Company: SWZ
Filing Date: 2025-01-10
Form Type: PRE 14A
Source: 0000894189-25-000129
Chunk: 23

Company: Total Return Securities Fund
Filing Date: 2025-01-10
Form: PRE 14A
Chunk 23
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, including two publicly-traded investment funds domiciled offshore that Bulldog identified as pursuing a strategy somewhat similar to that proposed for the Fund. The Non-Bulldog Directors noted that the proposed management fee is the same as the management fee paid by SPE and PCF notwithstanding the broader investment universe for the Fund and the more concentrated portfolio than is the case for SPE and PCF. The Non-Bulldog Directors also noted Bulldog’s experience in efficiently executing an activist investment strategy. The Non-Bulldog Directors also noted that unlike some funds that are concentrated and pursue an activist strategy, Bulldog would not be paid a performance fee. The Non-Bulldog Directors concluded that the fees to be paid by the Fund under the Proposed Agreement were reasonable in light of the nature of the services to be provided in connection with Bulldog’s proposed investment objective and strategy for the Fund, the fees paid by certain other funds and such other matters as the Non-Bulldog Directors considered relevant in the exercise of their reasonable judgment. Economies of Scale The Non-Bulldog Directors considered that the Fund is a closed-end fund and that it was not expected to have meaningful asset growth absent primarily a rights offering or an acquisition. They did not view the potential for realization of economies of scale as the Fund’s assets grow to be a meaningful factor in their deliberations. The Non-Bulldog Directors noted, however, that the advisory fee rate schedule under the current Agreement contains multiple breakpoints commencing with assets of U.S. $250 million and above, which benefits stockholders by reducing the advisory fee rate in the event of asset growth in the Fund. Adviser Profitability The Non-Bulldog Directors considered the financial statements of Bulldog for the fiscal year ended December 31, 2023 and the advisory fee payable to Bulldog under the Proposed Agreement. The Non-Bulldog Directors discussed the profitability of Bulldog and asked the principals questions regarding whether such profitability was adequate to maintain their interest in managing the Fund. The Non-Bulldog Directors were satisfied by Bulldog’s responses regarding the level of profitability it was seeking from managing the Fund and that such level of profitability was sufficient and appropriate to provide the necessary advisory services to the Fund. -13- Other Benefits of the Proposed Relationship The Non-Bulldog Directors also considered that Bulldog may receive certain “fall-out” or ancillary benefits from its relationship with the Fund, such as research and other services in exchange for brokerage allocation, and determined that such benefits