Twin Oak funds holding more than half of TOAK now say they will vote for the move

Twin Oak ETF Company now says it intends to have two of its own funds vote more than 50% of Twin Oak Short Horizon Absolute Return ETF TOAK in favor of moving the fund into RBB Fund Trust. The same page of RBB's pre-effective amendment, filed Nov. 6 and still marked subject to completion, says those shares will instead be voted the way other holders vote.

Those two statements cannot both be true of the same shares. The registration statement filed Aug. 25 did not have this split. It left the funds unnamed, put the stake at more than 25%, and said the shares would be voted in the same proportion as other holders, the practice the draft called mirror voting.

Who holds the shares

The amendment names the holders. As of Oct. 31, Twin Oak Endure ETF SPYA and Twin Oak Active Opportunities III ETF TOAO were the record owners of more than 50% of TOAK.

Both are already series of RBB Fund Trust, the trust that would receive the fund, and both are advised by Twin Oak, the adviser proposing the deal. Twin Oak intends to cause them to vote their TOAK shares in support of the reorganization.

Under a separate heading on the same page, the filing says that where Twin Oak or its affiliates own shares of either fund being asked to move, each will vote those shares for, against, or as an abstention, in the same proportion as the votes of other shareholders.

That general sentence is the August instruction, still in the document. The new sentence is the one that says the affiliated funds will vote for the deal.

What the dates allow

The stake is dated Oct. 31. The vote counts shares held at the close of business on Sept. 14, the record date, and the amendment gives no position for the two funds on that earlier day. Their October stake does not show they can carry the vote on their own.

Only shareholders of record that day may vote. TOAK had 3,610,000 shares outstanding then.

Approval takes a majority of outstanding voting securities under the Investment Company Act of 1940. That is the lesser of more than 50% of all outstanding shares, or 67% of the shares at the meeting if holders of more than 50% of the fund are present. A quorum is 40% of a fund's shares.

The commitment to vote for the deal is stated only for TOAK. The filing states no voting intent for Twin Oak Active Opportunities ETF TSPX.

As of Sept. 30, National Financial Services LLC was listed as the record holder of 99.93% of TSPX. A record holder is the name on the fund's books. The proxy does not say National Financial Services owns those shares for itself, or how it will vote them.

Each fund's shareholders vote separately. One reorganization is not contingent on the other, though a fund is not obligated to close if the other has not won its vote.

What holders would pay

Each fund would move on its own, from Manager Directed Portfolios, the trust that houses them now, into a new series of RBB Fund Trust with the same name. Holders would receive shares of that series with the same total net asset value, and the old series would liquidate. As of June 30, the proxy's capitalization table shows $90.6 million in TOAK and $271.5 million in TSPX.

The expense tables match on both sides of the move. TOAK shows a 0.45% management fee, total annual operating expenses of 0.46%, and 0.26% after a fee waiver. Twin Oak has contractually agreed to cut that management fee from 0.45% to 0.25% through at least Sept. 30, 2027 on the current fund, and through at least Dec. 31, 2027 on the new series. The agreement can end sooner only if the board and Twin Oak both agree.

TSPX is different. Its table shows a 0.99% management fee and total annual operating expenses of 1.04%, including 0.05% for the indirect cost of the other funds it holds. The table has no waiver line.

The cut sits outside that table. Twin Oak has voluntarily reduced the management fee from 0.99% to 0.35%, and it may end that reduction at any time on 30 days' written notice. The amendment says the new series is expected to continue the reduction. It does not say the reduction is locked in.

The board of trustees of Manager Directed Portfolios approved the plan on Aug. 18. The proxy says the board noted that the move would let Twin Oak consolidate fund management, board oversight and service providers at RBB Fund Trust, and that Twin Oak has represented those efficiencies would allow it to maintain fee waivers that otherwise expire if they are not renewed. That representation covers the funds after the move. It does not say the waivers continue if holders vote the plan down.

A closing date that sits before the meeting

The letter to shareholders says that if the votes pass, the reorganizations are expected to close in the fourth quarter of 2026. The meeting line now reads 10 a.m. CT on a blank day in December, at the funds' administrator in Milwaukee. The mailing date is still blank.

The draft agreement still puts the closing at on or about Nov. 20, in brackets, or another date the two trusts' officers agree. That bracketed day falls before any meeting that could be held in December. In the proxy's board discussion, the line for when the reorganizations would take effect is blank. The agreement says it may be terminated if the closing has not occurred by Feb. 28, 2027, a date that is also in brackets.

Shareholders are not expected to recognize a gain or loss. An opinion of counsel to that effect is a condition the parties cannot waive, and the filing says no tax ruling has been or will be sought from the Internal Revenue Service. Twin Oak or an affiliate is to bear the reorganization expenses whether or not the transactions close.