Ecofin Interval Fund Seeks Liquidation Approval From Shareholders
Via a recommendation made by its investment adviser, Ecofin Tax-Exempt Private Credit Fund Inc. – an interval fund primarily invested in long-term municipal bonds – is asking its shareholders to consider an orderly liquidation of the fund.
The interval fund’s board of directors has approved the proposal made by Tortoise Capital Advisors LLC and believes a liquidation is in the best interest of shareholders and maximizes the “underlying value of the fund’s investments.” Alongside a shareholder letter, Ecofin included a proxy statement seeking shareholders’ approval to implement the liquidation.
The proposal would replace quarterly repurchase offers with an orderly liquidation, allowing Ecofin to seek to maximize portfolio recovery while providing equal access to liquidity to all shareholders. Further, Ecofin said that liquidating the fund increases the opportunities to preserve net asset value while returning capital, unlike a mandatory quarterly redemption schedule.
Ecofin noted that it would seek to return capital by 2027, though a final liquidation date could shift based on market conditions. Although not guaranteed, the fund said it also intends to make distributions from time to time until it has been completely liquidated.
Launched in March 2018, the Ecofin interval fund reported $111.7 million in total assets as of June 30, 2024.
Ecofin sought two “yes” votes from shareholders by Sept. 27, each reliant on the other: one to liquidate and dissolve the fund, and the second to revoke quarterly repurchase offers ranging between 5% and 25% of the fund’s outstanding shares’ NAV.
Earlier this year, Ecofin appointed Gary Henson to succeed P. Bradley Adams as chief executive officer of the fund. Due to his retirement, Adams stepped down from his role as fund CEO and from his position as managing director of Tortoise. In addition to assuming the CEO role, Henson became the director and chairman of the fund’s board and serves as senior managing director of Ecofin Advisors LLC.
Ecofin Tax-Exempt Private Credit Fund seeks to generate attractive total return with an emphasis on tax-exempt income. Ecofin privately originates tax-free loans collateralized by infrastructure. Ecofin has specialized originators/structurers focused in three areas: education, senior living, and waste transition.
