SEC Company Response from ANCORA TRUST (CIK 0001260667) — Oct 21, 2021
ANCORA TRUST (CIK 0001260667)
Date: Oct. 21, 2021 · CIK: 0001260667 · Accession: 0001162044-21-001280
AI Filing Summary & Sentiment
File numbers found in text: 333-108196, 811-21418
Letter
Via Edgar Transmission Division of Investment Management 100 F Street, N.E. Washington, DC 20549-0506 Re: Ancora Trust, File Nos. 333-108196 and 811-21418
Dear Ms. Browning:
On September 29, 2021, Ancora Trust (the “Registrant”) filed a preliminary proxy statement relating to a shareholder meeting to consider approval of a new investment advisory agreement with Ancora Advisors LLC. In a telephone conversation on October 6, 2021, you provided comments to the preliminary proxy statement. Please find below a summary of your comments and the Registrant’s responses, which the Registrant has authorized McDonald Hopkins LLC to make on behalf of the Registrant. Capitalized terms used herein have the same meanings given to them in the proxy statement. Redlined changes to the preliminary proxy are provided in the attached Appendix A as you requested.
Comment 1. Please include Tandy Representations in your response letter.
Response. Tandy Representations are included below.
Comment 2. Please delete the “KK” and “MH 9/28” notations appearing on certain pages.
Response. These notations have been deleted.
{9918364: }
Comment 3. Please clearly mark the proxy statement and form of proxy “Preliminary” in accordance with Rule 14a-6(e)(1).
Response. Such marking will be done in future preliminary proxy statement filings.
Comment 4. Include in the shareholder letter, Q&A and proxy statement an explicit statement that the Board determined that approval of the advisory agreements is in the best interests of the Funds and their shareholders.
Response. The relevant disclosure has been revised as requested.
Comment 5. State the reasons for the Transaction. Supplementally provide to the SEC staff the amount of consideration paid in the Transaction.
Response. The requested disclosure regarding the reasons of Focus and Ancora for entering into the Transaction has been included. The requested disclosure with respect to the consideration paid in the Transaction has not been included since such information is confidential business information and Registrant believes it is not relevant to the shareholders’ decision whether to approve the new investment advisory agreement.
Comment 6. State the Closing Date of the Transaction.
Response. The disclosure that the Closing Date was October 1 has been included.
Comment 7. In general, please delete language such as “is expected to” or “anticipates” everywhere it appears, except that it is permissible to state that personnel who currently manage the Funds are expected to continue to do so after the Closing.
Response. The Registrant has revised the relevant disclosure as requested where it is feasible to do so without attempting to predict with certainty the course of future events.
Comment 8. Whenever comparing the terms of the new two agreements to the existing agreement, please do not state that they are “substantially” identical to the existing agreement, but specifically disclose any material differences.
Response. The relevant disclosure has been revised as requested.
Comment 9. Under the headings in the proxy statement “General Overview – The Transaction” and “Proposal 1: Approval of New Advisory Agreement – Interim Advisory Agreement,” please include an express statement that the compensation under the interim agreement will be no greater than would have been received under the existing agreement.
Response. The relevant disclosure has been revised as requested.
Comment 10. When describing the terms of the Interim Advisory Agreement, instead of the word “duration”, please use “effective and termination dates” to track Rule 15a-4(b)(2)(v).
{9918364: }
Response. The relevant disclosure has been revised as requested.
Comment 11. Disclose in the shareholder letter, Q&A and proxy statement the current advisory fee rates for each Fund.
Response. The relevant disclosure has been revised as requested.
Comment 12. When discussing Board approval of the Interim Advisory Agreement in the second paragraph under “Proposal to Approval of the new Advisory Agreement – Interim Advisory Agreement” consider tracking the language of Rule 15a-4(b)(2)(ii) that “majority” of disinterested Trustees approved.
Response. The Registrant does not believe it is necessary to change the current wording since it already states that the Trustees approved unanimously.
Comment 13. Supplementally to the SEC staff, confirm that the Funds satisfy the Fund Governance Standards.
Response. The Registrant confirms that the Fund satisfies the Fund Governance Standards.
Comment 14. In the paragraph of the shareholder letter beginning “Under the New Advisory Agreement…,” where listing what won’t change, add “risks, principal or non-principal strategies, and fundamental or non-fundamental investment restrictions.”
Response. The relevant disclosure has been revised as requested. Also, to avoid potentially confusing redundancy, in the immediately following paragraph, the references to “the Funds investment objectives, strategies and policies,” and “the Fund’s advisory fees” have been deleted. In addition, conforming changes have been made to the last two paragraphs under General Overview – The Transaction.”
Comment 15. Confirm to the SEC staff that no internet or telephone voting will be provided.
Response. The Registrant confirms that no internet or telephone voting will be provided.
Comment 16. In the shareholder letter, describe how a proxy may be revoked and wherever revocation is discussed, to whom and where notice of revocation should be sent.
Response. The relevant disclosure has been revised as requested.
Comment 17. In the third paragraph under the first Question in the Q&A, please delete “not expected to”.
Response. The relevant disclosure has been revised as requested.
{9918364: }
Comment 18. In the fourth Question on page vi, regarding fee rates, please state what the current fees are for each Fund.
Response. The relevant disclosure has been revised as requested.
Comment 19. Please describe the material terms of the Fee Waiver Agreement, including whether the Advisor has the right to recoup fees previously waived by the Advisor and whether such rights “flow through” from pre-closing to post-closing periods.
Response. The relevant disclosure has been revised as requested.
Comment 20. Add the new Fee Waiver Agreement as an Appendix to the Proxy Statement.
Response. The new Fee Waiver Agreement has been added as Appendix I.
Comment 21. Confirm to SEC staff that solicitations will not be made by any specially engaged employees or paid solicitors.
Response. The Registrant so confirms.
Comment 22. In the proxy statement, under Proposal 1, please give the date of the Annual Report.
Response. The relevant disclosure has been revised as requested.
Comment 23. In the discussion of Section 15(f), please state that the Board has determined that the conditions of the Rule will be met.
Response. The relevant disclosure has been revised as requested.
Comment 24. In the second paragraph of the Section 15(f) discussion, instead of a “three year period from the date the Transaction closed” consider referring to three years from the “date of the assignment”, so the text aligns with the language of the statute.
Response. The relevant disclosure has been revised as requested.
Comment 25. In the last paragraph under “Proposal 1: Approval of the New Advisory Agreement - Interim Advisory Agreement,” delete “prior to” and insert “by” the end of the 150-day period, to conform to Rule 15a-4. At the end of that sentence, state that interest will be paid. In the next sentence, revise to make clear that interest will be paid under either eventuality.
Response. The relevant disclosure has been revised as requested.
Comment 26. Supplementally confirm to SEC staff that the escrow agent will be the Fund’s Custodian.
{9918364: }
Response. The Registrant confirms that the escrow agent will be the Fund’s custodian.
Comment 27. In last sentence under “Proposal 1: Approval of the New Advisory Agreement - Interim Advisory Agreement,” conform the language to Rule 15a-4 by stating that the contract may be terminated by the Board or a majority of Fund’s outstanding voting securities.
Response. The relevant disclosure has been revised as requested.
Comment 28. In the first bullet point under “Factors Considered in Approving the Advisory Agreements,” describe what other services were considered (in addition to the investment advisory services).
Response. The relevant disclosure has been revised as requested.
Comment 29. In the last bullet point under “Factors Considered in Approving the Advisory Agreements”, state that the Board has determined that the conditions of Section 15(f) will be met.
Response. The relevant disclosure has been revised as requested.
Comment 30. Confirm supplementally to the SEC staff that the independent Trustees did not have separate counsel.
Response. The Registrant so confirms.
Comment 31. Explain supplementally to the SEC staff whether the Board obtained information from sources other than the Advisor. If not, explain why not.
Response. The Board did not obtain information from sources other than the Advisor because the Board believed that the information provided by the Advisor was adequate for the Board to make a decision. However, the information provided by the Advisor did include information obtained from third party sources, that is, Morningstar data and information obtained from the Fund’s transfer agent on fees paid by comparably sized funds.
Comment 32. Under the heading “The investment performance of the Funds achieved by the Advisor”, please clarify what factors were considered by the Board.
Response. The Registrant has revised he disclosure to clarify the considerations of the Trustees.
Comment 33. In the paragraph under “The extent to which the Advisor will realize economies of scale,” disclose that there can be no assurance that the Funds will ever reach the asset levels necessary for economies of scale to take effect.
Response. The Registrant has revised the disclosure as requested.
{9918364: }
Comment 34. In the paragraph under “Total expenses of the Funds and competitiveness of fees,” explain what is meant by “other smaller funds”.
Response. The Registrant has revised the disclosure as requested.
Comment 35. Disclose that when the fee waiver agreement expires and is not renewed, expenses will increase. Disclose that the Board considered this factor in its determination.
Response. The relevant disclosure has been revised as requested.
Comment 36. Explain supplementally to the SEC staff whether any adverse considerations were considered by the Board (i.e., reasons for not approving the new Advisory Agreement). If not, why not?
Response. No such adverse considerations were considered, because the Board was not aware of any reasons why the Agreement should not be approved.
Comment 37. “Under Voting Information – Voting Rights,” revise the disclosure to state that “broker non-votes” may not be considered for purposes of quorum or the 1940 Act definition of a “majority of the outstanding voting securities”, and make conforming changes in the “Quorum, Adjournment” section.
Response. The relevant disclosure has been revised as requested.
Comment 38. On Appendix C, please correct the mis-numbering of the footnotes to the table headings.
Response. The mis-numbering of the footnotes was caused by word processing errors and has been corrected.
Comment 39. On the proxy card, this language must be in bold type: This Proxy is Solicited on Behalf of the Board of Trustees.
Response. The relevant disclosure has been revised as requested.
Comment 40. On the proxy card, the language in caps above Proposal 1 should also be in bold.
Response. The relevant disclosure has been revised as requested.
Comment 41. Please provide a copy of the draft definitive proxy statement for Staff review prior to submitting the definitive proxy statement.
Response. The draft proxy statement has been included as Appendix A to this response letter.
* * * * *
{9918364: }
The Registrant has authorized McDonald Hopkins LLC to convey to you that the Registrant acknowledges the following:
1.
The Registrant is responsible for the adequacy and accuracy of the disclosure in the filings reviewed by the staff;
2.
Staff comments or changes to disclosure in response to staff comments in a filing reviewed by the staff do not foreclose the Commission from taking any action with respect to the filing; and
3.
The Registrant may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
If you have any questions, please call Michael J. Meaney at (216) 348-5411.
Very truly yours,
/s/ Michael J. Meaney
Show Raw Text
CORRESP
1
filename1.htm
Converted by EDGARwiz
Direct Dial: 216.348.5411
E-mail: mmeaney@mcdonaldhopkins.com
October 21, 2021
Via Edgar Transmission
Ms. Kimberly Browning
Securities & Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, DC 20549-0506
Re:
Ancora Trust, File Nos. 333-108196 and 811-21418
Dear Ms. Browning:
On September 29, 2021, Ancora Trust (the “Registrant”) filed a preliminary proxy statement relating to a shareholder meeting to consider approval of a new investment advisory agreement with Ancora Advisors LLC. In a telephone conversation on October 6, 2021, you provided comments to the preliminary proxy statement. Please find below a summary of your comments and the Registrant’s responses, which the Registrant has authorized McDonald Hopkins LLC to make on behalf of the Registrant. Capitalized terms used herein have the same meanings given to them in the proxy statement. Redlined changes to the preliminary proxy are provided in the attached Appendix A as you requested.
Comment 1. Please include Tandy Representations in your response letter.
Response. Tandy Representations are included below.
Comment 2. Please delete the “KK” and “MH 9/28” notations appearing on certain pages.
Response. These notations have been deleted.
{9918364: }
Comment 3. Please clearly mark the proxy statement and form of proxy “Preliminary” in accordance with Rule 14a-6(e)(1).
Response. Such marking will be done in future preliminary proxy statement filings.
Comment 4. Include in the shareholder letter, Q&A and proxy statement an explicit statement that the Board determined that approval of the advisory agreements is in the best interests of the Funds and their shareholders.
Response. The relevant disclosure has been revised as requested.
Comment 5. State the reasons for the Transaction. Supplementally provide to the SEC staff the amount of consideration paid in the Transaction.
Response. The requested disclosure regarding the reasons of Focus and Ancora for entering into the Transaction has been included. The requested disclosure with respect to the consideration paid in the Transaction has not been included since such information is confidential business information and Registrant believes it is not relevant to the shareholders’ decision whether to approve the new investment advisory agreement.
Comment 6. State the Closing Date of the Transaction.
Response. The disclosure that the Closing Date was October 1 has been included.
Comment 7. In general, please delete language such as “is expected to” or “anticipates” everywhere it appears, except that it is permissible to state that personnel who currently manage the Funds are expected to continue to do so after the Closing.
Response. The Registrant has revised the relevant disclosure as requested where it is feasible to do so without attempting to predict with certainty the course of future events.
Comment 8. Whenever comparing the terms of the new two agreements to the existing agreement, please do not state that they are “substantially” identical to the existing agreement, but specifically disclose any material differences.
Response. The relevant disclosure has been revised as requested.
Comment 9. Under the headings in the proxy statement “General Overview – The Transaction” and “Proposal 1: Approval of New Advisory Agreement – Interim Advisory Agreement,” please include an express statement that the compensation under the interim agreement will be no greater than would have been received under the existing agreement.
Response. The relevant disclosure has been revised as requested.
Comment 10. When describing the terms of the Interim Advisory Agreement, instead of the word “duration”, please use “effective and termination dates” to track Rule 15a-4(b)(2)(v).
{9918364: }
Response. The relevant disclosure has been revised as requested.
Comment 11. Disclose in the shareholder letter, Q&A and proxy statement the current advisory fee rates for each Fund.
Response. The relevant disclosure has been revised as requested.
Comment 12. When discussing Board approval of the Interim Advisory Agreement in the second paragraph under “Proposal to Approval of the new Advisory Agreement – Interim Advisory Agreement” consider tracking the language of Rule 15a-4(b)(2)(ii) that “majority” of disinterested Trustees approved.
Response. The Registrant does not believe it is necessary to change the current wording since it already states that the Trustees approved unanimously.
Comment 13. Supplementally to the SEC staff, confirm that the Funds satisfy the Fund Governance Standards.
Response. The Registrant confirms that the Fund satisfies the Fund Governance Standards.
Comment 14. In the paragraph of the shareholder letter beginning “Under the New Advisory Agreement…,” where listing what won’t change, add “risks, principal or non-principal strategies, and fundamental or non-fundamental investment restrictions.”
Response. The relevant disclosure has been revised as requested. Also, to avoid potentially confusing redundancy, in the immediately following paragraph, the references to “the Funds investment objectives, strategies and policies,” and “the Fund’s advisory fees” have been deleted. In addition, conforming changes have been made to the last two paragraphs under General Overview – The Transaction.”
Comment 15. Confirm to the SEC staff that no internet or telephone voting will be provided.
Response. The Registrant confirms that no internet or telephone voting will be provided.
Comment 16. In the shareholder letter, describe how a proxy may be revoked and wherever revocation is discussed, to whom and where notice of revocation should be sent.
Response. The relevant disclosure has been revised as requested.
Comment 17. In the third paragraph under the first Question in the Q&A, please delete “not expected to”.
Response. The relevant disclosure has been revised as requested.
{9918364: }
Comment 18. In the fourth Question on page vi, regarding fee rates, please state what the current fees are for each Fund.
Response. The relevant disclosure has been revised as requested.
Comment 19. Please describe the material terms of the Fee Waiver Agreement, including whether the Advisor has the right to recoup fees previously waived by the Advisor and whether such rights “flow through” from pre-closing to post-closing periods.
Response. The relevant disclosure has been revised as requested.
Comment 20. Add the new Fee Waiver Agreement as an Appendix to the Proxy Statement.
Response. The new Fee Waiver Agreement has been added as Appendix I.
Comment 21. Confirm to SEC staff that solicitations will not be made by any specially engaged employees or paid solicitors.
Response. The Registrant so confirms.
Comment 22. In the proxy statement, under Proposal 1, please give the date of the Annual Report.
Response. The relevant disclosure has been revised as requested.
Comment 23. In the discussion of Section 15(f), please state that the Board has determined that the conditions of the Rule will be met.
Response. The relevant disclosure has been revised as requested.
Comment 24. In the second paragraph of the Section 15(f) discussion, instead of a “three year period from the date the Transaction closed” consider referring to three years from the “date of the assignment”, so the text aligns with the language of the statute.
Response. The relevant disclosure has been revised as requested.
Comment 25. In the last paragraph under “Proposal 1: Approval of the New Advisory Agreement - Interim Advisory Agreement,” delete “prior to” and insert “by” the end of the 150-day period, to conform to Rule 15a-4. At the end of that sentence, state that interest will be paid. In the next sentence, revise to make clear that interest will be paid under either eventuality.
Response. The relevant disclosure has been revised as requested.
Comment 26. Supplementally confirm to SEC staff that the escrow agent will be the Fund’s Custodian.
{9918364: }
Response. The Registrant confirms that the escrow agent will be the Fund’s custodian.
Comment 27. In last sentence under “Proposal 1: Approval of the New Advisory Agreement - Interim Advisory Agreement,” conform the language to Rule 15a-4 by stating that the contract may be terminated by the Board or a majority of Fund’s outstanding voting securities.
Response. The relevant disclosure has been revised as requested.
Comment 28. In the first bullet point under “Factors Considered in Approving the Advisory Agreements,” describe what other services were considered (in addition to the investment advisory services).
Response. The relevant disclosure has been revised as requested.
Comment 29. In the last bullet point under “Factors Considered in Approving the Advisory Agreements”, state that the Board has determined that the conditions of Section 15(f) will be met.
Response. The relevant disclosure has been revised as requested.
Comment 30. Confirm supplementally to the SEC staff that the independent Trustees did not have separate counsel.
Response. The Registrant so confirms.
Comment 31. Explain supplementally to the SEC staff whether the Board obtained information from sources other than the Advisor. If not, explain why not.
Response. The Board did not obtain information from sources other than the Advisor because the Board believed that the information provided by the Advisor was adequate for the Board to make a decision. However, the information provided by the Advisor did include information obtained from third party sources, that is, Morningstar data and information obtained from the Fund’s transfer agent on fees paid by comparably sized funds.
Comment 32. Under the heading “The investment performance of the Funds achieved by the Advisor”, please clarify what factors were considered by the Board.
Response. The Registrant has revised he disclosure to clarify the considerations of the Trustees.
Comment 33. In the paragraph under “The extent to which the Advisor will realize economies of scale,” disclose that there can be no assurance that the Funds will ever reach the asset levels necessary for economies of scale to take effect.
Response. The Registrant has revised the disclosure as requested.
{9918364: }
Comment 34. In the paragraph under “Total expenses of the Funds and competitiveness of fees,” explain what is meant by “other smaller funds”.
Response. The Registrant has revised the disclosure as requested.
Comment 35. Disclose that when the fee waiver agreement expires and is not renewed, expenses will increase. Disclose that the Board considered this factor in its determination.
Response. The relevant disclosure has been revised as requested.
Comment 36. Explain supplementally to the SEC staff whether any adverse considerations were considered by the Board (i.e., reasons for not approving the new Advisory Agreement). If not, why not?
Response. No such adverse considerations were considered, because the Board was not aware of any reasons why the Agreement should not be approved.
Comment 37. “Under Voting Information – Voting Rights,” revise the disclosure to state that “broker non-votes” may not be considered for purposes of quorum or the 1940 Act definition of a “majority of the outstanding voting securities”, and make conforming changes in the “Quorum, Adjournment” section.
Response. The relevant disclosure has been revised as requested.
Comment 38. On Appendix C, please correct the mis-numbering of the footnotes to the table headings.
Response. The mis-numbering of the footnotes was caused by word processing errors and has been corrected.
Comment 39. On the proxy card, this language must be in bold type: This Proxy is Solicited on Behalf of the Board of Trustees.
Response. The relevant disclosure has been revised as requested.
Comment 40. On the proxy card, the language in caps above Proposal 1 should also be in bold.
Response. The relevant disclosure has been revised as requested.
Comment 41. Please provide a copy of the draft definitive proxy statement for Staff review prior to submitting the definitive proxy statement.
Response. The draft proxy statement has been included as Appendix A to this response letter.
* * * * *
{9918364: }
The Registrant has authorized McDonald Hopkins LLC to convey to you that the Registrant acknowledges the following:
1.
The Registrant is responsible for the adequacy and accuracy of the disclosure in the filings reviewed by the staff;
2.
Staff comments or changes to disclosure in response to staff comments in a filing reviewed by the staff do not foreclose the Commission from taking any action with respect to the filing; and
3.
The Registrant may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
If you have any questions, please call Michael J. Meaney at (216) 348-5411.
Very truly yours,
/s/ Michael J. Meaney
Michael J. Meaney
{9918364: }
Appendix A
i
{9918364: }
PRELIMINARY
ANCORA TRUST
Ancora Income Fund
Ancora/Thelen Small-Mid Cap Fund
Ancora Microcap Fund
Ancora Dividend Value Equity Fund
(each a “Fund” and together, the “Funds”)
October __, 2021
Dear Shareholders:
The enclosed Proxy Statement discusses a proposal to be voted upon by shareholders (the “Shareholders”) of the above-named Funds, each a series of Ancora Trust (the “Trust”), at a special meeting of shareholders to be held at the offices of Ancora Advisors LLC, 6060 Parkland Boulevard, Suite 200, Cleveland, Ohio 44124 on November 23, 2021 at 10:00 a.m. Eastern Time. Please review the Proxy Statement and cast your vote on the proposal. After considering the proposal, the Board of Trustees of the Trust (the “Board” or the “Trustees”) has unanimously approved the proposal. The Board recommends that shareholders vote “FOR” the proposal.
Ancora Advisors LLC (the “Adviser”) serves as each Fund’s investment adviser, under an investment advisory agreement between the Adviser and the Trust, on behalf of each Fund (the “Existing Advisory Agreement”). As each Fund’s investment adviser, the Adviser is responsible for each Fund’s overall investment strategy and its implementation.
As discussed in more detail in the enclosed Proxy Statement, on August 31, 2021, Ancora Holdings Inc., the parent company of the Adviser, entered into an agreement and plan of merger (the “Transaction Agreement”) with Focus Financial Partners Inc. (“Focus”), a partnership of independent fiduciary wealth management firms (the “Transaction”).
The Transaction closed on October 1, 2021. The reasons for this Transaction were for Focus to significantly expand its presence in the Midwest high net worth market and for the Ancora busi
ness to accelerate its grow
th by leveraging Focus’ resources.
Following the closing of the Transaction (“Closing”), the Adviser will continue to serve as each Fund’s investment adviser (the “Adviser”) pursuant to an Interim Advisory Agreement (as defined and discussed in more detail below).
The Transaction
is
will
not
expected
to
result in any material
change
in
changes to
the
day-to-day
management
organization and structure
of the Funds. The Adviser’s business is expected to continue to operate as it
has
did
prior to the Transaction.
If
successful,
the
The
Closing
will
result
resulted
in a change of control of the Adviser (the “Change of Control”). Consistent with applicable requirements under the Investment Company Act of 1940, as amended (the “1940 Act”), the Existing Advisory Agreement contains a provision that the agreement will automatically terminate in the event of its “assignment” (as defined in the 1940 Act). The Change of Control
will cause
caused
the assignment of the Existin