LMP Real Estate Income Fund DEFA14A Additional proxy soliciting materials

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  x                             Filed by a Party other than the Registrant  ¨

Check the appropriate box:

¨ Preliminary Proxy Statement

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

¨ Definitive Proxy Statement

x Definitive Additional Materials

¨ Soliciting Material Under Rule 14a-12

LMP REAL ESTATE INCOME FUND INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

x	No fee required.
¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
	(1)	Title of each class of securities to which transaction applies:
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¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
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INDEPENDENT EXPERTISE. SINGULAR FOCUS.

LMP Real Estate Income Fund Inc. (RIT)

May 6, 2015

ISS Presentation

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

2

Executive Summary

•

RIT has delivered on its investment objectives with exceptionally strong investment performance and attractive

income to shareholders

•

RIT’s discount is in-line with its Lipper peers as well as equity closed-end funds more broadly

•

The Board is highly experienced and overwhelmingly comprised of independent directors (89%)

•

The Board continues to be focused on delivering results to investors and will consider any option that is in the long-

term

best

interests

of

all

shareholders

•

Bulldog’s actions are not aligned with the long-term interests of all shareholders

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

3

RIT has delivered strong investment performance

•

RIT

has

outperformed

its

Lipper

real

estate

peers

1

for

the

1-,

3-,

5-

and

10-year

periods

based

on

NAV

and

market

price

•

Since

the

Board

changed

RIT’s

sub-advisor

in

August

15,

2011,

RIT

has

outperformed

its

Lipper

real

estate

peers

as well as the MSCI U.S. REIT Index

1

Lipper real estate peers excludes non-exchange traded closed-end funds and Storage Group Inc., a fund in the process of converting into a REIT.

Source: Lipper.  Data as of 4/30/15

19.10

12.54

12.92

7.57

15.84

13.97

12.10

13.12

5.96

14.58

13.11

11.11

12.67

6.41

13.32

12.41

11.94

12.36

5.69

13.62

13.08

10.82

12.93

8.36

13.79

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

1 Year

3 Year

5 Year

10 Year

Current Sub-advisor    

8/15/11 -

4/30/15

Average Annualized Total Returns

(for periods ended April 30, 2015)

RIT Market Price

RIT NAV

Lipper Peers --

Market Price

Lipper Peers -

NAV

MSCI U.S. REIT Index

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

4

RIT has delivered attractive monthly distributions since inception

•

Since

inception,

RIT

has

paid

$16.71

per

share

in

total

distributions

1

to

investors.

This

equates

to

an

annualized

rate of 8.85% based on the IPO price of $15.00

•

RIT has paid a monthly distribution of $0.06 per share since December 2008.  The monthly distribution equates

to an annualized rate based on market price of 5.70% and a rate on NAV of 5.12%.  This compares to 2.07% on

the

10-year

Treasury,

3.85%

for

the

MSCI

REIT

Index

2

,

and

1.98%

for

the

S&P

500

Index

2

•

RIT has had a managed distribution policy in place since 2004 that allows payment of long-term capital gains

throughout the year

Source: Bloomberg, Legg Mason.  Data as of 4/30/15.

1

Total distributions includes all regular and special distributions paid since inception July 31, 2002 through April 30, 2015

2

Rate based on trailing twelve month data

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

5

•

The

Fed’s

change

in

monetary

policy

and

the

ensuing

‘taper

tantrum’

in

May

2013

drove

discounts

wider

for

the

broader

closed-end fund market. Current discount levels are not unique to RIT:

•

88% of all CEFs trade at discounts: median -8.24%, average -6.60%

•

92% of all equity CEFs trade at discounts:  median -9.84%, average -8.28%

•

100%

of

Lipper

real

estate

peers

1

trade

at

discounts:

median

-12.43%,

average

-10.97%

•

70%

of

Lipper

real

estate

peers

1

have

discounts

greater

than

-10%

•

RIT’s current discount of -10.10% is consistent with its Lipper peers

RIT’s discount is in-line with the market and its peers

Source:  Bloomberg, Lipper.  Data as of 4/30/15 

1

Lipper real estate peers excludes non-exchange traded closed-end funds and Storage Group Inc., a fund in the process of converting into a REIT.

4/30/15

-45.0

-35.0

-25.0

-15.0

-5.0

5.0

15.0

5/6/2005

5/6/2006

5/6/2007

5/6/2008

5/6/2009

5/6/2010

5/6/2011

5/6/2012

5/6/2013

5/6/2014

RIT’s premium / discount level has fluctuated with its peers

and reflects market events

Premium / Discount of RIT vs. Lipper peers

1

(May 6, 2005 –

April 30, 2015)

RIT

Peer Group Average

Peer Group Median

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

6

•

The Board is comprised of nine individuals who have substantial professional accomplishments and experience 

•

Eight of the nine directors (89%), including the Fund’s 2015 nominees William R. Hutchinson, Eileen A. Kamerick and

Robert D. Agdern, are independent under the Investment Company Act of 1940 and NYSE rules.

•

The Board’s actions demonstrate its commitment to all investors and have benefited all shareholders:

•

The current Board and its 2015 nominees are highly experienced, independent and focused on the interests of all

shareholders with a proven track record of performance

•

RIT’s Board is highly experienced and independent

•

The Board reviews and discusses performance and premiums/discounts when they meet.  The Board believes that

in the current market environment a tender offer will not benefit shareholders in the long term

•

Bulldog proposed its own slate of directors, but does not articulate how they will aid ALL shareholders

•

In August 2011, replaced the sub-advisor

•

In August 2011, negotiated a fee waiver of 5 bps

•

In August 2008, redeemed all $95 million ARPS at liquidation value

•

In 2004, adopted a managed distribution policy

The Bulldog nominees have a history and relationship with Bulldog and Philip Goldstein and will pursue actions

that benefit Bulldog investors, not all RIT shareholders

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

Bulldog’s actions are self serving and may hurt long-term investors

7

•

The vast majority of RIT shareholders are long-term investors who initially invested in RIT because of performance and

monthly distributions.  It is obvious that our shareholders are not short-term players

•

Bulldog has a short-term investment agenda to benefit its own investors

•

In September 2014, Bulldog reported ownership in RIT of 5.54%, but only eight days later reduced its position to

4.77%.  Bulldog sold shares for a quick gain

•

Bulldog

submitted

a

letter

to

RIT

on

February

24,

2015,

informing

senior

management

that

it

would

be

presenting

a proposal to shareholders at the annual meeting to seek a tender offer.  Bulldog was purchasing shares before it

sent

the

letter

and

continued

to

accumulate

shares

after

sending

the

letter

•

From January 15, 2015 to April 6, 2015, (less than 4 months), Bulldog purchased over 50% of its current holdings

•

A tender offer in the current market environment is not in the best interests of all shareholders, as it would:

•

Force the sale of securities at inopportune times and could result in a taxable event for remaining shareholders

•

Increase RIT’s expense ratio and potentially reduce future earnings and distributions to shareholders

•

Reduce market trading liquidity as fewer shares would be outstanding

•

Given current market conditions, the discount levels of the broader closed-end fund space and RIT’s Lipper peers, and

as independent research has shown, a tender offer cannot reasonably be expected to have a lasting impact on RIT’s

discount

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

Bulldog’s claims are misguided

8

•

Bulldog claims “the Board concedes that the persistent discount is a problem”

•

At each meeting the Board reviews and discusses RIT’s performance and premium/discounts with portfolio

managers

•

The Board is committed to delivering results to all investors and believes that any action that can narrow the

discount over the longer-term would benefit all investors and should be explored 

•

Tender

offers

are

not

new;

the

Board

has

evaluated

them

in

the

past.

Historical

analysis

shows

that

tender

offers do not have a lasting effect on discounts and can negatively impact long-term investors who do not tender shares

•

Bulldog says the Board refused to include its proposal on the Fund’s proxy card

•

Bulldog

missed

the

shareholder

proposal

submission

deadline

of

November

26

th

by

three

months

and

never

submitted or requested its proposal appear in the Fund’s proxy until after mailing its own proxy to investors

•

The Board believes proxy rules are in place for a reason -

to protect retail investors and the integrity of the

process -

and should be followed

•

Bulldog questions board independence based on the number of funds they serve and overall compensation

•

RIT’s board oversees multiple funds in the Legg Mason family of funds in conformity with best practices in the

industry.  See for example: The Independent Director’s Council Task Force Report (May 2005)

•

Eight of nine current directors are independent under the 1940 Act and NYSE rules

•

Each director received approximately $3,000 last year for their service to RIT

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

Bulldog’s claims are misguided (continued)

9

•

Bulldog appears to equate following the rules regarding disclosure of sensitive shareholder information to cheating?

•

RIT’s shareholder list contains personal information that mandates taking precautions under applicable law to

protect it

•

Because RIT is a Maryland corporation doing business in New York, the Fund must follow both the Maryland

General Corporation Law and New York  Business Corporation Law  in safeguarding shareholder information

•

Under Maryland law, shareholders must meet certain requirements in order to inspect a list of

shareholders.

This includes a requirement to have held at least 5% of a fund’s outstanding stock for six months

or more prior to the request.

Based upon Bulldog’s public filings, the Fund determined that Bulldog did not

satisfy the ownership requirements

•

New York law permits shareholders who are New York residents to access fund shareholder records, but only

after

satisfying

certain

safeguards

designed

to

protect

shareholder

privacy.

These

include

a

requirement

that

the requesting shareholder furnish to the fund an affidavit stating that:

the

shareholder

does

not

desire

to

conduct

such

inspection

for

a

purpose

which

is

in

the

interest

of

a

business or object other than the business of the fund, and

the shareholder has not within five years sold or offered for sale any list of stockholders of any corporation,

or aided or abetted any person in procuring any such record of stockholders for any such purpose

•

RIT furnished the shareholder list to Bulldog only after these requirements were satisfied

•

Bulldog received the shareholder list on April 13, 2015.  This is 47 days in advance of the May 29, 2015

annual meeting.  As of May 5, 2015, Bulldog has not commenced a calling campaign, nor has Bulldog mailed

any subsequent communications to shareholders

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

10

Conclusion

•

RIT has delivered on its investment objectives with exceptionally strong investment performance and attractive

income to shareholders

•

All of

RIT’s

directors

are

focused

on

increasing

value

for

all

shareholders

over

the

long-term

•

The Board is focused on the current discount

•

RIT’s

discount

is

in-line

with

its

Lipper

real

estate

peers

1

and

reflects

market

events

that

have

impacted

the

broader closed-end fund market

•

The Board will consider any option that is in the long-term best interests of all shareholders

1

Lipper real estate peers excludes non-exchange traded closed-end funds and Storage Group Inc., a fund in the process of converting into a REIT.

Appendix

11

FOR HOME OFFICE USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

Directors biographies

12

*Nominated

as

a

Class

III

Director

to

serve

until

the

2018

Annual

Meeting

of

Stockholders

ROBERT D. AGDERN*

CAROL L. COLMAN –

Investment, Performance & Pricing Committee Chair

Born 1946 –

Board Member since 2007 –

President, Colman Consulting.

Ms.

Colman

began

her

career

with

the

United

States

Trust

Company

of

New

York

in

1968.

After

ten

years

in research, she became a portfolio

manager for both domestic and international clients.  From 1980 to 1983 she worked at J.P. Morgan, Madison Fund and William G. Campbell and

Company.  For seven years starting in 1983 she was a Managing Director of Inferential Focus, a research and consulting organization.

Additionally,

she

is

a

member

of

the

Chartered

Financial

Analysts

Association.

Ms. Colman

is

a

member

of

two

not-for-profit

boards,

Audobon,

Florida

and

the

North

Salem

Open

Land

Foundation.

Ms. Colman is a graduate of St. Lawrence University.

Born –

1950 –

Board Member since 2015.  Member of the Advisory Committee of the Dispute Resolution Research Center at the Kellogg

Graduate School of Business, Northwestern University.

Mr.

Agdern

held

various

executive

positions

with

Amoco

Corporations

from

1975

through

1998,

including

Exploration

and

Production

Company

General

Counsel

and

Executive

Vice

President

–

Natural

Gas;

Chemical

Company

General

Counsel;

and

Associate

General

Counsel,

Amoco

Corporation.  Mr. Agdern also served as Deputy General Counsel, BP plc, responsible for Western Hemisphere matters.  

Mr. Agdern holds a B.S. in Engineering from the University of Michigan, a J.D., National Law Center, George Washington University and

attended the Parker School of International Law, Columbia University and the Harvard Business School Advanced Management Program.  

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

Directors biographies

13

DANIEL CRONIN –

Nominating Committee Chair

Born

1946

–

Board

Member

since

2007

–

Retired.

Mr. Cronin retired in 2004 from the pharmaceutical company Pfizer, Inc., ending his 30-year career as Associate General Counsel of

the company.  During his tenure with Pfizer he conceived and developed, with New York University’s Stern School of Business, the

Pfizer Legal Leadership Series to teach business, financial and management principles to Pfizer’s attorneys.  He supervised major

product liability, intellectual property and commercial litigations, as well as structuring and negotiating business transactions.  He

was

the

chief

lawyer

for

all

Pfizer

global

business

units

as

well

as

tax,

treasury

and

licensing

and

development

divisions.

Mr. Cronin holds a B.S. from Fordham College and a J.D. from Brooklyn Law School.

PAOLO M. CUCCHI

Born

1941

–

Board

Member

since

2002

–

Emeritus Professor of French and Italian, Drew University.

Dr.

Cucchi

began

his

career

at

Princeton

University,

first

as

an

instructor

of

French

and

Italian,

from

1967

to

1970,

becoming

an

assistant professor in 1970 and Assistant Dean of the College and Lecturer of French and Italian in 1975.  In 1984 he began his

association with Drew University as Dean of the College and Professor of French and Italian until 1996 when he assumed the

position of Vice

President

and

Dean,

College

of

Liberal

Arts,

Drew

University until 2009.  Dr. Cucchi is a member of Phi Beta

Kappa and served on the Council of Deans of Arts and Sciences, Modern Language Association, American Council of

Education,

Association

of

American

Higher

Education,

Association

of

American

Colleges

and

Universities,

and

the

Association

of Independent Colleges and Universities of New Jersey.

Dr. Cucchi holds a B.A. from Fordham University and an M.A. and Ph.D. from Princeton University.

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

Directors biographies

14

KENNETH D. FULLER –

Chairman, President and Chief Executive Officer

Born  -

1958.  Managing Director, Legg Mason & Co., LLC. Chairman, Closed End Funds; President and CEO of the Legg

Mason-Affiliated Funds since 2013.

Prior

to

assuming

his

current

role,

Mr.

Fuller

was

Director

–

Legg

Mason

Enterprise

Risk

Management

unit,

specializing

in

investment

risk

analysis

since

2009.

Prior

to

joining

the

Firm,

Mr.

Fuller

held

various

positions

at

T.

Rowe

Price

since

1993,

most recently, Vice President of the Equity Division. 

Mr.

Fuller

holds

an

MA

and

BA

from

the

State

University

of

New

York

at

Buffalo

and

an

MBA

from

University

of

Chicago

–

Booth

School of Business.

LESLIE H. GELB

Born

1937

–

Board

Member

since

2007.

Dr. Gelb is the President Emeritus and Board Senior Fellow of the Council on Foreign Relations.  He has also served as the

Foreign

Affairs

columnist,

the

Deputy

Editorial

Page

Editor,

the

Op-Ed

Page

Editor

and

diplomatic

and

national

security

correspondent

at

The

New

York

Times,

earning

a

Pulitzer

Prize

during

this

tenure.

He

also

served

for

two

years

starting

in

1966

as

Executive

Assistant

to

U.S.

Senator

Jacob

Javits,

as

Director

of

Policy

Planning

in

the

Pentagon

from

1967

to

1969,

and

as

Assistant

Secretary

of

State

for

Politico-Military

Affairs

from

1977

to

1979.

Dr.

Gelb

serves

as

a

member

of

numerous

not-for-profit

and commercial boards including Trustee of the Carnegie Endowment for International Peace; Trustee Emeritus, Tufts University;

Emeritus Board Member, James A. Baker, III Institute for Public Policy, Rice University; Board Member, The Center for the National

Interest;

Board

Member,

The

India

Fund,

Inc.

and

The

Asia

Tigers

Fund,

Inc.;

and

Board

Member

of

Britannica.com.

Dr. Gelb holds a B.A. from Tufts University and an M.A. and Ph.D. from Harvard University.

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

Directors biographies

15

*Nominated

as

a

Class

III

Director

to

serve

until

the

2018

Annual

Meeting

of

Stockholders

WILLIAM

R.

HUTCHINSON*

–

Lead

Independent Director

Born

1942

–

Board

Member

since

2002

–

President,

W.R.

Hutchinson

&

Associates Inc.

Prior to opening his energy consulting business in 2001, Mr. Hutchinson was associated with BP Amoco, PLC, from 1968 until his

retirement in 2001.  There he held various positions at Amoco and BP Amoco: Treasurer; Vice President and Controller; Vice

President of Mergers, Acquisitions and Negotiations; Vice President of Financial Operations; and finally as Group Vice President

Worldwide Mergers and Acquisitions. Mr. Hutchinson is a director

(Non-Executive Chairman of the Board (since December 1,

2009)), Associated Banc-Corp (since 1994).

Mr. Hutchinson holds a B.A. from Trinity College, Dublin, Ireland, an M.Sc. from Cranfield College, Bedford, England and an

M.B.A. from Harvard University.

EILEEN

A.

KAMERICK*

–

Audit

Committee

Chair

Born

1958

–

Board

Member

since

2013

–

Senior Vice President and Chief Financial Officer, ConnectWise, Inc (software and

services company) (since 2015) and Adjunct Professor, Washington

University in St. Louis and University of Iowa law schools

(since 2014).

Ms. Kamerick was the CFO at Press Ganey, a leading health care informatics company, serving over 10,000 hospitals in the US

from 2012-2014.  From May 2010 to October 2012, she served as Managing Director and CFO of Houlihan Lokey, an international

investment bank.  She also served as the President of the Houlihan Lokey Foundation.  For two years starting in 2008, she was

Senior Vice President, CFO and Chief Legal Officer of Tecta America Corporation, the largest commercial roofing company in the

country.  During her 25 year career as a senior financial and legal expert, she has served with Heidrick & Struggles; Bcom3; BP

Amoco Americas and Skadden, Arps, Slate, Meagher & Flom. Ms. Kamerick is a director of Associated Banc-Corp (since 2007)

and Westell Technologies, Inc. (since 2003).

Ms. Kamerick graduated Phi Beta Kappa and summa cum laude from Boston College.  She received a law degree from the

University of Chicago Law School and holds an MBA from the Graduate School of Business of the University of Chicago.

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

Directors biographies

16

RIORDAN ROETT

Born

1938

–

Board

Member

since

2007

–

Professor/Director

Johns

Hopkins

University.

Dr. Roett holds a Ph.D. from Columbia University.

Dr. Roett is the Sarita and Don Johnston Professor of Political Science and Director of Western Hemisphere Studies at the Paul H. Nitze

School of Advanced International Studies (SAIS) in Washington, D.C.  Previously, Dr. Roett served as a consultant at Chase 

Manhattan Bank where he was Senior Political Analyst in Emerging Markets Division of the bank’s International Capital Markets Group.  

From 1989 to 1997 he served as a Faculty Fellow of the World Economic Forum at the annual meeting in Davos, Switzerland.  Dr. Roett

is a member of the Council on Foreign Relations, The Bretton Woods Committee and a former national president of the Latin American

Studies Association.  In 2000 the President of Brazil named Dr. Roett as Commander of the Order of Rio Branco. The government of

Chile named Dr. Roett to the order of Bernardo O’Higgins with the rank of “Gran Oficial” in 2009. In 2004, SAIS established the Riordan

Roett Chair in Latin American Studies.

INDEPENDENT EXPERTISE. SINGULAR FOCUS.

Disclosure

17

On March

27, 2015, the Fund filed with the Securities and Exchange Commission (SEC) and began mailing to

stockholders a notice of annual meeting and a definitive proxy statement, together with a White Proxy Card that can

be used to elect the Board’s three current incumbent nominees. BEFORE MAKING ANY VOTING DECISION,

STOCKHOLDERS ARE URGED TO READ THE NOTICE OF ANNUAL MEETING AND PROXY STATEMENT, AND

ANY

OTHER

RELEVANT

DOCUMENTS

FILED

WITH

THE

SEC

WHEN

THEY

BECOME

AVAILABLE,

BECAUSE

THEY CONTAIN IMPORTANT INFORMATION ABOUT THE FUND AND THE UPCOMING MAY 29, 2015 ANNUAL

MEETING OF STOCKHOLDERS. Stockholders can obtain additional copies of the notice of annual meeting and proxy

statement and other documents filed by the Fund with the SEC when they become available, by contacting the Fund,

620 Eighth Avenue, New York, New York 10018, or by calling 1-888-777-0102. You may also visit the Fund’s Web site

at www.lmcef.com. Additional copies of the proxy materials will be delivered promptly upon request. Free copies of

these

materials

can

also

be

found

on

the

SEC’s

Web

site

at

http://www.sec.gov.