Tortoise Capital Unveils Shareholder Approval for Fund Mergers and Transition to Actively Managed ETF

Tortoise Capital Announces Strategic Fund Mergers and ETF Transition

Tortoise Capital Advisors, L.L.C., a prominent fund manager specializing in energy investments, has recently revealed shareholder approval for significant mergers and the conversion of certain funds into an actively managed Exchange-Traded Fund (ETF). This announcement marks a pivotal moment in the firm's strategic efforts to enhance shareholder value and increase operational efficiency. The mergers and ETF transformation are set to take effect before the market opens on December 23, 2024, pending the fulfillment of standard closing conditions.

The two funds involved in this transaction are the Tortoise Midstream Energy Fund, Inc. (NYSE: NTG) and the Tortoise Energy Infrastructure Corp. (NYSE: TYG). In this merger, TYG will continue as the surviving entity, and the combined assets under management (AUM) are projected to total around $1.1 billion as of November 29, 2024. TYG will maintain its original investment strategy, serving as Tortoise Capital's flagship closed-end fund tailored for investors who prefer this structure.

Moreover, Tortoise Capital is implementing a change in distribution frequency for TYG, transitioning from quarterly to monthly payments. TYG will announce a monthly distribution of $0.365 per share, reflecting a remarkable 40% increase. Shareholders can expect the distributions to be payable on December 31, 2024, January 31, 2025, and February 28, 2025, to those on record as of December 24, January 24, and February 21, respectively. Notably, these distributions are foreseen to include roughly 0% to 20% ordinary income, with the remainder classified as a return of capital. Additionally, NTG will finalize its distribution of $0.53 per share on December 13, 2024, for shareholders recorded as of December 6, 2024.

In a broader consolidation effort, the Tortoise Power and Energy Infrastructure Fund, Inc. (NYSE: TPZ), Tortoise Pipeline Energy Fund, Inc. (NYSE: TTP), and Tortoise Energy Independence Fund, Inc. (NYSE: NDP) are set to merge into a newly formed actively managed ETF. This ETF will leverage TPZ’s prior accounting and performance history, thereby emphasizing TPZ's focus on identifying high-quality investments while facilitating growth in the energy sector and providing substantial current income.

As of November 29, 2024, the aggregate assets transitioning into the ETF, inclusive of leverage, are estimated at $358 million. Shareholders of TTP and NDP can expect final distributions of $0.175 and $0.255 per share before the aforementioned mergers, scheduled for payment on December 13, 2024, to investors recorded as of December 6, 2024.

Tom Florence, CEO of Tortoise Capital, stated, “These strategic initiatives reflect our commitment to delivering value and flexibility to our shareholders. By merging TYG and NTG, we solidify TYG as our primary closed-end fund option for long-term investors.” He further emphasized that the transition of TPZ, TTP, and NDP into an actively managed ETF represents a modernization of the fund structure to enhance liquidity and reduce inefficiencies, positioning investors to capitalize on high-quality opportunities within the energy sector.

The board of directors approved the mergers and ETF transition, marking a significant evolution in Tortoise Capital’s investment strategy. With approximately $8.8 billion in assets under management as of October 31, 2024, Tortoise Capital has a two-decade track record of investment experience and research, positioning the firm as a leader in Global energy evolution.

For more details about Tortoise Capital and their investment strategies, please visit www.tortoiseadvisors.com.

Caution Regarding Forward-Looking Statements

This announcement may contain certain forward-looking statements regarding future events. While the expectations expressed are believed to be reasonable, they involve assumptions and uncertainties. Actual results may differ materially due to various factors, including those discussed in fund reports filed with the SEC. Thus, it is advised not to place undue reliance on these forward-looking statements, which represent the status as of the date of this announcement, considering that there is no obligation to update them post-release.

About Tortoise Capital

Tortoise Capital Advisors, L.L.C. specializes in energy and power infrastructure investments, focusing on publicly traded companies from production to distribution. Based in Overland Park, Kansas, their investment approach strives to identify dynamic opportunities in the energy sector.