Center Coast Brookfield
MLP & Energy Infrastructure Fund
Notes to Financial Statements (continued)
September 30, 2020
the operation of the Fund, including maintaining certain books and records
of the Fund and preparing reports and other documents required by federal, state, and other applicable laws and regulations, and providing the Fund with administrative office facilities. For these services, the Fund pays to the Adviser a monthly fee
at an annual rate of 0.15% of the Fund’s Managed Assets. The Adviser is responsible for any fees due to the Sub-Administrator.
Certain officers and/or trustees of the Fund are officers
and/or employees of the Adviser.
6.Purchases and Sales of Investments
For the fiscal year ended September 30, 2020, purchases and
sales of investments, excluding short-term securities were $169,267,242 and $255,892,245, respectively.
7.Reverse Share
Split
On July 6, 2020, the Fund executed a 10-for-1
reverse share split prior to the open of trading on the NYSE. The reverse share split decreased the Fund’s common shares outstanding. While the number of outstanding common shares declined, neither the Fund’s portfolio holdings nor the
total value of shareholders’ investments in the Fund were affected as a result of the reverse share split. As a result of the reverse share split, shareholders' accounts reflect proportionally fewer common shares with a higher net asset value
per common share.
All historical per share
information has been retroactively adjusted to reflect this reverse share split. The NAV and shares outstanding of the Fund before the split was $1.17 and 49,299,453 and after the split was $11.70 and 4,929,945 after market close on July 2,
2020.
8.Capital
Shares
The Fund is authorized to issue unlimited
common shares of beneficial interest, par value of $0.01 per share (“Common Shares”). As of September 30, 2020, the shares outstanding were 4,929,945. Of the 4,929,945 shares outstanding as of September 30, 2020 for the Fund, the
Adviser owned 11,558 shares. The Fund’s Board is authorized to classify and reclassify any unissued shares into other classes or series of shares and authorize the issuance of shares without obtaining shareholder approval. The Board, without
any action by the shareholders, may amend the charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series that the Fund has authority to issue.
The Common Shares have no preemptive, conversion, exchange
or redemption rights. The Common Shares have equal voting, dividend, distribution and liquidation rights, are fully paid and non-assessable. Shareholders are entitled to one vote per share and all voting rights for the election of directors are
non-cumulative.
The Fund has entered into and
maintained an “at-the-market” offering program (the “ATM Program”) through Foreside Fund Services, LLC, as distributor (the “Distributor”), and UBS Securities LLC, as sub-placement agent (the “Sub-Placement
Agent”), since May 2016 (i.e., prior to the acquisition of Center Coast Capital Advisors, LP by the Adviser, following the close of business on February 2, 2018). Under the ATM Program, the Fund may sell Common Shares on a daily basis through
the Distributor and Sub-Placement Agent at prevailing market prices; provided, however, that the Common Shares are not sold at a price below the current NAV, exclusive of commissions.
Amortization of offering costs (excluding underwriter
discounts and commissions which is included in proceed from shares sold in the statement of changes) of $188,306 related to the issuance of common stock were recorded to paid-in capital during the fiscal year ended September 30, 2020.
The minimum price at which such Common Shares may be sold
may not be less than the current NAV per Common Share plus any commissions to be paid to the distributor. For the fiscal year ended September 30, 2020, the Fund issued 6,317,604 shares under this “at the market” program at an average
price of $6.3095 per share.
24Brookfield
Public Securities Group LLC
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees
The aggregate fees billed by the Registrant’s independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”), for
the most recent fiscal year for professional services rendered for the audit of the Registrant’s annual financial statements and the review of financial statements that are included in the Registrant’s annual and semi-annual reports to
shareholders (“Audit Fees”) were $68,000 and $52,000 for the fiscal years ended September 30, 2020 and September 30, 2019, respectively.
(b) Audit-Related
Fees
The aggregate Audit-Related Fees billed by Deloitte to the Registrant in the fiscal years ended September 30, 2020 and September 30, 2019 were
$8,500 and $10,500, respectively, for services rendered for assurance and related services that are reasonably related to the performance of the audit or review of the Registrant’s financial statements but are not reported as Audit Fees
(“Audit-Related Fees”). The Audit-Related Fees listed in this Item 4(b) are related to agreed-upon procedures performed during the initial and secondary offerings of the Registrant and the issuance of consents by Deloitte with respect to
corresponding registration statement filings.
For the Registrant’s two most recent fiscal years, there were no Audit-Related Fees billed by Deloitte
for engagements related directly to the operations and financial reporting of the Registrant by a “Fund Service Provider.” A Fund Service Provider is any investment adviser to the Registrant, or any entity that provides ongoing services to
the Registrant and is controlling, controlled by or under common control with such investment adviser.
(c) Tax Fees
For the fiscal years ended September 30, 2020 and September 30, 2019, the aggregate fees billed by Deloitte to the Registrant for tax compliance, tax advice
and tax planning (“Tax Fees”) were $133,124 and $74,938, respectively. The nature of the services comprising the Tax Fees was the review of the Registrant’s income tax returns and tax distribution requirements.
The Tax Fees billed by Deloitte for engagements by Fund Service Providers that related directly to the operations and financial reporting of the Registrant
were $0 for the Registrant’s fiscal years ended September 30, 2020 and September 30, 2019.
The services for which Tax Fees were charged comprise all
services performed by professional staff in Deloitte’s respective tax divisions except those services related to the audits. Typically, this category would include fees for tax compliance, tax advice, and tax planning services, which include,
among other things, preparation of original and amended tax returns, claims for refund and tax payment-planning services, assistance with tax audits and appeals, tax advice related to mergers and acquisitions
and requests for rulings or technical advice from taxing authorities.
(d) All Other Fees
All other fees billed by Deloitte for engagements by Fund Service Providers that related directly to the operations and financial reporting of the Registrant
were $0 for the Registrant’s fiscal years ended September 30, 2020 and September 30, 2019.
(e) (1) According to policies adopted by the Audit
Committee, services provided by Deloitte to the Registrant must be pre-approved by the Audit Committee. On an annual basis, the Audit Committee reviews and pre-approves
various types of services that Deloitte may perform for the Registrant without specific approval of each engagement, subject to specified budget limitations. As contemplated by the Sarbanes-Oxley Act of 2002 and related SEC rules, the Audit
Committee also pre-approves non-audit services provided by Deloitte to any Fund Service Provider for any engagement that relates directly to the operations and financial reporting of the Registrant. Any
engagement that is not already pre-approved or that will exceed a pre-approved budget must be submitted to the Audit Committee for pre-approval.
(e) (2) None.
(f) Not applicable.
(g) The aggregate fees billed by Deloitte for the fiscal years ended September 30, 2020 and September 30, 2019, for non-audit services rendered to the
Registrant and Fund Service Providers were $290,624 and $230,438, respectively. For the fiscal years ended September 30, 2020 and September 30, 2019, these amounts reflect the amounts disclosed above in Item 4(b),(c),(d), plus $149,000 and
$145,000, respectively, in fees billed to the Fund Service Providers for non-audit services that did not relate directly to the operations and financial reporting of the Registrant, including fees billed by Deloitte to Brookfield Public Securities
Group LLC that were associated with Deloitte’s SSAE 16 Review (formerly, SAS No. 70).
(h) The Registrant’s Audit Committee has considered
whether the provision of non-audit services by the Registrant’s independent registered public accounting firm to the Registrant’s investment adviser, and any entity controlling, controlled, or under common control with the investment
adviser that provided ongoing services to the Registrant that were not pre-approved by the Audit Committee (because such services did not relate directly to the operations and financial reporting of the
Registrant) were compatible with maintaining the independence of the independent registered public accounting firm.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
The Portfolio Proxy Voting Policies and Procedures (the “Policies and Procedures”) set forth the proxy voting policies, procedures
and guidelines to be followed by Brookfield Public Securities Group LLC and its subsidiaries and affiliates (collectively, “PSG”) in voting portfolio proxies relating to securities that are held in the portfolios of the investment
companies or other clients (“Clients”) for which PSG has been delegated such proxy voting authority.
A. Proxy Voting Committee
PSG’s internal proxy voting committee (the “Committee”) is responsible for overseeing the proxy voting process and ensuring
that PSG meets its regulatory and corporate governance obligations in voting of portfolio proxies.
The Committee shall oversee the proxy
voting agent’s compliance with these Policies and Procedures, including any deviations by the proxy voting agent from the proxy voting guidelines (“Guidelines”).
B. Administration and Voting of Portfolio Proxies
1.
Fiduciary Duty and Objective
As an investment adviser that has been granted the authority to vote on portfolio proxies, PSG owes a
fiduciary duty to its Clients to monitor corporate events and to vote portfolio proxies consistent with the best interests of its Clients. In this regard, PSG seeks to ensure that all votes are free from unwarranted and inappropriate influences.
Accordingly, PSG generally votes portfolio proxies in a uniform manner for its Clients and in accordance with these Policies and Procedures and the Guidelines.
In meeting its fiduciary duty, PSG generally view proxy voting as a way to enhance the value of the company’s stock held by the Clients.
Similarly, when voting on matters for which the Guidelines dictate a vote be decided on a case-by-case basis, PSG’s primary consideration is the economic interests of its Clients.
2. Proxy Voting Agent
PSG may retain an
independent third party proxy voting agent to assist PSG in its proxy voting responsibilities in accordance with these Policies and Procedures and in particular, with the Guidelines. As discussed above, the Committee is responsible for monitoring
the proxy voting agent.
In general, PSG may consider the proxy voting agent’s research and analysis as part of PSG’s own review
of a proxy proposal in which the Guidelines recommend that the vote be considered on a case-by-case basis. PSG bears ultimate responsibility for how portfolio proxies are voted. Unless instructed otherwise by
PSG, the proxy voting agent, when retained, will vote each portfolio proxy in accordance with the Guidelines. The proxy voting agent also will assist PSG in maintaining records of PSG’s portfolio proxy votes, including the appropriate records
necessary for registered investment companies to meet their regulatory obligations regarding the annual filing of proxy voting records on Form N-PX with the Securities and Exchange Commission
(“SEC”).
3. Material Conflicts of Interest
PSG votes portfolio proxies without regard to any other business relationship between PSG and the company to which the portfolio proxy
relates. To this end, PSG must identify material conflicts of interest that may arise between a Client and PSG, such as the following relationships:
|
|
●
|
|
PSG provides significant investment advisory or other services to a portfolio company or its affiliates (the
“Company”) whose management is soliciting proxies or PSG is seeking to provide such services;
|
|
|
●
|
|
PSG serves as an investment adviser to the pension or other investment account of the Company or PSG is
seeking to serve in that capacity; or
|
|
|
●
|
|
PSG and the Company have a lending or other financial-related relationship.
|
In each of these situations, voting against the Company management’s recommendation may cause PSG a loss of revenue or other benefit.
PSG generally seeks to avoid such material conflicts of interest by maintaining separate investment decision-making and proxy voting
decision-making processes. To further minimize possible conflicts of interest, PSG and the Committee employ the following procedures, as long as PSG determines that the course of action is consistent with the best interests of the Clients:
|
|
●
|
|
If the proposal that gives rise to a material conflict is specifically addressed in the Guidelines, PSG will
vote the portfolio proxy in accordance with the Guidelines, provided that the Guidelines do not provide discretion to PSG on how to vote on the matter (i.e., case-by-case); or
|
|
|
●
|
|
If the previous procedure does not provide an appropriate voting recommendation, PSG may retain an independent
fiduciary for advice on how to vote the proposal or the Committee may direct PSG to abstain from voting because voting on the particular proposal is impracticable and/or is outweighed by the cost of voting.
|
4. Certain Foreign Securities
Portfolio
proxies relating to foreign securities held by Clients are subject to these Policies and Procedures. In certain foreign jurisdictions, however, in accordance with local law or business practices, many foreign companies prevent the sales of shares
that have been voted for a certain period beginning prior to the shareholder meeting and ending on the day following the meeting. The costs of voting proxies with respect to shares of foreign companies include the potentially serious portfolio
management consequences of reduced flexibility to sell the shares at the most advantageous time for the Fund. As a result, such proxies generally will not be voted in the absence of an unusual, significant vote of compelling economic importance. In
determining whether to vote proxies under these circumstances, PSG, in consultation with the Committee, considers whether the costs of voting proxies with respect to such shares of foreign companies generally outweigh any benefits that may be
achieved by voting such proxies.
C. Fund Board Reporting and Recordkeeping
PSG will prepare periodic reports for submission to the Boards of Directors/Trustees of its affiliated funds (the “Funds”)
describing:
|
|
●
|
|
any issues arising under these Policies and Procedures since the last report to the Funds’ Boards of
Directors/Trustees and the resolution of such issues, including but not limited to, information about conflicts of interest not addressed in the Policies and Procedures; and
|
|
|
●
|
|
any proxy votes taken by PSG on behalf of the Funds since the last report to such Funds’ Boards of
Directors/Trustees that deviated from these Policies and Procedures, with reasons for any such deviations In addition, no less frequently than annually, PSG will provide the Boards of Directors/Trustees of the Funds with a written report of any
recommended changes based upon PSG’s experience under these Policies and Procedures, evolving industry practices and developments in the applicable laws or regulations.
|
PSG will maintain all records that are required under, and in accordance with, all applicable regulations, including the Investment Company
Act of 1940, as amended, and the Investment Advisers Act of 1940, which include, but not limited to:
|
|
●
|
|
these Policies and Procedures, as amended from time to time;
|
|
|
●
|
|
records of votes cast with respect to portfolio proxies, reflecting the information required to be included in
Form N-PX, as applicable;
|
|
|
●
|
|
records of written client requests for proxy voting information and any written responses of PSG to such
requests; and
|
|
|
●
|
|
any written materials prepared by PSG that were material to making a decision in how to vote, or that
memorialized the basis for the decision.
|
D. Amendments to these Procedures
The Committee shall periodically review and update these Policies and Procedures as necessary. Any amendments to these Procedures and Policies
(including the Guidelines) shall be provided to the Board of Directors of PSG and to the Boards of Directors/Trustees of the Funds for review and approval.
E. Proxy Voting Guidelines
Guidelines are available
upon request.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Robert T. Chisholm. Rob Chisholm is a Managing Director and Portfolio Manager on the Energy Infrastructure Equities team for
Brookfield’s Public Securities Group. In this role, he oversees and contributes to the portfolio construction process, including execution of buy/sell decisions. Prior to joining Brookfield in 2007, Mr. Chisholm worked in the Energy
Investment Banking Division of Morgan Keegan and was Senior Project Analyst at Enbridge Energy Partners, LP where he analyzed midstream MLP mergers and asset acquisitions. He also worked at Koch Industries in the Capital Markets, Hydrocarbon and
Midstream Groups. Mr. Chisholm earned a Master of Business Administration from The University of Texas at Austin and a Bachelor of Business Administration from Texas Christian University.
Jeff Jorgensen. Jeff Jorgensen is a Portfolio Manager and the Director of Research on the Energy Infrastructure Equities team for
Brookfield’s Public Securities Group. In this role, he leads the research efforts across the firm’s energy infrastructure investment products and contributes to the portfolio construction process, including execution of buy/sell decisions.
Prior to joining Brookfield in 2014, Mr. Jorgensen was an Executive Director at UBS Investment Bank in the Global Natural Resources group after working in Energy Investment Banking at Morgan Stanley and as a finance attorney at
Bracewell & Giuliani LLP. As a banker and an attorney, he worked with more than 50 management teams on over $40 billion of MLP and energy equity and debt offerings and $10 billion of M&A transactions. Mr. Jorgensen earned
a Juris Doctor degree with Honors from The University of Texas School of Law, and a Bachelor of Arts in Economics, Managerial Studies and Sports Management from Rice University.
Management of Other Accounts
Mr. Chisholm manages
other investment companies and/or investment vehicles and accounts in addition to the Registrant. The tables below show the number of other accounts managed by Mr. Chisholm as of September 30, 2020 and the total assets in each of the following
categories: (a) registered investment companies; (b) other pooled investment vehicles; and (c) other accounts. For each category, the table also shows the number of accounts and the total assets in the accounts with respect to which
the advisory fee is based on account performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered
Investment
Companies
|
|
|
Other Pooled
Investment
Companies
|
|
|
Other
Accounts
|
|
|
Number of Accounts Managed
|
|
|
3
|
|
|
|
5
|
|
|
|
501
|
|
|
Number of Accounts Managed with Performance-Based
Fees
|
|
|
–
|
|
|
|
1
|
|
|
|
–
|
|
|
Assets Managed (assets in millions)
|
|
$
|
806.0
|
|
|
$
|
22.0
|
|
|
$
|
258.7
|
|
|
Assets Managed with
Performance-Based Fees (assets in millions)
|
|
$
|
–
|
|
|
$
|
6.1
|
|
|
$
|
–
|
|
Mr. Jorgensen manages other investment companies and/or investment vehicles and accounts in addition to the Registrant.
The tables below show the number of other accounts managed by Mr. Jorgensen as of September 30, 2020 and the total assets in each of the following categories: (a) registered investment companies; (b) other pooled investment vehicles;
and (c) other accounts. For each category, the table also shows the number of accounts and the total assets in the accounts with respect to which the advisory fee is based on account performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered
Investment
Companies
|
|
|
Other Pooled
Investment
Companies
|
|
|
Other
Accounts
|
|
|
Number of Accounts Managed
|
|
|
3
|
|
|
|
5
|
|
|
|
501
|
|
|
Number of Accounts Managed with Performance-Based
Fees
|
|
|
–
|
|
|
|
1
|
|
|
|
–
|
|
|
Assets Managed (assets in millions)
|
|
$
|
806.0
|
|
|
$
|
22.0
|
|
|
$
|
258.7
|
|
|
Assets Managed with
Performance-Based Fees (assets in millions)
|
|
$
|
–
|
|
|
$
|
6.1
|
|
|
$
|
–
|
|
Share Ownership
The following table indicates the dollar range of securities of the Registrant owned by the Registrant’s portfolio managers as of
September 30, 2020.
|
|
|
|
|
|
|
Dollar Range of Securities Owned
|
|
Robert T. Chisholm
|
|
$1 - $10,000
|
|
Jeff Jorgensen
|
|
$1 - $10,000
|
Potential Conflicts of Interest
Actual or apparent conflicts of interest may arise when the portfolio managers also have day-to-day management responsibilities with respect
to one or more other accounts. The Registrant’s investment adviser, Brookfield Public Securities Group LLC (the “Adviser”), has adopted policies and procedures that are reasonably designed to identify and minimize the effects of these
potential conflicts, however, there can be no guarantee that these policies and procedures will be effective in detecting potential conflicts, or in eliminating the effects of any such conflicts. These potential conflicts include:
Allocation of Limited Time and Attention. As indicated above, each portfolio manager manages multiple accounts. As a result, a
portfolio manager will not be able to devote all of his time to management of the Fund. A portfolio manager, therefore, may not be able to formulate as complete a strategy or identify equally attractive investment opportunities for the Fund as might
be the case if he were to devote all of his attention to the management of only the Fund.
Allocation of Limited Investment
Opportunities. As indicated above, each portfolio manager manages accounts with investment strategies and/or policies that are similar to the Fund. If a portfolio manager identifies an investment opportunity that may be suitable for multiple
accounts, the Fund may not be able to take full advantage of that opportunity because the opportunity may be allocated among these accounts or other accounts managed primarily by other portfolio managers of the Adviser and its affiliates. In
addition, in the event a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more
favorable price than accounts that made subsequent transactions.
Pursuit of Differing Strategies. At times, a portfolio manager
may determine that an investment opportunity may be appropriate for only some of the accounts for which the manager exercises investment responsibility, or may decide that certain of these funds or accounts should take differing positions with
respect to a particular security. In these cases, a portfolio manager may execute differing or opposite transactions for one or more accounts which may affect the market price of the security or the execution of the transaction, or both, to the
detriment of one or more other accounts. For example, the sale of a long position or establishment of a short position by an account may impair the price of the same security sold short by (and therefore benefit) the Adviser and its affiliates, or
other accounts, and the purchase of a security or covering of a short position in a security by an account may increase the price of the same security held by (and therefore benefit) the Adviser and its affiliates, or other accounts.
Selection of Broker/Dealers. A portfolio manager may be able to select or influence the selection of the brokers and dealers that are
used to execute securities transactions for the funds or accounts that he supervises. In addition to providing execution of trades, some brokers and dealers provide portfolio managers with brokerage and research services which may result in the
payment of higher brokerage fees than might otherwise be available. These services may be more beneficial to certain funds or accounts of the Adviser and its affiliates than to others. Although the payment of brokerage commissions is subject to the
requirement that the Adviser determines in good faith that the commissions are reasonable in relation to the value of the brokerage and research services provided to the fund, a portfolio manager’s decision as to the selection of brokers and
dealers could yield disproportionate costs and benefits among the funds or other accounts that the Adviser and its affiliates manage. In addition, with respect to certain types of accounts (such as pooled investment vehicles and other accounts
managed for organizations and individuals) the Adviser may be limited by the client concerning the selection of brokers or may be instructed to direct trades to particular brokers. In these cases, the Adviser or its affiliates may place separate,
non-simultaneous transactions in the same security for the Fund and another account that may temporarily affect the market price of the security or the execution of the transaction, or both, to the detriment of the Fund or the other accounts.
Variation in Compensation. A conflict of interest may arise where the financial or other benefits available to a portfolio manager
differ among the accounts that he manages. If the structure of the Adviser’s management fee or a portfolio manager’s compensation differs among accounts (such as where certain accounts pay higher management fees or performance based
management fees), the portfolio manager may be motivated to favor certain accounts over others. A portfolio manager also may be motivated to favor accounts in which he has investment interests, or in which the Adviser or its affiliates have
investment interests. Similarly, the desire to maintain assets under management or to enhance a portfolio manager’s performance record or to derive other rewards, financial or otherwise, could influence a portfolio manager in affording
preferential treatment to those accounts that could most significantly benefit the portfolio manager. For example, as reflected above, if a portfolio manager manages accounts which have performance fee arrangements, certain portions of his
compensation will depend on the achievement of performance milestones on those accounts. A portfolio manager could be incented to afford preferential treatment to those accounts and thereby be subject to a potential conflict of interest.
Certain Business Relationships. Dan C. Tutcher, is a Managing Director of the Adviser on the Energy Infrastructure Securities team.
Mr. Tutcher also serves on the Board of Enbridge, Inc. (NYSE: ENB). Enbridge Inc. is the parent company of Spectra Energy Corp (NYSE:SE) and DCP Midstream Partners (NYSE: DCP) (collectively, the “Enbridge Companies”). As a board
member, Mr. Tutcher attends quarterly board meetings for Enbridge, Inc. The Fund may from time to time invest in Enbridge Companies. In connection with any such investments, the Adviser has adopted policies and procedures that are designed to
address potential conflicts of interest that may arise in connection with Mr. Tutcher’s service as a director of Enbridge Inc. Specifically, these policies and procedures, among other things; (i) establish information barriers
designed to restrict Mr. Tutcher from sharing information regarding Enbridge Companies with other investment professionals of the Adviser, (ii) require Mr. Tutcher to recuse himself from any discussions by the Adviser’s
Investment Committee involving Enbridge Companies and (iii) require that all trading decisions involving Enbridge Companies be made by the Fund’s Portfolio Managers, without any input from Mr. Tutcher. While these policies and
procedures are designed to allow the Fund to invest in Enbridge Companies, the policies and procedures may require the Adviser to restrict trading in Enbridge Companies from time to time, which may prevent the Fund from acquiring or disposing of
securities of Enbridge Companies at a favorable time. In addition, as a result of these policies and procedures, the Fund will not benefit from Mr. Tutcher’s experience and expertise with respect to investments in Enbridge Companies.
Portfolio Manager Compensation
The portfolio managers are compensated based on the scale and complexity of their portfolio responsibilities, the total return performance of
funds and accounts managed by the portfolio manager on an absolute basis and when compared to appropriate peer groups of similar size and strategy, as well as the management skills displayed in managing their portfolio teams and the teamwork
displayed in working with other members of the firm. Since the portfolio managers are responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis almost equally weighted among performance, management and
teamwork. Base compensation for the portfolio managers varies in line with a portfolio manager’s seniority and position. The compensation of portfolio managers with other job responsibilities (such as acting as an executive officer of their
firm or supervising various departments) includes consideration of the scope of such responsibilities and the portfolio manager’s performance in meeting them. The Adviser seeks to compensate portfolio managers commensurate with their
responsibilities and performance, and in a manner that is competitive with other firms within the investment management industry. Salaries, bonuses and stock-based compensation in the industry also are influenced by the operating performance of
their respective firms and their parent companies. While the salaries of the portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate significantly from year to year. Bonuses are determined on a
discretionary basis by the senior executives of the firm and measured by individual and team-oriented performance guidelines. Awards under the Long Term Incentive Plan (LTIP) are approved annually and there is a rolling vesting schedule to aid in
retention of key people. A key component of this program is achievement of client objectives in order to properly align interests with our clients. Further, the incentive compensation of all investment personnel who work on each strategy is directly
tied to the relative performance of the strategy and its clients.
The compensation structure of the portfolio managers and other
investment professionals has four primary components:
|
|
●
|
|
If applicable, long-term compensation consisting of restricted stock or stock options of the Adviser’s
ultimate parent company, Brookfield Asset Management Inc.; and
|
|
|
●
|
|
If applicable, long-term compensation consisting generally of restricted share units tied to the performance
of funds managed by Brookfield.
|
The portfolio managers also receive certain retirement, insurance and other benefits
that are broadly available to all employees. Compensation of the portfolio managers is reviewed on an annual basis by senior management.
Each portfolio manager was compensated for the sale of his equity interests in Center Coast to Brookfield, and may receive additional
contingent payments to be paid within the first five years following the closing of the transaction calculated based, in part, on the assets under management of the business and subject to certain conditions.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
None.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which stockholders may recommend nominees to the Registrant’s Board of Trustees that
were implemented after the Registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by 22(b)(15)) of Schedule 14A (17 CFR 240.14a- 101), or this Item 10.