Salient MF Trust N-14Registration statement for investment companies business combination

File No. _____________

As filed with the SEC on July 21, 2022

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-14

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO.

POST-EFFECTIVE AMENDMENT NO.

SALIENT MF TRUST

(Exact Name of Registrant as Specified in Charter)

4265 San Felipe, 8th Floor

Houston, Texas 77027

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, including Area Code: 1-713-993-4001

Gregory A. Reid

Salient MF Trust

4265 San Felipe, 8th Floor

Houston, Texas 77027

(Name and Address of Agent for Service)

Copies to:

George J. Zornada

K&L Gates LLP

One Lincoln Street

Boston, MA 02111-2950

(617) 261-3231

Approximate Date of Proposed Offering: As soon as practicable after this Registration Statement becomes effective.

Title of securities being registered: Class A shares of beneficial interest, without par value, of Salient MLP & Energy Infrastructure Fund, a series of the Registrant.

It is proposed that the filing will become effective on August 20, 2022 pursuant to Rule 488 under the Securities Act of 1933, as amended.

No filing fee is due because Registrant is relying on section 24(f) of the Investment Company Act of 1940, as amended.

Dear Salient Midstream & MLP Fund Shareholder:

You are cordially invited to attend a special meeting of holders of common shares (the “Special Meeting”) of Salient Midstream & MLP Fund (NYSE Ticker: SMM) (the “Acquired Fund”), which will be held at the principal office of the Acquired Fund, 4265 San Felipe, 8th Floor, Houston, Texas 77027 on [         ], 2022 at [          ] a.m., Central Daylight Time, to consider and vote on the proposal discussed in the enclosed Proxy Statement/Prospectus. Before the Special Meeting, I would like to provide you with additional background and ask for your vote on this important proposal affecting your fund.

At the Special Meeting, shareholders will be asked to consider and vote upon a proposal to approve an Agreement and Plan of Reorganization (the “Agreement”) providing for the reorganization of the Acquired Fund, a Delaware statutory trust and a closed-end management investment company, into Salient MLP & Energy Infrastructure Fund (the “Acquiring Fund” and, together with the Acquired Fund, the “Funds”), a series of Salient MF Trust, a Delaware statutory trust and an open-end management investment company (the “Reorganization”). The Acquiring Fund has a substantially similar investment objective, investment strategies, policies and restrictions as the Acquired Fund, although there are some differences reflecting the different structures of the Funds as closed-end and open-end management investment companies. The Acquiring Fund’s management fee and overall expenses, on both a gross and net basis, are materially lower than those of the Acquired Fund. Voting only takes a few minutes and your participation is important! We recommend that you read the Proxy Statement/Prospectus in its entirety; the explanation will help you decide on the vote. Thank you in advance for your vote.

Currently, Salient Capital Advisors, LLC (the “Adviser”) serves as the investment advisor to both of the Funds and Gregory A. Reid, President of Salient, Frank T. (Ted) Gardner III, CFA, Portfolio Manager, and Parag Sanghani, CFA, Portfolio Manager, as the Adviser portfolio management team, have ultimate responsibility for each Fund’s investment decisions. After the Reorganization, the Adviser would continue to serve as the investment advisor to the Acquiring Fund and Mr. Reid, Mr. Gardner, and Mr. Sanghani would continue to be ultimately responsible for day-to-day portfolio management.

We appreciate your participation and prompt response in this matter. If you should have any questions regarding the proposal, or to quickly vote your shares, please call Okapi Partners LLC, our proxy solicitor, toll-free at (888) 785-6617. Thank you for your continued investment in the Fund.

QUESTIONS AND ANSWERS

Although we recommend that you read the complete Proxy Statement/Prospectus, for your convenience, we have provided a brief overview of the proposal to be voted on.

Q: Why am I receiving the enclosed Proxy Statement/Prospectus?

A: Certain funds are required to obtain shareholders’ votes for certain types of events, like the one described here and in the accompanying Proxy Statement/Prospectus. As a shareholder of record as of August 10, 2022 (the “Record Date”), you have a right to vote on these events, and we urge you to do so. A prompt response will save the expense of additional follow-up mailings and solicitations.

The Acquired Fund’s Board of Trustees (the “Acquired Fund Board”) unanimously recommends that you vote “FOR” the proposed Agreement.

Q: Why is the Reorganization being recommended by the Acquired Fund Board?

A: After careful consideration, the Trustees of the Acquired Fund Board, including by separate vote the trustees who are not “interested persons” within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”), have unanimously determined that the proposed Reorganization is in the best interests of the Acquired Fund and its shareholders and that the interests of existing shareholders of the Acquired Fund will not be diluted as a result of the Reorganization. In particular, the Acquired Fund Board has determined, among other things, that (i) shareholders of the Acquired Fund may benefit from the ability to achieve liquidity for their shares at net asset value, while being invested in the Acquiring Fund, which has a substantially similar investment objective and investment strategies as the Acquired Fund and is managed by the same Adviser portfolio management team; (ii) although past performance does not guarantee future results, for the five-year period ended December 31, 2021 and for the period from the Acquiring Fund’s Class A inception on December 20, 2012 through December 31, 2021, the Acquiring Fund outperformed the Acquired Fund, while for the one-year period ended December 31, 2021, the Acquired Fund outperformed the Acquiring Fund; (iii) shareholders of the Acquired Fund may benefit from the lower expense ratio of the Acquiring Fund; and (iv) the Reorganization is anticipated to be tax-free under the Internal Revenue Code of 1986, as amended. However, the Acquired Fund will distribute any undistributed income and realized capital gains accumulated prior to the Reorganization to its shareholders. These distributions, if any, may be taxable to investors who hold their shares in a taxable account.

Q: How will the Reorganization affect Acquired Fund shareholders?

A: Upon the closing of the Reorganization, shareholders of the Acquired Fund, a closed-end investment company, will become holders of Class A shares of the Acquiring Fund, a series of an open-end investment company (commonly referred to as a “mutual fund”). The aggregate net asset value of the Acquiring Fund shares received by Acquired Fund shareholders will be equal to the aggregate net asset value of their shares of the Acquired Fund held as of the close of business on the business day immediately prior to the closing date of the Reorganization.

Shares of the Acquired Fund are listed for trading on the New York Stock Exchange (the “NYSE”), where such shares may be purchased and sold through broker-dealers at prevailing market prices. The Acquired Fund’s shares historically have traded at a discount to net asset value. In contrast, Class A shares of the Acquiring Fund are not listed for trading on a securities exchange but rather can be purchased and sold (redeemed) directly from the Acquiring Fund or through financial intermediaries at net asset value, less any applicable charges. Following the completion of the Reorganization, Acquired Fund shareholders (as shareholders of the Acquiring Fund), will be able to redeem shares received in the Reorganization at net asset value on each day the Acquiring Fund is open for business.

The Acquiring Fund currently also offers Class C, Class I, and Class R6 shares, none of which will be issued in the Reorganization. Class A shares were chosen as the share class to be received by Acquired Fund shareholders based on eligibility and expense considerations.

If the Reorganization is consummated, current Acquired Fund shareholders, as shareholders of the Acquiring Fund, would be able to exchange their Class A shares received in the Reorganization for shares of another class of the Acquiring Fund for which they are eligible. Such shareholders should consult their tax advisers regarding the potential tax consequences of such an exchange.

In addition, on May 26, 2022, Salient Partners, L.P. (“Salient”), the parent company to the Adviser, and Westwood Holdings Group, Inc. (“Westwood”) entered into a definitive purchase agreement pursuant to which Westwood has agreed to acquire certain investment management related assets of Salient (the “Westwood Transaction”). In anticipation of the Westwood Transaction, the Board of Trustees of the Acquiring Fund has separately approved an agreement and plan of reorganization providing for the reorganization of the Acquiring Fund into a newly formed series of the Ultimus Managers Trust (the “Westwood Fund”) to be managed by a Westwood-affiliated registered investment adviser. It is anticipated that the Acquiring Fund and the Westwood Fund will have substantially similar investment objectives, principal investment strategies, investment policies and principal risks. The Westwood Fund is anticipated to have a lower management fee and overall expenses, on both a gross and net basis, than the Acquiring Fund. Following the closing of the Westwood Transaction, the portfolio management team that currently manages the Acquiring Fund (as well as the Acquired Fund) is anticipated to continue to manage the Westwood Fund in the same manner as the Acquiring Fund is managed today, with the same stated investment objective. Class A shareholders of the Acquiring Fund are anticipated to receive Class A shares of the Westwood Fund, if that reorganization is approved by Acquiring Fund shareholders. The Westwood Transaction reorganization is also intended to be tax-free.

The Westwood Transaction reorganization is subject to shareholder approval, and Acquiring Fund shareholders of record will receive a separate proxy statement/prospectus that contains important information about the Westwood Transaction reorganization and the Westwood Fund. It is currently anticipated that the Reorganization of the Acquired Fund into the Acquiring Fund will be consummated prior to the record date to determine Acquiring Fund shareholders who will be eligible to vote on the Westwood Transaction reorganization. However, if the consummation of the Reorganization of the Acquired Fund into the Acquiring Fund is delayed, it is possible that Acquired Fund shareholders who receive Class A shares of the Acquiring Fund will not be eligible to vote on the Westwood Transaction reorganization, but would be subject to the results of such vote if they remain shareholders of the Acquiring Fund. These shareholders would continue to be permitted to redeem shares of the Acquiring Fund until the consummation of the Westwood Transaction reorganization, at which time they would become shareholders of the Westwood Fund.

Q: What are the principal differences between an open-end investment company and a closed-end investment company?

A: Common shares of closed-end investment companies, such as the Acquired Fund, are generally listed for trading on a securities exchange, such as the NYSE, where such shares may be purchased and sold through broker-dealers at prevailing market prices, which may be greater than (premium) or less than (discount) net asset value. Exchange-listed closed-end funds typically do not engage in a continuous offering of new shares, and the common shares of closed-end funds are not redeemable from the fund.

In contrast, open-end investment companies, such as the Acquiring Fund, engage in a continuous offering of new shares. Shares of open-end funds are not listed for trading on a securities exchange but rather can be purchased and sold (redeemed) directly from the fund, or through financial intermediaries, at net asset value, less any applicable charges. Certain additional differences exist between how closed-end funds and open-end funds are permitted to operate under the 1940 Act. Open-end funds, such as the Acquiring Fund, are subject to Rule 22e-4 under the 1940 Act, which prohibits them from investing more than 15% of their net assets in illiquid investments (the “15% Illiquid Investment Limit”). Closed-end funds are not subject to Rule 22e-4, and the Acquired Fund may invest in illiquid investments without limit. Although the Acquired Fund currently holds an illiquid investment, in light of the much larger size of the Acquiring Fund, following the Reorganization, the Acquiring Fund’s illiquid investments will not exceed the 15% Illiquid Investment Limit and is expected to be de minimis in size.

In addition, closed-end funds are permitted to use leverage to a greater extent than open-end funds and may issue preferred shares and debt securities in addition to common shares, although the Acquired Fund has not issued such securities. The Acquiring Fund, as an open-end fund, is managed without utilizing leverage and with higher cash balances than the Acquired Fund, which is a closed-end fund. Due to limitations on the use of leverage by open-end funds, the Acquired Fund will have to reduce its use of leverage prior to the consummation of the Reorganization.

Investors pay brokerage commissions in connection with the purchase and sale of Acquired Fund shares on the NYSE. Certain open-end fund share classes may be subject to a front-end or contingent deferred sales charge. In addition, an open-end fund is permitted to finance the distribution of its shares by adopting a plan under Rule 12b-1 under the 1940 Act, subject to shareholder approval. Distribution and service fees are generally used to compensate financial intermediaries for distribution and/or shareholder services. Salient MF Trust (the “Acquiring Trust”), on behalf of the Acquiring Fund, has adopted a distribution and service plan under Rule 12b-1, under which Class A shares are subject to an ongoing annual service fee of 25 basis points (0.25%). While the Acquiring Fund Class A Rule 12b-1 fee represents a new type of fee not applicable to the Acquired Fund, as described in more detail below, the Acquiring Fund’s management fee and overall expenses, on both a gross and net basis, are materially lower than those of the Acquired Fund.

Q: How will the Reorganization affect shareholders’ fees?

A: The fee and expense structures of the Funds differ, in part, because of operational and regulatory differences between open-end funds and closed-end funds. The fee and expense structure of the Acquiring Fund will apply following the Reorganization.

Please see the table below reflecting the current management fees and total annual operating expenses, on a gross and net basis, for each of the Funds. The Acquiring Fund has a competitive management fee and expense ratios, each of which is lower when compared to the Acquired Fund.

*The Adviser has contractually agreed to waive all or a portion of its management fee and reimburse or pay operating expenses of the Acquiring Fund to the extent necessary to maintain total operating expenses at 1.55% for Class A, excluding certain expenses, such as taxes, brokerage commissions, interest, short dividend expense, any acquired fund fees and expenses, litigation and extraordinary expenses. This expense limitation agreement expires on April 30, 2023 (the “Termination Date”), unless renewed by mutual agreement of the Acquiring Fund and the Adviser based upon a determination doing so would be appropriate under the prevailing circumstances. If the Reorganization is approved, the Termination Date will be extended until the one-year anniversary of the consummation of the Reorganization.

Q. Will Acquired Fund shareholders who redeem Acquiring Fund shares after the Reorganization be charged a redemption fee?

A: No. Shareholders of the Acquired Fund who receive Acquiring Fund shares in the Reorganization will not be charged a redemption fee when redeeming Acquiring Fund shares.

Q: Will I have to pay any sales charge, commission or other similar fee in connection with the Reorganization?

A: No. You will not have to pay any sales charge, commission or other similar fee in connection with the Reorganization. As more fully discussed in the Proxy Statement/Prospectus, no front-end sales charge or contingent deferred sales charge will be imposed on the Class A shares of the Acquiring Fund received in connection with the Reorganization. Additional Class A shares or any other class of shares of the Acquiring Fund purchased after the Reorganization will be subject to the standard fee structure applicable to such class.

Q. Will the portfolio of the Acquired Fund or the Acquiring Fund be repositioned in connection with the Reorganization?

A: The portfolio managers of the Funds have reviewed the portfolio holdings of the Acquired Fund and, as of June 30, 2022, all the securities held by the Acquired Fund comply with the compliance guidelines and/or investment restrictions of the Acquiring Fund. As of June 30, 2022, approximately 80% of the Acquired Fund’s total assets were invested in the same securities held by the Acquiring Fund. Approximately 30% of the securities of the Acquired Fund are anticipated to be sold in order to reduce the Acquired Fund’s leverage prior to the Reorganization. The Adviser has estimated that the brokerage commissions and other transaction costs associated with these repositioning transactions will be approximately $60,000, amounting to less than $0.01 per share, of the Acquired Fund.

Q: Will the Reorganization constitute a taxable event for the Acquired Fund’s shareholders?

A: No. The Reorganization is intended to qualify as a tax-free “reorganization” for federal income tax purposes. It is expected that shareholders of the Acquired Fund who receive Acquiring Fund shares pursuant to the Reorganization will recognize no gain or loss for federal income tax purposes as a direct result of the Reorganization. Prior to the closing of the Reorganization, the Acquired Fund expects to declare a distribution of all of its net investment income and net capital gains, if any. All or a portion of such a distribution may be taxable to the Acquired Fund’s shareholders for federal income tax purposes. To the extent the Acquired Fund realizes net losses from the sale of portfolio securities in connection with the portfolio repositioning described above (or otherwise), the net capital gain or net investment income to be distributed by the Acquired Fund will be reduced. In the event the Acquired Fund realizes income or gain as a result of such sales, the net capital gain or net investment income to be distributed by the Acquired Fund will be increased if such income or gain cannot be offset by available capital loss carryforwards. To the extent that additional portfolio investments of the Acquiring Fund are sold after the Reorganization in order to meet redemption requests from former shareholders of the Acquired Fund, the Acquiring Fund may recognize gains or losses, which may result in taxable distributions to shareholders of the Acquiring Fund (including former shareholders of the Acquired Fund).

At any time before the Reorganization takes place, a shareholder may sell shares of the Acquired Fund on the NYSE. Generally, such sales would be taxable transactions.

You may wish to consult with your tax adviser concerning the tax consequences of the Reorganization.

Q: Will the Funds have to pay any fees or expenses in connection with the Reorganization?

A: The Acquired Fund will pay 70% of the costs associated with the Reorganization, and the Acquiring Fund will pay 30% of the costs associated with the Reorganization, which are estimated to be $315,000 (including auditor and legal fees and the costs of preparing and filing the enclosed Proxy Statement/Prospectus). These estimated expenses, in addition to the estimated brokerage commission and other transaction costs associated with the Reorganization purchases and sales of portfolio securities described above, will be borne indirectly by the Funds’ shareholders regardless of whether the Reorganization is consummated. The Acquired Fund Board and the Board of Trustees of the Acquiring Fund determined this allocation was fair and reasonable because the Acquired Fund’s shareholders would receive additional benefit in the form of liquidity from the Reorganization, as described in the Proxy Statement/Prospectus, not applicable to Acquiring Fund shareholders.

Q: When will the Reorganization occur?

A: Subject to the approval of the shareholders of the Acquired Fund, the Reorganization is expected to be consummated during the month of September 2022.

Q: What happens if shareholders of the Acquired Fund do not approve the Agreement?

A: If shareholders of the Acquired Fund do not approve the Agreement, the Reorganization will not occur, the Acquired Fund would continue to operate as a closed-end fund and its shares would continue to trade on the NYSE. The Acquired Fund Board may consider other alternatives for the Acquired Fund, which may include seeking a merger with a different fund, the liquidation of the Acquired Fund (which would likely take an extended period of time), continuing current operations of the Acquired Fund with the Adviser or seeking a new investment adviser to manage the Acquired Fund.

Q: How does the Acquired Fund Board suggest that I vote?

A: As stated above, the Acquired Fund Board unanimously recommends that you vote “FOR” the Agreement.

Q: What should I do in connection with the Reorganization?

A: Please vote your shares today. If the Reorganization is approved and consummated, your shares in the Acquired Fund will automatically be exchanged for Class A shares of the Acquiring Fund. Please do not attempt to make the exchange yourself.

Q: How do I vote my shares?

A: There are several ways in which you can cast your vote. To vote, you may use any of the following methods:

Q: Whom should I call if I have questions?

If you should have any questions regarding the proposal, or to quickly vote your shares, please call Okapi Partners LLC, our proxy solicitor, toll-free at (888) 785-6617. Thank you for your continued investment in the Fund.

Your vote is very important. We encourage you as a shareholder to participate by returning your vote as soon as possible. If enough shareholders fail to cast their votes, the Acquired Fund may not be able to hold the Special Meeting or the vote on the proposal, and will be required to incur additional solicitation costs in order to obtain sufficient shareholder participation.

Important additional information about the Reorganization is set forth in the accompanying Proxy Statement/Prospectus.

Please read it carefully.

SALIENT MIDSTREAM & MLP FUND

NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS

Important Notice Regarding the Availability of Proxy Materials for a Special Meeting of Shareholders to be Held on [       ], 2022: The Notice of a Special Meeting of Shareholders, Proxy Statement/Prospectus, Proxy Card and other materials are available at www.OkapiVote.com/SMMSPECIAL.

The Special Meeting of Shareholders of Salient Midstream & MLP Fund, a closed-end investment management company formed as a Delaware statutory trust (the “Acquired Fund”), will be held at the principal offices of the Acquired Fund, 4265 San Felipe, 8th Floor, Houston, Texas 77027, on [         ], 2022 at [         ] p.m. Central Daylight Time, for the following purposes:

To approve an Agreement and Plan of Reorganization pursuant to which Salient MLP & Energy Infrastructure Fund, a series of Salient MF Trust, a Delaware statutory trust and an open-end investment management company (the “Acquiring Fund”), would acquire all of the assets of Salient Midstream & MLP Fund (the “Acquired Fund”) in exchange for Class A shares of the Acquiring Fund to be distributed pro rata to shareholders of the Acquired Fund, in complete liquidation, dissolution and termination of the Acquired Fund.

The Board of Trustees of the Acquired Fund has fixed the close of business on August 10, 2022 as the record date for the determination of the shareholders of the Acquired Fund entitled to notice of and to vote at the meeting and any adjournments thereof.

[       ], 2022

Houston, Texas

IMPORTANT

Shareholders can help the Board of Trustees of the Acquired Fund avoid the necessity and additional expense to the Acquired Fund of further solicitations by promptly returning the enclosed proxy. The enclosed addressed envelope requires no postage if mailed in the United States and is intended for your convenience. Alternatively, you may vote by telephone or Internet as set forth on your proxy card. 

It is important that you vote. The Board of Trustees of the Acquired Fund unanimously recommends that you vote FOR the proposed reorganization.

PROXY STATEMENT of

Salient Midstream & MLP Fund

PROSPECTUS for

Salient MLP Energy & Infrastructure Fund

a series of Salient MF Trust

4265 San Felipe, 8th Floor,

Houston, Texas 77027

Telephone No.: 1-713-993-4001

This Proxy Statement/Prospectus is provided in connection with a special meeting of holders of common shares (the “Special Meeting”) of Salient Midstream & MLP Fund (NYSE Ticker: SMM), which will be held at the principal offices of the Acquired Fund, 4265 San Felipe, 8th Floor, Houston, Texas 77027, on [          ], 2022 at [          ] a.m., Central Daylight Time, to consider and vote on the below proposal (the “Proposal”):

To approve an Agreement and Plan of Reorganization pursuant to which Salient MLP & Energy Infrastructure Fund, a series of Salient MF Trust, a Delaware statutory trust and an open-end investment management company (the “Acquiring Fund”), would acquire all of the assets of Salient Midstream & MLP Fund (the “Acquired Fund”) in exchange for Class A shares of the Acquiring Fund to be distributed pro rata to shareholders of the Acquired Fund, in complete liquidation, dissolution and termination of the Acquired Fund.

The Acquired Fund and the Acquiring Fund are each a “Fund” and together referred to as the “Funds.”

A proxy is enclosed with the foregoing Notice of the Special Meeting of Shareholders of the Acquired Fund, for the benefit of shareholders who do not expect to be present at the meeting. This proxy is solicited on behalf of the Board of Trustees of the Acquired Fund (collectively the “Acquired Fund Board” and individually each a “Trustee”), and is revocable by the person giving it prior to exercise by a signed writing filed with the Acquired Fund’s Secretary, or by executing and delivering a later dated proxy, or by attending the meeting and voting the shares in person. If you attend the meeting in person, please be prepared to present photo identification. Each proxy will be voted in accordance with its instructions; if no instruction is given, an executed proxy will authorize the persons named as attorneys, or any of them, to vote in favor of the Proposal. This proxy material will be first sent to shareholders on or about [         ], 2022.

This Proxy Statement/Prospectus contains information that shareholders of the Acquired Fund may wish to know about the reorganization of the Acquired Fund into the Acquiring Fund (the “Reorganization”). Please read it carefully and retain it for future reference. Voting only takes a few minutes and your participation is important! We recommend that you read the Proxy Statement/Prospectus in its entirety; the explanation will help you decide on the vote. Thank you in advance for your vote.

The Board of Trustees of each Fund, including by separate vote the trustees who are not “interested persons” within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”), determined that participation by the Fund in the Reorganization is in the best interests of the Fund and its shareholders and that the interests of existing shareholders in the Fund will not be diluted as a result of effecting the proposed Reorganization. Information on the rationale for the Reorganization is included in this Proxy Statement/Prospectus in the section entitled “Summary – Reasons for the Proposed Reorganizations.”

The Board has fixed the close of business on August 10, 2022 as the record date for the determination of the shareholders entitled to notice of and to vote at the meeting and any adjournments thereof. Shareholders at the close of business on the record date will be entitled to one vote for each share held.

The Board knows of no business other than the Proposal included in the Notice of a Special Meeting of Shareholders which will be presented for consideration. If any other matters are properly presented, it is the intention of the persons named as attorneys in the enclosed proxy to vote the proxies in accordance with their judgment on such matters.

Where to Get More Information 

Fund documents and additional information about each Fund are available at no charge by writing to that Fund or by calling, toll-free: 1-866-667-9228.

These documents and additional information about the Funds are also on file with the SEC at www.sec.gov on the EDGAR database. You may obtain copies of this information by electronic request, after paying a duplicating fee, to the following e-mail address: publicinfo@sec.gov.

The common shares of the Acquired Fund, a closed-end fund, are listed on the New York Stock Exchange (the “NYSE”). Reports, proxy statements and other information concerning the Acquired Fund can be inspected at the offices of the NYSE, 11 Wall Street, New York, New York 10005. Class A and other shares of the Acquiring Fund, an open-end fund, are not listed on any exchange but rather are purchased and redeemed directly from the Acquiring Fund, or through financial intermediaries, at net asset value, less any applicable charges.

This Proxy Statement/Prospectus serves as a prospectus of the Acquiring Fund in connection with the issuance of the Class A shares of the Acquiring Fund in the Reorganization. In this connection, no person has been authorized to give any information or make any representation not contained in this Proxy Statement/Prospectus and, if so given or made, such information or representation must not be relied upon as having been authorized. This Proxy Statement/Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction in which, or to any person to whom, it is unlawful to make such offer or solicitation.

The U.S. Securities and Exchange Commission has not approved or disapproved these securities or passed upon the accuracy or adequacy of this Proxy Statement/Prospectus. Any representation to the contrary is a criminal offense.

Shares of the Funds offered by this Proxy Statement/Prospectus are not deposits or obligations of, or guaranteed or endorsed by, any bank. Shares of the Funds are not federally insured by, guaranteed by, obligations of, or otherwise supported by the U.S. Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other governmental agency. An investment in the Funds involves investment risks, including possible loss of the principal amount invested.

To ask questions about this Proxy Statement/Prospectus, call our toll-free telephone number: 1-866-667-9228.

The date of this Proxy Statement/Prospectus is [      ], 2022.

TABLE OF CONTENTS 

Page

INTRODUCTION

This Proxy Statement/Prospectus includes information that is specific to the Reorganization, including summary comparisons. You should read the entire Proxy Statement/Prospectus carefully, including Exhibit A, which contains the form of Agreement and all other exhibits, and retain these documents for future reference. This Proxy Statement/Prospectus is being mailed to the Acquired Fund’s shareholders on or about [                ], 2022. Voting only takes a few minutes and your participation is important! We recommend that you read the Proxy Statement/Prospectus in its entirety; the explanation will help you decide on the vote. Thank you in advance for your vote.

If the Proposal is approved by shareholders of the Acquired Fund, under the Agreement, the Acquired Fund would transfer all of its assets to the Acquiring Fund in exchange for Class A shares of the Acquiring Fund, and the Acquiring Fund would assume the Acquired Fund’s liabilities as of the Closing Date. These shares would be distributed to shareholders of the Acquired Fund in proportion to such shareholders’ holdings of Acquired Fund shares on the Closing Date.

If shareholders of the Acquired Fund do not approve the Agreement, the Reorganization will not occur, the Acquired Fund would continue to operate as a closed-end fund and its shares would continue to trade on the NYSE. The Acquired Fund Board may consider other alternatives for the Acquired Fund, which may include seeking a merger with a different fund, the liquidation of the Acquired Fund(which would likely take an extended period of time), or continuing current operations of the Acquired Fund with the Adviser or seeking a new investment adviser to manage the Acquired Fund.

DESCRIPTION OF THE REORGANIZATION

How the Reorganization Will Work

Rationale for the Reorganization

The Reorganization is intended to consolidate the Acquired Fund with a similar fund advised by Salient Capital Advisors, LLC (the “Adviser”). Each of the Funds pursues a high level of total return by investing primarily in securities of master limited partnerships (“MLPs”) and energy infrastructure companies. Following the Reorganization, the combined fund will pursue a substantially similar investment objective in a larger fund utilizing substantially similar investment policies to the Acquired Fund, and subject to lower overall expenses than the Acquired Fund.

Although past performance does not guarantee future results, for the five-year period ended December 31, 2021 and for the period from the Acquiring Fund’s Class A inception on December 20, 2012 through December 31, 2021, the Acquiring Fund outperformed the Acquired Fund, while for the one-year period ended December 31, 2021, the Acquired Fund outperformed the Acquiring Fund.

Immediately following the Reorganization of the Acquired Fund into the Acquiring Fund, the maximum annual operating expenses of Class A shares of the Acquiring Fund are expected to be lower than the current annual operating expenses of the Acquired Fund on a gross and net basis. In addition, Acquired Fund shareholders will have the ability to achieve liquidity for their shares at net asset value.

The Adviser believes that the Acquiring Fund will be better positioned in the market to increase asset size and achieve additional economies of scale than the Acquired Fund as currently constituted. As a result, the Acquiring Fund may benefit from the ability to achieve better net prices on securities trades and spread fixed expenses in a manner that may contribute to achieving a lower expense ratio in the long-term than the Acquired Fund could be expected to achieve as currently constituted.

The Reorganization is expected to be a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). For information on the federal income tax consequences of the Reorganization, see “Comparison of Buying, Selling and Exchanging Shares – Tax Information.” However, the Acquired Fund will distribute any undistributed income and realized capital gains accumulated prior to the Reorganization to its shareholders. These distributions, if any, may be taxable to investors who hold their shares in a taxable account.

In addition, on May 26, 2022, Salient Partners, L.P. (“Salient”), the parent company to the Adviser, and Westwood Holdings Group, Inc. (“Westwood”) entered into a definitive purchase agreement pursuant to which Westwood has agreed to acquire certain investment management related assets of Salient (the “Westwood Transaction”). In anticipation of the Westwood Transaction, the Board of Trustees of the Acquiring Fund has separately approved an agreement and plan of reorganization providing for the reorganization of the Acquiring Fund into a newly formed series of the Ultimus Managers Trust (the “Westwood Fund”) to be managed by a Westwood-affiliated registered investment adviser. It is anticipated that the Acquiring Fund and the Westwood Fund will have substantially similar investment objectives, principal investment strategies, investment policies and principal risks. The Westwood Fund is anticipated to have a lower management fee and overall expenses, on both a gross and net basis, than the Acquiring Fund. Following the closing of the Westwood Transaction, the portfolio management team that currently manages the Acquiring Fund (as well as the Acquired Fund) is anticipated to continue to manage the Westwood Fund in the same manner as the Acquiring Fund is managed today, with the same stated investment objective. Class A shareholders of the Acquiring Fund are anticipated to receive Class A shares of the Westwood Fund, if that reorganization is approved by Acquiring Fund shareholders. The Westwood Transaction reorganization is also intended to be tax-free.

The Westwood Transaction reorganization is subject to shareholder approval, and Acquiring Fund shareholders of record will receive a separate proxy statement/prospectus that contains important information about the Westwood Transaction reorganization and the Westwood Fund. It is currently anticipated that the Reorganization of the Acquired Fund into the Acquiring Fund will be consummated prior to the record date to determine Acquiring Fund shareholders who will be eligible to vote on the Westwood Transaction reorganization. However, if the consummation of the Reorganization of the Acquired Fund into the Acquiring Fund is delayed, it is possible that Acquired Fund shareholders who receive Class A shares of the Acquiring Fund will not be eligible to vote on the Westwood Transaction reorganization, but would be subject to the results of such vote if they remain shareholders of the Acquiring Fund. These shareholders would continue to be permitted to redeem shares of the Acquiring Fund until the consummation of the Westwood Transaction reorganization, at which time they would become shareholders of the Westwood Fund.

SUMMARY COMPARISONS OF THE FUNDS

Comparison of the Funds’ Organization, Investment Objectives, Strategies and Policies

The chart below describes the similarities and differences between the Funds’ objectives and principal investment strategies. As shown below, as of the Closing Date, the Funds have substantially similar investment objectives and invest primarily in securities of MLPs and energy infrastructure companies. As of June 30, 2022, approximately 80% of the Acquired Fund’s total assets were invested in the same securities held by the Acquiring Fund. However, as also shown below, there are differences in the principal investment strategies of the Funds, including:

Additional Investment Strategies

In addition to the principal investment strategies described above, the Acquiring Fund may employ the following techniques in pursuing its investment objective.

Segregation of Assets

As an open-end investment management company registered with the U.S. Securities and Exchange Commission (the “SEC”), the Acquiring Fund is subject to the federal securities laws, including the 1940 Act, the rules thereunder, and various SEC and SEC staff interpretive positions. In accordance with these laws, rules and positions, the Acquiring Fund must “set aside” (often referred to as “asset segregation” or “earmarking”) liquid assets, or engage in other SEC or staff-approved measures, to “cover” open positions with respect to certain kinds of derivatives instruments. In the case of forward contracts that are not contractually required to cash settle, for example, the Acquiring Fund must set aside liquid assets equal to such contracts’ full notional value while the positions are open. With respect to forward contracts that are contractually required to cash settle, however, the Acquiring Fund is permitted to set aside liquid assets in an amount equal to its daily marked-to-market net obligations (i.e., the Acquiring Fund’s daily net liability) under the contracts, if any, rather than such contracts’ full notional value. The Acquiring Fund reserves the right to modify its asset segregation policies in the future to comply with any changes in the positions from time to time articulated by the SEC or its staff regarding asset segregation.

The Acquiring Fund generally will use its money market instruments (or any other liquid assets) to cover its obligations as required by the 1940 Act, the rules thereunder, and applicable SEC and SEC staff positions. Short-term debt securities (or any other liquid asset so used) may not be used for other operational purposes but may be replaced by other liquid assets as may be determined by the Acquiring Fund’s Advisor. The Acquiring Fund’s Advisor will monitor the Acquiring Fund’s use of derivatives and will take action as necessary for the purpose of complying with the asset segregation policy stated above. Such actions may include the sale of the Acquiring Fund’s portfolio investments.

Lending of Portfolio Securities

In order to generate additional income, the Acquiring Fund from time to time may lend portfolio securities to broker-dealers, banks or institutional borrowers of securities. During the time portfolio securities are on loan, the borrower pays the lending fund any dividends or interest paid on such securities. In the event the borrower defaults on its obligation to the lending fund, the lending fund could experience delays in recovering its securities and possible capital losses.

Temporary Defensive Positions; Cash Reserves

Under adverse market conditions or to meet anticipated redemption requests, the Acquiring Fund may not follow its principal investment strategy. Under such conditions, the Acquiring Fund may invest without limit in money market securities, U.S. Government obligations, interests in short-term investment funds, repurchase agreements, and short-term debt securities. This could have a negative effect on the Acquiring Fund’s ability to achieve its investment objective. Although the issuers of certain federal agency securities or government-sponsored entity securities in which the Acquiring Fund may invest (such as debt securities or mortgage-backed securities issued by Freddie Mac, Fannie Mae, Federal Home Loan Banks (“FHLB”), and other government-sponsored entities) may be chartered or sponsored by Acts of Congress, the issuers are not funded by Congressional appropriations, and their securities are neither guaranteed nor issued by the United States Treasury.

The Acquiring Fund is authorized to invest its cash reserves (funds awaiting investment) in the specific types of securities to be acquired by the Acquiring Fund or cash to provide for payment of the Acquiring Fund’s expenses or to permit the Acquiring Fund to meet redemption requests. The Acquiring Fund also may create equity or fixed-income exposure for cash reserves through the use of options or futures contracts in accordance with its investment objectives to minimize the impact of cash balances. This will enable the Acquiring Fund to hold cash while receiving a return on the cash that is similar to holding equity or fixed-income securities.

Additional Information Regarding the Security Selection Process

As part of analysis in its security selection process, among other factors, the Advisor also evaluates whether environmental, social and governance (“ESG”) factors could have a positive or negative impact on the risk profiles of many issuers in the universe of securities in which the Acquiring Fund may invest. This qualitative analysis does not automatically result in including or excluding specific securities but may be used by the Advisor as an additional input in its primary analysis.

Comparison of Investment Risks

The Funds are exposed to various risks that could cause shareholders to lose money on their investments in the Funds. The table below identifies the principal risks of each Fund. As shown below, as of the Closing Date, the Funds have substantially similar investment risks. However, as also shown below, there are differences in the principal investment risks of the Funds, largely reflecting the different structures of the Funds as closed-end or open-end:

The following summarizes the principal risks affecting each Fund.

Principal Risks Applicable to Both Funds

Below are descriptions of the main factors that may play a role in shaping the Funds’ overall risk profile. The following discussions relating to various principal risks associated with investing in the Funds are not, and are not intended to be, a complete enumeration or explanation of the risks involved in an investment in the Funds. Your investment may be subject to the risks described below if a shareholder invests in the Funds.

An investment in the Funds is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. The Funds’ principal risk factors are listed below. The Funds’ shares will go up and down in price, meaning that you could lose money by investing in the Funds. Many factors influence a mutual fund’s performance. An investment in the Funds is not intended to constitute a complete investment program and should not be viewed as such. Before investing, be sure to read the additional descriptions of these risks below.

As an overall matter, instability in the financial markets has led many governments, including the United States government, to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that have experienced extreme volatility and, in some cases, a lack of liquidity. Federal, state and other governments, and their regulatory agencies or self-regulatory organizations, may take actions that affect the regulation of the instruments in which the Funds invests, or the issuers of such instruments, in ways that are unforeseeable. Legislation or regulation may also change the way in which the Funds itself is regulated. Such legislation or regulation could limit or preclude the Funds’ ability to achieve its investment objective.

All securities investing and trading activities risk the loss of capital. No assurance can be given that the Funds’ investment activities will be successful or that the Funds’ shareholders will not suffer losses.

Borrowing Risk

Borrowing for investment purposes creates leverage, which will exaggerate the effect of any increase or decrease in the market price of securities in the Acquiring Fund’s portfolio on the Acquiring Fund’s net asset value and, therefore, may increase the volatility of the Acquiring Fund. Money borrowed will be subject to interest and other costs (that may include commitment fees and/or the cost of maintaining minimum average balances). These costs may exceed the gain on securities purchased with borrowed funds. Increased operating costs, including the financing cost associated with any leverage, may reduce the Acquiring Fund’s total return. Unless the income and capital appreciation, if any, on securities acquired with borrowed funds exceed the cost of borrowing, the use of leverage will diminish the investment performance of the Acquiring Fund.

Concentration Risk

The Funds concentrates its investments in issuers of one or more particular industries to the extent permitted by applicable regulatory guidance. There is a risk that those issuers (or industry sector) will perform poorly and negatively impact the Funds. Concentration risk results from maintaining exposure (long or short) to issuers conducting business in a specific industry. The risk of concentrating investments in a limited number of issuers in a particular industry is that the Funds will be more susceptible to market, economic, political, regulatory, and other conditions and risks associated with that industry than a Funds that does not concentrate its investments.

Counterparty Risk

In general, a derivative contract typically involves leverage, i.e., it provides exposure to potential gain or loss from a change in the level of the market price of a security, currency or commodity (or a basket or index) in a notional amount that exceeds the amount of cash or assets required to establish or maintain the derivative contract. Many of these derivative contracts will be privately negotiated in the over-the-counter market. These contracts also involve exposure to credit risk, since contract performance depends in part on the financial condition of the counterparty. If a privately negotiated over-the-counter contract calls for payments by the Funds, the Funds must be prepared to make such payments when due. In addition, if a counterparty’s creditworthiness declines, a Fund may not receive payments owed under the contract, or such payments may be delayed under such circumstances and the value of agreements with such counterparty can be expected to decline, potentially resulting in losses by the Funds.

Debt Instruments Risk

Debt instruments are generally subject to credit risk and interest rate risk. Credit risk refers to the possibility that the issuer of a security will be unable to make interest payments and/or repay the principal on its debt. Interest rate risk refers to fluctuations in the value of a fixed income security resulting from changes in the general level of interest rates. When the general level of interest rates goes up, the prices of most fixed income securities go down. When the general level of interest rates goes down, the prices of most fixed-income securities go up. Derivatives related to debt instruments may be exposed to similar risks for individual securities, groups of securities or indices tracking multiple securities or markets. Both debt securities and debt-related derivative instruments may be exposed to one or more of the following risks:

Derivatives Risk

The market value of the derivative instruments in which the Funds may invest, including options, futures contracts, forward currency contracts, swap agreements and other similar instruments, may be more volatile than that of other instruments. A Fund’s use of derivative instruments involves risks different from, and possibly greater than, the risks associated with investing directly in securities and other more traditional investments, and certain derivatives may create a risk of loss greater than the amount invested. There can be no assurance given that each derivative position will perform as expected, or that a particular derivative position will be available when sought by the portfolio manager. A Fund’s use of derivative instruments to obtain short exposures may result in greater volatility because losses are potentially unlimited. In addition, there can be no assurance given that any derivatives strategy will succeed and the Funds may lose money as a result of its use of derivative instruments. Changes in regulation relating to a Fund’s use of derivatives and related instruments could potentially limit or impact the Fund’s ability to invest in derivatives, limit the Fund’s ability to employ certain strategies that use derivatives and adversely affect the value or performance of derivatives and the Funds.

Equity Securities Risk

The risks associated with investing in equity securities of companies include the financial and operational risks faced by individual companies, the risk that the stock markets, sectors and industries in which the Funds invests may experience periods of turbulence and instability, and the general risk that domestic and global economies may go through periods of decline and cyclical change.

Industry Specific Risk

The Midstream Companies, MLPs and other energy companies in which the Funds invests are subject to risks specific to the industry they serve, including the following:

Leverage Risk

If the Funds makes investments in futures contracts, forward currency contracts and other derivative instruments, the futures contracts and certain other derivatives provide the economic effect of financial leverage by creating additional investment exposure, as well as the potential for greater loss. If the Funds uses leverage through activities such as borrowing, entering into short sales, purchasing securities on margin or on a “when issued” basis or purchasing derivative instruments in an effort to increase its returns, the Funds has the risk of magnified capital losses that occur when losses affect an asset base, enlarged by borrowings or the creation of liabilities, that exceeds the net assets of the Funds. The Funds’ NAV when employing leverage will be more volatile and sensitive to market movements. Leverage may involve the creation of a liability that requires the Funds to pay interest.

Liquidity Risk

Although common units of MLPs trade on the exchanges, certain securities may trade less frequently than those of larger companies due to their smaller capitalizations. In the event certain securities experience limited trading volumes, the prices may display abrupt or erratic movements at times. Additionally, it may be more difficult for the Funds to buy and sell significant amounts of such securities without an unfavorable impact on prevailing market prices. As a result, these securities may be difficult to dispose of at a fair price at the times when the Advisor believes it is desirable to do so. The Funds’ investment in securities that are less actively traded or over time experience decreased trading volume may restrict its ability to take advantage of other market opportunities or to dispose of securities.

Manager Risk

If the Funds’ portfolio managers make poor investment decisions, it will negatively affect the Funds’ investment performance.

Market Risk

Market risk is the risk that the markets on which the Acquiring Fund’s investments trade will increase or decrease in value. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. If there is a general decline in the securities and other markets, your investment in the Acquiring Fund may lose value, regardless of the individual results of the securities and other instruments in which the Acquiring Fund invests.

Market Events Risk

Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth, may at times, and for varying periods of time, result in unusually high market volatility, which could negatively impact the Funds’ performance and cause the Funds to experience illiquidity, shareholder redemptions, or other potentially adverse effects. Reduced liquidity in credit and fixed-income markets could negatively affect issuers worldwide. Banks and financial services companies could suffer losses if interest rates rise or economic conditions deteriorate.

Master Limited Partnerships (“MLPs”) Risk

Investments in the debt and equity securities of MLPs involve risks that differ from investments in the debt and equity securities of corporate issuers, including risks related to limited control and limited rights to vote on matters affecting the partnership, risks related to potential conflicts of interest between the partnership and its general partner, cash flow risks, dilution risks and risks related to the general partner’s right to require unitholders to sell their common units at an undesirable time or price. The Funds and its shareholders are not eligible for a tax deduction based on income received from MLPs that is available to individuals who invest directly in MLPs.

Non-Diversification Risk

The Funds is a non-diversified Funds. Because the Funds may invest in securities of a smaller number of issuers, the Funds may be more exposed to the risks associated with and developments affecting an individual issuer than a Funds that invests more widely, which may, therefore, have a greater impact on the Funds’ performance.

Renewable Energy Companies Risk

Renewable energy companies may be more volatile than companies operating in more established industries. Renewable energy companies are subject to specific risks, including, among others: fluctuations in commodity prices and/or interest rates; changes in governmental or environmental regulation; reduced availability of renewable energy sources or other commodities for transporting, processing, storing or delivering; slowdowns in new construction; seasonal weather conditions, extreme weather or other natural disasters; and threats of attack by terrorists on certain renewable energy assets. Certain investments may be dependent on U.S. and foreign government policies, including tax incentives and subsidies. The above factors could also impact the ability of renewable energy companies to pay dividends comparable to those paid by other Energy Infrastructure Companies. Certain valuation methods used to value renewable energy companies have not been in widespread use for a significant period of time and may further increase the volatility of certain renewable energy company share prices.

Small and Medium Capitalization Stocks Risk

Investment in securities of smaller companies presents greater investment risks than investing in the securities of larger companies. These risks include greater price volatility, greater sensitivity to changing economic conditions, and less liquidity than the securities of larger, more mature companies.

Tax Law Change Risk

Changes in tax laws or regulations, or interpretations thereof in the future, could adversely affect the Funds or the Midstream Companies, MLPs and other energy companies in which the Funds invests. Any such changes could negatively impact the Funds’ shareholders. Legislation could also negatively impact the amount and tax characterization of distributions received by the Funds’ shareholders.

Tax Risk

The Funds’ ability to meet its objective will depend, in part, on the level of taxable income and distributions received from the equity securities in which the Funds invests. If an MLP were treated as a corporation for federal income tax purposes, such MLP would be obligated to pay federal income tax on its income at the corporate tax rate and the amount of cash available for distribution would be reduced and distributions received by the Funds would be taxed under federal income tax laws applicable to corporate dividends (as dividend income, return of capital, or capital gain). MLPs restructuring their debts as a result of a decline in oil prices and a decline in value of energy-related properties could result in the receipt of cancellation of debt income by MLP partners, including the Funds. The receipt of this taxable income by the Funds will result in increased investment company taxable income required to be distributed by the Funds, without corresponding cash distributions from the MLPs. The Funds might need to sell assets that it might not otherwise wish to sell in order to pay the required distributions.

In addition, the Funds faces the risk that it could fail to qualify as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended, and the risk of changes in tax laws or regulations, or interpretations thereof, which could adversely affect any or all of the Funds, the MLPs and other portfolio companies in which the Funds invests. Effective for taxable years beginning after December 31, 2017 and before January 1, 2026, the Tax Cuts and Jobs Act of 2017 generally allows individuals and certain other non-corporate entities, such as partnerships, a deduction for 20% of “qualified publicly traded partnership income” such as income from MLPs. However, the law does not include any provision for a RIC to pass the character of its qualified publicly traded partnership income through to its shareholders. As a result, an investor who invests directly in MLPs will be able to receive the benefit of that deduction, while a shareholder in the Funds will not. The federal, state, local and foreign tax consequences of an investment in Funds shares will depend on the facts of each investor’s situation. Investors are encouraged to consult their own tax advisors regarding the specific tax consequences that may affect such investors.

Volatility Risk

The Acquiring Fund may have investments that appreciate or decrease significantly in value over short periods of time. This may cause the Acquiring Fund’s net asset value per share to experience significant appreciations or decreases in value over short periods of time.

Particular Risks of the Acquired Fund

Discount from or Premium to Net Asset Value

The shares of closed-end management investment companies often trade at a discount from or premium to their NAV, and the common shares of the Acquired Fund may likewise trade at a discount from or premium to NAV. This risk is separate and distinct from the risk that the Acquired Fund’s NAV could decrease or increase as a result of its investment activities. The trading price of the common shares may be less than the initial public offering price, creating a risk of loss for investors purchasing in the initial public offering of the common shares. This market price risk may be greater for investors who sell their common shares within a relatively short period after completion of an offering.

Lower-Rated Debt Securities (“Junk Bonds”) Risk

Securities rated below investment grade and comparable unrated securities are often referred to as “junk bonds.” Junk bonds involve greater risks of default or downgrade and are more volatile than investment grade securities. In addition, issuers of junk bonds may be more susceptible than other issuers to economic downturns. Junk bonds are subject to the risk that the issuer may not be able to pay interest or dividends or ultimately repay principal upon maturity. Analysis of the creditworthiness of issuers of lower-rated debt securities may be more complex than for issuers of higher-rated securities, and the use of credit ratings to evaluate lower-rated securities can involve certain risks.

Private Investments in Public Equities (“PIPEs”) Risk

The Acquired Fund makes investments in private investments in public equities whose stock is quoted on a stock exchange or which trade in the over-the-counter securities market, a type of investment commonly referred to as a “PIPE” transaction. PIPE transactions will generally result in the Acquired Fund acquiring either restricted stock or an instrument convertible into restricted stock. As with investments in other types of restricted securities, such an investment may be illiquid. The Acquired Fund’s ability to dispose of securities acquired in a PIPE transaction may depend upon the registration of such securities for resale. Any number of factors may prevent or delay a proposed registration. Even if the Acquired Fund is able to have securities acquired in a PIPE transaction registered or sell such securities through an exempt transaction, the Acquired Fund may not be able to sell some or all of the securities on short notice, and the sale of the securities could lower the market price of the securities.

Privately Held Company Risk

Privately held companies are not subject to SEC reporting requirements, are not required to maintain their accounting records in accordance with generally accepted accounting principles, and are not required to maintain effective internal controls over financial reporting. As a result, the Advisor may not have timely or accurate information about the business, financial condition and results of operations of the privately held companies in which the Acquired Fund invests. In addition, the securities of privately held companies are generally illiquid.

Restricted and Illiquid Securities Risk

Certain securities generally trade in lower volume and may be less liquid than securities of large established companies. If a security is illiquid, the Acquired Fund may not be able to sell the security at a time when the Advisor might wish to sell, which means that the Acquired Fund could lose money. In addition, the security could have the effect of decreasing the overall level of the Acquired Fund’s liquidity. Certain restricted securities, i.e., securities subject to legal or contractual restrictions on resale, may be treated as liquid even though they may be less liquid than registered securities traded on established secondary markets.

Short Sales Risk

The Acquired Fund may take a short position in a derivative instrument, such as a future, forward or swap. A short position on a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying instrument. The Acquired Fund may also from time to time sell securities short, which involves borrowing and selling a security and covering such borrowed security through a later purchase. A short sale creates the risk of an unlimited loss, in that the price of the underlying security could theoretically increase without limit, thus increasing the cost of buying those securities to cover the short position. There can be no assurance that the securities necessary to cover a short position will be available for purchase. Until 2022, when new short sales rules will apply which are not expected to impact materially the Acquired Fund’s ability to conduct short sales, the Acquired Fund must set aside “cover” for short sales to comply with applicable SEC provisions under the 1940 Act.

Particular Risks of the Acquiring Fund

Model and Data Risk

Given the complexity of the investments and strategies of the Acquiring Fund, the Advisor relies heavily on quantitative models (both proprietary models developed by the Advisor, and those supplied by third party vendors) and information and data supplied by third party vendors (“Models and Data”). Models and Data are used to construct sets of transactions and investments and to provide risk management insights.

When Models and Data prove to be incorrect or incomplete, any decisions made in reliance thereon expose the Acquiring Fund to potential risks. The success of relying on such models may depend on the accuracy and reliability of historical data supplied by third party vendors.

All models rely on correct market data inputs. If incorrect market data is entered into even a well-founded model, the resulting information will be incorrect. However, even if market data is input correctly, “model prices” will often differ substantially from market prices, especially for securities with complex characteristics, such as derivative securities.

Portfolio Turnover Risk

The Acquiring Fund is generally expected to engage in frequent and active trading of portfolio securities to achieve its investment objective. A higher turnover rate (100% or more) will involve correspondingly greater transaction costs, which will be borne directly by the Acquiring Fund, may have an adverse impact on performance, and may increase the potential for more taxable distributions being paid to shareholders, including short-term capital gains that are taxed at ordinary income rates. To the extent the Acquiring Fund engages in short sales (which are not included in calculating the portfolio turnover rate), the transaction costs incurred by a Acquiring Fund are likely to be greater than the transaction costs incurred by a mutual Acquiring Fund that does not take short positions and has a similar portfolio turnover rate.

Comparison of the Funds’ Investment Limitations

The following table details the fundamental and non-fundamental investment limitations for the Acquired Fund and the Acquiring Fund. While shareholder approval is required to change a fundamental limitation, non-fundamental limitations may be changed by a Fund’s Board without shareholder approval.

Both Funds pursue investment objectives of total return, though the exact language between the two funds differs in the manner in which total return is sought and framed. In addition, the objective is fundamental for the Acquired Fund, but non-fundamental for the Acquiring Fund.

There are no material differences between the fundamental limitations of the Funds, though the language used and certain detailed explanations of limitations may differ between the Funds. In particular, both Funds concentrate in the energy and energy infrastructure industries, but the Acquired Fund policy includes additional detail about specific investment types through which this concentration policy is implemented. In addition, neither Fund is permitted to purchase or sell commodities except in specifically enumerated circumstances, and the Acquiring Fund includes an additional exception for transactions made through a vehicle whereby the risk of loss is not greater than the investment therein that is not included for the Acquired Fund.

In addition, the Acquired Fund identifies a number of investment strategies as non-fundamental policies while the Acquired Fund does not have any corresponding policies identified in this manner.

Comparison Of Fund Structures

As a result of the Reorganization, shareholders of the Acquired Fund, a closed-end investment company, will become holders of Class A shares of the Acquiring Fund, an open-end investment company (commonly referred to as a “mutual fund”).

The Reorganization would provide similar benefits as the conversion of the Acquired Fund into an open-end structure: namely, the trading discount would be eliminated and Acquired Fund shareholders who become shareholders of the Acquiring Fund would be permitted to redeem, purchase or exchange shares of the Acquiring Fund received in the Reorganization at the then-current net asset value. Common shares of closed-end funds, such as the Acquired Fund, are generally listed for trading on a securities exchange, such as the NYSE, where such shares may be purchased and sold through broker-dealers at prevailing market prices, which may be greater than (premium) or less than (discount) net asset value.

The following table sets forth the high and low daily closing prices on the NYSE per common share of the Acquired Fund for each full quarterly period within the Acquired Fund’s two most recent fiscal years and each full quarter since the beginning of the Acquired Fund’s current fiscal year, along with the net asset value and discount or premium to net asset value for each quotation. Market price quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

For all periods shown in the table above, the common shares of the Acquired Fund have traded at a discount. On July 14, 2022, the closing market price of the Acquired Fund was $7.21, the closing net asset value was $7.71, and the discount represented by these quotations was -6.49%.

If the Agreement is approved by Acquired Fund shareholders, the discount may be reduced before the date of the Reorganization to the extent purchasers of shares in the open market are willing to accept less of a discount in anticipation of the completion of the Reorganization. However, the existence of such a trading discount creates an arbitrage trade for opportunistic investors, and there is a possibility that Acquired Fund shareholders may redeem post- Reorganization to take advantage of this arbitrage opportunity.

If the Reorganization is completed, Acquired Fund shareholders who become holders of Class A shares of the Acquiring Fund who wish to realize the net asset value of their shares will be able to do so by redeeming their Acquiring Fund shares at net asset value. Shares of open-end funds are not listed for trading on a securities exchange but rather can be purchased and sold (redeemed) directly from the fund, or through financial intermediaries, at net asset value, less any applicable charges.

The Reorganization also presents certain disadvantages. Closed-end funds typically do not engage in a continuous offering of new shares, and the common shares of closed-end funds are not redeemable. As a result, closed-end funds operate with a relatively fixed capitalization and may keep their assets more fully invested and make investment decisions without having to adjust for cash inflows and outflows from continuing sales and redemptions of its shares. In contrast, open-end funds, such as the Acquiring Fund, engage in a continuous offering of new shares, which allows them to continuously raise new assets. However, in order to satisfy redemption requests, open-end funds generally are required to hold a higher cash position than closed-end funds and may be forced to sell portfolio securities at disadvantageous times or prices.

If the Reorganization is completed, Acquired Fund shareholders will no longer be able to take advantage of a closed-end fund’s ability to use a higher percentage of leverage to increase earnings. Unlike a closed-end fund, the Acquiring Fund is not permitted to invest without limit in illiquid investments, as open-end funds are subject to daily redemptions and regulatory limitations on illiquid investments, as further discussed below.

In addition, unlike the Acquired Fund, Class A shares of the Acquiring Fund also have front-end sales loads and contingent deferred sales charges, but such fees will be waived for the one-time transfer of assets. Also, holders of Class A shares of the Acquiring Fund are subject to an ongoing annual service fee of 25 basis points (0.25%) under the Acquiring Fund’s distribution and service plan adopted under Rule 12b-1 under the 1940 Act. Shareholders of Class A Shares of the Acquiring Fund may exchange their shares without paying any fees for the same class of shares in any other fund in the Acquiring Trust or for a different class of shares within the Acquiring Fund. If considering an exchange, shareholders should be mindful of any additional fees they might incur or any tax consequences following the exchange.

Below are more detailed descriptions of the legal and practical differences between closed-end funds and open-end funds.

Redemption Right

Unlike the shares of closed-end funds, shares of open-end funds are redeemable securities. Shareholders of open-end funds have the right to surrender their shares to the fund and receive an amount equal to the then-current net asset value of the share, less any applicable charges. Most open-end funds, including the Acquiring Fund, also continuously offer new shares to investors based on the net asset value of the shares at the time of purchase.

Acquisition and Disposition of Shares

Investors pay brokerage commissions in connection with the purchase and sale of common shares of closed-end funds, such as the Acquired Fund, on a securities exchange. Investors wishing to acquire shares of an open-end fund, such as the Acquiring Fund, are typically able to purchase shares either through a financial adviser or other financial intermediary or directly from the fund.

If the Reorganization is completed, shareholders wishing to realize the value of their Acquiring Fund shares received in the Reorganization may do so by redeeming those shares at net asset value. Class A shares or any other class of shares of the Acquiring Fund purchased after the Reorganization will be subject to the standard shareholder fee structure applicable to such class of shares. Under normal circumstances, the Acquiring Fund expects to meet redemption requests by using cash or cash equivalents in its portfolio or by selling portfolio assets to generate cash. During periods of stressed market conditions, when a significant portion of the Acquiring Fund’s portfolio may be comprised of less-liquid investments, the Acquiring Fund may be more likely to limit cash redemptions and may determine to pay redemption proceeds by (i) accessing other available liquidity facilities, and/or (ii) transferring portfolio securities in-kind to you. If the Acquiring Fund pays redemption proceeds by transferring portfolio securities in-kind to you, you may pay transaction costs to dispose of the securities, and you may receive less for them than the price at which they were valued for purposes of redemption.

Determination of Net Asset Value

SEC regulations generally require open-end funds to value their assets at least once on each business day in order to determine the current net asset value at which shares may be redeemed by shareholders or purchased by investors. The net asset value of most open-end funds is published daily by leading financial publications. Similarly, although not required to do so, closed-end funds generally value their assets at least once on each business day in order to determine net asset value.

Each Fund calculates the net asset value of each class of its shares each day the NYSE is open, generally as of the close of regular trading hours on the NYSE, based on prices at the time of closing. The NYSE generally closes at 4:00 p.m. (Eastern time). With respect to the Acquiring Fund, the net asset value used in determining your share price is the next one calculated after your purchase or redemption order is received. The Funds’ valuation procedures are identical.

Fees and Expenses

Unlike the common shares of closed-end funds, certain open-end fund share classes may be subject to a front-end or contingent deferred sales charge, but such fees will be waived for the one-time transfer of assets. In addition, an open-end fund is permitted to finance the distribution of its shares by adopting a plan under Rule 12b-1 under the 1940 Act, subject to shareholder approval. The Acquiring Fund has adopted a distribution and service plan under Rule 12b-1, under which holders of Class A shares are subject to an ongoing annual service fee of 25 basis points (0.25%). For a complete description of this arrangement, see the section of this Proxy Statement/Prospectus entitled “Comparison of Fees and Expenses.”

Portfolio Management

Unlike open-end funds, closed-end funds are not subject to pressures to sell portfolio securities at disadvantageous times in order to meet shareholder redemption requests. Most open-end funds maintain adequate reserves of cash or cash equivalents to meet net redemptions as they arise. Because closed-end funds do not have to meet redemption requests, their cash reserves can be substantial or minimal, depending primarily on management’s perception of market conditions and on decisions to use fund assets for other purposes, such as to repurchase shares as part of a repurchase program. The larger reserves of cash or cash equivalents required to operate prudently as an open-end fund when net redemptions are anticipated could reduce the Acquiring Fund’s investment flexibility and the scope of its investment opportunities.

Illiquid Investments

Open-end funds, such as the Acquiring Fund, are subject to Rule 22e-4 under the 1940 Act, which prohibits them from investing more than 15% of their net assets in illiquid investments (the “Illiquid Investment Limit”). Closed-end funds are not subject to Rule 22e-4, and the Acquired Fund may invest in illiquid investments without limit. Although the Acquired Fund currently holds an illiquid investment, in light of the much larger size of the Acquiring Fund, the Acquired Fund currently does not hold any illiquid investments. As a result, following the Reorganization, the Acquiring Fund’s illiquid investments will not exceed the 15% Illiquid Investment Limit and is expected to be de minimis in size.

Dividend Reinvestment

While both closed-end funds and open-end funds may adopt dividend reinvestment plans, the operation of such plans may differ. Pursuant to the Acquired Fund’s Dividend Reinvestment Plan (the “Reinvestment Plan”), shareholders are automatically enrolled to have all distributions of dividends and capital gains and other distributions reinvested in the Acquired Fund’s shares unless they elect to receive distributions in cash. After the Acquired Fund declares a dividend or determines to make a capital gain or other distribution, the number of common shares received is determined as follows:

(1) If the Acquired Fund’s common shares are trading at or above net asset value at the time of valuation, each participant’s account will receive newly-issued common shares from the Acquired Fund. The number of common shares to be credited to a participant will be determined by dividing the dollar amount of the participant’s distribution by the greater of (i) the net asset value per common share at the time of valuation, or (ii) 95% of the market price per common share one day prior to the distribution payment date.

(2) If the Acquired Fund’s common shares are trading below net asset value at the time of valuation, upon notice from the Acquired Fund, each participant’s account will receive common shares purchased in the open market, on the NYSE or elsewhere, except that the plan administrator will endeavor to terminate unfulfilled orders in the open market and cause the Acquired Fund to issue the remaining common shares if, following the commencement of the purchases, the market value of the common shares, including brokerage commissions, exceeds the net asset value at the time of valuation. Provided the unfulfilled orders can be terminated, the remaining common shares will be issued by the Acquired Fund at a price equal to the greater of (i) the net asset value at the time of valuation, or (ii) 95% of the then-current market price. It is possible that the average purchase price per common share paid may exceed the market price at the time of valuation, resulting in the purchase of fewer common shares than if the distribution had been paid entirely in common shares issued by the Acquired Fund.

Acquired Fund shareholders who become holders of Class A shares of the Acquiring Fund in the Reorganization will continue to have the opportunity to have dividends and distributions automatically reinvested in shares of the Acquiring Fund at net asset value. With respect to the Acquiring Fund, dividends may be reinvested automatically in shares of the Acquiring Fund at net asset value without a sales charge or may be taken in cash. If a shareholder of the Acquiring Fund would like to receive dividends in cash, the shareholder should contact their financial intermediary or the Acquiring Fund.

Comparison of Shareholder Rights

While the Acquired Fund and the Acquiring Trust are each registered under the 1940 Act as a management investment company and was established under the laws of the State of Delaware as a statutory trust, the rights of shareholders of the Funds are defined by their respective organizational documents and differ in certain ways, including but not limited to differences in the open-end and closed-end fund structures. The chart in Exhibit C attached hereto compares the rights of shareholders of the Acquired Fund and the rights of shareholders of the Acquiring Fund.

Comparison of Fees and Expenses

Shareholders of the Funds pay various expenses, either directly or indirectly. Transaction expenses are charged directly to your account. Operating expenses are paid from the Fund’s assets and, therefore, are paid by shareholders indirectly. Future expenses for all share classes may be greater or less than those shown in the following tables.

The fee and expense structures of the Funds differ, in part, because of operational and regulatory differences between open-end funds and closed-end funds. The fee and expense structure of the Acquiring Fund will apply following the Reorganization. The Acquiring Fund’s management fee rate is lower than that of the Acquired Fund. However, Class A shares of the Acquiring Fund are subject to an ongoing Rule 12b-1 distribution and service fee at an annual rate of 25 basis points (0.25%) while shares of the Acquired Fund are not subject to an ongoing Rule 12b-1 distribution and service fee.

As the tables below indicate, the maximum hypothetical pro forma annual operating expenses (both before and after waivers and reimbursements) of the Acquiring Fund’s Class A shares after the Reorganization are expected to be lower than those of the Acquired Fund. The management fee of the Acquiring Fund is also lower than that of the Acquired Fund.

The tables below describe (1) the actual fees and expenses for common shares of the Acquired Fund for the fiscal six-month period ended May 31, 2022; (2) the actual fees and expenses for Class A shares of the Acquiring Fund for the fiscal year ended December 31, 2021; and (3) the anticipated pro forma fees and expenses of Class A Shares of the Acquiring Fund on a combined basis assuming the Reorganization with the Acquired Fund had occurred at the beginning of the twelve-month period ended December 31, 2021 (i.e., on January 1, 2021). The Acquiring Fund is expected to be the legal, tax and accounting survivor of the Reorganization. The Acquiring Fund’s actual expenses after the Reorganization may be greater or less than those shown.

These tables do not include Acquiring Fund share classes not involved in the Reorganization.

Shareholder Fees and Annual Fund Operating Expenses

This table describes the fees and expenses you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts on Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in one or more funds that are a part of Forward Funds and Salient MF Trust (collectively the “Salient Funds”). This amount may vary depending on the Fund in which you invest.

⁽¹⁾    Class A shares are available with no front-end sales charge on investments of $1 million or more. Brokers that initiate and are responsible for purchases of $1 million or more may receive a sales commission of up to 1.00% of the offering price of Class A shares. As a result, Class A shares that were not subject to a front-end sales charge, but for which a commission or finder’s fee was paid, may be subject to a contingent deferred sales charge (CDSC) of 1.00% if such Class A shares are sold within twelve months of purchase. In addition, while Class C shares are offered at NAV, without any initial sales charge, a 1.00% CDSC may be charged on any Class C shares upon which a finder’s fee has been paid that are sold within twelve months of purchase.

⁽²⁾    Other Expenses include expenses related specifically to each class, such as administrative services fees.

Expense Examples

The hypothetical examples below are intended to help you compare the cost of investing in common shares of the Acquired Fund with the cost of investing in Class A shares of the Acquiring Fund or other mutual funds. The examples assume that you invest $10,000 in each Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The examples also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. Pro forma expenses of Class A shares of the Acquiring Fund assuming the Reorganization with the Acquired Fund had occurred at the beginning of the twelve-month period ended December 31, 2021 (i.e., on January 1, 2021), also are included. The pro forma examples are for comparison purposes only and are not a representation of the Acquiring Fund’s actual expenses or returns, either past or future.

Portfolio Turnover

Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Example tables above, affect each Fund’s performance. During each Fund’s most recent fiscal year, the Acquired Fund’s portfolio turnover rate was 86% of the average value of its portfolio, and the Acquiring Fund’s portfolio turnover rate was 248% of the average value of its portfolio.

Comparison of Past Performance

Performance information in the bar charts and tables below illustrates the variability of the Funds’ returns and provides some indication of the risks of investing in the Funds by showing changes in the Funds’ performance from year to year. Past performance (before and after taxes) does not indicate future results.

The bar charts under “Calendar year total returns” show how each Fund’s total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The tables under “Average annual total returns” show average annual total return for each Fund over time, compared with broad-based securities market indexes. Because indices cannot be invested in directly, the returns of the indices do not reflect a deduction for fees, expenses, or taxes. All returns assume reinvestment of dividends and distributions and reflect all applicable fees and sales charges. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

Acquired Fund - Market Price

Calendar Year Total Returns — Common Share Class

Year-to-date total return for the six months ended June 30, 2022 was 14.83% on a market price basis.

Quarterly Returns

During the period shown in the above bar chart, the Acquired Fund’s highest quarterly return on a market price basis was 44.51% for the quarter ended June 30, 2016, and its lowest quarterly return on a market price basis was -54.07% for the quarter ended March 31, 2020.

Acquired Fund - Net Asset Value

Calendar Year Total Returns — Common Share Class

Year-to-date total return for the six months ended June 30, 2022 was 8.53% on a net asset value basis.

Quarterly Returns

During the period shown in the above bar chart, the Acquired Fund’s highest quarterly return on a net asset value basis was 46.01% for the quarter ended June 30, 2016, and its lowest quarterly return on a net asset value was -54.34% for the quarter ended March 31, 2020. 

Average Annual Total Returns for Periods Ended December 31, 2021

The tables below compare the average annual total returns of the Acquired Fund’s common shares, on both a market price and net asset value basis, to the Alerian Midstream Energy Select Total Return Index, the Acquired Fund’s benchmark, which is an unmanaged index consisting of investments in North American midstream energy infrastructure companies that are engaged in activities involving energy commodities.

Common Shares (Inception: 12/20/2012)

Acquiring Fund

Calendar Year Total Returns — Class A Shares

Year-to-date total return for the six months ended June 30, 2022 was 5.86%.

Quarterly Returns

During the period shown in the above bar chart, the Acquiring Fund’s highest quarterly return for Class A Shares was 29.22% for the quarter ended June 30, 2020, and its lowest quarterly return was -42.35% for the quarter ended March 31, 2020.

Average Annual Total Returns for Periods Ended December 31, 2021

The tables below compare the average annual total returns of the Acquiring Fund’s Class A shares to the Alerian Midstream Energy Select Index, the Fund’s benchmark, which is a composite of North American midstream energy infrastructure companies that are engaged in activities involving energy commodities.

Class A Shares (Inception: 9/19/2012)

ADDITIONAL INFORMATION ABOUT THE REORGANIZATION

Description of Reorganization

The Board of each Fund has approved the Agreement, a form of which is attached to this Proxy Statement/Prospectus as Exhibit A. Additional information about the Reorganization and the Agreement is set forth below under “Further Information on the Reorganization.” The Agreement provides for the Reorganization on the following terms:

The Reorganization is expected to be consummated during the month of September 2022. The Acquired Fund will transfer all of its assets to the Acquiring Fund and the Acquiring Fund will assume all of the liabilities of the Acquired Fund as of the Closing Date. The net asset value of both Funds will be computed as of 4:00 p.m., Eastern Time, on the Closing Date.

The Acquiring Fund will issue to the Acquired Fund a number of full and fractional Class A shares having an aggregate net asset value equal to the value of the assets of the Acquired Fund attributable to its shares, less the value of any liabilities attributable to such shares. As part of the liquidation of the Acquired Fund, these shares will immediately be distributed to the shareholders of the Acquired Fund (in exchange for their Acquired Fund shares and in complete liquidation thereof) in proportion to their holdings on the Closing Date. As a result, shareholders of the Acquired Fund will become shareholders of the Class A shares of the Acquiring Fund. As there are no material differences between the valuation policies used by each of the Funds, it is not expected that any differences in valuation between the value of your investment immediately before the Reorganization (calculated using the Acquired Fund’s valuation procedures) and the value of your investment immediately after the Reorganization will occur.

After the Acquiring Fund’s shares are issued, the Acquired Fund will cease operations and be terminated.

Board Considerations of the Proposed Reorganization

The Independent Trustees of the Acquired Fund and the Acquiring Fund met in an executive session on June 26 and June 27, 2022. The Independent Trustees discussed the Reorganization and alternatives for the Acquired Fund, including among others, the recommendation of the Adviser. The Independent Trustees requested information from, and posed questions to, executive officers of the Adviser. On June 27, the Independent Trustees determined to recommend the Reorganization. The Independent Trustees considered the Adviser’s alternative recommendation that the Acquired Fund seek shareholder approval for a new advisory agreement with Westwood, as a new investment adviser as part of the Westwood Transaction, and information presented to them and discussed at the meetings. After examination of alternatives, the Independent Trustees determined that the Reorganization is in the best interests of each Fund and its shareholders and that the interests of existing shareholders in each Fund will not be diluted as a result of effecting the proposed Reorganization. In making these determinations, the Trustees considered the following matters, among others, and in no order of priority, in approving the Proposal.

The investment objective, principal investment strategies, policies and risks of the Acquiring Fund are substantially similar to those of the Acquired Fund.

Shareholders of the Acquired Fund will experience continuity in portfolio management because the Adviser, the investment advisor to the Acquired Fund, will continue to manage the Acquiring Fund’s assets on a day-to-day basis. The Trustees also considered that Gregory A. Reid, Frank T. (Ted) Gardner III, CFA, and Parag Sanghani, CFA, the portfolio managers of the Acquired Fund, serve together as the primarily responsible portfolio managers of the Acquiring Fund. Accordingly, Acquired Fund shareholders should be provided with a continuing investment program and the same level of portfolio management services and there is not expected to be any diminution in the nature, quality and extent of services provided to shareholders after the Reorganization.

The Reorganization would provide similar benefits as the conversion of the Acquired Fund into an open-end structure, but to a degree greater than a conversion of the Acquired Fund: namely, the trading discount would be eliminated and Acquired Fund shareholders who become shareholders of the Acquiring Fund would be permitted to redeem, purchase or exchange shares of the Acquiring Fund received in the Reorganization at the then-current net asset value, but within a much larger fund with a substantially similar strategy, policies and risks. Acquiring Fund shares purchased after the Reorganization will be subject to the standard shareholder fee structure applicable to such class of shares.

The fee and expense structures of the Funds differ, in part, because of structural differences between open-end funds and closed-end funds. In this regard, in particular, Class A shares of the Acquiring Fund, including those received in the Reorganization, are subject to an ongoing Rule 12b-1 distribution and service fee of 0.25%, which generally is used to compensate financial intermediaries for shareholder services, that is not present for the Acquired Fund. However, the Acquiring Fund’s management fee and overall expenses, on both a gross and net basis, are materially lower than those of the Acquired Fund. In addition, shareholders of the Acquired Fund will not pay any front-end sales charges in connection with the receipt of Class A shares of the Acquiring Fund in the Reorganization. Class A shares received in the Reorganization will not be subject to any redemption fees or contingent deferred sales charges. Any class of shares purchased after the Reorganization will be subject to the standard shareholder fee structure applicable to such class.

Although the Funds’ respective investment strategies are substantially similar, the Acquiring Fund, as an open-end fund, is managed without using leverage and is not able to employ leverage to the same extent as the Acquired Fund, a closed-end fund, which may, but does not, also issue preferred shares and debt securities in addition to common shares. Due to limitations on the use of leverage by open-end funds, the Acquired Fund will have to reduce its use of leverage prior to the consummation of the Reorganization. In addition, open-end funds, such as the Acquiring Fund, are subject to Rule 22e-4 under the 1940 Act, which prohibits them from investing more than 15% of their net assets in illiquid investments (the “15% Illiquid Investment Limit”). Closed-end funds are not subject to Rule 22e-4, and the Acquired Fund may invest in illiquid investments without limit. Although the Acquired Fund currently holds an illiquid investment, in light of the much larger size of the Acquiring Fund, following the Reorganization, the Acquiring Fund’s illiquid investments will not exceed the 15% Illiquid Investment Limit and is expected to be de minimis in size.

The Reorganization is anticipated to be tax-free for federal income tax purposes for the Funds and their shareholders, and the Funds will receive an opinion from counsel to that effect as a condition to the closing of the Reorganization. However, the Acquired Fund will distribute any undistributed income and realized capital gains accumulated prior to the Reorganization to its shareholders. These distributions, if any, may be taxable to investors who hold their shares in a taxable account.

The terms of the Agreement include that the Reorganization is intended to avoid dilution of the interests with respect to net asset value of the existing shareholders of the Funds. In this regard, the Trustees considered that the aggregate net asset value of the Class A shares of the Acquiring Fund that shareholders of the Acquired Fund will receive in the Reorganization is expected to be equal to the aggregate net asset value of the common shares of the Acquired Fund held by such shareholders, as of the close of business on the business day immediately prior to the closing date of the Reorganization. As there are no material differences between the valuation policies used by each of the Funds, it is not expected that any differences in valuation between the value of your investment immediately before the Reorganization (calculated using the Acquired Fund’s valuation procedures) and the value of your investment immediately after the Reorganization will occur.

The direct costs of the Reorganization will be borne by the Funds with the Acquired Fund paying 70% of the costs associated with the Reorganization and the Acquiring Fund paying 30% of the costs associated with the Reorganization, which are estimated to be $315,000 (including auditor and legal fees and the costs of preparing and filing the enclosed Proxy Statement/Prospectus. These estimated expenses, in addition to the estimated brokerage commission and other transaction costs associated with the Reorganization purchases and sales of portfolio securities described above, will be borne indirectly by the Funds’ shareholders regardless of whether the Reorganization is consummated. The Acquired Fund Board and the Board of Trustees of the Acquiring Fund determined this allocation was fair and reasonable because the Acquired Fund’s shareholders would receive additional benefit in the form of liquidity from the Reorganization, as described in the Proxy Statement/Prospectus, not applicable to Acquiring Fund shareholders.

The Board also reviewed the historical performance of each of the Funds and their benchmark. Although past performance does not guarantee future results, for the five-year period ended December 31, 2021 and for the period from the Acquiring Fund’s Class A inception on December 20, 2012 through December 31, 2021, the Acquiring Fund outperformed the Acquired Fund, while for the one-year period ended December 31, 2021, the Acquired Fund outperformed the Acquiring Fund. The Acquiring Fund will be the legal and accounting survivor of the Reorganization. As such, the Acquiring Fund will continue to have the same performance history following the Reorganization as it had prior to the Reorganization, although no assurances may be given that the Acquiring Fund will achieve any particular level of performance after the Reorganization.

On May 26, 2022, Salient Partners, L.P. (“Salient”), the parent company to the Adviser, and Westwood Holdings Group, Inc. (“Westwood”) entered into a definitive purchase agreement pursuant to which Westwood has agreed to acquire certain investment management related assets of Salient (the “Westwood Transaction”). In anticipation of the Westwood Transaction, the Board of Trustees of the Acquiring Fund has separately approved an agreement and plan of reorganization providing for the reorganization of the Acquiring Fund into a newly formed series of the Ultimus Managers Trust (the “Westwood Fund”) to be managed by a Westwood-affiliated registered investment adviser. It is anticipated that the Acquiring Fund and the Westwood Fund will have substantially similar investment objectives, principal investment strategies, investment policies and principal risks. The Westwood Fund is anticipated to have a lower management fee and overall expenses, on both a gross and net basis, than the Acquiring Fund. Following the closing of the Westwood Transaction, the portfolio management team that currently manages the Acquiring Fund (as well as the Acquired Fund) is anticipated to continue to manage the Westwood Fund in the same manner as the Acquiring Fund is managed today, with the same stated investment objective. Class A shareholders of the Acquiring Fund are anticipated to receive Class A shares of the Westwood Fund, if that reorganization is approved by Acquiring Fund shareholders. The Westwood Transaction reorganization is also intended to be tax-free. The Westwood Transaction reorganization is subject to shareholder approval, and Acquiring Fund shareholders of record on the record date established for the Westwood Transaction will receive a separate proxy statement/prospectus that contains important information about the Westwood Transaction reorganization and the Westwood Fund. It is currently anticipated that the Reorganization of the Acquired Fund into the Acquiring Fund will be consummated prior to the record date to determine Acquiring Fund shareholders who will be eligible to vote on the Westwood Transaction reorganization. However, if the consummation of the Reorganization of the Acquired Fund into the Acquiring Fund is delayed, it is possible that Acquired Fund shareholders who receive Class A shares of the Acquiring Fund will not be eligible to vote on the Westwood Transaction reorganization, but would be subject to the results of such vote if they remain shareholders of the Acquiring Fund. These shareholders would continue to be permitted to redeem shares of the Acquiring Fund until the consummation of the Westwood Transaction reorganization, at which time they would become shareholders of the Westwood Fund.

The Reorganization involves conflicts of interest, as the Board recognized that the Adviser is expected to benefit from the Reorganization to the extent it later impacts the total assets or overall approvals of the Westwood Transaction. In approving the Reorganization and the Agreement, the Board, including the Independent Trustees of each of the Funds or the Adviser, was aware of and considered these potential conflicts of interest.

For the reasons described above, the Acquired Fund Board, including the Independent Trustees, approved the Reorganization. In particular, the Acquired Fund Board determined that the Reorganization is in the best interests of the Acquired Fund and that the interests of the shareholders of the Acquired Fund would not be diluted as a result of the Reorganization.

Accordingly, the Acquired Fund Board, including the Independent Trustees, unanimously recommends that you vote FOR the proposed reorganization

Tax Status of the Reorganization

The Reorganization is intended not to result in income, gain or loss for federal income tax purposes to the Acquiring Fund, the Acquired Fund, or the shareholders of the Acquired Fund and will not take place unless the Funds receive a satisfactory opinion from K&L Gates LLP, substantially to the effect that the Reorganization will be a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).

As a result, with respect to the Reorganization, for federal income tax purposes:

In rendering such opinion, counsel shall rely upon, among other things, reasonable assumptions as well as representations of the Funds.

No tax ruling has been or will be received from the Internal Revenue Service (“IRS”) in connection with the Reorganization. An opinion of counsel is not binding on the IRS or a court and no assurance can be given that the IRS would not assert, or a court would not sustain, a contrary position.

Prior to the Closing Date, it is anticipated that the Acquired Fund will sell approximately 30% of its portfolio in order to reduce the Acquired Fund’s leverage in preparation of the Reorganization. It is estimated that these transactions will generate approximately $60,000, amounting to less than $0.01 per share, in portfolio transaction costs for the Acquired Fund. As a result of the existing unused capital loss carryforwards of the Acquired Fund, these transactions are not anticipated to cause any capital gain distributions to be paid to the shareholders of the Acquired Fund. Additional information regarding the unused capital loss carryforwards of the Acquired Fund is included below.

Prior to the closing of the Reorganization, the Acquired Fund will, and the Acquiring Fund may, declare a distribution to shareholders that, together with all previous distributions, will have the effect of distributing to shareholders all of its investment company taxable income (computed without regard to the deduction for dividends paid) and net capital gains, including those realized on disposition of portfolio securities in connection with the Reorganization (after reduction by any available capital loss carry-forwards), if any, through the closing of the Reorganization. Such distributions will be taxable to shareholders.

As of November 30, 2021, the Acquired Fund had unused short-term capital loss carryforwards of $145,470,239 and unused long-term capital loss carryforwards of $83,113,664. Capital loss carryforwards are considered valuable tax attributes because they can reduce a fund’s future taxable income and thus reduce the taxable amount distributed to fund shareholders. The Reorganization of the Acquiring Fund and the Acquired Fund will affect the use of these tax attributes of the Acquired Fund in two respects. The first concerns the “sharing” of these tax attributes with the shareholders of the Acquiring Fund. If there was no Reorganization, these tax attributes would inure solely to the benefit of the shareholders of the Acquired Fund. After the Reorganization occurs, these tax attributes carry over (subject to the limitations described below) to the Acquiring Fund. That means that any resulting tax benefits inure to all shareholders of the post-Reorganization Acquiring Fund (i.e., both pre-Reorganization shareholders of the Acquired Fund and pre-Reorganization shareholders of the Acquiring Fund).

The second manner in which the Reorganization will affect the use of the capital loss carryforwards and built-in losses concerns certain limitations imposed under the Code with respect to the use of these losses. Generally, when ownership of a “loss corporation” such as the Acquired Fund changes for tax purposes in connection with a reorganization (as will be the case here), the Code imposes various limitations on the use of loss carryforwards following the change in ownership. The amount of such loss carryforwards that can be used each year to offset post-acquisition income is generally limited to an amount equal to the “federal long-term tax-exempt rate” (the applicable rate as of July 2022 was 2.43%) multiplied by the value of the “loss corporation’s” equity. This limitation would result in the reduction of the portion of the loss carryforwards that the post-Reorganization Acquiring Fund will be able to use each year to offset realized capital gains. However, there is no assurance that such losses would be used even in the absence of the Reorganization.

The foregoing consequences may not apply to certain classes of taxpayers who are subject to special circumstances, such as shareholders who are not citizens of or residents of the United States, insurance companies, tax-exempt organizations, financial institutions, dealers in securities or foreign currencies or persons who hold their shares as part of a straddle or conversion transaction.

This description of the federal income tax consequences of the Reorganization is made without regard to the particular circumstances of any shareholder. Shareholders are urged to consult their own tax advisors as to the specific consequences to them of the Reorganization, including the applicability and effect of state, local, foreign and other tax laws.

Additional Terms of the Agreement and Plan of Reorganization

Certain terms of the Agreement are described above. The following is a summary of certain additional terms of the Agreement. This summary and any other description of the terms of the Agreement contained in this Proxy Statement/Prospectus are qualified in their entirety by Exhibit A, the Form of Agreement and Plan of Reorganization and Liquidation, in its entirety.

Conditions to Closing the Reorganization. The obligation of the Acquired Fund to consummate the Reorganization is subject to the satisfaction of certain conditions, including the performance by the Acquiring Fund of all its obligations under the Agreement and the receipt of all consents, orders and permits necessary to consummate the Reorganization (see Agreement, paragraph 6.2).

The obligation of the Acquiring Fund to consummate the Reorganization is subject to the satisfaction of certain conditions, including the Acquired Fund’s performance of all of its obligations under the Agreement, the receipt of certain documents and financial statements from the Acquired Fund and the receipt of all consents, orders and permits necessary to consummate the Reorganization (see Agreement, paragraph 6.2).

The Funds’ obligations are also subject to the receipt of a favorable opinion of K&L Gates LLP as to the federal income tax consequences of the Reorganization (see Agreement, paragraph 6.4).

Termination of Agreement. Either of the Acquired Fund Board or the Board of Trustees of the Acquiring Fund may terminate the Agreement at any time before the Reorganization, subject to certain conditions.

Expenses of the Reorganization. The direct costs of the Reorganization will be borne by the Funds with the Acquired Fund paying 70% of the costs associated with the Reorganization and the Acquiring Fund paying 30% of the costs associated with the Reorganization, which are estimated to be $315,000 (including auditor and legal fees and the costs of preparing and filing the enclosed Proxy Statement/Prospectus. These estimated expenses, in addition to the estimated brokerage commission and other transaction costs associated with the Reorganization purchases and sales of portfolio securities described above, will be borne indirectly by the Funds’ shareholders regardless of whether the Reorganization is consummated. The Acquired Fund Board and the Board of Trustees of the Acquiring Fund determined this allocation was fair and reasonable because the Acquired Fund’s shareholders would receive additional benefit in the form of liquidity from the Reorganization, as described in the Proxy Statement/Prospectus, not applicable to Acquiring Fund shareholders.

PROXIES, QUORUM AND VOTING AT THE SPECIAL MEETING

Only shareholders of record on the Record Date will be entitled to attend, participate and/or vote at the Special Meeting. Each share of the Acquired Fund is entitled to one vote. Fractional shares are entitled to proportionate shares of one vote. The votes of shareholders of the Acquiring Fund are not being solicited since their approval is not required in order to effect the Reorganization.

Proxies will be solicited by mail and may be solicited in person, by telephone, Internet or facsimile by officers of the Acquired Fund, by personnel of the Adviser or of the Acquired Fund’s administrator and transfer agent, or by broker-dealer firms. The Acquired Fund has retained Okapi Partners LLC (“Okapi”), a professional proxy solicitation firm, to assist with any necessary solicitation of proxies. Some of the proxy solicitation services to be provided by Okapi include mail and tabulation services, as well as services to facilitate mail, telephone and Internet voting. Acquired Fund shareholders may receive a telephone call from Okapi asking them to vote. A written proxy may be delivered to the Acquired Fund or its transfer agent prior to the meeting by telephone, Internet, facsimile machine, graphic communication equipment or similar electronic transmission. The Funds will reimburse banks, broker-dealer firms, and other persons holding shares registered in their names or in the names of their candidates, for their expenses incurred in sending proxy material to and obtaining proxies from the beneficial owners of such shares. Total estimated proxy solicitation costs are approximately $65,000.

Where shares are held of record by more than one person, any co-owner or co-fiduciary may execute the proxy or give authority to an agent, unless the Secretary of the Trust is notified in writing by any co-owner or co-fiduciary that the joinder of more than one is to be required. All proxy cards solicited by the Board that are properly executed and received by the Secretary (via mail, telephone or electronic transmission) prior to the meeting, and which are not revoked, will be voted at the meeting. A proxy is revocable by the person giving it prior to exercise by a signed writing delivered to the Acquired Fund’s Secretary, or by executing and delivering a later dated proxy (via mail, telephone or electronic transmission) prior to the meeting, or by attending the meeting and voting the shares in person. Shares represented by such proxies will be voted in accordance with the instructions thereon. If no specification is made on the proxy card, all shares held by such shareholder shall be voted in favor of the Proposal.

A quorum requires the presence, in person or by proxy, of holders of a majority of the outstanding shares of the Acquired Fund entitled to vote. Approval of the Reorganization requires the affirmative vote of the lesser of: (i) 67% or more of the shares present at the meeting, if the holders of more than 50% of the outstanding shares entitled to vote are present or represented by proxy; or (ii) more than 50% of the outstanding shares entitled to vote. The Acquired Fund anticipates that a large shareholder will support the Reorganization, which may facilitate obtaining the required vote.

All shares that are voted and votes to ABSTAIN will be counted towards establishing a quorum. However, abstentions will not be treated as votes cast at such Special Meeting. Abstentions, therefore, will have no effect on a proposal that requires an affirmative vote of a majority of outstanding shares entitled to vote for approval, but will effectively be a vote against a proposal that requires the affirmative vote of a minimum percentage of the shares present or represented by proxy for approval. In contrast, it is the Funds’ understanding that broker “non-votes” (that is, proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owner or other persons entitled to vote shares on a particular matter with respect to which the brokers or nominees do not have discretionary power) are not expected at the Special Meeting as there is no routine matter on which such brokers could vote. Broker non-votes otherwise would have the same effect as abstentions, i.e., they would be included for purposes of determining whether a quorum is present but would not be counted as votes cast on a proposal.

Shareholders do not have appraisal rights in connection with the Proposal in this Proxy Statement/Prospectus. In the event that a quorum is not present at the meeting, or if a quorum is present at the meeting but sufficient votes by the shareholders of the Acquired Fund in favor of the Proposal set forth in the Notice of this meeting are not received by [         ], the chairman of the meeting may call an adjournment or the persons named as proxies in the Acquired Fund’s enclosed proxy may propose one or more adjournments of the meeting to permit further solicitation of proxies. Any such adjournment, if submitted to a vote, will require the affirmative vote of the holders of a majority of the shares present in person or by proxy at the session of the meeting to be adjourned. The persons named as proxies will vote those proxies that they are entitled to vote FOR the approval of the Proposal in favor of such an adjournment, and will vote those proxies required to be voted AGAINST the approval of the Proposal against such an adjournment. The costs of any such additional solicitation and of any adjourned session will be borne by the Funds.

To be considered for presentation at a shareholder meeting, rules promulgated by the SEC generally require that, among other things, a shareholder’s proposal must be received at the offices of the relevant Fund a reasonable time before solicitation is made. Shareholders should review each Fund’s bylaws for additional information regarding the Funds’ advance notice provisions. The Acquired Fund Bylaws are posted on the Acquired Fund’s website and the Acquiring Trust Bylaws were filed with the SEC on April 29, 2016 on Form N-1A pursuant to Rule 485(b) under the Securities Act of 1933, as amended. Shareholders may obtain copies of such documents by contacting a Fund in the manner described above under “Where to Get More Information.”

Shareholders wishing to communicate with the Board of Trustees of either Fund may do so by sending a written communication to the Chairperson of the Board, the Chairperson of any Committee of the Board or to the Independent Trustees as a group, at the following address: 4265 San Felipe, 8th Floor, Houston, Texas 77027, c/o the Secretary of the Fund.

SHARE OWNERSHIP OF THE FUNDS

A shareholder who owns, directly or indirectly, more than 25% of a Fund’s voting securities may be deemed a “control person” (as defined under applicable securities laws) of the Fund. A control person’s vote could have more significant effect on matters presented to shareholders for approval then the vote of other Fund shareholders.

[As of August 10, 2022, the Boards and officers as a group owned less than 1% of each of the Funds’ outstanding shares].

The following shareholders owned, of record, beneficially, or both, as of August 10, 2022, 5% or greater of the Fund’s outstanding equity securities. Percentage of the Acquiring Funds owned may include shareholder’s holdings of other share classes of the Acquiring Fund not involved in the Reorganization.

[To be completed after record date.]

The following persons owned of record, beneficially, or both, as of August 10, 2022, 25% or greater of the Fund’s outstanding equity securities. Percentage of the Acquiring Funds owned may include shareholder’s holdings of other share classes of the Acquiring Fund not involved in the Reorganization.

[To be completed after record date.]

The table below sets forth the outstanding securities of the Acquired Fund as of June 30, 2022.

CAPITALIZATION

With respect to the Reorganization, the following tables set forth the capitalization of the Acquired Fund and the Acquiring Fund as of December 31, 2021, the most recent fiscal year end of the Acquiring Fund, and the pro forma combined capitalization of the Acquiring Fund as if the Reorganization had occurred on that date.

ADDITIONAL INFORMATION ABOUT THE FUNDS

Comparison of the Funds’ Classes of Shares

The following table details the expense structures of the Acquired Fund’s Common Shares and the Acquiring Fund’s Class A shares.

The Acquired Fund does not continuously issue shares, as it is a closed-end fund. Following the Reorganization, Acquired Fund shareholders will receive Class A shares of the Acquiring Fund for their Common Shares.

Shareholders of the Acquired Fund will not pay any front-end sales charges in connection with the receipt of Class A shares of the Acquiring Fund in the Reorganization. Class A shares received in the Reorganization will not be subject to any redemption fees or contingent deferred sales charges. Any class of shares purchased after the Reorganization will be subject to the standard shareholder fee structure applicable to such class.

Comparison of Buying, Selling and Exchanging Shares

The common shares of the Acquired Fund, a closed-end fund, are listed for trading on the NYSE, where such shares may be purchased and sold through broker-dealers at prevailing market prices, which may be greater than (premium) or less than (discount) net asset value. Shares of the Acquired Fund do not have any exchange rights. The Acquiring Fund, an open-end fund, continuously offers new shares. As an open-end fund with multiple share classes, the Acquiring Fund has detailed information regarding how to buy shares, minimum initial investment amount, tax information, payments to broker-dealers and intermediaries, exchanging shares, concerning frequent purchases and redemptions, and redeeming shares. The Acquired Fund does not continuously offer shares, as it is a closed-end fund, and therefore the Acquired Fund does not provide the below information. Following the Reorganization, shareholders will receive Class A shares of the Acquiring Fund for their Common Shares, and the details for buying, selling and exchanging those shares is described below.

Minimum Initial Investment

The minimum initial investment for Class A shares of the Acquiring Fund is:

Subsequent investments in Class A shares must be $100 or more. Financial intermediaries may charge their customers a transaction or service fee.

The Acquiring Fund may, in its sole discretion, waive or reduce any minimum investment requirements.

How to Buy Shares

Class A shares are sold with a front-end sales charge, which may be reduced or waived, as discussed below. Class A shares’ cost structure includes a Rule 12b-1 plan that allows the payment of fees for the sale, distribution and/or service of their shares.

Your financial representative can help you decide which share class is best for you.

12b-1 Fees

Rule 12b-1 fees are paid to, but not retained by, Foreside Fund Services, LLC (the “Distributor”). These fees are used by the Distributor to pay for expenses relating to the distribution and servicing of the Acquiring Fund shares. The specific treatment per class of Rule 12b-1 fees is as follows:

Class A. The services fee represents the entire portion of the 0.25% Rule 12b-1 fee. There is no distribution-specific fee.

Because Rule 12b-1 fees are paid out of the Acquiring Fund’s assets on an ongoing basis, over time they will increase the cost of your investment and may cost shareholders more than other types of sales charges.

Your broker-dealer or agent may charge you a fee to effect transactions in the Acquiring Fund shares. Any such fee is not a charge of the Acquiring Fund. 

Sales Charges

Shareholders of the Acquired Fund will not pay any front-end sales charges in connection with the receipt of Class A shares of the Acquiring Fund in the Reorganization. Class A shares received in the Reorganization will not be subject to any redemption fees or contingent deferred sales charges. Any class of shares purchased after the Reorganization will be subject to the standard shareholder fee structure applicable to such class. 

Class A Shares

You may qualify for a reduced Class A sales charge if you own or are purchasing Class A, Class C or Class I shares of a Salient fund contained in the Salient MF Trust. To receive the reduced sales charge, you must tell your broker or financial representative at the time you purchase the Acquiring Fund’s Class A shares about any other funds contained in the Salient MF Trust held by you, your spouse or your children under the age of 21 living in the same household. This includes investments held in an individual retirement account, an employee benefit plan or with a broker or financial representative other than the one handling your current purchase. Salient will credit the combined value, at the current offering price, of all eligible accounts to determine whether you qualify for a reduced sales charge on your current purchase. You may need to provide documentation for these accounts, such as an account statement. For more information about sales charges, reductions, and waivers, you may visit the Acquiring Fund’s Web site www.salientpartners.com, which includes hyperlinks to facilitate access to this information. You may also consult your broker or financial advisor, or refer to the section entitled “Initial Sales Charge on Class A Shares” in the SAI. You may request an SAI from your broker or financial advisor by accessing the Acquiring Fund’s Web site www.salientpartners.com or by calling the Transfer Agent at 1-866-667-9228.

If shares of the Acquiring Fund are tendered for redemption or repurchased by the Acquiring Fund for any reason within seven business days after confirmation of the purchase order for such shares, the full sales load or other concession will be returned to the shareholder and any financial intermediary making such sale forfeits the right to receive any compensation on such shares.

Deferred Sales Charges

Class A shares are available with no front-end sales charge on investments of $1 million or more. Brokers that initiate and are responsible for purchases of $1 million or more may receive a sales commission of up to 1.00% of the offering price of Class A shares. As a result, Class A shares that were not subject to a front-end sales charge, but for which a commission or finder’s fee was paid, may be subject to a contingent deferred sales charge (CDSC) of 1.00% if such Class A shares are sold within twelve months of purchase.

For purposes of charging a CDSC, all purchases made during a calendar month are counted as having been made on the first day of that month. The CDSC is based on the lesser of the original purchase cost or the current market value of the shares being sold, and is not charged on shares you acquired by reinvesting your dividends. To keep your CDSC as low as possible, each time you place a request to sell shares we will first sell any shares in your account that are not subject to a CDSC.

Reduced Sales Charge for Class A Shareholders

As noted in the table above, discounts (“breakpoints”) are available for larger purchases. There are several ways for shareholders to reach a higher discount level and qualify to pay a lower sales charge. Shareholders may qualify by combining current and past purchases in any of the Class A shares of the Salient funds. To determine whether or not a reduced initial sales charge applies to a proposed purchase, we take into account not only the money that is invested upon such proposed purchase, but also the value of all Class A shares of the Salient funds that we currently have associated with you, calculated at their historical cost and/or offering price.

You can minimize sales charges in any of the following ways:

To qualify for the Combined Purchase Privilege or to obtain the Right of Accumulation, when each such purchase is made, the investor or financial intermediary must provide us with sufficient information at the time of purchase to verify that the purchase qualifies for the privilege or discount. Because breakpoint eligibility may be determined based on historical cost, you should retain any records necessary to substantiate those costs in cases where the Acquiring Fund, its Transfer Agent, and financial intermediaries do not maintain this information.

It may be necessary for an investor to provide the following information or records to the Acquiring Fund or his or her financial intermediary in order to verify his or her eligibility for a breakpoint discount: (a) information or records regarding shares of the Acquiring Fund or other Salient funds held in all accounts (e.g., retirement accounts) of the investor at the financial intermediary; (b) information or records regarding shares of the Acquiring Fund or other Salient funds held in any account of the shareholder at another financial intermediary; and (c) information or records regarding shares of the Acquiring Fund or other Salient funds held at any financial intermediary by related parties of the investor, such as members of the same family or household. If an investor fails to identify necessary breakpoint information, at the time of purchase, the investor may not receive the breakpoints that would otherwise be available.

Reinstatement Privilege for Class A Shares

An investor who has sold Class A shares of the Acquiring Fund may, upon prompt written notification to Salient funds, reinvest the proceeds of such sale in Class A shares of any of the Salient funds within 120 days of the sale, and any such reinvestment will be made at the Acquiring Fund’s then-current net asset value, so that no sales charge will be levied. Investors should call the Acquiring Fund for additional information prior to exercising this privilege.

By exercising this reinstatement privilege, the investor does not alter the federal income tax treatment of any capital gains realized on the previous sale of shares of the Acquiring Fund, but to the extent that any shares are sold at a loss and proceeds are reinvested in shares of the Acquiring Fund, some or all of the loss may be disallowed as a deduction. Please contact your tax advisor for more information concerning tax treatment of such transactions.

Waiver of Initial Sales Charges for Class A Shares

The Acquiring Fund may waive the imposition of sales charges on investor purchases of Class A shares of the Acquiring Fund under certain circumstances and conditions, including shares purchased by:

Salient funds reserves the right to waive or update these waiver requirements at its discretion.

Waiver of CDSC

The Acquiring Fund may waive the imposition of a CDSC on redemptions of Class A shares of the Acquiring Fund under certain circumstances and conditions, including without limitation the following:

If you think you may be eligible for a CDSC waiver, contact your financial intermediary. You must notify the Acquiring Fund prior to the redemption request to ensure your receipt of the waiver. Please call 1-866-667-9228 for additional information.

To utilize a waiver, you must contact your financial representative or the Transfer Agent. Consult the SAI for additional details.

Other Waivers

Front-end sales charges and CDSCs are not imposed in connection with the following transactions:

Intermediary-Defined Sales Charge Waiver Policies

The availability of certain sales charge waivers and discounts will depend on whether you purchase your shares directly from the Acquiring Fund or through a financial intermediary. Intermediaries may have different policies and procedures regarding the availability of front-end sales load waivers or contingent deferred (back-end) sales load (“CDSC”) waivers, which are discussed below. In all instances, it is the purchaser’s responsibility to notify the Acquiring Fund or the purchaser’s financial intermediary at the time of purchase of any relationship or other facts qualifying the purchaser for sales charge waivers or discounts. For waivers and discounts not available through a particular intermediary, shareholders will have to purchase Acquiring Fund shares directly from the Acquiring Fund or through another intermediary to receive these waivers or discounts.

Janney Montgomery Scott LLC

Effective May 1, 2020, if you purchase Acquiring Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Acquiring Fund’s prospectus or SAI.

Front-end sales charge* waivers on Class A shares available at Janney

CDSC waivers on Class A and C shares available at Janney

Front-end sales charge* discounts available at Janney: breakpoints, rights of accumulation, and/or letters of intent

*Also referred to as an “initial sales charge.”

Morgan Stanley

Effective July 1, 2018, shareholders purchasing Acquiring Fund shares through a Morgan Stanley Wealth Management transactional brokerage account will be eligible only for the following front-end sales charge waivers with respect to Class A shares, which may differ from and may be more limited than those disclosed elsewhere in this prospectus or the SAI.

Front-end Sales Charge Waivers on Class A Shares available at Morgan Stanley Wealth Management

Oppenheimer & Co. Inc. (“OPCO”)

Effective February 26, 2020, shareholders purchasing Acquiring Fund shares through an OPCO platform or account are eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in the Acquiring Fund’s prospectus or SAI.

Front-end Sales Load Waivers on Class A Shares available at OPCO

CDSC Waivers on A, B and C Shares available at OPCO

Front-end load Discounts Available at OPCO: Breakpoints, Rights of Accumulation & Letters of Intent

Raymond James & Associates, Inc., Raymond James Financial Services, Inc. and each entity’s affiliates (“Raymond James”)

Effective March 1, 2019, shareholders purchasing Acquiring Fund shares through a Raymond James platform or account, or through an introducing broker-dealer or independent registered investment adviser for which Raymond James provides trade execution, clearance, and/or custody services, will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this prospectus or SAI.

Front-end sales load waivers on Class A shares available at Raymond James

CDSC Waivers on Classes A and C shares available at Raymond James

Front-end load discounts available at Raymond James: breakpoints, rights of Accumulation, and/or letters of intent

Pricing of the Acquiring Fund Shares

When you buy shares, you pay the NAV, plus any applicable sales charges, as described earlier. When you sell shares, you receive the NAV, minus any applicable deferred sales charges.

The Acquiring Fund is open on those days when the NYSE is open, typically Monday through Friday. Buy and sell requests are executed at the next NAV to be calculated after the Transfer Agent receives your request in good order. In unusual circumstances, the Acquiring Fund has the right to redeem in kind.

At times of peak activity, it may be difficult to place requests by telephone. During these times, consider sending your request in writing.

In case of emergency or other disruption resulting in the NYSE not opening for trading or closing at a time other than the regularly scheduled close, the time at which shares are priced and until which purchase and redemption orders are accepted may be changed as permitted by the SEC. This may result in the Acquiring Fund closing for business prior to the time at which the Acquiring Fund’s NAV is determined. 

Other Information

The issuance of shares is recorded electronically on the books of the Trust. You will receive a confirmation and a quarterly account statement reflecting each new transaction in your account. Your quarterly statements will show the total number of shares of the Acquiring Fund you own. You can rely on these statements in lieu of certificates. Certificates representing shares of the Acquiring Fund will not be issued.

For your protection, telephone requests may be recorded in order to verify their accuracy. Also for your protection, telephone redemption transactions are not permitted on accounts in which names or mailing addresses have changed within the past 30 days. Proceeds from telephone transactions can only be mailed to the address of record.

The Acquiring Fund may be required to “freeze” your account if there appears to be suspicious activity or if account information matches information on a government list of known terrorists or other suspicious persons.

Due to the relatively high cost of handling small investments, the Acquiring Fund reserves the right, upon 60 days’ written notice, to redeem, at NAV, the shares of any shareholder whose account has a value of less than $500 in the Acquiring Fund, other than as a result of a decline in the NAV per share. This policy will not be implemented where the Acquiring Fund has previously waived the minimum investment requirement for that shareholder. Before the Acquiring Fund redeems such shares and sends the proceeds to the shareholder, it will notify the shareholder that the value of the shares in the account is less than the minimum amount and will allow the shareholder 60 days to make an additional investment in an amount that will increase the value of the account to at least $500 before the redemption is processed. As a sale of your Acquiring Fund shares, this redemption may have tax consequences.

The Acquiring Fund reserve the right to refuse any request to purchase shares.

Account Statements

In general, you will receive account confirmations and statements as follows:

Every year you should also receive, if applicable, a Form 1099 tax information statement, mailed by February 15.

How to Exchange Shares

Exchanges of Class A for the Same Class of Shares of Any Other Fund

By following the instructions below, and subject to such limitations as may be imposed by the Trust (including that the financial intermediary maintain an agreement with the Acquiring Funds’ Distributor), shareholders may exchange Class A shares of any fund for the same class shares of any other fund contained in the Trust. There are generally no fees for exchanges, but an exchange of shares between funds is technically a sale of shares in one fund followed by a purchase of shares in another fund, and therefore may have tax consequences. Thus, the exchange may, like a sale, result in a taxable gain or loss to the shareholder and will generally give a new tax basis for the new shares.

Class A shares of the Acquiring Fund initially purchased subject to a front-end sales load may generally be exchanged for Class A shares of another fund without the payment of an additional front-end sales load. If a shareholder exchanges Class A shares of the Acquiring Fund for Class A shares of another fund that is subject to a higher front-end sales load, the shareholder will be charged the difference between the two sales loads. If the front-end sales load was waived for the initial purchase of Class A shares, the shareholder may be subject to the imposition of a front-end sales load upon exchanging into Class A shares of another fund. If the shareholder purchased Class A shares subject to a sales load, they will not be reimbursed the sales load upon exchange of the shares to another fund.

If the Class A shares are subject to a CDSC, and the shareholder exchange them for Class A shares subject to a CDSC, the shares will be subject to the higher applicable CDSC of the two classes and, for purposes of calculating CDSC rates, will be deemed to have been held since the date the shares being exchanged were initially purchased.

Shareholders should read the prospectus for any other Salient Fund into which they are considering exchanging.

Exchanges of Class A Shares for a Different Class within the Same Fund

By following the instructions below, and subject to such limitations as may be imposed by the Trust (including that the financial intermediary maintain an agreement with the Acquiring Fund’s Distributor), a shareholder may exchange their Class A shares of the same fund. An exchange of shares of one class of a fund into another class of the same fund is not treated as a redemption and sale for tax purposes.

Class A shares subject to a CDSC will be charged the applicable CDSC upon exchange for Class I shares.

If a shareholder purchased Class A shares subject to a sales load, they will not be reimbursed the sales load upon exchange of the shares to another Class in the same fund.

Shareholders should read the prospectus for any other class of shares into which they are considering exchanging.

Shares of one Acquiring Fund or a class thereof may be exchanged for shares of another fund or class on days when the NYSE is open for business, as long as shareholders meet the normal investment requirements, including the minimum investment requirements, of the other Fund or class. The registration for both accounts must be identical. The Trust reserves the right to prohibit exchanges during the first 15 days following an investment in the Acquiring Fund and may terminate or change the terms of the exchange privilege at any time. The Acquiring Fund may change or cancel its exchange policies at any time, upon 60 days’ written notice to its shareholders.

Additionally, investors who hold shares of the Acquiring Fund through a fee-based advisory program, but who subsequently become ineligible to participate in the program or withdraw from the program, may be subject to exchange of their shares by their financial intermediary to another class of shares of the same Acquiring Fund. Any such conversion will occur at the relative net asset value of the two share classes, without the imposition of any sales load, fee, or other charge. Notwithstanding the foregoing, a shareholder’s shares will not be converted without prior notice by the financial intermediary. Investors should contact their financial intermediary to obtain information about their eligibility for the program and the class of shares they would receive upon such a conversion.

How to Redeem Shares

You may normally redeem your shares on any Business Day. Redemptions are priced at the NAV per share next determined after receipt of a redemption request in good order by the Acquiring Fund’s Distributor, the Acquiring Fund, or its agent, and subject to any applicable CDSC. A financial intermediary may charge its customers a transaction or service fee in connection with redemptions. The Acquiring Funds intend to redeem shares of the Acquiring Fund solely in cash up to the lesser of $250,000 or 1.00% of the Acquiring Fund’s net assets during any 90-day period for any one shareholder. In consideration of the best interests of the remaining shareholders, the Acquiring Fund reserve the right to pay any redemption proceeds exceeding this amount in whole or in part by a distribution in-kind of securities held by the Acquiring Fund in lieu of cash. It is highly unlikely that shares would ever be redeemed in-kind. If shares are redeemed in-kind, the redeeming shareholders should expect to incur transaction costs upon the disposition of the securities received in the distribution including, but not limited to, brokerage costs of converting the portfolio securities to cash.

Requests must be received prior to the close of the NYSE, normally 4:00 p.m., Eastern Time.

Shares will be redeemed at the next NAV calculated after the Transfer Agent receives the redemption request in good order. Requests received “in good order” must include: account name, account number, dollar or share amount of transaction, class, the Acquiring Fund, allocation of investment and signature of authorized signer. Payment will ordinarily be made within seven days of the request as set out in the current payment instruction on file for a shareholder’s account.

Neither the Advisor, the Distributor, the Transfer Agent, the Acquiring Fund nor any of its affiliates or agents will be liable for any loss, expense or cost when acting upon any oral, written or electronically transmitted instructions or inquiries believed by them to be genuine. While precautions will be taken, as more fully described below, you bear the risk of any loss as the result of unauthorized telephone redemptions or exchanges believed to be genuine. The Acquiring Fund will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. These procedures include recording phone conversations, sending confirmations to shareholders within 72 hours of the telephone transaction, verifying the account name and sending redemption proceeds only to the address of record or to a previously authorized bank account.

By Telephone

You may redeem your shares by telephone if you choose that option on your Account Application. If you did not originally select the telephone option, you must provide written instructions to the Acquiring Fund in order to add this option. The maximum amount that an individual investor may redeem by telephone at any one time is $100,000. You may have the proceeds mailed to your address of record, wired or sent via ACH to a bank account previously designated on the Account Application. If you elect to have the payment wired to your bank, a wire transfer fee of $30.00 may be charged by the Acquiring Fund.

By Mail

To redeem by mail, you must send a written request for redemption to Salient Funds, PO Box 1345, Denver, Colorado 80201. The Acquiring Fund’s Transfer Agent will require a Medallion Signature Guarantee. A Medallion Signature Guarantee may be obtained from a domestic bank or trust company, broker, dealer, clearing agency, savings association, or other financial institution that is participating in a medallion program recognized by the Securities Transfer Association. Signature guarantees from financial institutions that are not participating in one of these programs are not accepted as Medallion Signature Guarantees. The Medallion Signature Guarantee requirement will be waived if all of the following conditions apply: (1) the redemption is payable to the shareholder(s) of record; (2) the redemption is delivered to the shareholder(s) at the address of record or current banking instructions on file; (3) the address of record and banking instructions have not changed in the last 30 days; and (4) an application is on file with the Transfer Agent. The Transfer Agent cannot send an overnight package to a post office box.

By Systematic Withdrawal

You may elect to have annual or monthly electronic transfers ($100 minimum) made to your bank account from your Salient funds account. Your account must have a minimum balance of $100 and automatically have all dividends and capital gains reinvested. If the balance of your account falls below $100, the systematic withdrawal will be terminated, and you must resubmit your request in writing to have the privilege reinstated. The transfer will be made on the day you specify (or the next Business Day) to your designated account or a check will be mailed to your address of record. If you do not specify a day, the transfer will be made on the 20th day of each month or the next Business Day if the 20th is not a Business Day.

Retirement Accounts

To redeem shares from an IRA, Roth IRA, SIMPLE IRA, SEP IRA, 403(b) or other retirement account, you must mail a completed and signed Distribution Form to the Acquiring Fund. You may not redeem shares of an IRA, Roth IRA, SIMPLE IRA, SEP IRA, 403(b) or other retirement account by telephone or via the Internet.

Payments of Redemption Proceeds

Redemption orders are valued at the NAV per share next determined after the shares are properly tendered for redemption, as described above. Payment for shares redeemed generally will be made within seven days after receipt of a valid request for redemption. The Acquiring Fund may temporarily stop redeeming shares or delay payment of redemption proceeds when the NYSE is closed or trading on the NYSE is restricted, when an emergency exists and the Acquiring Fund cannot sell shares or accurately determine the value of assets, if the SEC orders the Acquiring Fund to suspend redemptions or delay payment of redemption proceeds, or to the extent permitted by applicable laws and regulations.

At various times, the Acquiring Fund may be requested to redeem shares for which it has not yet received good payment. If this is the case, the forwarding of proceeds may be delayed until payment has been collected for the purchase of the shares. The delay may last up to 10 days. The Acquiring Fund intends to forward the redemption proceeds as soon as good payment for purchase orders has been received. This delay may be avoided if shares are purchased by wire or ACH transfer. The Acquiring Fund intends to pay cash for all shares redeemed, except in cases noted above under the heading “Redeeming Shares,” in which case payment for certain large redemptions may be made wholly or partly in portfolio securities that have a market value equal to the redemption price. You may incur brokerage costs in converting the portfolio securities to cash.

Under normal market conditions, the Acquiring Fund typically expects to meet redemption requests through holdings of cash or cash equivalents or through sales of portfolio securities, and may access other available liquidity facilities, such as the ReFlow liquidity program. In unusual or stressed market conditions (for example, when a foreign securities exchange is closed for an extended holiday), in addition to the methods used in normal market conditions, yhe Acquiring Fund may meet redemption requests through the use of redemptions in kind, or such other liquidity means or facilities as the Acquiring Fund may have in place from time to time.

Neither the Acquiring Fund nor its agents are responsible for losses or fees resulting from posting delays or non-receipt of redemption payments when shareholder payment instructions are followed.

By Check

You may have a check for the redemption proceeds mailed to your address of record. To change the address to which a redemption check is to be mailed, you must send a written request with a Medallion Signature Guarantee to Salient Funds, PO Box 1345 Denver, Colorado 80201.

The Acquiring Fund does not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in the mail or with such services, or receipt at the Acquiring Fund’s post office box, of purchase orders or redemption requests does not constitute receipt by the Acquiring Fund.

By ACH Transfer

You can arrange for the proceeds of a redemption to be sent by ACH to a single previously designated bank account if you have given authorization for ACH redemption on your Salient funds Account Application.

By Wire Transfer

You can arrange for the proceeds of a redemption to be sent by wire transfer to a single previously designated bank account if you have given authorization for wire redemption on your Salient funds Account Application. This redemption option does not apply to shares held in broker “street name” accounts. If a request for a wire redemption is received by the Acquiring Fund prior to the close of the NYSE, the shares will be redeemed that day at the next determined NAV, and the proceeds will generally be sent to the designated bank account the next Business Day. The bank must be a member of the Federal Reserve wire system. Delivery of the proceeds of a wire redemption request may be delayed by the Acquiring Fund for up to seven days if the Acquiring Fund deems it appropriate under then current market conditions. Redeeming shareholders will be notified if a delay in transmitting proceeds is anticipated. The Acquiring Fund cannot be responsible for the efficiency of the Federal Reserve wire system or the shareholder’s bank. You are responsible for any charges imposed by your bank. The minimum amount that may be wired is $2,500. The Acquiring Fund reserves the right to change this minimum or to terminate the wire redemption privilege. Shares purchased by check may not be redeemed by wire transfer until the shares have been owned (i.e., paid for) for at least 10 days. To change the name of the single bank account designated to receive wire redemption proceeds, you must send a written request with a Medallion Signature Guarantee to Salient Funds, PO Box 1345, Denver, Colorado 80201. If you elect to have the payment wired to your bank, a wire transfer fee of $30.00 may be charged by the Acquiring Fund.

Policies Concerning Frequent Purchases and Redemptions

Unlike closed-end funds, open-end funds may be subject to adverse effects from frequent purchases and redemptions of shares. Excessive trading in an open-end fund’s shares can disrupt portfolio management, lead to higher operating costs, and cause other operating inefficiencies for the fund. However, the Acquiring Fund is also mindful that shareholders may have valid reasons for periodically purchasing and redeeming Acquiring Fund shares.

The Acquiring Fund is intended for long-term investment purposes, and thus purchases, redemptions and exchanges of the Acquiring Fund shares should be made with a view toward long-term investment objectives. Excessive trading, short-term trading and other abusive trading activities may be detrimental to the Acquiring Fund and its long-term shareholders by disrupting portfolio management strategies, increasing brokerage and administrative cost, harming the Acquiring Fund performance and diluting the value of shares. Such trading may also require the Acquiring Fund to sell securities to meet redemptions, which could cause taxable events that impact shareholders. If a shareholders investment horizon is not long-term, then they should not invest in the Acquiring Fund.

The Board has adopted policies and procedures that seek to discourage and not accommodate excessive or short-term trading activities. These policies and procedures include, among other things, use of fair value pricing of international securities and periodic review of shareholder trading activity. If the Reorganization is completed, Acquired Fund shareholders who become holders of Class A shares of the Acquiring Fund in the Reorganization will become subject to these policies, and they may be implemented in the event of a large number of redemption requests occurring shortly after the Reorganization is completed.

Despite the Acquiring Fund’s efforts to detect and prevent abusive trading activity, there can be no assurance that the Acquiring Fund will be able to identify all of those who may engage in abusive trading and curtail their activity in every instance. In particular, it may be difficult to curtail such activity in certain omnibus accounts and other accounts traded through intermediaries, despite arrangements the Funds have entered into with the intermediaries to provide access to account level trading information. Omnibus accounts are comprised of multiple investors whose purchases, exchanges and redemptions are aggregated before being submitted to the Acquiring Fund.

Valuation

Discount to Net Asset Value

The Common Shares of closed-end investment companies, such as the Acquired Fund, frequently trade at prices lower than their net asset value, while open-end funds, such as the Acquiring Fund, trade at net asset value. The possibility that the Common Shares may trade at a discount to the net asset value is separate and distinct from the risk that the Common Shares’ net asset value may decline. In addition to net asset value, the market price of the Common Shares is affected by such factors as the distributions made, which are in turn affected by expenses, the stability of the distributions, liquidity and market supply and demand.

The Acquiring Fund’s valuation policies and procedures are described below. The Acquired Fund’s valuation policies are substantially identical to those of the Acquiring Fund.

Valuation of the Acquiring Fund’s Shares

The net asset value (“NAV”) for each class of shares of the Acquiring Fund is determined once daily as of the close of trading of the New York Stock Exchange (the “NYSE”) (typically 4:00 P.M., Eastern Time) on each business day that the NYSE is open. On holidays or other days when the NYSE is closed, the NAV is not calculated and the Acquiring Fund does not conduct purchase or redemption transactions of its own shares. In case of emergency or other disruption resulting in the NYSE not opening for trading or closing at a time other than the regularly scheduled close, the time at which shares are priced and until which purchase and redemption orders are accepted may be changed as permitted by the SEC. This may result in the Acquiring Fund closing for business prior to the time at which the Acquiring Fund’s NAV is determined. Trading of securities that are primarily listed on foreign exchanges may take place on weekends and U.S. business holidays on which the Acquiring Fund’s NAV is not calculated. Consequently, the Acquiring Fund’s portfolio securities may trade and the Acquiring Fund’s NAV may be significantly affected on days when a shareholder will not be able to purchase or redeem the Acquiring Fund shares. The NAV of the Acquiring Fund is available at the Acquiring Fund’s Web site: www.salientpartners.com.

Each class of shares of the Acquiring Fund has its own NAV, which is computed by dividing the total assets, minus liabilities, allocated to each share class by the number of the Acquiring Fund shares outstanding for that share class.

Valuation of Portfolio Securities

Except as noted below, securities held by the Acquiring Fund may be primarily valued on the basis of market quotations or official closing prices from recognized exchanges. The Acquiring Fund’s Advisor or administrator, as delegated by the Advisor, may use third party pricing vendors to supply the valuations for the publicly traded securities and certain derivative securities in the portfolio:

Exchange-Traded Debt and Equity Securities: Debt and equity securities (including exchange-traded funds (“ETFs”) and closed-end investment companies) traded on a recognized exchange or on the Nasdaq National Market Listing are valued using the last sale price on each security’s primary exchange on the valuation date.

Debt and Equity Securities Traded Over-The-Counter: Debt and equity securities traded over-the-counter (“OTC”) (but excluding the Nasdaq National Market Listing) are valued at the last reported sales price on the valuation date. In either of the foregoing cases, if there are no trades of the security on the valuation date, the price of the security shall generally be the mean of the reported bid and asked prices at market’s close on the valuation date. Certain short-term debt instruments with maturities of 60 days and shorter may be valued on the basis of amortized cost.

Exchange-Traded Options Contracts: Written/purchased option contracts on securities, currencies, indices and other financial instruments traded on one or more exchanges shall be valued on the valuation date at the last bid/ask price for options held long/short, respectively, or at the closing mid of the posted market, on the exchange on which the option is listed. If no such bid/ask price is reported by such exchange on the valuation date, the Advisor’s valuation committee will determine the fair value of such options in good faith using publicly available data where possible.

OTC Options: Option contracts on securities, currencies and other financial instruments traded in the OTC market shall be valued at a price obtained from a broker (often the counterparty to the option) on the valuation date. If a broker price is not available, the Advisor’s investment committee will determine the fair value using industry standard models.

Futures: Exchange-traded futures are valued at the last trade or settlement price on the primary exchange on which the futures contracts trade. Third party pricing vendors will be used as primary pricing sources for these contracts.

Swaps: Swaps are valued using prices obtained from third party pricing vendors, which are based on standard industry models using publicly available data where available. If prices from third party pricing vendors are not available, the Advisor’s investment committee will determine the fair value using industry standard models.

Forward Contracts: Forward foreign currency contracts shall be valued at prices supplied by a third party pricing vendor.

Government Obligations: U.S. Government obligations (including U.S. Treasury securities and U.S. Government Agency securities) shall be valued at prices supplied by a third party pricing vendor.

Securities Traded on Foreign Exchanges: The Acquiring Fund may invest in securities primarily traded in the United States as well as foreign securities markets. The Acquiring Fund utilize fair value pricing on a daily basis for all securities that are not primarily traded in United States markets because trading in these securities typically is completed at times that can vary from the closing of the NYSE. This fair value pricing process for securities primarily traded on foreign exchanges uses the quotations of third party pricing vendors to value such securities unless the use of another fair valuation methodology is deemed appropriate by the Advisor’s investment committee. This policy is designed to help ensure that the Acquiring Fund’s NAV per share appropriately reflects its investments’ values on the valuation date. If the Acquiring Fund has portfolio securities that are primarily listed on foreign exchanges that trade on weekends or other days when the Acquiring Fund does not price its shares, the NAV of the Acquiring Fund’s shares may change on days when shareholders will not be able to purchase or redeem the Acquiring Fund’s shares. Foreign currencies, securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rates generally determined as of 4:00 p.m. (Eastern Standard Time).

Private Securities with no Public Market, and Other Illiquid Securities: If market quotations or official closing prices are not readily available or do not accurately reflect fair value for a security, or if a security’s value has been materially affected by events occurring before the Acquiring Fund’s pricing time but after the close of the exchange or market on which the security is primarily traded, the security will be valued at its fair value as determined in good faith by the Trustees. The Trustees have delegated the responsibility to estimate the fair value of securities to the Advisor’s valuation committee, and the actual calculation of a security’s fair value may be made by persons acting pursuant to the direction of the Trustees. Further, the Advisor may engage third party valuation firms to assist in determining the estimated fair values of such securities. Fair value pricing of securities is intended to help ensure that the Acquiring Fund’s NAV reflects the fair value of the Acquiring Fund’s portfolio securities as of the close of trading on the valuation date, thus limiting the opportunity for aggressive traders or market timers to purchase shares of the Acquiring Fund at deflated prices reflecting stale security valuations and promptly sell such shares at a gain, thereby diluting the interests of long-term shareholders. However, a security’s valuation may differ depending on the method used for determining value, and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains. The use of fair value pricing has the effect of valuing a security based upon the price the Acquiring Fund might reasonably expect to receive if it sold that security in an orderly transaction between market participants, but does not guarantee that the security can be sold at the fair value price. Further, because of the inherent uncertainty and subjective nature of fair valuation, a fair valuation price may differ significantly from the value that would have been used had a readily available market price for the investment existed and these differences could be material.

Investments in unregistered and open-ended investment companies: The fair value of investments in non-registered and open-ended investment companies is based on the NAV of that investment company in conformity with applicable accounting standards, so long as the Acquiring Fund’s NAV is based on fair value reporting of its underlying securities.

Management of the Funds

Each of the Funds is managed by the same board of trustees, investment adviser and portfolio managers. The below information describes these groups with respect to the Acquiring Fund, but also applies to the Acquired Fund.

Board of Trustees Oversight

The Board of Trustees’ (the “Board”) primary responsibility is oversight of the management of the Acquiring Fund for the benefit of its shareholders, not day-to-day management. The Board authorizes Salient MF Trust (the “Acquiring Trust”) to enter into service agreements with the Advisors and other service providers in order to provide necessary or desirable services on behalf of the Acquiring Trust and the Acquiring Fund. Shareholders are not parties to or third-party beneficiaries of such service agreements. Neither this prospectus nor the Acquiring Fund’s summary prospectus, the SAI, any documents filed as exhibits to the Acquiring Trust’s registration statement, nor any other communications, disclosure documents or regulatory filings from or on behalf of the Acquiring Trust or the Acquiring Fund creates a contract between or among any shareholder of the Acquiring Fund, on the one hand, and the Acquiring Trust, the Acquiring Fund, a service provider to the Acquiring Trust or the Acquiring Fund, and/or the Trustees or officers of the Acquiring Trust, on the other hand. The Board (or the Acquiring Trust and its officers, service providers or other delegates acting under authority of the Board) may amend or use a new prospectus, summary prospectus or SAI with respect to the Acquiring Fund or the Acquiring Trust, and/or amend, file and/or issue any other communications, disclosure documents or regulatory filings, and may amend or enter into any contracts to which the Acquiring Trust or the Acquiring Fund is a party, and interpret or amend the investment objective(s), policies, restrictions and contractual provisions applicable to the Acquiring Fund, without shareholder input or approval, except in circumstances in which shareholder approval is specifically required by law (such as changes to fundamental investment restrictions) or where a shareholder approval requirement is specifically disclosed in the Acquiring Trust’s then-current prospectus or SAI. More information about the Board and its governance processes is included in the Management of the Acquiring Fund section of the Acquiring Fund’s SAI.

Adviser/Portfolio Managers

The Acquiring Fund is a series of the Acquiring. The Acquiring Trust is governed by a Board of Trustees that is responsible for overseeing all business activities of the Acquiring Trust and the Acquiring Fund.

Salient Capital Advisors, LLC (“Salient Capital” or the “Adviser”) serves as investment adviser to the Acquiring Fund. Salient Capital is a registered investment adviser and has the authority to engage the services of different sub-advisers with the approval of the Board of the Acquiring Fund and its shareholders. Salient Capital is located at 4265 San Felipe, 8^th Floor, Houston, Texas, 77027. As of June 30, 2022, Salient Capital had approximately $3.875 billion of assets under management.

Subject to the overall authority of the Board, the Adviser furnishes continuous investment supervision and management to the Acquiring Fund and also furnishes office space, equipment, and management personnel to the Acquiring Fund. Salient Capital is a wholly-owned subsidiary of Salient Partners, L.P. (“Salient”), a Houston-based investment firm. The Adviser is also registered with the Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator and commodity trading advisor and is a member of the National Futures Association (“NFA”).

The Adviser makes investment decisions on the Acquiring Fund’s behalf using a series of security selection models, and implemented using proprietary trading and risk-management systems. The Adviser believes that a systematic and disciplined process is essential to achieving long-term success in investment and risk management. By pursuing these targeted risk levels and allocations, Salient Capital believes the portfolio can achieve a higher level of return at the same level of price volatility sought by more traditional asset allocation portfolio designs.

The portfolio managers of the Acquiring Fund are jointly and primarily responsible for overseeing the day-to-day management of the Acquiring Fund, as well as setting the Acquiring Fund’s overall investment strategy. Information regarding the portfolio managers of the Acquiring Fund is set forth below. Further information regarding the portfolio managers, including other accounts managed, compensation, ownership of the Acquiring Fund shares, and possible conflicts of interest, is available in the SAI.

Gregory A. Reid is President of Salient and Portfolio Manager for the various MLP strategies. Prior to joining Salient in January 2011, Mr. Reid served as the Founder and CEO from 2010 to 2011 of Salient Capital Advisors, LLC, then known as RDG Capital LLC, a Houston-based asset management firm specializing in MLP and Energy Sector investments that was spun off from Telemus Capital Partners in June 2010. Salient acquired RDG Capital LLC in January 2011 and renamed the company “Salient Capital Advisors, LLC.” Mr. Reid was Managing Partner of Telemus Capital Partner’s Houston office from May 2007 to June 2010 at which time he formed RDG Capital LLC to acquire Telemus Capital Partner’s Houston office. Prior to joining Telemus Capital Partners in 2007, Mr. Reid was employed by Merrill Lynch’s Private Banking Group from 1997 to 2007 and he was employed by Goldman Sachs from 1991 to 1997. Mr. Reid has over 20 years of experience investing in MLPs and Energy Infrastructure Companies dating back to his employment at Goldman Sachs in 1995. Mr. Reid received his undergraduate degree from Texas A&M University in 1987 and his MBA from the J.L. Kellogg Graduate School of Management at Northwestern University in 1991, and he later earned his Certified Investment Management Analyst designation from the Wharton School at the University of Pennsylvania. In addition, Mr. Reid is registered with the Financial Industry Regulatory Authority as a General Securities Representative and a General Securities Principal.

Frank T. Gardner III, CFA (Ted Gardner) serves as Portfolio Manager. Prior to joining Salient in early 2011, Mr. Gardner was a Portfolio Manager and Director of Research for RDG Capital LLC from 2010 to 2011. Prior to RDG, Mr. Gardner was a Portfolio Manager for Telemus Capital Partners from 2007 to 2010. Prior to joining Telemus, he was an MLP research analyst for Raymond James Equity Research from 2004 to 2007. During his tenure at Raymond James, he followed 35 public MLPs and initiated coverage on 22 MLPs in the midstream, maritime, coal and refining industries. He was also actively involved in due diligence related to Raymond James’ investment banking transactions. Prior to joining Raymond James, Mr. Gardner was a financial advisor at UBS Financial Services. Mr. Gardner earned a Bachelor of Business Administration degree from The University of Texas at Austin and an MBA from the University of St. Thomas. He is also a CFA Charterholder.

Parag Sanghani, CFA serves as Portfolio Manager. Parag Sanghani is a Managing Director and Portfolio Manager at Salient for various energy infrastructure strategies. Mr. Sanghani has over 15 years of experience in the financial services industry focused on energy investments. Prior to joining Salient in April of 2011, he served as the Senior MLP analyst at Telemus Capital Partners from 2008 to 2009. Mr. Sanghani previously held a Senior Research Associate position at Raymond James Financial, Inc. from 2004 to 2006. At Raymond James, Mr. Sanghani published detailed research reports on the energy industry and followed companies within the oil service and coal sectors. Mr. Sanghani graduated from the University of Texas at Austin with a Bachelor of Business Administration in Finance and earned a Masters in Finance from London Business School. He is a CFA® charterholder and a member of CFA Society of Houston. In addition, Mr. Sanghani is registered with the Financial Industry Regulatory Authority as a Securities Representative.

Hiring Sub-Advisers Without Shareholder Approval

The Acquiring Fund may in the future rely on an order from the SEC permitting its Adviser, subject to Board approval, to appoint an unaffiliated sub-adviser or change the terms of a sub-advisory agreement with an unaffiliated sub-adviser without obtaining shareholder approval. Reliance on such order would permit the Acquiring Fund to change unaffiliated sub-advisers or the fees paid to an unaffiliated sub-adviser from time to time without the expense and delays associated with obtaining shareholder approval of the change. This order would not, however, permit its Adviser to appoint a sub-adviser that is an affiliate of the Adviser or the Acquiring Fund (other than by reason of serving as a sub-adviser to the Acquiring Fund), or to increase the sub-advisory fee of an affiliated sub-adviser, without the approval of the shareholders. The Acquiring Fund would not be permitted to rely on such order until such reliance has been approved by the Shareholders of the Acquiring Fund.

Management Fees

The advisory fees paid by the Acquiring Fund during the fiscal year ended December 31, 2021, as a percentage of the Acquiring Fund’s average daily net assets, was 0.97%.

The advisory fees paid by the Acquired Fund during the fiscal year ended November 30, 2021, as a percentage of the Acquired Fund’s average monthly total assets, was 1.20%.

A discussion regarding the basis for the Board’s approval of the investment management agreement for each Fund is available in the Fund’s annual report to shareholders.

Expense Limitation Agreement

Under the Acquiring Fund’s Expense Limitation Agreement, the Adviser has contractually agreed to waive all or a portion of its management fee and reimburse or pay operating expenses of the Acquiring Fund to the extent necessary to maintain the Acquiring Fund’s total operating expenses at 1.55% for Class A shares, excluding certain expenses, such as taxes, brokerage commissions, interest, short dividend expense, any acquired fund fees and expenses, litigation and extraordinary expenses. The Expense Limitation Agreement expires on April 30, 2023, unless renewed by mutual agreement of the Acquiring Fund and its Adviser based upon a determination doing so would be appropriate under the prevailing circumstances. If the Reorganization is approved, the Termination Date will be extended until the one-year anniversary of the consummation of the Reorganization.

The Acquiring Fund’s Adviser is permitted to recover from the Acquiring Fund expenses attributable to the Acquiring Fund or a Class thereof that the Adviser has borne (whether through reduction of its management fee or otherwise) in later periods to the extent that the expenses for a Class of shares fall below the annual rate in effect at the time of the actual waiver/reimbursement. Under the expense limitation agreement, the Acquiring Fund is not obligated to reimburse such expenses beyond three years from the end of such year in which its Adviser waived a fee or reimbursed an expense. Any such recovery by an Adviser will not cause a Class to exceed the annual limitation rate in effect at the time of the actual waiver/reimbursement.

Additional Information About the Acquiring Fund Expenses

The Acquiring Fund’s annual operating expenses will likely vary throughout the period and from year to year. The Acquiring Fund’s expenses for the current fiscal year may be higher than the expenses listed in the Acquiring Fund’s “Annual fund operating expenses” table, for some of the following reasons: (i) a significant decrease in average net assets may result in a higher advisory fee rate if advisory fee breakpoints are in place and are not achieved; (ii) a significant decrease in average net assets may result in an increase in the expense ratio because the Acquiring Fund expenses do not decrease as asset levels decrease; or (iii) fees may be incurred for extraordinary events such as the Acquiring Fund’s tax expenses.

The “Other Expenses” line item in the Acquiring Fund’s “Annual fund operating expenses” table consists of annual Acquiring Fund operating expenses, including professional fees (such as audit and legal), accounting, administration, transfer agency, recordkeeping and custodian fees payable to the Acquiring Fund’s administrator and custodian, and fees under the Acquiring Fund’s Administrative Services Plan payable to certain intermediary platforms (such as “fund supermarkets” and retirement plan administrators) for non-distribution related administration and recordkeeping services.

Rule 12b-1 Distribution Plan

The Acquiring Fund has adopted a distribution plan under Rule 12b-1 (“Plan”) for Class A shares of the Acquiring Fund that allow the Acquiring Fund to pay for the sale and distribution of its shares. The Acquired Fund has not adopted a distribution plan. The Acquiring Fund may make payments under a Plan for the purpose of financing any activity primarily intended to result in the sale of its shares. In addition, payments under a Plan may be made to banks and their affiliates and other financial intermediaries, including broker-dealers, for the provision of administrative and/or shareholder services for the Acquiring Fund shareholders.

Under the Plan, the Acquiring Fund may pay one or more persons or entities a fee up to the following annual rates for service rendered and expenses borne in connection with the provision of distribution, administrative and/or shareholder services with respect to Class A shares of the Acquiring Fund:

Payments available under the Plan may exceed amounts received by broker-dealers or other financial intermediaries in connection with the sale of the Acquiring Fund’s shares.

Because these 12b-1 fees are paid out of assets attributable to the Acquiring Fund’s Class A shares on an ongoing basis, over time these fees will increase the cost of an investment in such shares and may cost more than other types of sales charges.

The Plan recognizes that the Adviser may use its management or administrative fees, in addition to their past profits or their other resources, to pay for expenses incurred in connection with providing services intended to result in the sale of Acquiring Fund shares and/or shareholder services in the form of cash, or if permitted, non-cash payments.

Networking, Sub-Transfer Agency and Administrative Fees

Certain financial intermediaries may contract with the Acquiring Fund, the Adviser or the Distributor to perform certain networking, sub-transfer agency or administrative services for shareholders of the Acquiring Fund. In consideration for providing these services, the financial intermediaries will receive networking, sub-transfer agency or administrative fees, a portion of which may be paid by the Acquiring Fund. Any such payments by the Acquiring Fund to a financial intermediary for networking, sub-transfer agency or administrative services are in addition to any shareholder services fees payable to the financial intermediary by the Acquiring Fund.

Administrative Services Plan

The Acquiring Fund has adopted an Administrative Services Plan applicable to Shares sold through certain broker-dealers that offer so-called mutual fund “supermarkets” to their customers, including retirement plan administrators and investment advisers and other sponsors of advisory “wrap” and similar programs (collectively, “Supermarket Intermediaries”). Under the Administrative Services Plan a Class may pay certain Supermarket Intermediaries for non-distribution related administration and recordkeeping services. Any such payments may be negotiated with Supermarket Intermediaries, must be approved by the Board as not related to distribution and may not exceed 0.10%. Any such payments may be made in conjunction with Rule 12b-1 payments and payments by the Adviser (and/or its affiliates) and the Board oversees any such allocation.

Additional Payments to Intermediaries

Shares of the Acquiring Fund are primarily sold through financial intermediaries, such as brokers, banks, registered investment advisers, financial planners and retirement plan administrators. These firms may be compensated for selling shares of the Acquiring Fund in two principal ways:

Certain firms may request, and the Adviser (and/or its affiliates) may agree to make, payments in addition to sales commissions and Rule 12b-1 fees out of the Adviser’s own resources. These additional payments are sometimes referred to as “revenue sharing.” These payments assist in the Adviser’s efforts to promote the sale of the Acquiring Fund’s shares. The Adviser agrees with the firm on the methods for calculating any additional compensation, which may include the level of sales or assets attributable to the firm. Not all firms receive additional compensation and the amount of compensation will vary. These payments could be significant to a firm. The Adviser determines which firms to support and the extent of the payments it is willing to make. The Adviser generally chooses to compensate firms that have a strong capability to distribute shares of the Acquiring Fund and that are willing to cooperate with the Adviser’s promotional efforts.

The Adviser hopes to benefit from revenue sharing by increasing the Acquiring Fund’s net assets, which, as well as benefiting the Acquiring Fund, would result in additional management and other fees for the Adviser and its affiliates. In consideration for revenue sharing, a firm may feature the Acquiring Fund in its sales system or give preferential access to members of its sales force or management. In addition, the firm may agree to participate in the Adviser’s marketing efforts by allowing the Adviser or its affiliates to participate in conferences, seminars or other programs attended by the intermediary’s sales force. Although an intermediary may seek revenue-sharing payments to offset costs incurred by the firm in selling the Acquiring Fund shares and servicing its clients who have invested in the Acquiring Fund, the intermediary may earn a profit on these payments. Revenue-sharing payments may provide your firm with an incentive to favor the Acquiring Fund.

Your intermediary may charge you additional fees other than those disclosed in this Proxy Statement/Prospectus. You can ask your firm about any payments it receives from the Adviser or the Acquiring Fund, as well as about fees and/or commissions it charges.

The Adviser and its affiliates may have other relationships with your firm relating to the provisions of services to the Acquiring Fund, such as providing omnibus account services, transaction-processing services or effecting portfolio transactions for the Acquiring Fund. If your intermediary provides these services, the Adviser or the Acquiring Fund may compensate the intermediary for these services. In addition, your intermediary may have other compensated relationships with the Adviser or its affiliates that are not related to the Acquiring Fund.

Description of Acquired Fund Securities

General. All common shares of the Acquired Fund have identical rights, as described below. Holders of common shares have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no preemptive rights to subscribe for any of its securities. Common shares are freely transferable, except where their transfer is restricted by federal and state securities laws or by contract. All common shares have equal earnings, assets, distribution, liquidation and other rights.

Distributions. Distributions may be paid to the holders of Acquired Fund common shares if, as and when authorized by the Board and declared by the Acquired Fund out of funds legally available therefor. The yield on common shares will likely vary from period to period depending on factors, including, but not limited to: market conditions, the timing of the Acquired Fund’s investments, the securities comprising the Acquired Fund’s portfolio, changes in interest rates, the amount and timing of the use of financial leverage by the Acquired Fund, and the Acquired Fund’s net assets and operating expenses. Consequently, the Acquired Fund cannot guarantee any particular yield on common shares, and the yield for any given period is not an indication or representation of future yield on common shares.

Limitations on Distributions. So long as senior securities representing indebtedness are outstanding, holders of common shares will not be entitled to receive any distributions from the Acquired Fund unless (1) there is no event of default existing under the terms of such indebtedness, (2) the Acquired Fund’s asset coverage (as defined in the 1940 Act) with respect to any outstanding Indebtedness would be at least 300% and (3) the assets in the Acquired Fund’s portfolio meet certain asset coverage requirements as set forth by each applicable rating agency, in each case, after giving effect to Distributions.

Liquidation Rights. Common shareholders are entitled to share ratably in the assets legally available for distribution to common shareholders in the event of liquidation, dissolution or winding up, after payment of or adequate provision for all known debts and liabilities, including any outstanding debt securities or other borrowings and any interest thereon. These rights are subject to the preferential rights of any other class or series of the Acquired Fund’s common shares, including preferred shares (if any).

Voting Rights. Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of common shareholders, including the election of Trustees. The presence of the holders of common shares entitled to cast a majority of the votes entitled to be cast shall constitute a quorum at a meeting of common shareholders. The Declaration of Trust provides that, except as otherwise provided in the By-Laws, the qualified nominees receiving the highest numbers of votes cast by the shareholders entitled to vote at a meeting at which a quorum is present, up to the number of Trustees to be elected at such meeting, shall be elected. There is no cumulative voting in the election of Trustees. Pursuant to the Declaration of Trust and By-Laws, the Board may amend the By-Laws to alter the vote required to elect Trustees.

Under NYSE rules applicable to listed companies, the Acquired Fund normally will be required to hold an annual meeting of common shareholders in each fiscal year. If the Acquired Fund is converted into an open-end company or if for any reason the shares are no longer listed on the NYSE (or any other national securities exchange, the rules of which require annual meetings of common shareholders), the Acquired Fund may amend the By-Laws so that the Acquired Fund is not otherwise required to hold annual meetings of common shareholders.

Issuance of Additional Shares. The provisions of the 1940 Act generally require that the public offering price of common shares of a closed-end investment company (less underwriting commissions and discounts) must equal or exceed the net asset value of such company’s common shares (calculated within 48 hours of the Acquired Fund’s pricing), unless such sale is made with the consent of a majority of the company’s outstanding common shareholders. Any sale of common shares by the Acquired Fund will be subject to the requirements of the 1940 Act.

Acquired Fund Anti-Takeover Provisions

The Acquired Fund’s Agreement and Declaration of Trust (the “Declaration of Trust”) and By-Laws include provisions that could limit the ability of other entities or persons to acquire control of the Acquired Fund, to convert the Acquired Fund to open-end status, or to change the composition of the Board. The Acquired Fund has also adopted other measures that may make it difficult for a third party to obtain control of the Acquired Fund, including provisions of the Declaration of Trust classifying the Board in three classes serving staggered three-year terms, and provisions authorizing the Board, without the common shareholder approval, to cause the issuance of additional classes or series of shares and to amend the Declaration of Trust. These provisions, as well as other provisions of the Declaration of Trust and By-Laws, could have the effect of discouraging, delaying, deferring or preventing a transaction or a change in control that might otherwise be in the best interests of the Acquired Fund’s common shareholders. As a result, these provisions may deprive common shareholders of opportunities to sell their common shares at a premium over the then-current market price of the common shares. The Declaration of Trust of the Acquired Fund generally provides for approval of Declaration of Trust amendments and extraordinary transactions by the shareholders entitled to cast at least a majority of the votes entitled to be cast on the matter. The Declaration of Trust of the Acquired Fund also provides that certain Declaration of Trust amendments and any proposal for conversion, whether by reorganization or otherwise, from a closed-end company to an open-end company or any proposal for liquidation or dissolution requires the approval of shareholders entitled to cast at least 75% of the outstanding shares of each affected class or series of shares of the Acquired Fund outstanding, voting separately as a class or series, unless such amendment has been approved by at least 80% of the Trustees, in which case the favorable vote of the “majority of the outstanding voting securities” (as that term is defined in the 1940 Act) will be required. The foregoing vote would satisfy a separate requirement in the 1940 Act that any conversion of the Acquired Fund to an open-end investment company be approved by the Acquired Fund’s common shareholders. See “Exhibit C — Summary of Rights of Shareholders” for additional discussion of certain provisions of the Acquired Fund Declaration of Trust.

Dividends and Taxes

Dividends

The Acquiring Fund typically declares and pays income dividends and capital gains, if any, at least annually.

Dividend Reinvestments

Most investors have their dividends reinvested in additional shares of the same class of the same the Acquiring Fund. If you choose this option, or if you do not indicate any choice, your dividends will be reinvested. Alternatively, you may choose to have your dividends and capital gains sent directly to your bank account or a check may be mailed if your combined dividend and capital gains amount is $10 or more. However, if the check is not deliverable or the combined dividend and capital gains amount is less than $10, your proceeds will be reinvested. If any of your dividend or capital gains checks remain uncashed after 180 days, all subsequent dividends and capital gains will be reinvested. No front-end sales charge or CDSC will be imposed on shares derived from reinvestment of dividends or capital gains distributions.

Taxability of Dividends

For investors who are not exempt from federal income taxes, dividends you receive from the Acquiring Fund, whether reinvested or taken as cash, are generally considered taxable. Dividends from the Acquiring Fund’s short-term capital gains are taxable as ordinary income. Dividends from the Acquiring Fund’s long-term capital gains are taxable at a lower rate. Whether gains are short-term or long-term depends on the Acquiring Fund’s holding period. Some dividends paid in January may be taxable as if they had been paid the previous December.

The Form 1099 that is mailed to you every February, if applicable, details your dividends and their federal tax category, although you should verify your tax liability with your tax professional.

Distributions

It is expected that only a portion of the cash payments from the Acquiring Fund’s investments will constitute investment company taxable income. The balance will be return of capital from such investments. The Acquiring Fund cannot predict with respect to a given quarter how much of the Acquiring Fund’s investment company taxable income will be included in the distribution we make for that quarter. However, the Acquiring Fund intends to pay to common shareholders on an annual basis at least 90% of the Acquiring Fund’s investment company taxable income. Distributions may also include cash received as return of capital from the Acquiring Fund’s portfolio investments or return of the Acquiring Fund’s investors’ capital. Provisions of the 1940 Act and rules thereunder require the Acquiring Fund to provide a written statement accompanying payment from any source other than income that adequately discloses the source or sources of such payment. Thus, if capital was the source of a distribution, and the payment amounted to a return of capital, written notice to that effect would be provided. Nevertheless, shareholders who periodically receive distributions from the Acquiring Fund may be under the impression that such payments are made from income, when, in fact, they are not. The amount of the Acquiring Fund’s distribution that constitutes a return of capital represents a return of a shareholder’s original investment in shares. Accordingly, shareholders should carefully read any written disclosure accompanying a distribution and should not assume that the source of payment is income.

Cost Basis Reporting

The Acquiring Fund will be required to report to the IRS, and furnish to the Acquiring Fund shareholders, detailed “cost basis” and “holding period” information for the Acquiring Fund shares (“covered shares”) that are redeemed. If you redeem covered shares during any year, the Acquiring Fund will report the following information to the IRS and to you on Form 1099-B: (i) the “cost basis” of such shares; (ii) the gross proceeds you received on the redemption; and (iii) the “holding period” for the redeemed shares.

The default method for calculating the cost basis of covered shares of the Acquiring Fund will be the average cost of all Acquiring Fund shares of that the Acquiring Fund you purchased prior to a particular redemption. If you and your financial or tax advisor determine another calculation method may be more beneficial for your individual tax situation, you will be able to elect another IRS-accepted method by notifying the Acquiring Fund’s transfer agent in writing.

You should contact your financial or tax advisor about the application of the cost basis reporting rules to you, particularly whether you should elect a cost basis calculation method or use the default average basis.

Buying a Dividend

Purchasing the Acquiring Fund’s shares in a taxable account shortly before a distribution is sometimes known as buying a dividend. In taxable accounts, you must pay income taxes on the distribution whether you reinvest the distribution or take it in cash. In addition, you will have to pay taxes on the distribution whether the value of your investment decreased, increased or remained the same after you bought the Acquiring Fund’s shares.

The risk in buying a dividend is that the Acquiring Fund’s portfolio may build up taxable gains throughout the period covered by a distribution, as securities are sold at a profit. The Acquiring Fund distributes those gains to you, after subtracting any losses, even if you did not own the shares when the gains occurred.

If you buy a dividend, you incur the full tax liability of the distribution period, but you may not enjoy the full benefit of the gains realized in the Acquiring Fund’s portfolio.

Returns of Capital

If the Acquiring Fund’s distributions exceed its taxable income and capital gains realized during a taxable year, all or a portion of the distributions made in the same taxable year may be recharacterized as a return of capital to shareholders. A return of capital distribution will generally not be taxable, but will reduce each shareholder’s cost basis in the Acquiring Fund and result in a higher reported capital gain or lower reported capital loss when those shares on which the distribution was received are sold.

Taxability of Transactions

Any time you sell or exchange shares, it is considered a taxable event for you if you are not exempt from federal income taxes. Depending on the purchase price and the sale price of the shares you sell or exchange, you may have a gain or a loss on the transaction. You are responsible for any tax liabilities generated by your transactions.

SERVICE PROVIDERS

Custodian (Acquired Fund and Acquiring Fund)

Holds the Funds’ assets, settles all portfolio trades and collects most of the valuation data required for calculating the Funds’ net asset value.

Citibank, N.A.

388 Greenwich Street

New York, NY 10013

Principle Underwriter (Acquiring Fund Only)

Markets the Acquiring Fund and distributes shares through selling brokers, financial planners and other financial representatives.

Foreside Fund Services, LLC

Three Canal Plaza, Suite 100

Portland, ME 04101

Transfer Agents (Acquired Fund and Acquiring Fund)

Handles shareholder services, including recordkeeping and statements, distribution of dividends and, for the Acquiring Fund, processing of buy and sell requests.

Acquired Fund:

Computershare, Inc.

150 Royall Street

Canton, MA 02021

Acquiring Fund:

ALPS Fund Services, Inc.

P.O. Box 1345

Denver, CO 80201

EXPERTS

The financial highlights of the Acquired Fund for the fiscal year ended November 30, 2021 and of the Acquiring Fund for the fiscal year ended December 31, 2021 are included in Exhibit B to this Proxy Statement/Prospectus. The financial highlights for the noted fiscal years have been audited by the independent registered public accounting firm KPMG LLP, as stated in its report given on their authority as experts in accounting and auditing, which, along with the financial statements, is included in each Fund’s annual report, which is available upon request as discussed above under “Where to Get More Information.”

AVAILABLE INFORMATION

Each Fund is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and the 1940 Act, and files reports, proxy statements and other information with the SEC. Copies of these materials, and other information about the Funds, can be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information concerning the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-877-8339. Copies of this information can also be obtained, after paying a duplicating fee, by electronic request (publicinfo@sec.gov), or by writing the SEC’s Public Reference Section, Washington, DC 20549-1520. In addition, copies of these documents may be viewed on-screen or downloaded from the SEC’s Internet site at http://www.sec.gov.

The Funds are required to file their complete portfolio holdings schedules with the SEC on a quarterly basis. This schedule is filed with each Fund’s annual and semi-annual reports on Form N-CSR for the second and fourth fiscal quarters. Form N-CSR must be filed with the SEC no later than 10 calendar days after the Fund transmits its annual or semi-annual reports to shareholders. In addition, each Fund’s portfolio holdings schedule as of the end of the third month of the first and third fiscal quarters will be disclosed on Form N-PORT within 60 days of the end of the fiscal quarter. You may obtain a copy of these reports by calling the Funds at 1-866-667-9228. These reports are also available on the SEC’s website at www.sec.gov.

Please note that only one copy of shareholder documents, including annual or semi-annual reports and proxy materials, may be delivered to two or more shareholders of a Fund who share an address, unless the Fund has received instructions to the contrary. This practice is commonly called “householding” and it is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. To request a separate copy of any shareholder document or for instructions as to how to request a separate copy of these documents or as to how to request a single copy if multiple copies of these documents are received, shareholders should contact the Fund at the address and phone number set forth herein.

EXHIBIT A —

FORM OF

AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION

THIS AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION (“Agreement”) is made as of [            ], 2022, between SALIENT MIDSTREAM & MLP FUND, a Delaware statutory trust (the “Acquired Fund”), and SALIENT MF TRUST, also a Delaware statutory trust (“Acquiring Trust”), on behalf of Salient MLP & Energy Infrastructure Fund, a series thereof (the “Acquiring Fund”). (Each of the Acquired Fund and the Acquiring Fund is sometimes referred to herein as a “Fund,” each of the Acquired Fund and the Acquiring Trust is sometimes referred to herein as an “Investment Company,” and the Acquiring Trust is sometimes referred to herein as the “Acquiring Investment Company.”) Notwithstanding anything to the contrary contained herein, (1) all agreements, covenants, representations, warranties, actions, and obligations (collectively, “Obligations”) of and by the Acquiring Fund, and of and by the Acquiring Investment Company on its behalf, contained herein shall be deemed to be the Obligations of the Acquiring Fund only, (2) all rights and benefits created hereunder in favor of the Acquiring Fund shall inure to and be enforceable by the Acquiring Investment Company on the Acquiring Fund’s behalf, and (3) in no event shall any other series of the Acquiring Investment Company or the assets thereof be held liable with respect to the breach or other default by the Acquiring Fund or Acquiring Investment Company of its Obligations set forth herein.

The Investment Companies wish to effect a reorganization described in section 368(a)(1)(C) (all “section” references are to the Internal Revenue Code of 1986, as amended (“Code”), unless otherwise noted), and intend this Agreement to be, and adopt it as, a “plan of reorganization” (within the meaning of the regulations under the Code (“Regulations”)). The reorganization shall consist of (1) the transfer of all of the Acquired Fund’s assets to the Acquiring Fund in exchange for shares in the Acquiring Fund and the Acquiring Fund’s assumption of all of that Acquired Fund’s liabilities, (2) the distribution of those shares pro rata to that Acquired Fund’s shareholders in exchange for their shares therein and in complete liquidation thereof (for federal tax purposes), and (3) the Acquired Fund’s termination, all on the terms and conditions set forth herein (all the foregoing transactions being referred to herein as the “Reorganization”).

Each Investment Company’s board of trustees (each, a “Board”), in each case including a majority of its members who are not “interested persons” (as that term is defined in the Investment Company Act of 1940, as amended (“1940 Act”)) of either Investment Company, (1) has duly approved this Agreement and the transactions contemplated hereby and has duly authorized its performance hereof on its Fund’s behalf and consummation of the Reorganization by all necessary Board action and (2) has determined that participation in the Reorganization is in the best interests of its Fund and that the interests of the existing shareholders thereof will not be diluted as a result of the Reorganization.

The Acquired Fund offers one class of shares, designated common shares (“Acquired Fund Shares”). The Acquiring Fund offers four classes of shares, designated Class A, Class C, Class I and Class R6 shares (“Class A Acquiring Fund Shares”, “Class C Acquiring Fund Shares”, “Class I Acquiring Fund Shares”, and “Class R6 Acquiring Fund Shares,” respectively, and collectively, “Acquiring Fund Shares”). Only Class A Acquiring Fund Shares will be used in the Reorganization.

In consideration of the mutual promises contained herein, the parties agree as follows:

1.       PLAN OF REORGANIZATION AND TERMINATION

1.1.       Subject to the requisite approval of Acquired Fund’s shareholders and the terms and conditions set forth herein, Acquired Fund shall assign, sell, convey, transfer, and deliver all of its assets described in paragraph 1.2 (“Assets”) to Acquiring Fund. In exchange therefor, Acquiring Fund shall --

(a) issue and deliver to Acquired Fund the number of full and fractional (all references herein to “fractional” shares meaning fractions rounded to the eighth decimal place) Class A Acquiring Fund Shares determined by dividing the Acquired Fund Value (determined pursuant to paragraph 2.1) by the NAV of a Class A Acquiring Fund Share, and

(b) assume all of Acquired Fund’s liabilities described in paragraph 1.3 (“Liabilities”).

Those transactions shall take place at the Closing (as defined in paragraph 3.1).

1.2.       The Assets shall consist of all assets and property of every kind and nature – including all cash, cash equivalents, securities, commodities, futures interests, receivables (including interest and dividends receivable), claims and rights of action, rights to register shares under applicable securities laws, goodwill, and books and records – Acquired Fund owns at the Valuation Time (as defined in paragraph 2.1) and any deferred and prepaid expenses shown as assets on Acquired Fund’s books at that time; and Acquired Fund has no unamortized or unpaid organizational fees or expenses that have not previously been disclosed in writing to the Acquiring Investment Company.

1.3.       The Liabilities shall consist of all of Acquired Fund’s liabilities, debts, obligations, and duties of whatever kind or nature existing at the Valuation Time, whether absolute, accrued, contingent, or otherwise, whether known or unknown, whether or not arising in the ordinary course of business, whether or not determinable at the Effective Time (as defined in paragraph 3.1), and whether or not specifically referred to herein. Notwithstanding the foregoing, Acquired Fund shall use its best efforts to discharge all its known liabilities, debts, obligations, and duties before the Effective Time.

1.4.       If the dividends and/or other distributions Acquired Fund has paid through the Effective Time for its current taxable year do not equal or exceed the sum of its (a) “investment company taxable income” (within the meaning of section 852(b)(2)), computed without regard to any deduction for dividends paid, plus (b) “net capital gain” (as defined in section 1222(11)), after reduction by any capital loss carryovers, for that year through that time (including any such gain realized and recognized pursuant to the transactions comprising the Reorganization), then at or as soon as practicable before that time, Acquired Fund shall declare and pay to its shareholders of record one or more dividends and/or other distributions so that it will have distributed substantially all of that income and gain – and in no event less than the sum of 98% of its “ordinary income” plus 98.2% of its “capital gain net income,” as those terms are defined in section 4982(e)(1) and (2), respectively – for all federal income and excise tax periods ending at or before the Effective Time, and treating its current taxable year as ending at that time, such that Acquired Fund will have no tax liability under sections 852 or 4982 for the current and any prior tax periods.

1.5.       At the Effective Time (or as soon thereafter as is reasonably practicable), Acquired Fund shall distribute the Acquiring Fund Shares it receives pursuant to paragraph 1.1(a) to the Acquired Fund shareholders of record at the Effective Time (each, a “Shareholder”), in proportion to their Acquired Fund Shares then so held and in constructive exchange therefor, and shall completely liquidate (which shall be treated as a complete liquidation of Acquired Fund for federal tax purposes, within the meaning of section 1.368-2(m)(1)(iv) of the Regulations). That distribution shall be accomplished by the Acquiring Investment Company’s transfer agent’s opening accounts on Acquiring Fund’s shareholder records in the names of the Shareholders (except Shareholders in whose names accounts thereon already exist) and transferring those Acquiring Fund Shares to those newly opened and existing accounts. Pursuant to that transfer, each Shareholder’s account shall be credited with the respective pro rata number of full and fractional Class A Acquiring Fund Shares due that Shareholder. The aggregate NAV of Class A Acquiring Fund Shares to be so credited to each Shareholder’s account shall equal the aggregate NAV of the Acquired Fund Shares that Shareholder holds at the Effective Time. All issued and outstanding Acquired Fund Shares, including any represented by certificates, shall simultaneously be canceled on Acquired Fund’s shareholder records. The Acquiring Investment Company shall not issue certificates representing the Acquiring Fund Shares issued in connection with the Reorganization.

1.6.       Any transfer taxes payable on issuance and transfer of Acquiring Fund Shares in a name other than that of the registered holder on Acquired Fund’s shareholder records of the Acquired Fund Shares actually or constructively exchanged therefor shall be paid by the transferee thereof, as a condition of that issuance and transfer.

1.7.       After the Effective Time, Acquired Fund shall not conduct any business except in connection with its termination. As soon as reasonably practicable after distribution of the Acquiring Fund Shares pursuant to paragraph 1.5 -- as provided there, on making that distribution Acquired Fund’s liquidation shall be complete for federal tax purposes -- (a) Acquired Fund shall be terminated and (b) Acquired Fund shall make all filings and take all other actions in connection therewith necessary and proper to effect that termination.

1.8.       Any reporting responsibility of Acquired Fund to a public authority, including the responsibility for filing regulatory reports, tax returns, and other documents with the Securities and Exchange Commission (“Commission”), any state securities commission, any federal, state, and local tax authorities, and any other relevant regulatory authority, is and shall remain its responsibility up to and including the date on which it is terminated. In furtherance of the foregoing, after the Effective Time, except as otherwise agreed to by the Investment Companies, Acquired Fund shall prepare, or shall cause its agents to prepare, any federal, state, and local tax returns required to be filed by it with respect to Acquired Fund’s final taxable year ending with its complete liquidation and for any prior periods or taxable years and shall cause those tax returns to be duly filed with the appropriate taxing authorities.

2.       VALUATION

2.1.       For purposes of paragraph 1.1(a), the Acquired Fund Value shall be (a) the value of the Assets computed immediately after the close of regular trading on the New York Stock Exchange (“NYSE”) and Acquired Fund’s declaration of dividends and/or other distributions, if any, on the date of the Closing (“Valuation Time”), using the valuation procedures set forth in Acquired Fund’s then-current prospectus and statement of additional information (“Pro/SAI”) including Acquired Fund and valuation procedures established by its Board (collectively, “Valuation Procedures”), less (b) the amount of the Liabilities at the Valuation Time.

2.2.       For purposes of paragraph 1.1(a), the NAV per share of each class of Acquiring Fund Shares shall be computed at the Valuation Time, using the Valuation Procedures.

2.3.       All computations pursuant to paragraphs 2.1 and 2.2 shall be made (a) by ALPS Fund Services, Inc., in its capacity as each Investment Company’s administrator, or (b) in the case of securities subject to fair valuation, in accordance with the respective Valuation Procedures.

3.       CLOSING AND EFFECTIVE TIME

3.1.       Unless the Investment Companies agree otherwise, all acts necessary to consummate the Reorganization (“Closing”) shall be deemed to occur simultaneously as of immediately after the close of business (4:00 p.m., Eastern Time) on [           ], 2022, or a later date as to which they agree (or Acquired Fund determines) (“Effective Time”). If, at or immediately before the Valuation Time, (a) the NYSE or another primary trading market for Fund securities of either Fund (each, an “Exchange”) is closed to trading or trading thereon is restricted or (b) trading or the reporting of trading on an Exchange or elsewhere is disrupted, so that, in either Board’s judgment, accurate appraisal of the value of either Fund’s net assets and/or the NAV per share of any class of Acquiring Fund Shares is impracticable, the date of the Closing (and, therefore, the Valuation Time and the Effective Time) shall be postponed until the first business day on which that Exchange is open for regular trading after the day when that trading has been fully resumed and that reporting has been restored. The Closing shall be held at the Investment Companies’ offices or at another place as to which they agree.

3.2.       Acquired Fund shall direct the custodian of the Funds’ assets to deliver at the Closing a certificate of an authorized officer (“Certificate”) stating that (a) the Assets it holds will be transferred to Acquiring Fund at the Effective Time and (b) all necessary taxes in connection with the delivery of the Assets, including all applicable federal and state stock transfer stamps, if any, have been paid or provision for payment has been made.

3.3.       Acquired Fund shall direct its transfer agent to deliver to the Acquiring Investment Company at or immediately after the Closing a Certificate stating that its records contain (a) the name, address, and taxpayer identification number of each Shareholder, (b) the number of full and fractional shares in each outstanding class of Acquired Fund Shares each Shareholder owns, and (c) the dividend reinvestment elections, if any, applicable to each Shareholder, all at the Effective Time.

3.4.       The Acquiring Investment Company shall direct its transfer agent to deliver to the Acquired Fund, (a) at the Closing, a confirmation, or other evidence satisfactory to Acquired Fund, that the Acquiring Fund Shares to be issued to Acquired Fund pursuant to paragraph 1.1(a) have been credited to Acquired Fund’s account on Acquiring Fund’s shareholder records and (b) at or as soon as reasonably practicable after the Closing, a Certificate as to the opening of accounts on those records in the names of the Shareholders (except Shareholders in whose names accounts thereon already exist).

3.5.       Each Investment Company shall deliver to the other at the Closing (a) a Certificate in form and substance satisfactory to the recipient and dated the Effective Time, to the effect that the representations and warranties it made herein are true and correct at the Effective Time except as they may be affected by the transactions contemplated hereby and (b) bills of sale, checks, assignments, share certificates, receipts, and/or other documents the other Investment Company or its counsel reasonably requests.

4.       REPRESENTATIONS AND WARRANTIES

4.1.       Acquired Fund represents and warrants to the Acquiring Investment Company, on Acquiring Fund’s behalf, as follows:

4.1.1.       Acquired Fund (a) is a statutory trust that is duly organized, validly existing, and in good standing under the laws of the State of Delaware (a “Delaware Statutory Trust”), and its Certificate of Trust has been duly filed in the office of the Secretary of State thereof, (b) is duly registered under the 1940 Act as a closed-end management investment company, which registration is in full force and effect, and (c) has the power to own all its properties and assets and to carry on its business described in its current registration statement on Form N-2;

4.1.2.       The execution, delivery, and performance hereof have been duly authorized at the date hereof by all necessary action on the part of the Acquired Fund’s Board, which has made the determinations required by Rule 17a-8(a) under the 1940 Act; and this Agreement constitutes a valid and legally binding obligation of Acquired Fund, with respect to Acquired Fund, enforceable in accordance with its terms, except as they may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, receivership, moratorium, and similar laws affecting the rights and remedies of creditors generally and by general principles of equity;

4.1.3.       At the Effective Time, Acquired Fund will have good and marketable title to the Assets and full right, power, and authority to sell, assign, transfer, and deliver the Assets hereunder free of any liens or other encumbrances (except securities that are subject to “securities loans,” as referred to in section 851(b)(2), or are restricted to resale by their terms); and on delivery and payment for the Assets, the Acquiring Investment Company, on Acquiring Fund’s behalf, will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, including restrictions that might arise under the Securities Act of 1933, as amended (“1933 Act”);

4.1.4.       Acquired Fund is not currently engaged in, and its execution, delivery, and performance hereof and consummation of the Reorganization will not result in, (a) a conflict with or material violation of any provision of Delaware law, or Acquired Fund’s Amended and Restated Agreement and Declaration of Trust (“Acquired Fund Declaration”) or Bylaws, or any agreement, indenture, instrument, contract, lease, or other undertaking (each, an “Undertaking”) to which Acquired Fund, with respect to Acquired Fund or on its behalf, is a party or by which it is bound or (b) the acceleration of any obligation, or the imposition of any penalty, under any Undertaking, judgment, or decree to which the Acquired Fund is a party or by which it is bound;

4.1.5.       At or before the Effective Time, either (a) all material contracts and other commitments of or applicable to Acquired Fund (other than this Agreement and certain investment contracts, including options, futures, forward contracts, and swap agreements) will terminate or (b) provision for discharge, and/or Acquiring Fund’s assumption, of any liabilities of Acquired Fund thereunder will be made, without either Fund’s incurring any liability or penalty with respect thereto and without diminishing or releasing any rights Acquired Fund may have had with respect to actions taken or omitted or to be taken by any other party thereto before the Closing;

4.1.6.       No litigation, administrative proceeding, action, or investigation of or before any court, governmental body, or arbitrator is presently pending or, to Acquired Fund’s knowledge, threatened against Acquired Fund or any of its properties or assets that, if adversely determined, would materially and adversely affect Acquired Fund’s financial condition or the conduct of its business; and Acquired Fund knows of no facts that might form the basis for the institution of any such litigation, proceeding, action, or investigation and is not a party to or subject to the provisions of any order, decree, judgment, or award of any court, governmental body, or arbitrator that materially and adversely affects Acquired Fund’s business or Acquired Fund’s ability to consummate the transactions contemplated hereby;

4.1.7.       Acquired Fund’s Statement of Assets and Liabilities, Schedule of Investments, Statement of Operations, Statement of Cash Flows, and Statement of Changes in Net Assets (each, a “Statement”) at and for the fiscal year (in the case of the last Statement, for the two fiscal years) ended November 30, 2021, have been audited by KPMG LLP, an independent registered public accounting firm (“KPMG”), and are in accordance with generally accepted accounting principles consistently applied in the United States (“GAAP”); those Statements present fairly, in all material respects, Acquired Fund’s financial condition at that date in accordance with GAAP and the results of its operations and changes in its net assets for the period(s) then ended; and, to Acquired Fund’s management’s best knowledge and belief, there are no known contingent liabilities of Acquired Fund required to be reflected on a Statement of Assets and Liabilities (including the notes thereto) in accordance with GAAP at that date that are not disclosed therein;

4.1.8. Since November 30, 2021, there has not been any material adverse change in Acquired Fund’s financial condition, assets, liabilities, or business, other than changes occurring in the ordinary course of business, or any incurrence by Acquired Fund of indebtedness maturing more than one year from the date that indebtedness was incurred; for purposes of this representation and warranty, a decline in Acquired Fund’s NAV due to declines in market values of securities Acquired Fund holds, the discharge of Acquired Fund’s liabilities, or the redemption of Acquired Fund Shares by its shareholders will not constitute a material adverse change;

4.1.9. All federal, state, and local tax returns, dividend reporting forms, and other tax-related reports (collectively, “Returns”) of Acquired Fund required by law to have been filed by the Effective Time (including any properly and timely filed extensions of time to file) will have been timely filed and are or will be correct in all material respects, and all federal and other taxes shown as due or required to be shown as due on those Returns will have been paid or provision will have been made for the payment thereof (except for amounts that alone or in the aggregate would not reasonably be expected to have a material adverse effect); to the best of Acquired Fund’s knowledge, no such Return is currently under audit and no assessment has been asserted with respect to those Returns; and Acquired Fund (a) is in compliance in all material respects with all applicable Regulations pertaining to (1) the reporting of dividends and other distributions on and redemptions of its shares, (2) withholding in respect thereof, and (3) shareholder basis reporting, (b) has withheld in respect of dividends and other distributions and paid to the proper taxing authorities all taxes required to be withheld, and (c) is not liable for any material penalties that could be imposed thereunder;

4.1.10. Acquired Fund is not classified as a partnership, and instead is classified as an association that is taxable as a corporation, for federal tax purposes and either has elected the latter classification by filing Form 8832 with the Internal Revenue Service (“IRS”) or is a “publicly traded partnership” (as defined in section 7704(b)) that is treated as a corporation; Acquired Fund is an “investment company” (as defined in section 368(a)(2)(F)(iii)), eligible for treatment under section 851(g)(1)); Acquired Fund has elected to be a “regulated investment company” under Part I of Subchapter M of Chapter 1 of Subtitle A of the Code (“Subchapter M”) (“RIC”); for each taxable year of its operation (including the taxable year that will end at the Effective Time (“current year”)), Acquired Fund has met (and for the current year will meet) the requirements of Subchapter M for qualification and treatment as a RIC and has been (and for the current year will be) eligible to and has computed (and for the current year will compute) its federal income tax under section 852; and Acquired Fund has no earnings and profits accumulated in any taxable year in which the provisions of Subchapter M did not apply to it;

4.1.11.   Acquired Fund is in the same line of business as Acquiring Fund is in, for purposes of section 1.368-1(d)(2) of the Regulations, and did not enter into that line of business as part of the plan of reorganization; from the time the Board approved the transactions contemplated hereby (“Approval Time”) through the Effective Time, Acquired Fund has invested and will invest its assets in a manner that ensures its compliance with the foregoing and paragraph 4.1.10; from the time it commenced operations through the Effective Time, Acquired Fund has conducted and will conduct its “historic business” (within the meaning of that section) in a substantially unchanged manner; and from the Approval Time through the Effective Time, Acquired Fund (1) has not disposed of and/or acquired, and will not dispose of and/or acquire, any assets (a) for the purpose of satisfying Acquiring Fund’s investment objective or policies or (b) for any other reason except in the ordinary course of its business as a RIC and (2) has not changed, and will not change, its historic investment policies in connection with the Reorganization;

4.1.12.   At the Effective Time, (1) at least 33⅓% of Acquired Fund’s Fund assets -- including, for these purposes, a proportionate share of the Fund assets of any RIC (including an exchange-traded fund that is a RIC) in which Acquired Fund invests -- will meet Acquiring Fund’s investment objective, strategies, policies, risks, and restrictions (collectively, “Investment Criteria”), (2) Acquired Fund will not have altered its portfolio in connection with the Reorganization to meet that 33⅓% threshold, and (3) Acquired Fund will not have modified any of its Investment Criteria as part of the plan of reorganization, for purposes of section 1.368-1(d)(2) of the Regulations;

4.1.13.   To the best of Acquired Fund’s management’s knowledge, there is no plan or intention by Acquired Fund’s shareholders to redeem, sell, exchange, or otherwise dispose of a number of Acquired Fund Shares (or Acquiring Fund Shares to be received in the Reorganization), in connection with the Reorganization, that would reduce their ownership of the Acquired Fund Shares (or the equivalent Acquiring Fund Shares) to a number of shares that is less than 50% of the current number of Acquired Fund Shares outstanding;

4.1.14.   During the five-year period ending at the Effective Time, neither Acquired Fund nor any person “related” (within the meaning of section 1.368-1(e)(4) of the Regulations (“Related”), without regard to section 1.368-1(e)(4)(i)(A) thereof) to it will have (1) acquired Acquired Fund Shares with consideration other than Acquiring Fund Shares or Acquired Fund Shares, or (2) made distributions with respect to Acquired Fund Shares except for (i) normal, regular dividend distributions made pursuant to Acquired Fund’s historic dividend-paying practice and (ii) other distributions declared and paid to ensure Acquired Fund’s continuing qualification as a RIC and to avoid the imposition of fund-level tax;

4.1.15.   All issued and outstanding Acquired Fund Shares are, and at the Effective Time will be, duly and validly issued and outstanding, fully paid, and non-assessable by Acquired Fund and have been offered and sold in every state and the District of Columbia in compliance in all material respects with applicable registration requirements of the 1933 Act and state securities laws; all issued and outstanding Acquired Fund Shares will, at the Effective Time, be held by the persons and in the amounts set forth on Acquired Fund’s shareholder records (as provided in the Certificate to be delivered pursuant to paragraph 3.3); and Acquired Fund does not have outstanding any options, warrants, or other rights to subscribe for or purchase any Acquired Fund Shares, nor are there outstanding any securities convertible into any Acquired Fund Shares;

4.1.16.   Acquired Fund incurred the Liabilities, which are associated with the Assets, in the ordinary course of its business;

4.1.17.   Acquired Fund is not under the jurisdiction of a court in a “title 11 or similar case” (as defined in section 368(a)(3)(A));

4.1.18.   Not more than 25% of the value of Acquired Fund’s total assets (excluding cash, cash items, and Government securities) is invested in the stock and securities of any one issuer, and not more than 50% of the value of those assets is invested in the stock and securities of five or fewer issuers; provided that a proportionate share of the assets of any RIC in which Acquired Fund invests (and not the securities issued by the RIC itself) shall be taken into account for this purpose;

4.1.19.   On the effective date of the Registration Statement (as defined in paragraph 4.3.1), at the time of the Shareholders Meeting (as defined in paragraph 5.2), and at the Effective Time, Acquired Fund’s Pro/SAI will (a) conform in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the rules and regulations of the Commission thereunder and (b) not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

4.1.20.   The information to be furnished by the Acquired Fund for use in no-action letters, applications for orders, the Registration Statement, and other documents filed or to be filed with any federal, state, or local regulatory authority (including the Financial Industry Regulatory Authority, Inc. (“FINRA”)) that may be necessary in connection with the transactions contemplated hereby will be accurate and complete in all material respects, will comply in all material respects with federal securities laws and other laws and regulations, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

4.1.21.   The Acquiring Fund Shares to be delivered to Acquired Fund hereunder are not being acquired for the purpose of making any distribution thereof, other than in accordance with the terms hereof; and

4.1.22.   The Acquired Fund Declaration permits Acquired Fund to vary its shareholders’ investment; the Acquired Fund does not have a fixed pool of assets – each series thereof (including Acquired Fund) is a managed Fund of securities, and Salient Capital Advisors, LLC, and each investment sub-adviser thereof have the authority to buy and sell securities for it.

4.2.       The Acquiring Investment Company, on Acquiring Fund’s behalf, represents and warrants to Acquired Fund as follows:

4.2.1.    The Acquiring Investment Company (a) is a Delaware Statutory Trust, and its Certificate of Trust has been duly filed in the office of the Secretary of State of Delaware, (b) is duly registered under the 1940 Act as an open-end management investment company, which registration is in full force and effect, and (c) has the power to own all its properties and assets and to carry on its business described in its current registration statement on Form N-1A;

4.2.2.    Acquiring Fund is a duly established and designated series of the Acquiring Investment Company;

4.2.3.    The execution, delivery, and performance hereof have been duly authorized at the date hereof by all necessary action on the part of the Acquiring Investment Company’s Board, which has made the determinations required by Rule 17a-8(a) under the 1940 Act; and this Agreement constitutes a valid and legally binding obligation of the Acquiring Investment Company, with respect to Acquiring Fund, enforceable in accordance with its terms, except as they may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, receivership, moratorium, and similar laws affecting the rights and remedies of creditors generally and general principles of equity;

4.2.4.    No consideration other than Acquiring Fund Shares (and Acquiring Fund’s assumption of the Liabilities) will be issued in exchange for the Assets in the Reorganization;

4.2.5.    The Acquiring Investment Company, with respect to Acquiring Fund, is not currently engaged in, and its execution, delivery, and performance hereof and consummation of the Reorganization will not result in, (a) a conflict with or material violation of any provision of Delaware law, the Acquiring Trust’s Agreement and Declaration of Trust, as amended (the “Acquiring Trust Declaration”) or Acquiring Trust’s Bylaws, or any Undertaking to which the Acquiring Investment Company, with respect to Acquiring Fund or on its behalf, is a party or by which it is bound or (b) the acceleration of any obligation, or the imposition of any penalty, under any Undertaking, judgment, or decree to which the Acquiring Investment Company, with respect to Acquiring Fund or on its behalf, is a party or by which it is bound;

4.2.6.    No litigation, administrative proceeding, action, or investigation of or before any court, governmental body, or arbitrator is presently pending or, to the Acquiring Investment Company’s knowledge, threatened against the Acquiring Investment Company, with respect to Acquiring Fund or any of its properties or assets attributable or allocable to Acquiring Fund, that, if adversely determined, would materially and adversely affect Acquiring Fund’s financial condition or the conduct of its business; and the Acquiring Investment Company, on Acquiring Fund’s behalf, knows of no facts that might form the basis for the institution of any such litigation, proceeding, action, or investigation and is not a party to or subject to the provisions of any order, decree, judgment, or award of any court, governmental body, or arbitrator that materially and adversely affects Acquiring Fund’s business or the Acquiring Investment Company’s ability to consummate the transactions contemplated hereby;

4.2.7.    Acquiring Fund’s Statements at and for the fiscal year (in the case of the Statement of Changes in Net Assets, for the two fiscal years) ended December 31, 2021, have been audited by KPMG and are in accordance with GAAP; those Statements (copies of which Acquiring Trust has furnished to Acquired Fund) present fairly, in all material respects, Acquiring Fund’s financial condition at that date in accordance with GAAP and the results of its operations and changes in its net assets for the period(s) then ended; and, to the Acquiring Investment Company’s management’s best knowledge and belief, there are no known contingent liabilities of Acquiring Fund required to be reflected on a Statement of Assets and Liabilities (including the notes thereto) in accordance with GAAP at that date that are not disclosed therein;

4.2.8.    Since December 31, 2021, there has not been any material adverse change in Acquiring Fund’s financial condition, assets, liabilities, or business, other than changes occurring in the ordinary course of business, or any incurrence by Acquiring Fund of indebtedness maturing more than one year from the date that indebtedness was incurred; for purposes of this representation and warranty, a decline in Acquiring Fund’s NAV due to declines in market values of securities Acquiring Fund holds, the discharge of Acquiring Fund’s liabilities, or the redemption of Acquiring Fund Shares by its shareholders will not constitute a material adverse change;

4.2.9.    All Returns of Acquiring Fund required by law to have been filed by the Effective Time (including any properly and timely filed extensions of time to file) will have been timely filed and are or will be correct in all material respects, and all federal and other taxes shown as due or required to be shown as due on those Returns will have been paid or provision will have been made for the payment thereof except for amounts that alone or in the aggregate would not reasonably be expected to have a material adverse effect; to the best of the Acquiring Investment Company’s knowledge, no such Return is currently under audit and no assessment has been asserted with respect to those Returns; and Acquiring Fund (a) is in compliance in all material respects with all applicable Regulations pertaining to (1) the reporting of dividends and other distributions on and redemptions of its shares, (2) withholding in respect thereof, and (3) shareholder basis reporting, (b) has withheld in respect of dividends and other distributions and paid to the proper taxing authorities all taxes required to be withheld, and (c) is not liable for any material penalties that could be imposed thereunder;

4.2.10.   Acquiring Fund is not classified as a partnership, and instead is classified as an association that is taxable as a corporation, for federal tax purposes and either has elected the latter classification by filing Form 8832 with the IRS or is a “publicly traded partnership” (as defined in section 7704(b)) that is treated as a corporation; Acquiring Fund is an “investment company” (as defined in section 368(a)(2)(F)(iii)) and a “fund” (as defined in section 851(g)(2), eligible for treatment under section 851(g)(1)); Acquiring Fund has elected to be a RIC; for each taxable year of its operation (including the taxable year that includes the Effective Time (“current year”)), Acquiring Fund has met (and for the current year will meet) the requirements of Subchapter M for qualification and treatment as a RIC and has been (and for the current year will be) eligible to and has computed (and for the current year will compute) its federal income tax under section 852; Acquiring Fund will continue to meet all those requirements for the current year and intends to continue to do so, and to continue to be eligible to and to so compute its federal income tax, for succeeding taxable years; and Acquiring Fund has no earnings and profits accumulated in any taxable year in which the provisions of Subchapter M did not apply to it;

4.2.11.   Acquiring Fund is in the same line of business as Acquired Fund was in preceding the Reorganization, for purposes of section 1.368-1(d)(2) of the Regulations, and did not enter into that line of business as part of the plan of reorganization; and following the Reorganization, Acquiring Fund will continue, and has no plan or intention to change, that line of business;

4.2.12.   At the Effective Time, Acquiring Fund (1) will not have modified any of its Investment Criteria as part of the plan of reorganization and (2) will not have any plan or intention to change any of its Investment Criteria after the Reorganization.

4.2.13.   Following the Reorganization, Acquiring Fund will (1) continue Acquired Fund’s “historic business” (within the meaning of section 1.368-1(d)(2) of the Regulations) and (2) use a significant portion of Acquired Fund’s “historic business assets” (within the meaning of section 1.368-1(d)(3) of the Regulations) in a business; moreover, Acquiring Fund (3) has no plan or intention to sell or otherwise dispose of a significant part of the Assets, except for dispositions made in the ordinary course of that business and dispositions necessary to maintain its status as a RIC, and (4) expects to retain substantially all the Assets in the same form as it receives them in the Reorganization, unless and until subsequent investment circumstances suggest the desirability of change or it becomes necessary to make dispositions thereof to maintain that status;

4.2.14.   Acquiring Fund does not directly or indirectly own, nor at the Effective Time will it directly or indirectly own, nor has it directly or indirectly owned at any time during the past five years, any Acquired Fund Shares;

4.2.15.   Acquiring Fund has no plan or intention to issue additional Acquiring Fund Shares following the Reorganization, except for shares issued in the ordinary course of its business as a series of an open-end investment company; nor will Acquiring Fund or any person Related to it have any plan or intention at the Effective Time to acquire or redeem any Acquiring Fund Shares issued in the Reorganization – either directly or through any transaction, agreement, or arrangement with any other person – except for redemptions Acquiring Fund will make as such a series pursuant to section 22(e) of the 1940 Act;

4.2.16.   Before or in the Reorganization, neither Acquiring Fund nor any person Related to it will have acquired, directly or through any transaction, agreement, or arrangement with any other person, Acquired Fund Shares with consideration other than Acquiring Fund Shares;

4.2.17.   Acquiring Fund is not under the jurisdiction of a court in a “title 11 or similar case” (as defined in section 368(a)(3)(A));

4.2.18.   There is no plan or intention for Acquiring Fund to be terminated, dissolved, or merged into another statutory or business trust or a corporation or any “fund” thereof (as defined in section 851(g)(2)) following the Reorganization, other than the acquisition of the Acquiring Fund in a transaction that qualifies as a tax-free reorganization under section 368(a)(1)(F);

4.2.19.   Assuming satisfaction of the condition in paragraph 4.1.18, immediately after the Reorganization (1) not more than 25% of the value of Acquiring Fund’s total assets (excluding cash, cash items, and Government securities) will be invested in the stock and securities of any one issuer and (2) not more than 50% of the value of those assets will be invested in the stock and securities of five or fewer issuers; provided that a proportionate share of the assets of any RIC in which Acquiring Fund invests (and not the securities issued by the RIC itself) shall be taken into account for this purpose;

4.2.20.   All issued and outstanding Acquiring Fund Shares are, and at the Effective Time will be, duly and validly issued and outstanding, fully paid, and non-assessable by the Acquiring Investment Company and have been offered and sold in every state and the District of Columbia in compliance in all material respects with applicable registration requirements of the 1933 Act and state securities laws; Acquiring Fund does not have outstanding any options, warrants, or other rights to subscribe for or purchase any Acquiring Fund Shares, nor are there outstanding any securities convertible into any Acquiring Fund Shares; and the Acquiring Fund Shares to be issued and delivered to Acquired Fund, for the Shareholders’ accounts, pursuant to the terms hereof, (a) will have been duly authorized by the Acquiring Investment Company and duly registered under the federal securities laws (and appropriate notices respecting them will have been duly filed under applicable state securities laws) at the Effective Time and (b) when so issued and delivered, will be duly and validly issued and outstanding Acquiring Fund Shares, fully paid and non-assessable by the Acquiring Investment Company;

4.2.21.    On the effective date of the Registration Statement, at the time of the Shareholders Meeting, and at the Effective Time, (a) the Acquiring Investment Company’s Pro/SAI including Acquiring Fund will conform in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the rules and regulations of the Commission thereunder and (b) that Pro/SAI and the prospectus included in the Registration Statement will not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that the foregoing will not apply to statements in or omissions from that prospectus made in reliance on and in conformity with information furnished by the Acquiring Investment Company for use therein;

4.2.22.    The information to be furnished by the Acquiring Investment Company for use in no-action letters, applications for orders, the Registration Statement, and other documents filed or to be filed with any federal, state, or local regulatory authority (including FINRA) that may be necessary in connection with the transactions contemplated hereby will be accurate and complete in all material respects, will comply in all material respects with federal securities laws and other laws and regulations, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and

4.2.23.    The Acquiring Trust Declaration permits the Acquiring Investment Company to vary its shareholders’ investment; the Acquiring Investment Company does not have a fixed pool of assets – each series thereof (including Acquiring Fund) is a managed Fund of securities, and Salient Capital Advisors, LLC, and each investment sub-adviser thereof have the authority to buy and sell securities for it.

4.3.        Each of Acquired Fund and the Acquiring Investment Company, on the Acquiring Fund’s behalf, represents and warrants to the other as follows:

4.3.1.     No governmental consents, approvals, or authorizations (collectively, “consents”) or filings are required under the 1933 Act, the Securities Exchange Act of 1934, as amended, the 1940 Act, or state securities laws, and no consents or orders of any court are required, for its execution, delivery, and performance hereof on its Fund’s behalf, except for (a) the Acquiring Investment Company’s filing with the Commission of a registration statement on Form N-14 relating to the Acquiring Fund Shares issuable hereunder, and any supplement or amendment thereto, including therein a prospectus and proxy statement (“Registration Statement”), and a post-effective amendment to the Acquiring Investment Company’s registration statement on Form N-1A and (b) consents, filings, and orders that have been made or received or may be required after the Effective Time;

4.3.2.     The fair market value of the Acquiring Fund Shares each Shareholder receives will be approximately equal to the fair market value of its Acquired Fund Shares it actually or constructively surrenders in exchange therefor; and

4.3.3.     The Investment Company’s management is unaware of any plan or intention of Shareholders to redeem, sell, or otherwise dispose of (i) any portion of their Acquired Fund Shares before the Reorganization to any person Related to either Fund or (ii) any portion of the Acquiring Fund Shares they receive in the Reorganization to any person Related to Acquiring Fund;

4.3.4.     Acquired Fund’s shareholders will pay their own expenses (such as fees of personal investment or tax advisers for advice concerning the Reorganization), if any, incurred in connection with the Reorganization;

4.3.5.     The fair market value and “adjusted basis” (within the meaning of section 1011) of the Assets will equal or exceed the Liabilities to be assumed by Acquiring Fund and those to which the Assets are subject;

4.3.6.     At the Effective Time, there will be no intercompany indebtedness existing between the Funds that was issued, acquired, or settled at a discount;

4.3.7.     Pursuant to the Reorganization, Acquired Fund will transfer to Acquiring Fund, and Acquiring Fund will acquire, at least 90% of the fair market value of the net assets, and at least 70% of the fair market value of the gross assets, Acquired Fund held immediately before the Reorganization; for the purposes of the foregoing, any amounts Acquired Fund uses to pay its Reorganization expenses and to make redemptions and distributions immediately before the Reorganization (except (1) redemptions pursuant to section 22(e) of the 1940 Act and (2) dividends and other distributions declared and paid to ensure Acquired Fund’s continuing qualification as a RIC and to avoid the imposition of fund-level tax) will be included as assets it held immediately before the Reorganization;

4.3.8.     None of the compensation Salient Capital Advisors, LLC, or any affiliate thereof receives as a service provider to Acquired Fund will be separate consideration for, or allocable to, any of the Acquired Fund Shares that Salient Capital Advisors, LLC (on any Shareholder’s behalf) holds; none of the Acquiring Fund Shares Salient Capital Advisors, LLC (on any Shareholder’s behalf) receives in the Reorganization will be separate consideration for, or allocable to, any employment agreement, investment advisory agreement, or other service agreement; and the compensation paid to Salient Capital Advisors, LLC or any affiliate thereof will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm’s-length for similar services;

4.3.9.     Immediately after the Reorganization, Acquired Fund Shareholders will not own shares constituting “control” (within the meaning of section 368(a)(2)(H)(i), i.e., as defined in section 304(c)) of Acquiring Fund;

4.3.10.   No expenses incurred by Acquired Fund or on its behalf in connection with the Reorganization will be paid or assumed by Acquiring Fund, Salient Capital Advisors, LLC, or any affiliate thereof, or any other third party unless those expenses are solely and directly related to the Reorganization (determined in accordance with the guidelines set forth in Rev. Rul. 73-54, 1973-1 C.B. 187) (“Reorganization Expenses”), and no cash or property other than Acquiring Fund Shares will be transferred to Acquired Fund or any of its shareholders with the intention that such cash or property be used to pay any expenses (even Reorganization Expenses) thereof;

4.3.11.   There will be no dissenters to the Reorganization under the applicable provisions of Delaware law, and Acquiring Fund will not pay cash in lieu of fractional Acquiring Fund Shares in connection with the Reorganization;

4.3.12.   The Reorganization is being undertaken for bona fide business purposes (and not a purpose to avoid federal income tax); and

4.3.13.   The principal purpose of Acquiring Fund’s assumption of the Liabilities is a bona fide business purpose and is not avoidance of federal income tax on the transaction.

5.       COVENANTS

5.1.       Each Investment Company covenants to operate its Fund’s business in the ordinary course between the date hereof and the Closing, it being understood that:

(a)   such ordinary course will include declaring and paying customary dividends and other distributions and changes in operations contemplated by each Fund’s normal business activities; and

(b)   each Fund will retain exclusive control of the composition of its portfolio until the Closing.

5.2.       Acquired Fund covenants to call and hold a meeting of Acquired Fund’s shareholders to consider and act on this Agreement and to take all other action necessary to obtain approval of the transactions contemplated hereby (“Shareholders Meeting”).

5.3.       Acquired Fund covenants that it will assist Acquiring Trust in obtaining information Acquiring Trust reasonably requests concerning the beneficial ownership of Acquired Fund Shares.

5.4.         Acquired Fund covenants that it will turn over its books and records regarding Acquired Fund (including all tax books and records and all books and records required to be maintained under the 1940 Act and the rules and regulations thereunder) to Acquiring Trust at the Closing.

5.5.         Each Investment Company covenants to cooperate with the other in preparing the Registration Statement in compliance with applicable federal and state securities laws.

5.6.         Each Investment Company covenants that it will, from time to time, as and when requested by the other Investment Company, execute and deliver or cause to be executed and delivered all assignments and other instruments, and will take or cause to be taken all further action, the other Investment Company deems necessary or desirable in order to vest in, and confirm to, (a) the applicable Acquiring Investment Company, on Acquiring Fund’s behalf, title to and possession of all the Assets, and (b) Acquired Fund, on its own behalf, title to and possession of the Acquiring Fund Shares to be delivered hereunder, and otherwise to carry out the intent and purpose hereof.

5.7.         Acquiring Investment Company covenants to use all reasonable efforts to obtain the consents required by the 1933 Act, the 1940 Act, and applicable state securities laws it deems appropriate to continue Acquiring Fund’s operations after the Effective Time.

5.8.         Acquired Fund covenants to distribute all the Acquiring Fund Shares it receives in the Reorganization to the Shareholders in complete liquidation of Acquired Fund.

5.9.         Subject to this Agreement, each Investment Company covenants to take or cause to be taken all actions, and to do or cause to be done all things, reasonably necessary, proper, or advisable to consummate and effectuate the transactions contemplated hereby.

6.            CONDITIONS PRECEDENT

Each Investment Company’s obligations hereunder shall be subject to (a) the other Investment Company’s performance of all its obligations to be performed hereunder at or before the Closing, (b) all representations and warranties of the other Investment Company contained herein being true and correct in all material respects at the date hereof and, except as they may be affected by the transactions contemplated hereby, at the Effective Time, with the same force and effect as if made at that time (except that clauses (a) and (b) shall not apply in the case of an Acquired Fund Reorganization), and (c) the following further conditions that, at or before that time:

6.1.         This Agreement and the transactions contemplated hereby shall have been duly adopted and approved by both Boards and by Acquired Fund’s shareholders at the Shareholders Meeting (including any adjournments or postponements thereof);

6.2.         All necessary filings shall have been made with the Commission and state securities authorities, and no order or directive shall have been received that any other or further action is required to permit the Investment Companies to carry out the transactions contemplated hereby; the Registration Statement shall have become effective under the 1933 Act, no stop orders suspending the effectiveness thereof shall have been issued, and, to each Investment Company’s best knowledge, no investigation or proceeding for that purpose shall have been instituted or shall be pending, threatened, or contemplated under the 1933 Act or the 1940 Act; the Commission shall not have issued an unfavorable report with respect to the Reorganization under section 25(b) of the 1940 Act nor instituted any proceedings seeking to enjoin consummation of the transactions contemplated hereby under section 25(c) of the 1940 Act; and all consents, orders, and permits of federal, state, and local regulatory authorities (including the Commission and state securities authorities) either Investment Company deems necessary to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain same would not involve a risk of a material adverse effect on either Fund’s assets or properties, provided that either Investment Company may for itself waive any of those conditions;

6.3.         At the Effective Time, no action, suit, or other proceeding shall be pending (or, to either Investment Company’s best knowledge, threatened to be commenced) before any court, governmental agency, or arbitrator in which it is sought to enjoin the performance of, restrain, prohibit, affect the enforceability of, or obtain damages or other relief in connection with, the transactions contemplated hereby;

6.4.         Each Investment Company shall have received an opinion of K&L Gates LLP (“Counsel”) as to the federal income tax consequences mentioned below (“Tax Opinion”). In rendering the Tax Opinion, Counsel may rely as to factual matters, exclusively and without independent verification, on the representations and warranties made in this Agreement, which Counsel may treat as representations and warranties made to it (that, notwithstanding paragraph 8, shall survive the Closing), and in separate letters, if Counsel requests, addressed to it (collectively, “Representations”) and the Certificates delivered pursuant to paragraph 3.5. The Tax Opinion shall be substantially to the effect that – based on the facts and assumptions stated therein and conditioned on the Representations’ being true and complete at the Effective Time and consummation of the Reorganization in accordance herewith (without the waiver or modification of any terms or conditions hereof and without taking into account any amendment hereof that Counsel has not approved) – for federal income tax purposes:

(a)       Acquired Fund’s transfer of the Assets to Acquiring Fund in exchange solely for Acquiring Fund Shares and Acquiring Fund’s assumption of the Liabilities, followed by Acquired Fund’s distribution of those shares pro rata to the Shareholders actually or constructively in exchange for their Acquired Fund Shares and in complete liquidation of Acquired Fund, will qualify as a “reorganization” (as defined in section 368(a)(1)(C)), and each Fund will be “a party to a reorganization” (within the meaning of section 368(b));

(b)       Acquired Fund will recognize no gain or loss on the transfer of the Assets to Acquiring Fund in exchange solely for Acquiring Fund Shares and Acquiring Fund’s assumption of the Liabilities or on the subsequent distribution of those shares to the Shareholders in exchange for their Acquired Fund Shares;

(c)       Acquiring Fund will recognize no gain or loss on its receipt of the Assets in exchange solely for Acquiring Fund Shares and its assumption of the Liabilities;

(d)       Acquiring Fund’s basis in each Asset will be the same as Acquired Fund’s basis therein immediately before the Reorganization, and Acquiring Fund’s holding period for each Asset will include Acquired Fund’s holding period therefor (except where Acquiring Fund’s investment activities have the effect of reducing or eliminating an Asset’s holding period);

(e)       A Shareholder will recognize no gain or loss on the exchange of all its Acquired Fund Shares solely for Acquiring Fund Shares pursuant to the Reorganization; and

(f)       A Shareholder’s aggregate basis in the Acquiring Fund Shares it receives in the Reorganization will be the same as the aggregate basis in its Acquired Fund Shares it actually or constructively surrenders in exchange for those Acquiring Fund Shares, and its holding period for those Acquiring Fund Shares will include, in each instance, its holding period for those Acquired Fund Shares, provided the Shareholder holds the latter as capital assets at the Effective Time.

Notwithstanding subparagraphs (b) and (d), the Tax Opinion may state that no opinion is expressed as to the effect of the Reorganization on the Funds or any Shareholder with respect to any Asset as to which any unrealized gain or loss is required to be recognized for federal income tax purposes at the end of a taxable year (or on the termination or transfer thereof) under a mark-to-market system of accounting.

6.5.       The Acquiring Investment Company, on Acquiring Fund’s behalf, shall have executed and delivered at or before the Closing a Certificate confirming that the Acquiring Investment Company, on Acquiring Fund’s behalf, assumes all of the Liabilities; and

6.6.       At any time before the Closing, either Investment Company may waive any of the foregoing conditions (except that set forth in paragraphs 6.1 and 6.4) if, in the judgment of its Board, that waiver will not have a material adverse effect on its Fund’s shareholders’ interests.

7.            BROKERAGE FEES AND EXPENSES

7.1.       Each Investment Company represents and warrants to the other that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for herein.

7.2.       The expenses of the Reorganization shall be borne 70% by the Acquired Fund and 30% by the Acquiring Fund, except that expenses shall be paid by the Fund directly incurring them if and to the extent that the payment thereof by another person would result in that Fund’s disqualification as a RIC.

8.             ENTIRE AGREEMENT; NO SURVIVAL

Neither Investment Company has made any representation, warranty, or covenant not set forth herein, and this Agreement constitutes the entire agreement between the Investment Companies. The representations, warranties, and covenants contained herein or in any document delivered pursuant hereto or in connection herewith shall not survive the Closing.

9.            TERMINATION OF AGREEMENT

This Agreement may be terminated at any time at or before the Closing:

9.1.         By either Investment Company (a) in the event of the other Investment Company’s material breach of any representation, warranty, or covenant contained herein to be performed at or before the Closing, (b) if a condition to its obligations has not been met and it reasonably appears that that condition will not or cannot be met, (c) if a governmental body issues an order, decree, or ruling having the effect of permanently enjoining, restraining, or otherwise prohibiting consummation of the Reorganization, or (d) if the Closing has not occurred on or before December 31, 2022, or another date to which the Investment Companies agree; or

9.2.         By the Investment Companies’ mutual agreement.

In the event of termination under paragraphs 9.1(c) or (d) or 9.2, neither Investment Company (nor its trustees, officers, or shareholders) shall have any liability to the other Investment Company.

10.         AMENDMENTS

The Investment Companies may amend, modify, or supplement this Agreement at any time in any manner they mutually agree on in writing, notwithstanding Acquired Fund’s shareholders’ approval hereof; provided that, following that approval, no such amendment, modification, or supplement shall have a material adverse effect on the Shareholders’ interests.

11.         MISCELLANEOUS

11.1.       This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to principles of conflicts of laws; provided that, in the case of any conflict between those laws and the federal securities laws, the latter shall govern.

11.2.       Nothing expressed or implied herein is intended or shall be construed to confer on or give any person, firm, trust, or corporation other than each Investment Company, on its Fund’s behalf, and their respective successors and assigns any rights or remedies under or by reason hereof.

11.3        Notice is hereby given that this instrument is executed and delivered on behalf of each Investment Company’s trustees solely in their capacities as trustees, and not individually, and that each Investment Company’s obligations under this instrument are not binding on or enforceable against any of its trustees, officers, shareholders, or series other than its Fund but are only binding on and enforceable against its property attributable to and held for the benefit of its Fund (“Fund’s Property”) and not its property attributable to and held for the benefit of any other series thereof. Each Investment Company, in asserting any rights or claims hereunder on its or its Fund’s behalf, shall look only to the other Fund’s Property in settlement of those rights or claims and not to the property of any other series of the other Investment Company or to those trustees, officers, or shareholders.

11.4        Any term or provision hereof that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of that invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions hereof or affecting the validity or enforceability of any of the terms and provisions hereof in any other jurisdiction.

11.5.       This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been executed by each Investment Company and delivered to the other Investment Company. The headings contained herein are for reference purposes only and shall not affect in any way the meaning or interpretation hereof.

IN WITNESS WHEREOF, each party has caused this Agreement to be executed and delivered by its duly authorized officer as of the day and year first written above.

EXHIBIT B —

FINANCIAL HIGHLIGHTS  OF THE FUNDS

The financial highlights tables are intended to help you understand the financial performance and other information of each Fund for the last five years. Certain information reflects financial results for a single Fund share. The total returns in the tables represent the rate that an investor would have earned or lost on an investment in each Fund (assuming reinvestment of all dividends and distributions). Information for the fiscal years ended November 30, 2017 through and including 2021 for the Acquired Fund and for the fiscal years ended December 31, 2017 through and including 2021 for the Acquiring Fund has been audited by KPMG LLP, which serves as the independent registered public accounting firm for both of the Funds. The reports of KPMG LLP, along with the Funds’ audited financial statements for the period from December 1, 2020 through November 30, 2021 for the Acquiring Fund for the period from January 1, 2021 through December 31, 2021 for the Acquiring Fund, is included in each Fund’s annual report, which are available upon request as discussed above under “Where to Get More Information.” Copies of the Funds’ shareholder reports are also currently available at www.salientpartners.com.

Financial Highlights

For a share outstanding throughout the periods presented.

Salient MLP & Energy Infrastructure Fund

(a) Calculated based on average shares outstanding.

(b) Total return calculations do not include any sales or redemption charges.

(c) Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. It is not annualized for periods less than one year.

Financial Highlights

Salient Midstream & MLP Fund

EXHIBIT C —

SUMMARY OF RIGHTS OF SHAREHOLDERS

STATEMENT OF ADDITIONAL INFORMATION

[ ], 2022

Relating to the Reorganization of

SALIENT MIDSTREAM & MLP FUND

With and into

SALIENT MLP & ENERGY INFRASTRUCTURE FUND, 

a series of Salient MF Trust

4265 San Felipe, 8th Floor 

Houston, Texas 77027 

Telephone No.: 1-713-993-4001

This Statement of Additional Information is not a prospectus and should be read in conjunction with the Proxy Statement/Prospectus dated [ ] (the “Proxy Statement/Prospectus”) relating to the proposed reorganization of Salient Midstream & MLP Fund (NYSE Ticker: SMM), a Delaware statutory trust and a closed-end management investment company (the “Acquired Fund”), into Salient MLP & Energy Infrastructure Fund (the “Acquiring Fund”), a series of Salient MF Trust, a Delaware statutory trust and an open-end management investment company (the “Reorganization”). The Acquiring Fund and Acquired Fund are each also referred to in this Statement of Additional Information individually as a “Fund” and collectively as the “Funds.” References to “we” “us” or “our” in this Statement of Additional Information are references to Acquiring Fund, except where context dictates otherwise.

A copy of the Proxy Statement/Prospectus may be obtained, without charge, by calling 1-866-667-9228 or on the Securities and Exchange Commission’s (“SEC”) website (www.sec.gov). Unless otherwise defined herein, capitalized terms have the meanings given to them in the Proxy Statement/Prospectus.

In the Reorganization, the Acquired Fund will contribute all of its assets to the Acquiring Fund in exchange for Class A shares of the Acquiring Fund and the assumption by the Acquiring Fund of the liabilities of the Acquired Fund and shareholders of the Acquired Fund will become shareholders of the Acquiring Fund. As a result of the Reorganization, each common share of the Acquired Fund will be replaced with Class A shares of the Acquiring Fund. The aggregate net asset value (“NAV”) of the Acquiring Fund’s Class A shares received by the Acquired Fund common shareholders in the Reorganization will equal the aggregate NAV of the Acquired Fund common shares held on the business day immediately prior to closing of the Reorganization, less the costs of the Reorganization attributable to their common shares. The Acquired Fund will cease its separate existence under Delaware law and terminate its registration under the Investment Company Act of 1940, as amended (“1940 Act”). The Acquiring Fund will continue to operate after the Reorganization as a registered, non-diversified, open-end management investment company with the investment objectives and policies described in this Statement of Additional Information.

TABLE OF CONTENTS

HISTORY OF THE FUNDS

Salient Midstream & MLP Fund (the “Acquired Fund”), was organized on May 24, 2012 as a Delaware statutory trust under the laws of the State of Delaware and is a non-diversified, closed-end investment management company registered under the 1940 Act. The Acquired Fund is authorized to issue an unlimited number of common shares of beneficial interest. The Acquired Fund’s common shares are listed on the New York Stock Exchange (“NYSE”) under the symbol “SMM.”

Salient MF Trust (the “Acquiring Trust”) was organized on November 15, 2011 as a Delaware statutory trust under the laws of the State of Delaware and is an open-end investment management company registered under the 1940 Act. The Acquiring Trust presently has two series, the Acquiring Fund and Salient Tactical Plus Fund, which is not involved in this Reorganization. The capitalization of the Acquiring Trust consists of an unlimited number of shares of beneficial interest with no par value per share. The Acquiring Fund offers Class A, Class C, Class I, and Class R6 shares, although only Class A shares are involved in this Reorganization. The Acquiring Fund has elected to qualify as a non-diversified series of the Acquiring Trust.

INVESTMENT OBJECTIVE AND INVESTMENT LIMITATIONS

The following table details the fundamental and non-fundamental investment limitations for the Acquired Fund and the Acquiring Fund. While shareholder approval is required to change a fundamental limitation, non-fundamental limitations may be changed by a Fund’s Board of Trustees (each, a “Board”) without shareholder approval.

Both Funds pursue investment objectives of total return, though the exact language between the two funds differs in the manner in which total return is sought and framed. In addition, the objective is fundamental for the Acquired Fund, but non-fundamental for the Acquiring Fund.

There are no material differences between the fundamental limitations of the Funds, though the language used and certain detailed explanations of limitations may differ between the Funds. In particular, both Funds concentrate in the energy and energy infrastructure industries, but the Acquired Fund policy includes additional detail about specific investment types through which this concentration policy is implemented. In addition, neither Fund is permitted to purchase or sell commodities except in specifically enumerated circumstances, and the Acquiring Fund includes an additional exception for transactions made through a vehicle whereby the risk of loss is not greater than the investment therein that is not included for the Acquired Fund.

In addition, the Acquired Fund identifies a number of investment strategies as non-fundamental policies while the Acquired Fund does not have any corresponding policies identified in this manner.

INVESTMENT STRATEGIES

The investment objectives and principal investment policies of the Funds are described in the Proxy Statement/Prospectus. Additional information concerning the characteristics of certain of the Funds’ investments is set forth below. As shown below, as of the as of the date of the closing of the Reorganization (the “Closing Date”), the Funds have substantially similar investment strategies and invest primarily in securities of MLPs and energy infrastructure companies. As of June 30, 2022, approximately 80% of the Acquired Fund’s total assets were invested in the same securities held by the Acquiring Fund.