 | ROPES & GRAY LLP
PRUDENTIAL TOWER
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|
July 15, 2014 | Maureen A. Meredith | |
| T +1 617 951 7239 | ||
| maureen.meredith@ropesgray.com |
VIA EDGAR
Ms. Anu Dubey, Esq.
Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, D.C. 20549
Re: AMG Funds (Registration Nos. 333-84639 and 811-09521)
Dear Ms. Dubey:
I am writing on behalf of AMG Funds (formerly Managers AMG Funds) (the “Trust”) to respond to the supplemental comments of the staff (the “Staff”) of the Securities and Exchange Commission (“SEC”) to Post-Effective Amendment No. 109 under the Securities Act of 1933, as amended (the “1933 Act”), to the Trust’s Registration Statement on Form N-1A (the “Registration Statement”) filed on February 27, 2014, relating to AMG TimesSquare Small Cap Growth Fund (the “Fund”), a series of the Trust. The Trust appreciates this opportunity to respond to the Staff’s comments.
On April 8, 2014, Anu Dubey of the Staff provided oral comments to Maureen A. Meredith of Ropes & Gray LLP, counsel to the Trust, regarding Post-Effective Amendment No. 109 to the Registration Statement. Responses to the Staff’s comments were provided supplementally via EDGAR correspondence on April 25, 2014. Ms. Dubey provided additional oral comments to Maureen A. Meredith on April 29, 2014. The Staff’s additional comments and the Trust’s responses are set forth below. Certain defined terms used herein have the meaning set forth in the Fund’s prospectus (the “Prospectus”).
1.Comment: Under “Additional Information About the Fund – Additional Information About the Fund’s Expenses and Performance,” the disclosure relating to the Fund’s Expense Limitation and Recoupment Agreement provides as follows: “The contractual expense limitation may only be terminated in the event the Investment Manager ceases to be the investment manager of the Fund or by mutual agreement between the Investment Manager and the Managers AMG Funds Board of Trustees; provided, however, that no such termination shall affect the obligation (including the amount of the obligation) of the Trust, on behalf of the Fund, to repay amounts previously paid, waived or reimbursed by the Investment Manager with respect to periods prior to the date of such termination.” Please explain supplementally the basis for the AMG Funds Board of Trustees’ (the “Board” or the “Trustees”) belief that this recoupment obligation is appropriate and in the best interests of shareholders if the Investment Manager no longer serves as the Fund’s investment manager.
Response: The Trust respectfully submits that the Fund’s Expense Limitation and Recoupment Agreement is appropriate and in the best interests of Fund shareholders. The Expense Limitation and Recoupment Agreement is advantageous to shareholders because it caps the total annual operating expenses of the Fund, regardless of when economies of scale are achieved, if at all. If the Investment Manager could not continue to recoup amounts previously paid, waived or reimbursed in the event the Trustees terminated the investment advisory agreement, the Investment Manager would be disincentivized from entering into an expense limitation arrangement with the Trust in the first instance. The Trust further notes that any recoupment payments would be made in consideration for services rendered while the Investment Manager served as the Fund’s investment manager. Therefore, the Trust believes it is reasonable for the Board of the Trust to conclude that the Expense Limitation and Recoupment Agreement as a whole, including the recoupment obligation, is appropriate and in the best interests of Fund shareholders. Nevertheless, the Trust confirms that any future expense limitation and recoupment agreement that the Trust enters into for the Fund will remove the proviso that a termination of the agreement shall not affect the obligation (including the amount of the obligation) of the Trust, on behalf of the Fund, to repay amounts previously paid, waived or reimbursed by the Investment Manager with respect to periods prior to the date of such termination in light of the Staff’s view that expenses cannot be recouped in such a situation, although it is expected that the agreement will separately address successor advisors and Fund mergers with respect to recoupment.
As requested, we acknowledge the following: (i) the Trust is responsible for the adequacy and accuracy of the disclosure in the filing; (ii) Staff comments or changes to disclosure in response to such comments in the filings reviewed by the Staff do not foreclose the SEC from taking any action with respect to the filing; and (iii) the Trust may not assert Staff comments as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States. As indicated in the SEC’s June 24, 2004, release regarding the public release of comment letters and responses, you are requesting such acknowledgements from all companies whose filings are being reviewed and this request and these acknowledgements should not be construed as suggesting that there is an inquiry or investigation or other matter involving the Trust.
Please direct any questions you may have with respect to this filing to me at (617) 951-7239.
Very truly yours, |
/s/ Maureen A. Meredith |
Maureen A. Meredith |
cc: Caren Cunningham, Esq. |
Michael Ponder, Esq. |
Gregory C. Davis, Esq. |