Portfolio, if applicable, through quantitative and qualitative analyses and consultations with such Subadviser; (ii) periodically, and at least annually, make recommendations to the Fund’s Board as to whether the contract with each Subadviser should be renewed, modified, or terminated in respect of such Portfolio; and (iii) periodically report to the Fund’s Board regarding the results of its evaluation and monitoring functions. The Fund recognizes that, subject to Board approval, a Subadviser’s services in respect of the Fund or any Portfolio may be terminated or modified pursuant to the “manager-of-managers” process, and that the Co-Managers may appoint a new Subadviser for any Subadviser that is so removed.
2. Subject to the supervision of the Board of Trustees of the Fund, the Co-Managers shall administer the Fund’s business affairs and, in connection therewith, shall furnish the Fund with office facilities and with clerical, bookkeeping and recordkeeping services at such office facilities and, subject to Section 1 hereof and any Subadvisory Agreement, the Co-Managers shall manage the investment operations of the Fund and the composition of the investment portfolio for each Portfolio, including the purchase, retention and disposition thereof, in accordance with the Portfolio’s investment objectives, policies and restrictions as stated in the Fund’s SEC registration statement on Form N-1A, as in effect from time to time (the Registration Statement), and subject to the following understandings:
(a) With respect to the Fund and each Portfolio, the Co-Managers (or the Subadviser(s) to such Portfolio under the Co-Managers’ supervision) shall provide supervision of the Portfolio’s investments, and shall determine from time to time what investments or securities will be purchased, retained, sold or loaned by the Portfolio, and what portion of the assets of such Portfolio will be invested or held uninvested as cash.
(b) With respect to the Fund and each Portfolio, the Co-Managers, in the performance of their duties and obligations under this Agreement, shall act in conformity with the Declaration of Trust of the Fund and the Registration Statement and with the instructions and directions of the Board of Trustees of the Fund, and will conform to and comply with the requirements of the 1940 Act and all other applicable federal and state laws and regulations. In connection therewith, the Co-Managers shall, among other things, prepare and file (or cause to be prepared and filed) such reports as are, or may in the future be, required by the SEC).
(c) With respect to the Fund and each Portfolio, the Co-Managers (or the Subadviser(s) to such Portfolio under the Co-Managers’ supervision) shall determine the securities and futures contracts to be purchased or sold by such Portfolio and will place orders pursuant to their determinations with or through such persons, brokers, dealers or futures commission merchants (including but not limited to Prudential Securities Incorporated, to the extent legally permissible) in conformity with the policy with respect to brokerage as set forth in the Registration Statement or as the Board of Trustees may direct from time to time. In providing the Fund and each Portfolio with investment supervision, it is recognized that the Co-Managers (or the Subadviser(s) to such Portfolio under the Co-Managers’ supervision) will give primary consideration to securing the most favorable price and efficient execution. Consistent with this policy, the Co-Managers (or the Subadviser(s) to such Portfolio under the Co-Managers’ supervision) may consider the financial responsibility of or research and investment information and other services provided by brokers, dealers or futures commission merchants who may effect or be a party to any such transaction or other transactions to which other clients of either of the Co-Manager (or Subadvisers) may be a party, the size and difficulty in executing the order, and the value of the expected contribution of the broker dealer to the investment performance of the Portfolio on a continuing basis. It is understood that, to the extent legally permissible, Prudential Securities Incorporated (or a broker-dealer affiliated with a Subadviser) may be used as principal broker for securities transactions, but that no formula has been adopted for allocation of the Fund’s investment transaction business for the Fund or any Portfolio. It is also understood that it is desirable for the Fund and each Portfolio that the Co-Manager (or the Subadviser(s) to such Portfolio) have access to supplemental investment and market research and security and economic analysis provided by brokers or futures commission merchants, and that such brokers or futures commission merchants may execute brokerage transactions at a higher cost to the Fund and such Portfolio than may result when allocating brokerage to other brokers or futures commission merchants on the basis of seeking the most favorable price and efficient execution. Therefore, the Co-Managers (and the Subadviser(s) to such Portfolio under the Co-Manager’s supervision) each is authorized to pay higher brokerage commissions for the purchase and sale of securities and futures contracts for the Fund to brokers or futures commission merchants who provide such research and analysis, subject to review by the Fund’s Board of Trustees from time to time with respect to the extent and continuation of this practice. It is understood that the services provided by such broker or futures commission merchant may be useful to the Co-Manager (or the Subadviser) in connection with its services to other clients.
On occasions when the Co-Managers (or any Subadviser to such Portfolio under the Co-Managers’ supervision) deem the purchase or sale of a security or a futures contract to be in the best interest of the Fund and such Portfolio as well as other clients of the Co-Managers (or such Subadviser), the Co-Manager (or such Subadviser), to the extent legally permissible, may, but shall be under no obligation to, aggregate the securities or futures contracts to be so sold or purchased in order to obtain the most favorable price or lower brokerage commissions and efficient execution. In such event, allocation of the securities or futures contracts so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Co-Managers (or such Subadviser) in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Fund and such Portfolio and to such other clients.
(d) With respect to the Fund and each Portfolio, the Co-Managers (or the Subadviser(s) to such Portfolio under the Co-Managers’ supervision) shall maintain all books and records with respect to the Fund’s and such Portfolio’s portfolio transactions and shall render to the Fund’s Board of Trustees such periodic and special reports as the Board may reasonably request.
(e) With respect to the Fund and each Portfolio, the Co-Managers (or the Subadviser(s) to such Portfolio under the Co-Manager’s supervision) shall be responsible for the financial and accounting records to be maintained by the Fund and such Portfolio’s (including those being maintained by the Fund’s custodian).
(f) With respect to the Fund and each Portfolio, the Co-Manager (or the Subadviser(s) to such Portfolio under the Co-Managers’ supervision) shall provide the Fund’s custodian on each business day information relating to all transactions concerning the assets of the Fund and such Portfolio.
(g) The investment management services of the Co-Managers under this Agreement are not to be deemed exclusive, and the Co-Managers shall be free to render similar services to others.
(h) The Co-Managers shall make reasonably available their employees and officers for consultation with any of the Trustees or officers or employees of the Fund with respect to any matter discussed herein, including, without limitation, the valuation of the Fund’s securities.
3. The Fund has delivered to the Co-Managers copies of each of the following documents and will deliver to it all future amendments and supplements, if any:
(a) Articles of Incorporation or Declaration of Trust of the Fund;
(b) By-Laws of the Fund (such By-Laws, as in effect on the date hereof and as amended from time to time, are herein called the “By-Laws”);
(c) Certified resolutions of the Board of Trustees of the Fund authorizing the appointment of the Manager and approving the form of this agreement;
(d) Registration Statement under the 1940 Act and the Securities Act of 1933, as amended, on Form N-1A, as filed with the SEC relating to the Fund and its shares of common stock and all amendments thereto; and
(e) Each prospectus and statement of additional information of the Fund.
4. The Co-Managers shall authorize and permit any of their officers and employees who may be elected as Trustees or officers of the Fund to serve in the capacities in which they are elected. All services to be furnished by the Co-Managers under this Agreement may be furnished through the medium of any such officers or employees of the Co-Managers.
5. The Co-Managers shall keep the Fund’s books and records required to be maintained by it pursuant to Paragraph 2 hereof. The Co-Managers agree that all records which it maintains for the Fund are the property of the Fund, and they will surrender promptly to the Fund any such records upon the Fund’s request, provided however that the Co-Managers may retain a copy of such records. The Co-Managers further agree to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by the Co-Managers pursuant to Paragraph 2 hereof.
6. During the term of this Agreement, the Co-Managers shall pay the following expenses:
(i) the salaries and expenses of all Trustees, officers and employees of the Fund and the Co-Managers, except the fees and expenses of Trustees who are not affiliated persons of the Co-Managers or any Subadviser,
(ii) all expenses incurred by the Co-Managers in connection with managing the ordinary course of the Fund’s business, other than those specifically assumed by the Fund herein, and
(iii) the fees, costs and expenses payable to each Subadviser pursuant to a Subadvisory Agreement.
The Fund assumes and will pay the expenses described below:
(a) the fees and expenses incurred by the Fund or any Portfolio in connection with the management of the investment and reinvestment of its assets,
(b) the fees and expenses of Fund Trustees who are not “interested persons” of the Fund within the meaning of the 1940 Act,
(c) the fees and expenses of the Custodian that relate to (i) the custodial function and the recordkeeping connected therewith, (ii) preparing and maintaining the general accounting records of the Fund and the provision of any such records to the Co-Managers useful to the Co-Managers in connection with the Co-Managers’ responsibility for the accounting records of the Fund pursuant to Section 31 of the 1940 Act and the rules promulgated thereunder, (iii) the pricing or valuation of the shares of the Fund, including the cost of any pricing or valuation service or services which may be retained pursuant to the authorization of the Board of Trustees of the Fund, and (iv) for both mail and wire orders, the cashiering function in connection with the issuance and redemption of the Fund’s securities,
(d) the fees and expenses of the Fund’s Transfer and Dividend Disbursing Agent that relate to the maintenance of each shareholder account,
(e) the charges and expenses of legal counsel and independent accountants for the Fund,
(f) brokers’ commissions and any issue or transfer taxes chargeable to the Fund in connection with its securities and futures transactions,
(g) all taxes and corporate fees payable by the Fund to federal, state or other governmental agencies,
(h) the fees of any trade associations of which the Fund may be a member,
(i) the cost of certificates representing, and/or non-negotiable share deposit receipts evidencing, shares of the Fund,
(j) the cost of fidelity, directors’ and officers’ and errors and omissions insurance,
(k) the fees and expenses involved in registering and maintaining registration of the Fund and of its shares with the SEC, and paying notice filing fees under state securities laws, including the preparation and printing of the Registration Statement and the Fund’s prospectuses and statements of additional information for filing under federal and state securities laws for such purposes,
(l) allocable communications expenses with respect to investor services and all expenses of shareholders’ and Trustees’ meetings and of preparing, printing and mailing reports and notices to shareholders in the amounts necessary for distribution to the shareholders,
(m) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business, and
(n) any expenses assumed by the Fund pursuant to a distribution and/or service plan adopted in a manner that is consistent with Rule 12b-1 under the 1940 Act.
7. For the services provided and the expenses assumed by the Co-Managers pursuant to this Agreement, the Fund will pay to ASISI as full compensation therefore a fee at the annual rate(s) as described on the attached Schedule A with respect to the average daily net assets of the Fund. This fee will be computed daily, and will be paid to ASISI monthly. The Fund shall not pay any fee or other compensation to PI for the services provided and the expenses assumed pursuant to this Agreement. Provided, however, that upon any dissolution, liquidation or merger of ASISI into PI, or in the event that ASISI is unable for any reason to perform its duties as specified in this Agreement, PI shall be entitled to receive the same fees as formerly paid by the Fund to ASISI subject to the performance of the obligations of the Co-Managers hereunder.
8. The Co-Managers shall not be liable for any error of judgment or for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except that the Co-Managers shall be jointly and severally liable for any loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or loss resulting from willful misfeasance, bad faith or gross negligence on either Co-Manager’s part in the performance of their duties or from reckless disregard by either Co-Manager of their obligations and duties under this Agreement. Federal and state laws impose responsibilities under certain circumstances on persons who act in good faith and, therefore, nothing herein shall in any way constitute a waiver of limitation of any rights which the Fund may have under applicable law.
9. This Agreement shall continue in effect as to each Portfolio for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated with respect to the Fund or any Portfolio at any time, without the payment of any penalty, by the Board of Trustees of the Fund or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of such Portfolio, or by the Co-Managers at any time, without the payment of any penalty, on not more than 60 days’ nor less than 30 days’ written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act).
10. Nothing in this Agreement shall limit or restrict the right of any officer or employee of the Co-Managers who may also be a Trustee, officer or employee of the Fund to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or dissimilar nature, nor limit or restrict the right of the Co-Managers to engage in any other business or to render services of any kind to any other corporation, firm, individual or association; provided that nothing in this paragraph 10 shall relieve the Co-Managers from the performance of any obligation hereunder.
11. Except as otherwise provided herein or authorized by the Board of Trustees of the Fund from time to time, the Co-Managers shall for all purposes herein be deemed to be independent contractors, and shall have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund or any Portfolio.
12. During the term of this Agreement, the Fund agrees to furnish the Co-Managers at their respective principal offices all prospectuses, proxy statements, reports to shareholders, sales literature, or other material prepared for distribution to shareholders of the Fund or the public, which refer in any way to the Co-Managers prior to use thereof and not to use such material if the Co-Managers reasonably object in writing within five business days (or such other time as may be mutually agreed) after receipt thereof. In the event of termination of this Agreement, the Fund will continue to furnish to the Co-Managers copies of any of the above- mentioned materials which refer in any way to the Co-Managers. Sales literature may be furnished to the Co-Managers hereunder by first-class or overnight mail, facsimile transmission equipment or hand delivery. The Fund shall furnish or otherwise make available to the Co-Managers such other information relating to the business affairs of the Fund as the Co-Managers at any time, or from time to time, reasonably request in order to discharge its obligations hereunder.
13. This Agreement may be amended by mutual consent, but the consent of the Fund must be obtained in conformity with the requirements of the 1940 Act.
14. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid to the respective addresses indicated below; provided that any party may, by written notice to the others, designate a different recipient or address for such party:
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If to the Co-Managers: |
| Prudential Investments LLC |
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| Gateway Center Three |
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| 100 Mulberry Street, 4th Floor |
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| Newark, NJ 07102-4077 |
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| Attention: President |
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| and |
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| AST Investment Services, Inc. |
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| One Corporate Drive |
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| Shelton, CT 06484 |
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| Attention: President |
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If to the Fund: |
| Advanced Series Trust |
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| One Corporate Drive |
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| Shelton, CT 06484 |
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| Attention: President |
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| Copy to: |
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| Prudential Investments LLC |
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| Gateway Center Three |
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| 100 Mulberry Street, 4th Floor |
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| Newark, NJ 07102-4077 |
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| Attention: President |
15. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
16. The Fund may use the name “Portfolio” or any name including the word “Prudential,” “Skandia,” “AST,” or “American Skandia” only for so long as this Agreement or any extension, renewal or amendment hereof remains in effect, including any similar agreement with any organization which shall have succeeded to the Co-Managers’ business as Co-Managers or any extension, renewal or amendment thereof remain in effect. At such time as such an agreement shall no longer be in effect, the Fund will (to the extent that it lawfully can) cease to use such a name or any other name indicating that it is advised by, managed by or otherwise connected with the Co-Managers, or any organization which shall have so succeeded to such businesses. In no event shall the Fund use the name “Portfolio.” or any name including the word “Prudential,” “Skandia,” “AST,” or “American Skandia” if the Co-Managers’ functions are transferred or assigned to a company of which The Prudential Insurance Company of America does not have control. Further provided, that the Fund’s right to use the words “Skandia,” “AST,” or “American Skandia” shall also be subject to the terms, conditions, restrictions and limitations governing the use of such words as set forth in any licensing or similar agreement(s) that may then be in effect between Prudential Financial, Inc. and Skandia Insurance Company Ltd. Or their successors or assigns.
17. Liability of the Trustees and Shareholders. A copy of the Agreement and Declaration of Trust of the Trust is on file with the Secretary of the Commonwealth of Massachusetts, and notice is hereby given that this instrument are not binding upon any of the Trustees or shareholders individually but is binding only upon the assets and property of the Trust.
18. Questions of Interpretation. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the ICA, shall be resolved by reference to such term or provision of the ICA and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Securities and Exchange Commission issued pursuant to the ICA. In addition, where the effect of a requirement of the ICA, reflected in any provision of this Agreement, is related by rules, regulation or order of the Securities and Exchange Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this instrument to be executed by their officers designated below as of the day and year above written.
ADVANCED SERIES TRUST |
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By: |
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PRUDENTIAL INVESTMENTS LLC |
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By: |
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AST INVESTMENT SERVICES, INC. |
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By: |
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SCHEDULE A
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Portfolio |
| Fee Rate |
AST Academic Strategies Asset Allocation Portfolio |
| 0.9325% of average daily net assets to $300 million; |
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| 0.9225% on next $200 million of average daily net assets; |
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| 0.9125% on next $250 million of average daily net assets; |
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| 0.9025% on next $2.5 billion of average daily net assets; |
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| 0.8925% on next $2.75 billion of average daily net assets; |
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| 0.8625% on next $4 billion of average daily net assets; |
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| 0.8425% on next $2.5 billion of average daily net assets; |
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| 0.8225% on next $2.5 billion of average daily net assets; |
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| 0.8025% on next $5 billion of average daily net assets; |
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| 0.7825% on next $5 billion of average daily net assets; |
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| 0.7625% on next $5 billion of average daily net assets; |
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| 0.7425% on next $5 billion of average daily net assets; |
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| 0.7225% on next $5 billion of average daily net assets; |
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| 0.7025% over $40 billion of average daily net assets. |
* The Manager will aggregate assets with the AST Academic Strategies Asset Allocation Portfolio, AST Balanced Asset Allocation Portfolio, AST Capital Growth Asset Allocation Portfolio, and AST Preservation Asset Allocation Portfolio for the purpose of calculating the management fee for each Portfolio.
EXHIBIT B
OUTSTANDING SHARES
The following table sets forth the outstanding shares of the AST Academic Strategies Asset Allocation Portfolio (the “Portfolio”) as of February 12, 2021. Each whole Share of the Portfolio is entitled to one vote as to the Proposal, and each fractional share is entitled to a proportionate fractional vote.
Portfolio |
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| Shares |
AST Academic Strategies Asset Allocation Portfolio |
| [TO BE ADDED BY SUBSEQUENT FILING] |
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Portfolio |
| Registration & Address |
| Total Balance |
| % of Portfolio |
AST Academic Strategies Asset Allocation Portfolio |
| [TO BE ADDED BY SUBSEQUENT FILING] |
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PROXY TABULATOR P.O. BOX 9112 FARMINGDALE, NY 11735 | To vote by Internet
1) Read the Proxy Statement and have the voting instruction card below in hand. 2) Go to the website www.proxyvote.com 3) Follow the instructions provided on the website.
To vote by Telephone
1) Read the Proxy Statement and have the voting instruction card below at hand. 2) Call 1-800-690-6903 3) Follow the instructions.
To vote by Mail
1) Read the Proxy Statement. 2) Check the appropriate boxes on the proxy voting instruction below. 3) Sign and date the voting instruction card. 4) Return the voting instruction card in the envelope provided |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | M37963-TBD | KEEP THIS PORTION FOR YOUR RECORDS | |
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| THIS VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY | |
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| ADVANCED SERIES TRUST’S BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE FOLLOWING PROPOSAL. |
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| For | Against |
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| 1. To approve an amended investment management agreement. |
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| IF YOU SIGN AND RETURN THIS VOTING INSTRUCTION CARD WITHOUT DIRECTING US HOW TO VOTE, THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION CARD WILL BE VOTED “FOR” THE PROPOSAL. |
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| NOTE: Please sign exactly as your name appears on the records of the Insurance Company and date. If joint owners, each holder should sign this Voting Instruction Card. When signing as attorney, executor, administrator, trustee, guardian or officer of a corporation or other entity or in another representative capacity, please give your full title. If a corporation, please sign in full corporate name by the President or other authorized officer. If a partnership, please sign in partnership name by an authorized person. |
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| Signature [PLEASE SIGN WITHIN BOX] | Date |
| Signature (Joint Owners) | Date |
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[Prudential Annuities Life Assurance Corporation
Pruco Life Insurance Company of New Jersey
Pruco Life Insurance Company
Prudential Retirement Insurance Annuity Company
Allstate Life Insurance Company
Allstate Life Insurance Company of New York]
VOTING INSTRUCTION CARD
SPECIAL MEETING OF THE SHAREHOLDERS TO BE HELD ON MAY 11, 2021
The undersigned, the owner of one or more variable annuity contracts or certificates (the “Contracts”) whose account value is invested in shares of the [PORTFOLIO] of Advanced Series Trust (the “Trust”), hereby instructs each of the insurance companies listed above, as the owners of the shares of the Trust attributable to the Contracts and, therefore, shareholders of the Trust, (i) to vote as indicated on the reverse side of the specific proposal that will be considered at the Special Meeting of the Shareholders of the Trust, or any adjournment or postponement thereof (the “Meeting”), as described in the Trust’s Proxy Statement dated April 1, 2021 (the “Proxy Statement”), and (ii) to vote, in its discretion, on such other matters as may properly come before the Meeting.
This Voting Instruction Card is solicited by the applicable Insurance Company as a shareholder of the Trust. Receipt of the Notice of Meeting, Information Statement and the Trust’s Proxy Statement relating to his Voting Instruction Card is acknowledged by the person signing on the reverse side of this card.