0001104659-19-046500.txt : 20190819 0001104659-19-046500.hdr.sgml : 20190819 20190819151418 ACCESSION NUMBER: 0001104659-19-046500 CONFORMED SUBMISSION TYPE: DEF 14C PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20190816 FILED AS OF DATE: 20190819 DATE AS OF CHANGE: 20190819 EFFECTIVENESS DATE: 20190819 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACIFIC FUNDS SERIES TRUST CENTRAL INDEX KEY: 0001137761 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: DEF 14C SEC ACT: 1934 Act SEC FILE NUMBER: 811-10385 FILM NUMBER: 191036249 BUSINESS ADDRESS: STREET 1: 700 NEWPORT CENTER DRIVE STREET 2: POST OFFFICE BOX 7500 CITY: NEWPORT BEACH STATE: CA ZIP: 92660 BUSINESS PHONE: 9492193233 MAIL ADDRESS: STREET 1: 700 NEWPORT CENTER DRIVE CITY: NEWPORT BEACH STATE: CA ZIP: 92660 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC FUNDS SERIES TRUST (formerly called PACIFIC LIFE FUNDS) DATE OF NAME CHANGE: 20150126 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC LIFE FUNDS DATE OF NAME CHANGE: 20070103 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC FUNDS DATE OF NAME CHANGE: 20010405 0001137761 S000001892 PF Emerging Markets Fund C000004974 CLASS P DEF 14C 1 a19-16784_1def14c.htm DEF 14C

 

SCHEDULE 14C INFORMATION

 

 

Information Statement Pursuant To Section 14(c)

of the Securities Exchange Act 1934

 

 

Check the appropriate box:

 

 

 

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Preliminary Information Statement

 

 

 

o

Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))

 

 

 

þ

Definitive Information Statement

 

 

 

 

 

 

Pacific Funds Series Trust

 

 

(Name of Registrant as Specified In Its Charter)

 

 

 

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Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.

 

 

 

 

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PACIFIC FUNDS SERIES TRUST

PF EMERGING MARKETS FUND

 

INFORMATION STATEMENT DATED AUGUST 19, 2019

 

This document (“Information Statement”) provides information concerning a new sub-advisory agreement for the PF Emerging Markets Fund and is being sent on or about August 19, 2019 to the shareholders of record as of August 14, 2019.

 

We are not asking you for a proxy, and you are requested not to send us a proxy.

 

I.                                      Introduction and Background

 

The Pacific Funds Series Trust (the “Trust”) Board of Trustees (the “Board” or “Trustees”) approved a new sub-advisory agreement with Invesco Advisers, Inc. (“Invesco”), with respect to the PF Emerging Markets Fund (the “Fund”), in connection with the acquisition of OppenheimerFunds, Inc. (“Oppenheimer”), the previous sub-adviser to the Fund, by Invesco Ltd., indirect parent company of Invesco, effective May 24, 2019 (the “Acquisition”). The Acquisition, which caused a change of control, resulted in the automatic termination of the sub-advisory agreement with Oppenheimer. In anticipation of the Acquisition, at an in-person meeting on March 27, 2019, based upon a recommendation from Pacific Life Fund Advisors LLC (“PLFA”), the Board, including all of the Trustees who are not “interested persons”, as that term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (“Independent Trustees”), approved, effective upon the effective date of the Acquisition, a new sub-advisory agreement with Invesco for the Fund (the “New Sub-Advisory Agreement”).

 

Under the 1940 Act, a new sub-advisory agreement generally requires shareholder approval; however, pursuant to an exemptive order issued to Pacific Life Insurance Company (“Pacific Life”) by the Securities and Exchange Commission (“SEC”) on October 13, 1999 and relied upon by the Trust and PLFA, PLFA and the Trust can hire, terminate, and replace, as applicable, sub-advisers and enter into new sub-advisory agreements (except, as a general matter, sub-advisers affiliated with PLFA) without shareholder approval in accordance with the requirements of the exemptive order. The information contained herein is being provided pursuant to the requirements of the exemptive order.

 

II.        Board Consideration of the New Sub-Advisory Agreement

 

The Trustees considered that Oppenheimer sub-advised the PF Emerging Markets Fund pursuant to a sub-advisory agreement dated January 1, 2014 (the “Current Sub-Advisory Agreement”), and that they were being asked to evaluate the New Sub-Advisory Agreement in light of the anticipated Acquisition.

 

In evaluating the New Sub-Advisory Agreement, the Board, including all the Independent Trustees, considered the following factors, among others:

 

·     The Current Sub-Advisory Agreement was last renewed by the Board, including all the Independent Trustees, at an in-person meeting on December 12, 2018. In connection with that renewal, the Trustees reviewed information regarding the nature, extent and quality of services provided by Oppenheimer; the investment results of the Fund; the sub-advisory fees paid to Oppenheimer; Oppenheimer’s costs in managing the Fund and its profitability from the Fund; and other benefits received by Oppenheimer and its affiliates as a result of their relationship with the Fund.

 

·     Oppenheimer represented to the Board that following the Acquisition, the Fund’s portfolio management team will be moved to Invesco and that there will be no changes to the Fund’s portfolio management team under the New Sub-Advisory Agreement.

 

·     There is expected to be no change in the level of services provided to the Fund.

 

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·     The sub-advisory fee rates under the New Sub-Advisory Agreement are the same as those under the Current Sub-Advisory Agreement.

 

·     The Trust’s Chief Compliance Officer (“CCO”) had reviewed the written compliance policies and procedures and code of ethics of Invesco. The Trustees also considered the CCO’s assessment of Invesco’s compliance program, as required under Rule 38a-1 of the 1940 Act, and its code of ethics prior to the effectiveness of the New Sub-Advisory Agreement.

 

Based on its review, including the consideration of each of the factors referred to above, the Board found that: (i) the New Sub-Advisory Agreement is in the best interests of the Fund and its shareholders; and (ii) the compensation payable under the New Sub-Advisory Agreement is fair and reasonable. No single factor was determinative of the Board’s findings, but rather the Trustees based their determination on the total mix of information available to them.

 

III.                          The New Sub-Advisory Agreement

 

The New Sub-Advisory Agreement is substantially similar to the Current Sub-Advisory Agreement with Oppenheimer. Invesco, subject to the supervision of PLFA, provides a continuous investment program for the Fund and determines the composition of the assets of the Fund, including the evaluation, investment, purchases and/or sales and reinvestment of the assets in accordance with the Fund’s investment goal, strategies, policies and restrictions. Invesco bears all expenses incurred by it and its staff with respect to all activities in connection with the performance of sub-advisory services under the New Sub-Advisory Agreement. The Fund is responsible for all expenses not specifically assumed by Invesco under the New Sub-Advisory Agreement or by PLFA under the Investment Advisory Agreement.

 

Except as may otherwise be required by the 1940 Act or the rules thereunder or other applicable law or the provisions of the New Sub-Advisory Agreement, Invesco, its affiliates and control persons are not subject to any liability for, nor subject to any damages, expenses or losses in connection with, any act or omission connected with or arising out of any services rendered under the New Sub-Advisory Agreement, except by reason of Invesco’s willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of Invesco’s obligations and duties under the New Sub-Advisory Agreement.

 

In addition, Invesco has agreed to indemnify and hold harmless PLFA, its affiliates and control persons against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses), to which PLFA or such affiliates or control persons may become subject under the federal securities laws, under any other statute, at common law or otherwise, arising out of Invesco’s responsibilities to the Trust that: (i) are based upon any willful misfeasance, bad faith, gross negligence or reckless disregard of, Invesco’s obligations and/or duties under the New Sub-Advisory Agreement by Invesco (or by any of its directors, officers or employees, or any affiliate or agent or delegate of Invesco); (ii) are based upon Invesco’s (or its agent’s or delegate’s) breach of any provision of the New Sub-Advisory Agreement, including breach of any representation or warranty; (iii) are based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement or prospectus covering the shares of the Trust or any fund, or any amendment thereof or any supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to PLFA, the Trust, or any affiliated person of the Trust by Invesco or any affiliated person or agent or delegate of Invesco; or (iv) are based upon a breach of Invesco’s fiduciary duties to the Trust or violation of applicable law.

 

The New Sub-Advisory Agreement will continue in effect for a period of two years from its effective date, and will continue from year to year thereafter, subject to approval annually by the Board or by the shareholders of the Fund and also, in either event, approval of a majority of the Independent Trustees. The New Sub-Advisory Agreement may be terminated without penalty at any time by any of the parties upon 60 days’ prior written notice to the other parties, and will terminate automatically in the event of its assignment as determined under the 1940 Act and any rules adopted by the SEC thereunder.

 

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There was no change to the advisory fee rate payable by the Fund to PLFA in connection with the New Sub-Advisory Agreement. Additionally, there was no change to the sub-advisory fee rate payable by PLFA to Invesco in connection with the New Sub-Advisory Agreement. The fee rate under the New Sub-Advisory Agreement is shown below:

 

PF Emerging Markets Fund1

0.55% on the first $500 million

0.40% on the next $750 million

0.35% on the next $1 billion

0.25% on the assets over $2.25 billion

 

1 When determining breakpoint rates under the New Sub-Advisory Agreement, the average daily net assets of the Fund will be aggregated with the average daily net assets of the Emerging Markets Portfolio, a series of Pacific Select Fund. The Fund’s assets will only be combined while Invesco is managing both the Fund and the Emerging Markets Portfolio. Otherwise rates presented above are applied as an annual percentage of the average daily net assets of the Fund only.

 

The Fund’s sub-advisory fees were paid by PLFA to Oppenheimer through May 24, 2019, pursuant to the Current Sub-Advisory Agreement. For the fiscal year ended March 31, 2019, the Fund’s sub-advisory fees paid or owed by PLFA to Oppenheimer totaled $671,305.50. For the Fund’s fiscal year ended March 31, 2019, the Fund did not pay any brokerage commissions to an affiliated broker of Invesco.

 

IV.                           Information Regarding Invesco

 

Invesco is wholly-owned by Invesco Group Services, Inc. which in turn is wholly-owned by OFI Global Asset Management, Inc. OFI Global Asset Management, Inc. is wholly-owned by Oppenheimer which in turn is wholly-owned by Oppenheimer Acquisition Corporation. Oppenheimer Acquisition Corporation is wholly-owned by Invesco Holding Company (US), Inc. which in turn is wholly-owned by Invesco Holding Company Limited. Invesco Holding Company Limited is wholly-owned by Invesco Ltd., a publicly-traded company. As of March 31, 2019, Invesco’s, including its affiliates, total assets under management were approximately $955 billion.

 

The address for Invesco, Invesco Group Services, Inc., Invesco Holding Company (US), Inc., and Invesco Ltd. is Two Peachtree Pointe, 1555 Peachtree Street, N.E., Suite 1800, Atlanta, GA 30309. The address for Invesco Holding Company Limited is Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH, United Kingdom. The address for OFI Global Asset Management, Inc., Oppenheimer Acquisition Corporation, and Oppenheimer is 225 Liberty Street, New York, NY 10281.

 

Invesco acts as sub-adviser to the following registered investment companies, which has a similar investment objective as the Fund.

 

 

 

Net Assets

 

Compensation

 

Waived/Reduced/Agreed to Reduce

Fund Name

 

(as of April 30, 2019)

 

Rate1

 

(Yes or No)

Invesco Oppenheimer Developing Markets Fund

 

$41 billion

 

0.77%

 

No/Yes/Yes

Sub-Advised Client #1

 

$209 million

 

0.68%

 

No

Sub-Advised Client #2

 

$145 million

 

0.67%

 

No

 

 

 

 

 

1Compensation rate represents effective fee rate paid as of April 30, 2019.

 

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As of May 31, 2019, Invesco’s principal executive officer and directors, and their principal occupations, are:

 

Name1

 

Title(s) and Principal Occupation with Invesco

Gregory Gerard McGreevey

 

President, Chief Executive Officer, and Director

Andrew Ryan Schlossberg

Kevin Michael Carome

Loren Michael Starr

Colin Meadows

 

Senior Vice President and Director

Director

Director

Director

 

 

 

1The address of all individuals listed above with respect to their positions with Invesco is Two Peachtree Pointe, 1555 Peachtree Street, N.E., Suite 1800, Atlanta, GA 30309.

 

No Officer or Trustee of the Trust is an officer, director or shareholder of Invesco (including its affiliates).

 

Additional Information

 

Additional information about Invesco is available in the Trust’s Statement of Additional Information, a copy of which may be obtained by calling the appropriate number set forth below.

 

******

 

The Trust’s annual report for the fiscal year ended March 31, 2019 and the Trust’s semi-annual report for the fiscal half-year ended September 30, 2018 were both previously sent to shareholders and are available upon request without charge by contacting the Trust by:

 

Regular mail:

Pacific Funds Series Trust, P.O. Box 9768, Providence, RI 02940-9768

 

 

Express mail:

Pacific Funds Series Trust, 4400 Computer Drive Westborough, MA 01581

 

 

Telephone:

(800) 722-2333 (select Option 2)

 

 

Website:

www.PacificLife.com/pacificfunds.html

 

To help reduce expenses, environmental waste and the volume of mail you receive, only one copy of this Information Statement may be sent to shareholders who share the same household address (“Householding”). You may elect to not participate in Householding by contacting the Trust through one of the methods provided above. If you are not currently participating in Householding, you may elect to do so by writing to the Trust.

 

The Trust’s investment adviser is PLFA and its administrator is Pacific Life. Both are located at 700 Newport Center Drive, Newport Beach, CA 92660.

 

The Trust’s distributor is Pacific Select Distributors, LLC, 700 Newport Center Drive, P.O. Box 9000, Newport Beach, CA 92660.

 

 

PLEASE RETAIN THIS INFORMATION STATEMENT FOR FUTURE REFERENCE

 

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