|
|
|
Nicholas-Applegate
Global Equity & Convertible Income Fund
|
|
Matters Relating to the Trustees’
Consideration of the Investment Management & Portfolio Management Agreements
(unaudited)
|
The
Investment Company Act of 1940 requires that both the full Board of Trustees
(the “Trustees”) and a majority of the non-interested Trustees (the
“Independent Trustees”), voting separately, approve the Fund’s Management
Agreement (the “Advisory Agreement”) with the Investment Manager and Portfolio
Management Agreement (the “Sub-Advisory Agreement”, and together with the
Advisory Agreement, the “Agreements”) between the Investment Manager and the
Sub-Adviser. The Trustees met in person on June 16-17, 2009 (the “contract
review meeting”) for the specific purpose of considering whether to approve the
continuation of the Advisory Agreement and the Sub-Advisory Agreement. The
Independent Trustees were assisted in their evaluation of the Agreements by
independent legal counsel, from whom they received separate legal advice and with
whom they met separately from Fund management during the contract review
meeting.
Based
on their evaluation of factors that they deemed to be material, including those
factors described below, the Board of Trustees, including a majority of the
Independent Trustees, concluded that the continuation of the Fund’s Advisory
Agreement and the Sub-Advisory Agreement, as amended, should be approved for a
one-year period commencing July 1, 2009.
In
connection with their deliberations regarding the continuation of the
Agreements, the Trustees, including the Independent Trustees, considered such
information and factors as they believed, in light of the legal advice
furnished to them and their own business judgment, to be relevant. As described
below, the Trustees considered the nature, quality, and extent of the various
investment management, administrative and other services performed by the
Investment Manager or the Sub-Adviser under the applicable Agreement.
In
connection with their contract review meeting, the Trustees received and relied
upon materials provided by the Investment Manager which included, among other
items: (i) information provided by Lipper Inc. (“Lipper”) on the total return
investment performance (based on net assets) of the Fund for various time
periods and the investment performance of a group of funds with substantially
similar investment classifications/objectives as the Fund identified by Lipper
and the performance of applicable benchmark indices, (ii) information provided
by Lipper on the Fund’s management fees and other expenses and the management
fees and other expenses of comparable funds identified by Lipper, (iii)
information regarding the investment performance and management fees of
comparable portfolios of other clients of the Sub-Advisers, including
institutional separate accounts and other clients, (iv) the profitability to
the Investment Manager and the Sub-Adviser from their relationship with the
Fund for the one year period ended March 31, 2009, (v) descriptions of various
functions performed by the Investment Manager and the Sub-Adviser for the Fund,
such as portfolio management, compliance monitoring and portfolio trading
practices, and (vi) information regarding the overall organization of the
Investment Manager and the Sub-Adviser, including information regarding senior
management, portfolio managers and other personnel providing investment
management, administrative and other services to the Fund.
The
Trustees’ conclusions as to the continuation of the Agreements were based on a
comprehensive consideration of all information provided to the Trustees and not
the result of any single factor. Some of the factors that figured particularly
in the Trustees’ deliberations are described below, although individual
Trustees may have evaluated the information presented differently from one
another, giving different weights to various factors.
As
part of their review, the Trustees examined the Investment Manager’s and the
Sub-Adviser’s abilities to provide high quality investment management and other
services to the Fund. The Trustees considered the investment philosophy and
research and decision-making processes of the Sub-Adviser; the experience of
key advisory personnel of the Sub-Adviser responsible for portfolio management
of the Fund; the ability of the Investment Manager and the Sub-Adviser to
attract and retain capable personnel; the capability and integrity of the
senior management and staff of the Investment Manager and the Sub-Adviser; and
the level of skill required to manage the Funds. In addition, the Trustees
reviewed the quality of the Investment Manager’s and the Sub-Adviser’s services
with respect to regulatory compliance and compliance with the investment
policies of the Fund; the nature and quality of certain administrative services
the Investment Manager is responsible for providing to the Fund; and conditions
that might affect the Investment Manager’s or the Sub-Adviser’s ability to
provide high quality services to the Funds in the future under the Agreements,
including each organization’s respective business reputation, financial
condition and operational stability. Based on the foregoing, the Trustees
concluded that the Sub-Adviser’s investment process, research capabilities and
philosophy were well suited to the Fund given its respective investment
objectives and policies, and that the Investment Manager and the Sub-Adviser
would be able to continue to meet any reasonably foreseeable obligations under
the Agreements.
Based
on information provided by Lipper, the Trustees also reviewed each Fund’s total
return investment performance as well as the performance of comparable funds
identified by Lipper. In the course of their deliberations, the Trustees took
into account information provided by the Investment Manager in connection with
the contract review meeting, as well
| 8.31.09 | Nicholas-Applegate Global
Equity & Convertible Income Fund Annual Report
31
|
|
|
Nicholas-Applegate Global Equity &
Convertible Income Fund
|
|
Matters Relating to the Trustees’ Consideration of
the Investment Management & Portfolio Management Agreements
(unaudited)
(continued)
|
as
during investment review meetings conducted with portfolio management personnel
during the course of the year regarding the Fund’s performance.
In
assessing the reasonableness of the Fund’s fees under the Agreements, the
Trustees considered, among other information, the Fund’s management fee and the
total expense ratio as a percentage of average net assets attributable to
common shares and the management fee and total expense ratios of comparable
funds identified by Lipper.
For
the Fund, the Trustees specifically took note of how the Fund compared to its
Lipper peers as to performance, management fee expenses and total expenses. The
Trustees noted that the Investment Manager had provided a memorandum containing
comparative information on the performance and expenses information of the Fund
compared to the their Lipper peer categories. The Trustees noted that while the
Fund is not charged a separate administration fee, it was not clear whether the
peer funds in the Lipper categories were charged such a fee by their investment
managers.
The
Trustees noted that the expense group for the Fund is small, consisting of
seven funds. The Trustees also noted that the actual management fees and total
actual expenses were both at the median. The Trustees also noted that the Fund
had fourth quintile performance for the 1-year period, ranking sixth out of
eight peer funds. As of May 31, 2009, the Fund moved into the third quintile
for performance during the 3-months ended May 31, 2009, and has second quintile
performance for the 1-year and year-to-date periods as of May 31, 2009.
After
reviewing these and related factors, the Trustees concluded, within the context
of their overall conclusions regarding the Agreements, that they were satisfied
with the Investment Manager’s and the Sub-Adviser’s responses and efforts to
continue to improve the Fund’s investment performance. The Trustees agreed to
reassess the services provided by the Investment Manager and Sub-Adviser under
the Agreements in light of the Fund’s ongoing performance at each quarterly
Board meeting.
The
Trustees also considered the management fees charged by the Sub-Adviser to
other clients, including institutional separate accounts with investment
strategies similar to those of the Funds. Regarding the institutional separate
accounts, they noted that the management fees paid by the Fund are generally
higher than the fees paid by these clients of the Sub-Adviser, but the Trustees
were advised by the Sub-Adviser that the administrative burden for the
Investment Manager and the Sub-Adviser with respect to the Fund is also
relatively higher, due in part to the more extensive regulatory regime to which
the Fund is subject in comparison to institutional separate accounts. The
Trustees noted that the management fees paid by the Fund is generally higher
than the fees paid by the open-end funds offered for comparison but were
advised that there are additional portfolio management challenges in managing
the Fund, such as meeting a regular dividend.
Based
on a profitability analysis provided by the Investment Manager, the Trustees
also considered the profitability of the Investment Manager and the Sub-Adviser
from their relationship with the Fund and determined that such profitability
was not excessive.
The
Trustees also took into account that, as closed-end investment companies, the
Fund does not currently intend to raise additional assets, so the assets of the
Fund will grow (if at all) only through the investment performance of the Fund.
Therefore, the Trustees did not consider potential economies of scale as a
principal factor in assessing the fee rates payable under the Agreements.
Additionally,
the Trustees considered so-called “fall-out benefits” to the Investment Manager
and the Sub-Adviser, such as reputational value derived from serving as
Investment Manager and Sub-Adviser to the Funds.
After
reviewing these and other factors described herein, the Trustees concluded with
respect to the Fund, within the context of their overall conclusions regarding
the Agreements, that the fees payable under the Agreements represent reasonable
compensation in light of the nature and quality of the services being provided
by the Investment Manager and Sub-Adviser to the Fund.
32
Nicholas-Applegate Global
Equity & Convertible Income Fund Annual Report | 8.31.09 |
|
|
|
|
Nicholas-Applegate Global Equity &
Convertible Income Fund
|
Priva
cy Policy/Proxy
Voting Policies & Procedures
(unaudited)
|
Privacy Policy:
Our Commitment to You
We consider customer privacy to be a fundamental aspect of our
relationship with clients. We are committed to maintaining the confidentiality,
integrity, and security of our current, prospective and former clients’
personal information. To ensure clients’ privacy, we have developed policies
designed to protect this confidentiality, while allowing client needs to be
served.
Obtaining Personal Information
In the course of providing you with products and services, we and
certain service providers to the Fund, such as the Fund’s investment adviser,
may obtain non-public personal information about you. This information may come
from sources such as account applications and other forms, from other written,
electronic or verbal correspondence, from your transactions, from your
brokerage or financial advisory firm, financial adviser or consultant, and/or
from information captured on our internet web sites.
Respecting Your Privacy
As a matter of policy, we do not disclose any personal or account
information provided by you or gathered by us to non-affiliated third parties,
except as required or permitted by law or as necessary for such third parties
to perform their agreements with respect to the Fund. As is common in the
industry, non-affiliated companies may from time to time be used to provide
certain services, such as preparing and mailing prospectuses, reports, account
statements and other information, conducting research on client satisfaction,
and gathering shareholder proxies. We may also retain non-affiliated companies
to market our products and enter in joint marketing agreements with other companies.
These companies may have access to your personal and account information, but
are permitted to use the information solely to provide the specific service or
as otherwise permitted by law. In most cases, you will be clients of a third
party, but we may also provide your personal and account information to your
respective brokerage or financial advisory firm and/or to your financial
adviser or consultant.
Sharing Information with Third Parties
We do reserve the right to disclose or report personal information to
non-affiliated third parties in limited circumstances where we believe in good
faith that disclosure is required under law, to cooperate with regulators or
law enforcement authorities, to protect our rights or property, or upon
reasonable request by any mutual fund in which you have chosen to invest. In
addition, we may disclose information about a shareholder’s accounts to a
non-affiliated third party with the consent or upon the request of the
shareholder.
Sharing Information with Affiliates
We may share client information with our affiliates in connection with
servicing your account or to provide you with information about products and
services that we or our affiliates believe may be of interest to you. The
information we share may include, for example, your participation in our mutual
funds or other investment programs sponsored by us or our affiliates, your
ownership of certain types of accounts (such as IRAs), or other data about your
accounts. Our affiliates, in turn, are not permitted to share your information
with non-affiliated entities, except as required or permitted by law.
Procedures to Safeguard Private Information
We take seriously the obligation to safeguard shareholder non-public
personal information. In addition to this policy, we have also implemented
procedures that are designed to restrict access to your non-public personal
information only to internal personnel who need to know that information in
order to provide products or services to you. In order to guard your non-public
personal information, physical, electronic and procedural safeguards are in
place.
|
|
|
Proxy Voting Policies & Procedures:
|
A description of the policies and procedures that the Fund has adopted
to determine how to vote proxies relating to portfolio securities and
information about how the Fund voted proxies relating to portfolio securities
held during the 12 months period ended June 30, is available (i) without
charge, upon request, by calling the Fund’s shareholder servicing agent at
(800) 254-5197;(ii) on the Fund’s website at
www.allianzinvestors.com/closedendfunds; and (iii) on the Securities and
Exchange Commission’s website at www.sec.gov.
|
8.31.09
|
Nicholas-Applegate Global Equity & Convertible Income Fund Annual
Report
33
|
|
|
|
Nicholas-Applegate Global Equity &
Convertible Income Fund
|
Div
idend Reinvestment Plan
(unaudited)
|
Pursuant to the Fund’s Dividend Reinvestment Plan (the “Plan”), all
Common Shareholders whose shares are registered in their own names will have
all dividends, including any capital gain dividends, reinvested automatically
in additional Common Shares by PNC Global Investment Servicing, as agent for
the Common Shareholders (the “Plan Agent”), unless the shareholder elects to
receive cash. An election to receive cash may be revoked or reinstated at the
option of the shareholder. In the case of record shareholders such as banks,
brokers or other nominees that hold Common Shares for others who are the
beneficial owners, the Plan Agent will administer the Plan on the basis of the
number of Common Shares certified from time to time by the record shareholder
as representing the total amount registered in such shareholder’s name and held
for the account of beneficial owners who are to participate in the Plan.
Shareholders whose shares are held in the name of a bank, broker or nominee
should contact the bank, broker or nominee for details. All distributions to
investors who elect not to participate in the Plan (or whose broker or nominee
elects not to participate on the investor’s behalf), will be paid cash by check
mailed, in the case of direct shareholder, to the record holder by PNC Global
Investment Servicing, as the Fund’s dividend disbursement agent.
Unless you elect (or your broker or nominee elects) not to participate
in the Plan, the number of Common Shares you will receive will be determined as
follows:
|
|
|
|
(1)
|
If on the
payment date the net asset value of the Common Shares is equal to or less
than the market price per Common Share plus estimated brokerage commissions
that would be incurred upon the purchase of Common Shares on the open market,
the Fund will issue new shares at the greater of (i) the net asset value per
Common Share on the payment date or (ii) 95% of the market price per Common
Share on the payment date;or
|
|
|
|
|
(2)
|
If on the
payment date the net asset value of the Common Shares is greater than the
market price per Common Share plus estimated brokerage commissions that would
be incurred upon the purchase of Common Shares on the open market, the Plan
Agent will receive the dividend or distribution in cash and will purchase
Common Shares in the open market, on the New York Stock Exchange or
elsewhere, for the participants’ accounts. It is possible that the market
price for the Common Shares may increase before the Plan Agent has completed
its purchases. Therefore, the average purchase price per share paid by the
Plan Agent may exceed the market price on the payment date, resulting in the
purchase of fewer shares than if the dividend or distribution had been paid
in Common Shares issued by the Fund. The Plan Agent will use all dividends
and distributions received in cash to purchase Common Shares in the open
market on or shortly after the payment date, but in no event later than the
ex-dividend date for the next distribution. Interest will not be paid on any
uninvested cash payments.
|
You may withdraw from the Plan at any time by giving notice to the Plan
Agent. If you withdraw or the Plan is terminated, you will receive a
certificate for each whole share in your account under the Plan and you will
receive a cash payment for any fraction of a share in your account. If you
wish, the Plan Agent will sell your shares and send you the proceeds, minus
brokerage commissions.
The Plan Agent maintains all shareholders’ accounts in the Plan and
gives written confirmation of all transactions in the accounts, including
information you may need for tax records. The Plan Agent will also furnish each
person who buys Common Shares with written instructions detailing the
procedures for electing not to participate in the Plan and to instead receive
distributions in cash. Common Shares in your account will be held by the Plan
Agent in non-certificated form. Any proxy you receive will include all Common
Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or
distributions in Common Shares. However, all participants will pay a pro rata
share of brokerage commissions incurred by the Plan Agent when it makes open
market purchases.
Automatically reinvested dividends and distributions are taxed in the
same manner as cash dividends and distributions.
The Fund and the Plan Agent reserve the right to amend or terminate the
Plan. There is no direct service charge to participants in the Plan; however, the
Fund reserves the right to amend the Plan to include a service charge payable
by the participants. Additional information about the Plan may be obtained from
the Fund’s shareholder servicing agent, PNC Global Investment Servicing, P.O.
Box 43027, Providence, RI 02940-3027, telephone number (800) 254-5197.
34
Nicholas-Applegate
Global Equity & Convertible Income Fund Annual Report | 8.31.09 |
|
|
|
|
Nicholas-Applegate
Global Equity & Convertible Income Fund
|
B
oard of Trustees
(unaudited)
|
|
|
|
|
|
Name, Date of
Birth, Position(s) Held with
Fund, Length of Service, Other Trusteeships/
Directorships Held by Trustee; Number of
Portfolios in Fund Complex/Outside Fund
Complexes Currently Overseen by Trustee
|
|
Principal
Occupation(s) During Past 5 Years:
|
|
|
|
|
|
The address of
each trustee is 1345 Avenue of the Americas, New York, NY 10105
|
|
|
|
|
|
Hans W. Kertess
Date of Birth:
7/12/39
Chairman of the Board of Trustees since: 2007
Trustee since: 2007
Term of office: Expected to stand for re-election
at 2011 annual meeting of shareholders.
Trustee/Director of 49 funds in Fund Complex;
Trustee/Director of no funds outside of Fund Complex
|
|
President, H. Kertess & Co.,
a financial advisory company; Formerly, Managing Director, Royal Bank of
Canada Capital Markets.
|
|
|
|
|
|
Paul Belica
Date of Birth:
9/27/21
Trustee since: 2007
Term of office: Expected to stand for re-election
at 2009 annual meeting of shareholders.
Trustee/Director of 49 funds in Fund Complex
Trustee/Director of no funds outside of Fund Complex
|
|
Retired. Formerly Director,
Student Loan Finance Corp., Education Loans, Inc., Goal Funding, Inc., Goal
Funding II, Inc. and Surety Loan Fund, Inc.; Formerly, Manager of Stratigos
Fund LLC, Whistler Fund LLC, Xanthus Fund LLC & Wynstone Fund LLC.
|
|
|
|
|
|
Robert E. Connor
Date of Birth:
9/17/34
Trustee since: 2007
Term of office: Expected to stand for re-election
at 2011 annual meeting of shareholders.
Trustee/Director of 49 funds in Fund Complex
Trustee/Director of no funds outside of Fund Complex
|
|
Retired. Formerly, Senior Vice
President, Corporate Office, Smith Barney Inc.
|
|
|
|
|
|
William B.
Ogden, IV
Date of Birth:
1/11/45
Trustee since: 2007
Term of office: Expected to stand for election
at 2011 annual meeting of shareholders.
Trustee/Director of 49 funds in Fund Complex;
Trustee/Director of no funds outside of Fund Complex
|
|
Asset Management Industry
Consultant; Formerly, Managing Director, Investment Banking Division of
Citigroup Global Markets Inc.
|
|
|
|
|
|
R. Peter
Sullivan III
Date of Birth:
9/4/41
Trustee since: 2007
Term of office: Expected to stand for re-election
at 2010 annual meeting of shareholders.
Trustee/Director of 49 funds in Fund Complex
Trustee/Director of no funds outside of Fund Complex
|
|
Retired. Formerly, Managing
Partner, Bear Wagner Specialists LLC, specialist firm on the New York Stock
Exchange.
|
|
|
|
|
|
Diana L. Taylor†
Date of Birth: 2/16/55
Trustee since 2007
Term of office: Expected to stand for election at 2009
annual meeting of shareholders.
Trustee/Director of 45 funds in Fund Complex
Trustee/Director of Brookfield Properties Corporation
of Sotheby’s and Citigroup, Inc.
|
|
Managing Director, Wolfensohn
& Co., 2007-present; Formerly, Superintendent Of Banks, State of New
York, 2003-2007.
|
| 8.31.09 | Nicholas-Applegate Global Equity & Convertible Income Fund Annual
Report
35
|
|
|
|
Nicholas-Applegate
Global Equity & Convertible Income Fund
|
Board of Trustees
(unaudited) (continued)
|
|
|
|
|
|
Name, Date of
Birth, Position(s) Held with
Fund, Length of Service, Other Trusteeships/
Directorships Held by Trustee; Number of
Portfolios in Fund Complex/Outside Fund
Complexes Currently Overseen by Trustee
|
|
Principal
Occupation(s) During Past 5 Years:
|
|
|
|
|
|
John C. Maney††
Date of Birth:
8/3/59
Trustee since 2007
Term of office: Expected to stand for re-election at 2009
annual meeting of shareholders
Trustee/Director of 78 funds in Fund Complex
Trustee/Director of no funds outside of Fund Complex
|
|
Management Board of Allianz
Global Investors Fund Management LLC; Management Board and Managing Director
of Allianz Global Investors of America L.P. since January 2005 and also Chief
Operating Officer of Allianz Global Investors of America L.P. since November
2006.
|
|
|
|
|
†
|
Ms. Taylor may be considered an “interested person” of the Fund due
to her status as a Director of Citigroup Inc., commencing with her
appointment to that position on July 24, 2009. Ms. Taylor resigned her
position as a Director of the Federal National Mortgage Association (Fannie
Mae) effective July 22, 2009.
|
|
††
|
Mr. Maney is an “interested person” of the Fund due to his
affiliation with Allianz Global Investors of America L.P. In addition to Mr.
Maney’s positions set forth in the table above, he holds the following
positions with affiliated persons: Management Board, Managing Director and
Chief Operating Officer of Allianz Global Investors of America L.P., Allianz
Global Investors of America LLC and Allianz-Pac Life Partners LLC; Member –
Board of Directors and Chief Operating Officer of Allianz Global Investors of
America Holdings Inc., Oppenheimer Group, Inc.; Managing Director and Chief
Operating Officer of Allianz Global Investors NY Holdings LLC; Management
Board and Managing Director of Allianz Global Investors U.S. Holding LLC;
Managing Director and Chief Financial Officer of Allianz Hedge Fund Partners
Holding L.P. and Allianz Global Investors U.S. Retail LLC; Member – Board of
Directors and Managing Director of Allianz Global Investors Advertising
Agency Inc.; Compensation Committee of NFJ Investment Group LLC.; Management
Board of Allianz Global Investors Fund Management LLC, Allianz Global
Investors Management Partners LLC, Nicholas-Applegate Holdings LLC and OpCap
Advisors LLC; Member – Board of Directors and Chief Operating Officer of
PIMCO Global Advisors (Resources) Limited; Executive Vice President of PIMCO
Japan Ltd; and Chief Operating Officer of Allianz Global Investors U.S.
Holding II LLC, and Member and Chairman – Board of Directors, President and
Chief Operating Officer of PFP Holdings, Inc.
|
36
Nicholas-Applegate Global Equity & Convertible Income
Fund Annual Report | 8.31.09 |
|
|
|
|
Nicholas-Applegate
Global Equity & Convertible Income Fund
|
Fund Officers
(unaudited)
|
|
|
|
|
|
Name, Date of
Birth, Position(s) Held with Fund
|
|
Principal
Occupation(s) During Past 5 Years:
|
|
|
|
|
|
Brian S.
Shlissel
Date of Birth:
11/14/64
President & Chief Executive Officer since: 2007
|
|
Executive Vice President,
Director of Fund Administration, Allianz Global Investors Fund Management
LLC; President and Chief Executive Officer of 35 funds in the Fund Complex;
Treasurer; Principal Financial and Accounting Officer of 46 funds in the Fund
Complex and The Korea Fund, Inc. Formerly, Director of 6 funds in the Fund
Complex (2002-2008).
|
|
|
|
|
|
Lawrence G.
Altadonna
Date of Birth:
3/10/66
Treasurer, Principal/Financial and Accounting
Officer since: 2007
|
|
Senior Vice President, Allianz
Global Investors Fund Management LLC; Treasurer, Principal Financial and
Accounting officer of 34 funds in the Fund Complex; Assistant Treasurer of 46
funds in the Fund Complex and The Korea Fund, Inc.
|
|
|
|
|
|
Thomas J.
Fuccillo
Date of Birth: 3/22/68
Vice President, Secretary & Chief Legal Officer
since: 2007
|
|
Executive Vice President, Chief
Legal Officer and Secretary of Allianz Global Investors Fund Management LLC;
Executive Vice President of Allianz Global Investors of America L.P; Vice
President, Secretary and Chief Legal Officer of 80 funds in the Fund Complex;
Secretary and Chief Legal Officer of the Korea Fund, Inc. Formerly, Vice
President and Associate General Counsel, Neuberger Berman, LLC, 1991-2004.
|
|
|
|
|
|
Scott Whisten
Date of Birth:
3/13/71
Assistant Treasurer since: 2007
|
|
Vice President, Allianz Global
Investors Fund Management LLC; Assistant Treasurer of 80 funds in the Fund
Complex. Formerly, Accounting Manager, Prudential Investments (2002-2005).
|
|
|
|
|
|
Richard J.
Cochran
Date of Birth:
1/23/61
Assistant Treasurer since: 2008
|
|
Vice President, Allianz Global
Investors Fund Management LLC; Assistant Treasurer of 80 funds in the Fund
Complex; formerly, Tax Manager, Teacher Insurance Annuity Association/College
Retirement Equity Fund (TIAA-CREF) (2002-2008).
|
|
|
|
|
|
Youse E. Guia
Date of Birth:
9/3/72
Chief Compliance Officer since: 2007
|
|
Senior Vice President, Group
Compliance Manager of Allianz Global Investors of America L.P., Chief
Compliance Officer of 80 funds in the Fund Complex and The Korea Fund, Inc.
Formerly, Vice President, Group Compliance Manager, Allianz Global Investors
of America L.P. (2002-2004).
|
|
|
|
|
|
Kathleen A.
Chapman
Date of Birth:
11/11/54
Assistant Secretary since: 2007
|
|
Assistant Secretary of 80 funds
in the Fund Complex. Formerly, Manager-Individual Investor Group Advisory
Law, Morgan Stanley (2004-2005); Paralegal and Assistant Corporate Secretary,
Prudential Financial, Inc. (formerly American Skandia, Inc.) (1996-2004).
|
|
|
|
|
|
Lagan Srivastava
Date of Birth:
9/20/77
Assistant Secretary since: 2007
|
|
Assistant Secretary of 80 funds
in the Fund Complex and The Korea Fund, Inc. formerly Research Assistant,
Dechert LLP (2004-2005); Research Assistant, Swidler Berlin Shereff Friedman
LLP (2002-2004).
|
Officers hold
office at the pleasure of the Board and until their successors are appointed
and qualified or until their earlier resignation or removal.
|
8.31.09
|
Nicholas-Applegate Global Equity & Convertible Income Fund Annual
Report
37
(This Page Intentionally Left Blank)
(This Page Intentionally Left Blank)
(This Page Intentionally Left Blank)
|
|
|
|
Trustees
|
Fund Officers
|
|
Hans W. Kertess
|
Brian S. Shlissel
|
|
Trustee, Chairman of the Board of Trustees
|
President & Chief Executive Officer
|
|
Paul Belica
|
Lawrence G. Altadonna
|
|
Robert E. Connor
|
Treasurer, Principal Financial & Accounting Officer
|
|
John C. Maney
|
Thomas J. Fuccillo
|
|
William B. Ogden, IV
|
Vice President, Secretary & Chief Legal Officer
|
|
R. Peter Sullivan III
|
Scott Whisten
|
|
|
Assistant Treasurer
|
|
|
Richard J. Cochran
|
|
|
Assistant Treasurer
|
|
|
Youse E. Guia
|
|
|
Chief Compliance Officer
|
|
|
Kathleen A. Chapman
|
|
|
Assistant Secretary
|
|
|
Lagan Srivastava
|
|
|
Assistant Secretary
|
|
Investment Manager
|
|
|
Allianz Global Investors Fund
Management LLC
|
|
|
1345 Avenue of the Americas
|
|
|
New York, NY 10105
|
|
|
|
|
|
Sub-Adviser
|
|
|
Nicholas-Applegate Capital
Management LLC
|
|
|
600 West Broadway, 30th Floor
|
|
|
San Diego, CA 92101
|
|
|
|
|
|
Custodian & Accounting Agent
|
|
|
Brown Brothers Harriman & Co.
|
|
|
40 Water Street
|
|
|
Boston, MA 02109
|
|
|
|
|
|
Transfer Agent, Dividend Paying Agent and
Registrar
|
|
PNC Global Investment Servicing
|
|
|
P.O. Box 43027
|
|
|
Providence, RI 02940-3027
|
|
|
|
|
|
Independent Registered Public Accounting
Firm
|
|
PricewaterhouseCoopers LLP
|
|
|
300 Madison Avenue
|
|
|
New York, NY 10017
|
|
|
|
|
|
Legal Counsel
|
|
|
Ropes & Gray LLP
|
|
|
One International Place
|
|
|
Boston, MA 02110-2624
|
|
This report, including the financial information
herein, is transmitted to the shareholders of Nicholas-Applegate Global Equity
& Convertible Income Fund for their information. It is not a prospectus,
circular or representation intended for use in the purchase of shares of the
Fund or any securities mentioned in this report.
Notice is hereby given in accordance with Section
23(c) of the Investment Company Act of 1940, as amended, that from time to time
the Funds may purchase shares of their common stock in the open market.
The Fund files its complete schedule of portfolio
holdings with the Securities and Exchange Commission (“SEC”) for the first and
third quarters of its fiscal year on Form N-Q. The Fund’s Form N-Q is available
on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s
Public Reference Room in Washington D.C. Information on the operation of the
Public Reference Room may be obtained by calling (800) SEC-0330. The
information on Form N-Q is also available on the Fund’s website at
www.allianzinvestors.com/closedendfunds.
On January 9, 2009, the Fund submitted a CEO annual
certification to the New York Stock Exchange (“NYSE”) on which the Fund’s
principal executive officer certified that he was not aware, as of the date, of
any violation by the Fund of the NYSE’s Corporate Governance listing standards.
In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and
related SEC rules, the Fund’s principal executive and principal financial
officer made quarterly certifications, included in filings with the SEC on
Forms N-CSR and N-Q relating to, among other things, the Fund’s disclosure
controls and procedures and internal control over financial reporting, as
applicable.
Information on the Fund is available at
www.allianzinvestors.com/closedendfunds or by calling the Fund’s shareholder
servicing agent at (800) 254-5197.
Receive this report electronically and eliminate paper
mailings.
To enroll, go to
www.allianzinvestors.com/edelivery.
ITEM 2. CODE OF ETHICS
|
(a)
|
As of the end of the period covered by this report, the registrant has adopted a code of ethics (the “Section 406 Standards for Investment Companies — Ethical Standards for Principal Executive and Financial
Officers”) that applies to the registrant’s Principal Executive Officer and Principal Financial Officer; the registrant’s Principal Financial Officer also serves as the Principal Accounting Officer. The registrant undertakes to
provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-254-5197. The code of ethics is included as an Exhibit 99.CODEETH hereto.
|
|
|
|
(b)
|
During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above.
|
|
|
|
(c)
|
During the period covered by this report, there were not any waivers or implicit waivers to a provision of the code of ethics adopted in 2(a) above.
|
|
|
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant’s Board has determined that Mr. Paul Belica, a member of the Board’s Audit Oversight Committee is an “audit committee financial expert,” and that he is “independent,” for
purposes of this Item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
a)
|
Audit fees. The aggregate fees billed for each of the last two fiscal years (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for
the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods were $55,000 in 2008 and
$55,000 in 2009.
|
|
|
|
b)
|
Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the principal accountant that are reasonably related to the performance of the audit registrant’s financial
statements and are not reported under paragraph (e) of this Item were $0 in 2008 and $0
in 2009. These services consist of accounting consultations, agreed upon procedure
reports, attestation reports and comfort letters.
|
|
|
|
c)
|
Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax service and tax planning (“Tax Services”) were $14,175 in 2008 and
$14,175 in 2009. These services consisted of review or preparation of U.S. federal, state, local and excise tax returns and calculation of excise tax distributions.
|
|
|
|
d)
|
All Other Fees. There were no other fees billed in the Reporting Periods for products and services provided by the Auditor to the Registrant.
|
|
|
|
e)
|
1. Audit Committee Pre-Approval Policies and Procedures. The Registrant’s Audit Committee has established policies and procedures for pre-approval of all audit and permissible non-audit services by the Auditor for the
Registrant, as well as the Auditor’s engagements related directly to the operations and financial reporting of the Registrant. The Registrant’s policy is stated below.
|
|
|
Nicholas-Applegate Global Equity & Convertible & Income Fund (The “Fund”)
AUDIT OVERSIGHT COMMITTEE POLICY FOR PRE-APPROVAL OF SERVICES PROVIDED BY THE INDEPENDENT ACCOUNTANTS
The Fund’s Audit Oversight Committee (“Committee”) is charged with the oversight of the Funds’ financial reporting policies and practices and their internal controls. As part of this
responsibility, the Committee must pre-approve any independent accounting firm’s engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement by the independent accountants, the
Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:
a review of the nature of the professional services expected to provided,
the fees to be charged in connection with the services expected to be provided,
a review of the safeguards put into place by the accounting firm to safeguard independence, and
periodic meetings with the accounting firm.
POLICY FOR AUDIT AND NON-AUDIT SERVICES TO BE PROVIDED TO THE FUNDS
On an annual basis, the Fund’s Committee will review and pre-approve the scope of the audits of the Funds and proposed audit fees and permitted non-audit (including audit-related) services that may be
performed by the Fund’s independent accountants. At least annually, the Committee will receive a report of all audit and non-audit services that were rendered in the previous calendar year pursuant to this Policy. In addition to the
Committee’s
pre-approval of services pursuant to this Policy, the engagement of the independent accounting firm for any permitted non-audit service
provided to the Fund will also require the separate written pre-approval of the President of the Fund, who will confirm, independently, that the accounting firm’s engagement will not adversely affect the firm’s independence. All non-audit
services performed by the independent accounting firm will be disclosed, as required, in filings with the Securities and Exchange Commission.
AUDIT SERVICES
The categories of audit services and related fees to be reviewed and pre-approved annually by the Committee are:
Annual Fund financial statement audits
Seed audits (related to new product filings, as required)
SEC and regulatory filings and consents
Semiannual financial statement reviews
AUDIT-RELATED SERVICES
The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants and services falling under one of these categories will be
pre-approved by the Committee on an annual basis if the Committee deems those services to be consistent with the accounting firm’s independence:
Accounting consultations
Fund merger support services
Agreed upon procedure reports
Other attestation reports
Comfort letters
Other internal control reports
Individual audit-related services that fall within one of these categories and are not presented to the Committee as part of the annual pre-approval process described above, may be pre-approved, if deemed
consistent with the accounting firm’s independence, by the Committee Chair (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated
fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
TAX SERVICES
The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants and services falling under one of these categories will be pre-approved by
the Committee on an annual basis if the Committee deems those services to be consistent with the accounting firm’s independence:
Tax compliance services related to the filing or amendment of the following:
Federal, state and local income tax compliance; and, sales and use tax compliance
Timely RIC qualification
reviews
Tax distribution analysis and planning
Tax authority
examination services
Tax appeals support services
Accounting
methods studies
Fund merger support service
Other tax consulting
services and related projects
Individual tax services that fall within one of these categories and are not presented to the Committee as part of the annual pre-approval process described above, may be pre-approved, if deemed consistent
with the accounting firm’s independence, by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for
those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
PROSCRIBED SERVICES
The Fund’s independent accountants will not render services in the following categories of non-audit services:
Bookkeeping or other services related to the accounting records or financial statements of the Funds
Financial
information systems design and implementation
Appraisal or valuation services, fairness opinions, or contribution-in-kind reports
Actuarial services
Internal audit outsourcing services
Management functions or human resources
Broker or dealer, investment adviser or investment
banking services
Legal services and expert services unrelated to the audit
Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible
PRE-APPROVAL OF NON-AUDIT SERVICES PROVIDED TO OTHER ENTITIES WITHIN THE FUND COMPLEX
The Committee will pre-approve annually any permitted non-audit services to be provided to Allianz Global Investors Fund Management LLC (Formerly, PA Fund Management LLC) or any other investment manager to
the Funds (but not including any sub-adviser whose role is primarily portfolio management and is sub-contracted by the investment manager) (the “Investment Manager”) and any entity controlling, controlled by, or under common control with
the Investment Manager that provides ongoing services to the Fund (including affiliated sub-advisers to the Fund), provided, in each case, that the engagement relates directly to the operations and financial reporting of the Fund (such entities,
including the Investment Manager, shall be referred to herein as the “Accounting Affiliates”). Individual projects that are not presented to the Committee as part of the annual pre-approval process, may be pre-approved, if deemed
consistent with the accounting firm’s independence, by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the
estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
Although the Committee will not pre-approve all services provided to the Investment Manager and its affiliates, the Committee will receive an annual report from the Funds’ independent accounting firm
showing the aggregate fees for all services provided to the Investment Manager and its affiliates.
DE MINIMUS EXCEPTION TO REQUIREMENT OF PRE-APPROVAL OF NON-AUDIT SERVICES
With respect to the provision of permitted non-audit services to a Fund or Accounting Affiliates, the pre-approval requirement is waived if:
|
|
(1)
|
The aggregate amount of all such permitted non-audit services provided constitutes no more than (i) with respect to such services provided to the Fund, five percent (5%) of the total amount of revenues paid
by the Fund to its independent accountant during the fiscal year in which the services are provided, and (ii) with respect to such services provided to Accounting Affiliates, five percent (5%) of the total amount of revenues paid to the Fund’s
independent accountant by the Fund and the Accounting Affiliates during the fiscal year in which the services are provided;
|
|
|
|
|
(2)
|
Such services were not recognized by the Fund at the time of the engagement for such services to be non-audit services; and
|
|
|
|
|
(3)
|
Such services are promptly brought to the attention of the Committee and approved prior to the completion of the audit by the Committee or by the Committee Chairman (or any other Committee member who is a
disinterested trustee under the Investment Company Act to whom this Committee Chairman or other delegate shall be reported to the full Committee at its next regularly scheduled meeting.
|
|
|
|
|
|
e)
|
2. No services were approved pursuant to the procedures
contained in paragraph (C) (7) (i) (C) of Rule 2-01 of Registration S-X.
|
|
|
|
|
|
|
|
|
f)
|
Not applicable
|
|
|
|
|
|
|
|
|
g)
|
Non-audit fees. The aggregate non-audit fees billed
by the Auditor for services rendered to the Registrant, and rendered to the Adviser,
for the 2008 Reporting Period was $14,175 and the 2009 Reporting Period was
$14,175.
|
|
|
|
|
|
h)
|
Auditor Independence. The Registrant’s Audit Oversight Committee has considered whether the provision of non-audit services that were rendered to the Adviser which were not pre-approved is compatible
with maintaining the Auditor’s independence.
|
|
|
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT
The Fund has a separately designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the Securities
Exchange Act of 1934. The audit committee of the Fund is comprised of Robert
E. Connor, Paul Belica, Hans W. Kertess, R. Peter Sullivan III, William B. Ogden,
IV.
ITEM 6. SCHEDULE OF INVESTMENTS
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Nicholas-Applegate Global Equity & Convertible
Income Fund
(the “Trust”)
PROXY VOTING POLICY
|
1.
|
It is the policy of the Trust that proxies should be voted in the interest of its shareholders, as determined by those who are in the best position to make this determination. The Trust believes that the firms and/or persons
purchasing and selling securities for the Trust and analyzing the performance of the Trust’s securities are in the best position and have the information necessary to vote proxies in the best interests of the Trust and its shareholders,
including in situations where conflicts of interest may arise between the interests of shareholders, on one hand, and the interests of the investment adviser, a sub-adviser and/or any other affiliated person of the Trust, on the other. Accordingly,
the Trust’s policy shall be to delegate proxy voting responsibility to those entities with portfolio management responsibility for the Trust.
|
|
|
|
2.
|
The Trust delegates the responsibility for voting proxies to Allianz Global Investors Fund Management LLC (“AGIFM”), which will in turn delegate such responsibility to the sub-adviser of the Trust. AGIFM’s Proxy
Voting Policy Summary is attached as
Appendix A
hereto. A summary of the detailed proxy voting policy of the Trust’s current sub-adviser is set forth in
Appendix B
attached hereto. Such summary may be revised from time to time to reflect changes to the sub-adviser’s detailed proxy voting policy.
|
|
|
|
3.
|
The party voting the proxies (i.e., the sub-adviser) shall vote such proxies in accordance with such party’s proxy voting policies and, to the extent consistent with such policies, may rely on information and/or
recommendations supplied by others.
|
|
|
|
4.
|
AGIFM and the sub-adviser of the Trust with proxy voting authority shall deliver a copy of its respective proxy voting policies and any material amendments thereto to the applicable Board of the Trust promptly after the adoption
or amendment of any such policies.
|
|
|
|
5.
|
The party voting the proxy shall: (i) maintain such records and provide such voting information as is required for the Trust’s regulatory filings including, without limitation, Form N-PX and the required disclosure of policy
called for by Item 18 of Form N-2 and Item 7 of Form N-CSR; and (ii) shall provide such additional information as may be requested, from time to time, by the Board or the Trust’s Chief Compliance Officer.
|
|
|
|
6.
|
This Proxy Voting Policy Statement (including
Appendix B
), the Proxy Voting Policy Summary of AGIFM and summary of the detailed proxy voting policy of the sub- adviser of
the Trust with proxy voting authority, shall be made available (i) without charge, upon request, by calling 1-800-426-0107 and (ii) on the Trust’s website at www.allianzinvestors.com. In addition, to the extent required by applicable law or
determined by the Trust’s Chief Compliance Officer or Board of Trustees, the Proxy Voting Policy Summary of AGIFM and summary of the detailed proxy voting policy of
the Trust’s sub-adviser with proxy voting authority shall also be included
in the Trust’s Registration Statements or Form N-CSR filings.
|
|
|
|
|
|
|
|
|
Appendix A
ALLIANZ GLOBAL INVESTORS FUND MANAGEMENT LLC (“AGIFM”)
|
1.
|
It is the policy of AGIFM that proxies should be voted in the interest of the shareholders of the applicable fund, as determined by those who are in the best position to make this determination. AGIFM believes that the firms
and/or persons purchasing and selling securities for the funds and analyzing the performance of the funds’ securities are in the best position and have the information necessary to vote proxies in the best interests of the funds and their
shareholders, including in situations where conflicts of interest may arise between the interests of shareholders, on one hand, and the interests of the investment adviser, a sub-adviser and/or any other affiliated person of the fund, on the other.
Accordingly, AGIFM’s policy shall be to delegate proxy voting responsibility to those entities with portfolio management responsibility for the funds.
|
|
|
|
2.
|
AGIFM, for each fund which it acts as an investment adviser, delegates the responsibility for voting proxies to the sub-adviser for the respective fund, subject to the terms hereof.
|
|
|
|
3.
|
The party voting the proxies (e.g., the sub-adviser) shall vote such proxies in accordance with such party’s proxy voting policies and, to the extent consistent with such policies, may rely on information and/or
recommendations supplied by others.
|
|
|
|
4.
|
AGIFM and each sub-adviser of a fund shall deliver a copy of its respective proxy voting policies and any material amendments thereto to the board of the relevant fund promptly after the adoption or amendment of any such
policies.
|
|
|
|
5.
|
The party voting the proxy shall: (i) maintain such records and provide such voting information as is required for such funds’ regulatory filings including, without limitation, Form N-PX and the required disclosure of policy
called for by Item 18 of Form N-2 and Item 7 of Form N-CSR; and (ii) shall provide such additional information as may be requested, from time to time, by such funds’ respective boards or chief compliance officers.
|
|
|
|
6.
|
This Proxy Voting Policy Summary and summaries of the proxy voting policies for each sub-adviser of a fund advised by AGIFM shall be available (i) without charge, upon request, by calling 1-800-426-0107 and (ii) at
www.allianzinvestors.com. In addition, to the extent required by applicable law or determined by the relevant fund’s board of directors/trustees or chief compliance officer, this Proxy Voting Policy Summary and summaries of the detailed proxy
voting policies of each sub-adviser and each other entity with proxy voting authority for a fund advised by AGIFM shall also be included in the Registration Statement or Form N-CSR filings for the relevant fund.
|
|
|
Appendix B
Nicholas-Applegate Capital Management LLC ("NACM")
Description of Proxy Voting Policy and Procedures
NACM votes proxies on behalf of its clients pursuant to its written Proxy Policy Guidelines and Procedures (the "Proxy Guidelines"), unless a client requests otherwise. The Proxy Guidelines are designed to honor NACM's fiduciary
duties to its clients and protect and enhance its clients' economic welfare and rights.
The Proxy Guidelines are established by a Proxy Committee consisting of executive, investment, sales, marketing, compliance and operations personnel. The Proxy Guidelines reflect NACM's normal voting positions on specific
corporate actions, including but not limited to those relating to social and corporate responsibility issues, stock option plans and other management compensation issues, changes to a portfolio company's capital structure and corporate governance.
For example, NACM generally votes for proposals to declassify boards and generally supports proposals that remove restrictions on shareholders' ability to call special meetings independently of management. Some issues will require a case-by-case
analysis.
The Proxy Guidelines largely follow the recommendations of Glass, Lewis & Co. LLC ("Glass Lewis"), an investment research and proxy advisory firm. The Proxy Guidelines may not apply to every situation and NACM may vote
differently than specified by the Proxy Guidelines and/or contrary to Glass Lewis' recommendation if NACM reasonably determines that to do so is in its clients' best interest. Any variance from the Proxy Guidelines is documented.
In the case of a potential conflict of interest, NACM's Proxy Committee will be responsible for reviewing the potential conflict and will have the final decision as to how the relevant proxy should be voted.
Under certain circumstances, NACM may in its reasonable discretion refrain from voting clients' proxies due to cost or other factors.
ITEM 8
(a)(1)
Nicholas-Applegate
Capital Management LLC (“Nicholas-Applegate” or the
“Investment
Adviser”)
As of October 28, 2009, the following individuals
constitute the team that has primary responsibility for the day-to-day implementation
of the Nicholas-Applegate Global Equity & Convertible Income Fund (NGZ),
with Mr. Forsyth serving as the lead portfolio manager:
Steven Tael, Ph.D., CFA
Vice President, Portfolio Manager, Systematic
Steven Tael has been a co-portfolio manager of the Fund since 2008 and joined Nicholas-Applegate in 2005 and has portfolio management responsibilities on the International, Global, and Emerging Markets Systematic
strategies. Previously, Steve worked at Mellon Capital Management in San Francisco, where he was a research analyst in the area of investment research. His experience spans quantitative model building, model production and portfolio management.
Prior to that, he was an Advisory Systems Engineer for Bank of America, where he co-developed a global portfolio risk reporting system. He also was Director of Information Technologies at AffiniCorp USA. Steve has a Ph.D. in applied mathematics and
statistics from State University of New York, Stony Brook, and a B.S. and M.A. in mathematics from the University of California, Santa Barbara. He has thirteen years of investment industry experience.
Kunal Ghosh
Senior Vice President, Portfolio Manager, Systematic
Kunal Ghosh has been a co-portfolio manager of the Fund since 2008 and joined the firm in 2006 and has portfolio management responsibilities on our International, Global, and Emerging Markets Systematic strategies. Prior to
joining the firm, Kunal was a research associate and then portfolio manager for Barclays Global Investors. His experience includes building and implementing models for portfolio management. Before that, he was a quantitative analyst for the Cayuga
Hedge Fund. Kunal earned his M.B.A. in finance from Cornell University, his M.S. in material engineering from the University of British Columbia, and his B.Tech from Indian Institute of Technology. He has six years of investment industry experience.
Douglas G. Forsyth, CFA
Managing Director, Portfolio Manager
Doug
Forsyth has been a lead portfolio manager of the Fund since inception (2007)
and oversees Nicholas-Applegate's Income and Growth Strategies portfolio management
and research teams and is a member of the firm’s
Executive Committee. Prior to joining Nicholas-Applegate in 1994, Doug was a
securities analyst at AEGON USA, where he was responsible for financial and strategic
analysis of high yield securities. Mr. Forsyth earned his B.B.A. in finance at
The University of Iowa and has seventeen years of investment industry experience
.
Justin Kass, CFA
Managing Director
Justin Kass has been a co-portfolio manager the Fund since 2008 and joined the firm in 2000 with responsibilities for portfolio management and research on our Income and Growth Strategies team. He was previously an analyst
and interned on the team, where he added significant depth to our proprietary Upgrade Alert Model. He earned his M.B.A. in finance from The UCLA
Anderson School of Management and his B.S. from the University of California, Davis. He has eleven years of investment industry experience.
Michael E. Yee
Senior Vice President
Michael Yee has been a co-portfolio manager the Fund since 2008 and has portfolio management, trading and research responsibilities for the Income and Growth Strategies team. He has been a member of the team since 1999. Mr.
Yee was previously an analyst for the Global/Systematic team, held positions in global and domestic portfolio administration areas, and in client services. Prior to joining the firm in 1995, he worked as a financial consultant for Priority One
Financial/Liberty Foundation. Mr. Yee holds an M.B.A. from San Diego State University and a B.S. from the University of California at San Diego. He has fifteen years of investment industry experience.
(a)(2)
The following summarizes information regarding each of the accounts, excluding the Fund, as of August 31, 2009, but including accounts managed by a team, committee, or other group that includes the portfolio
managers.
|
|
Other RICs
|
Other Accounts
|
Other Pooled
|
|
|
|
|
|
|
|
Investment Vehicles
|
|
|
PM
|
#
|
AUM($million)
|
#
|
AUM($million)
|
#
|
AUM($million)
|
|
|
|
|
Steven
|
8
|
525.7
|
14
|
218.13
|
7
|
885.9
|
|
|
Tael, PhD,
|
|
|
|
|
|
|
|
|
CFA
|
|
|
|
|
|
|
|
|
Kunal
|
8
|
525.7
|
14
|
218.3
|
7
|
885.9
|
|
|
Ghosh
|
|
|
|
|
|
|
|
|
Douglas G.
|
7
|
2,399.0
|
10
|
1,193.1
|
5
|
678.1
|
*
|
|
Forsyth,
|
|
|
|
|
|
|
|
|
CFA
|
|
|
|
|
|
|
|
|
Justin Kass,
|
7
|
2,399.0
|
10
|
1,193.1
|
5
|
678.1
|
*
|
|
CFA
|
|
|
|
|
|
|
|
|
Michael E.
|
7
|
2,399.0
|
10
|
1,193.1
|
5
|
678.1
|
*
|
|
Yee
|
|
|
|
|
|
|
|
*Of these other pooled investment vehicles, two
accounts totaling $415.9 million in assets pay an advisory fee that is based
in part on the performance of the account.
Like other investment professionals with multiple clients, a Portfolio Manager for a Fund may face certain potential conflicts of interest in connection with managing both the Fund and other accounts at the same
time. The paragraphs below describe some conflicts faced by investment professionals at most major financial firms.
The Investment Adviser has adopted compliance policies and procedures that address certain of these potential conflicts. The management of accounts with different advisory fee rates and/or fee structures, including
accounts that pay advisory fees based on account performance may raise potential conflicts of interest by creating an incentive to favor higher-fee accounts. These potential conflicts may include, among others:
-
The most attractive investments could be allocated to higher-fee accounts or
performance fee accounts.
-
The trading of higher-fee accounts could be favored as to timing and/or execution
price. For example, higher-fee accounts could be permitted to sell securities
earlier than other accounts when a prompt sale is desirable or to buy securities at
an earlier and more opportune time.
-
The investment management team could focus their time and efforts primarily on
higher-fee accounts due to a personal stake in compensation.
When the Investment Adviser considers the purchase or sale of a security to be in the best interests of a Fund as well as other accounts, the Investment Adviser’s trading desk may, to the extent permitted by
applicable laws and regulations, aggregate the securities to be sold or purchased. Aggregation of trades may create the potential for unfairness to a Fund or another account if one account is favored over another in allocating the securities
purchased or sold—for example, by allocating a disproportionate amount of a security that is likely to increase in value to a favored account. The Investment Adviser considers many factors when
allocating securities among accounts, including the account’s investment style, applicable investment restrictions, availability of securities, available cash and other current holdings. The Investment Adviser attempts to allocate investment
opportunities among accounts in a fair and equitable manner. However, accounts are not assured of participating equally or at all in particular investment allocations due to such factors as noted above.
“Cross trades,” in which one Investment Adviser account sells a particular security to another account (potentially saving transaction costs for both accounts), may also pose a potential conflict of
interest if, for example, one account is permitted to sell a security to another account at a higher price than an independent third party would pay. The Investment Adviser has adopted compliance procedures that provide that all cross trades are to
be made at an independent current market price, as required by law.
Another potential conflict of interest may arise from the different investment objectives and strategies of a Fund and other accounts. For example, another account may have a shorter-term investment horizon or
different investment objectives, policies or restrictions than a Fund. Depending on another account’s objectives or other factors, a Portfolio Manager may give advice and make decisions that may differ from advice given, or the timing or nature
of decisions made, with respect to a Fund. In addition, investment decisions are subject to suitability for the particular account involved. Thus, a particular security may not be bought or sold for certain
accounts even though it was bought or sold for other accounts at the same time. More rarely, a particular security may be bought for one or more accounts managed by a Portfolio Manager when one or more other
accounts are selling the security (including short sales). There may be circumstances when purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts.
The Investment Adviser maintains trading policies designed to provide portfolio managers an opportunity to minimize the effect that short sales in one portfolio may have on holdings in other portfolios.
A Portfolio Manager who is responsible for managing multiple accounts may devote unequal time and attention to the management of those accounts. As a result, the Portfolio Manager may not be able to formulate as
complete a strategy or identify equally attractive investment opportunities for each of those accounts as might be the case if he or she were to devote substantially more attention to the management of a single fund. The effects of this potential
conflict may be more pronounced where funds and/or accounts overseen by a particular Portfolio Manager have different investment strategies.
A Fund’s Portfolio Manager(s) may be able to select or influence the selection of the broker/dealers that are used to execute securities transactions for the Fund. In addition to executing trades, some brokers
and dealers provide the Investment Adviser with brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934), which may result in the payment of higher brokerage fees than might have otherwise
be available. These services may be more beneficial to certain funds or accounts than to others. In order to be assured of continuing to receive services considered of value to its clients, the Investment Adviser has adopted a brokerage allocation
policy embodying the concepts of Section 28(e) of the Securities Exchange Act of 1934. The Investment Adviser allocates the payment of brokerage commissions is subject to the requirement that the Portfolio Manager determine in good faith that the
commissions are reasonable in relation to the value of the brokerage and research services provided to the Fund.
A Fund’s Portfolio Manager(s) may also face other potential conflicts of interest in managing a Fund, and the description above is not a complete description of every conflict that could be deemed to exist in
managing both the Funds and other accounts. In addition, a Fund’s Portfolio Manager may also manage other accounts (including their personal assets or the assets of family members) in their personal capacity. The Investment Adviser’s
investment personnel, including each Fund’s Portfolio Manager, are subject to restrictions on engaging in personal securities transactions pursuant to the Investment Adviser’s Codes of Ethics, which contain provisions and requirements
designed to identify and address conflicts of interest between personal investment activities and the interests of the Funds.
(a) (3)
As of August 31, 2009, Nicholas-Applegate believes that competitive compensation is essential to retaining top industry talent. With that in mind, the firm continually reevaluates its compensation policies against industry
benchmarks. Its goal is to offer portfolio managers and analysts compensation and benefits in the top quartile for comparable experience, as measured by industry benchmarks surveyed by McLagan and ECS (Watson Wyatt Data Services).
Nicholas-Applegate’s compensation policy features both short-term and long-term components. The firm offers competitive base salaries and bonuses, profit-sharing and generous retirement plans. Investment professionals’
annual compensation is directly affected by the performance of their portfolios, their performance as individuals and the success of the firm. Typically, an investment professional’s compensation is comprised of a base salary and a
bonus.
Investment professionals are awarded bonuses based primarily on product performance. A 360-degree qualitative review is also considered. As part of the 360-degree review, analysts and portfolio managers are reviewed by the
portfolio manager who is responsible for the team’s final investment decisions and other portfolio managers to whose portfolios they contribute. Portfolio managers responsible for final investment decisions are reviewed by the Chief Investment
Officer, who evaluates performance both quantitatively versus benchmarks and peer universes, as well as qualitatively.
Compensation and Account Performance
Compensation pools for investment teams are directly related to the size of the business and the performance of the products. Approximately half of the pool is based on one, three and five year performance relative to a
fund’s primary benchmarks as specified in the prospectus and to peers. The team pools are then subjectively allocated to team members based on individual contributions to client accounts. We believe our compensation system clearly aligns the
interests of clients with our people and keeps our compensation competitive with industry norms.
Long-Term Incentive Plan
A Long-Term Incentive Plan provides rewards to certain key staff and executives of Nicholas-Applegate and the other Allianz Global Investors companies to promote long-term growth and profitability. The Plan provides awards that
are based on Nicholas-Applegate’s operating earnings growth. The plan provides a link between longer term company performance and participant pay, further motivating participants to make a long-term commitment to the company’s success.
Equity Ownership
In September 2006, Allianz SE approved an equity ownership plan for key employees of Nicholas-Applegate. The plan was implemented as of January 31, 2007. Nicholas-Applegate believes this plan is important in retaining and
recruiting key investment professionals, as well as providing ongoing incentives for Nicholas-Applegate employees.
(a) (4) The following summarizes the dollar range of securities the portfolio managers for the Fund beneficially owned of the Fund that they managed as of
August 31, 2009.
|
Portfolio Manager
|
Dollar Range of Equity Securities in each Fund
|
|
Steven
Tael
|
None
|
|
Kunal Ghosh
|
None
|
|
Douglas G. Forsyth
|
None
|
|
Justin Kass
|
None
|
|
Michael Yee
|
None
|
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED COMPANIES
None
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board of Trustees since the Fund last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES
(a) The registrant’s President and Chief Executive Officer and Treasurer, Principal Financial & Accounting Officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR 270.30a-3(c))), as amended are effective based on their evaluation of these controls and procedures
as of a date within 90 days of the filing date of this document.
(b) There were no significant changes over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants control over financial reporting.
ITEM 12. EXHIBITS
(a) (1) Exhibit 99.CODE ETH - Code of Ethics
(a) (2) Exhibit 99 Cert. - Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(b) Exhibit 99.906 Cert. - Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
(Registrant)
Nicholas-Applegate Global Equity & Convertible
Income Fund
By
/s/ Brian S. Shlissel
President and Chief Executive Officer
Date:
October 28, 2009
By
/s/ Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer
Date:
October 28, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By
/s/ Brian S. Shlissel
President and Chief Executive Officer
Date:
October 28, 2009
By
/s/ Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer
Date:
October 28, 2009
Grafico Azioni Allianzgi Global Equity & Convertible Income Fund (NYSE:NGZ)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Allianzgi Global Equity & Convertible Income Fund (NYSE:NGZ)
Storico
Da Lug 2023 a Lug 2024
