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Nearly four million shareholders of Puerto Rico Residents Tax Free Fund Inc. voted. (PRITF I) in favor of Ocean Capital's proposal, which aims to Termination of consulting and management contracts UBS Financial Services in Puerto Rico And popular asset management About the first family of closed-end investment funds established on the island.
The result of the vote was announced last week by Ocean Capital, an investment firm that has been calling for a reorganization of investment vehicles for years. This announcement came after the annual meeting was held, where, in additionShareholders elected Ocean Capital's nominee, Ian McCarthy, to the fund's board of directors with overwhelming support of 36 votes to one against..
Shareholders have already voted for Ocean Capital's nominees for management positions at eight annual meetings that the funds refuse to acknowledge, the company said.
The bid between Ocean Capital, a company that owns a 13% stake in PRITF I, and investment bank UBS to transfer leadership of its closed-end mutual fund family in Puerto Rico, began in 2021.. Since then, the company has made unsuccessful campaigns to appoint new independent directors.
Shareholders have spoken again; New leaders are needed to improve the Fund's performance and management. “Despite this clear and ongoing mandate for change, UBS, Popular Asset Management and established fund managers refuse to step aside,” said William Heath Hawke, founder of Ocean Capital.
“It is disappointing that funds continue to hide behind costly lawsuits – paid for by shareholders – to avoid long-awaited change.“The investment banker’s statement reads.
In June 2022, The investment company appealed to the court of first instance To recognize the two proposed directors elected by the shareholders – Brent Rosenthal and Jose Izquierdo II – claiming that the first PRITF refuses to recognize the replacement of Carlos Nido and Luis M. Pilot.
A year ago, Ocean Capital also Try to restructure fund governance Tax-Exempt Fixed Income Fund IV and V, designed by UBS exclusively for residents of Puerto Rico. However, UBS claimed that this was a strategy by the company – in collaboration with First Southern – to liquidate such investment funds and pocket the profits.
it is expected that The funds have already spent more than $5 million on outside advisors To fight Ocean Capital and other investors.
Previously, UBS had objected to the voting and board appointment processes at Ocean Capital, stating that the mechanisms used would be too diffuse.
El Nuevo Día requested a reaction from UBS regarding the situation, but as of press time, had not received any response.
While Ocean Capital insists that board members have remained “entrenched” in their positions and receiving their fees for more than 5,200 days – more than six and a half years – despite the election results.
“Last week’s shareholder vote now marks the eighth annual meeting and third consecutive annual meeting of PRITF I at which Ocean Capital’s nominees received sufficient votes to be elected by a significant margin,” Heath Hawke insisted.
Although the fund family was designed jointly by UBS and Popular Asset Management, Popular has indicated for years that the management and management of the investment vehicles in question was UBS's responsibility.
“It is time for Carlos Nido, Luis M. Pilote, Enrique Villa del Corral, Gabriel Pagan Pedro, Carlos V. Ubinias, Vicente León, José J. Villamil, Clotilde Pérez or Jorge Vallejo to resign from the positions they improperly hold. and that PRITF I terminate its management agreements with UBS and Popular Asset Management immediately. “We will continue to do everything we can to ensure our shareholders’ voices are recognized and respected.”
Over the course of nearly a decade, shareholders in closed-end mutual funds in Puerto Rico experienced hundreds of millions of dollars in losses as a result of the Puerto Rican government's bankruptcy. The decline in the value of these instruments has also translated into a state of illiquidity, a situation that, according to this newspaper's sources, has put thousands of savers on the island in a precarious situation.
Although each fund has its own board, some have questioned the independence of directors and that they are supposed to be appointed by the investment house, an issue that UBS has rejected on previous occasions.
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