SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _______)
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[ ] Preliminary information statement [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14c-5(d)(2)).
X Definitive information statement
Optimum Fund Trust
(Name of Registrant as Specified in Its Charter)
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[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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OPTIMUM FUND TRUST
OPTIMUM LARGE CAP GROWTH FUND
2005 Market Street
PHILADELPHIA, PA 19103-7094
INFORMATION STATEMENT
This Information Statement is being furnished on behalf of the Board of
Trustees ("Trustees" or "Board") of the Optimum Fund Trust (the "Trust") to
inform shareholders of the Optimum Large Cap Growth Fund (the "Fund") about a
recent change related to the Fund's subadvisory arrangements. The change was
approved by the Board of the Trust on the recommendation of the Fund's
investment manager, Delaware Management Company ("DMC" or the "Manager"),
without shareholder approval as is permitted by an order of the U.S. Securities
and Exchange Commission ("SEC") dated November 7, 2006. WE ARE NOT ASKING YOU
FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
This Information Statement is being mailed on or about March 4, 2008 to
shareholders of record of the Fund as of February 25, 2008.
INTRODUCTION
DMC is the investment manager for each of the Trust's funds. DMC employs a
"manager of managers" arrangement in managing the assets of the Trust. This
permits DMC, subject to approval by the Board, to hire, terminate or replace
subadvisers unaffiliated with the Trust or DMC ("unaffiliated subadvisers"), and
to modify material terms and conditions of subadvisory agreements with
unaffiliated subadvisers, without shareholder approval. DMC recommended and the
Board has approved a new subadvisory agreement ("New Subadvisory Agreement")
with one of the Fund's current subadvisers, Marsico Capital Management, LLC
("Marsico"), due to a transaction under which Marsico was repurchased from a
subsidiary of its parent company, Bank of America ("BOA") (the "Transaction")
(See "The Transaction" below).
Section 15(a) of the Investment Company Act of 1940 (the "1940 Act")
generally requires that the shareholders of a mutual fund approve an agreement
pursuant to which a person serves as investment adviser or subadviser of the
fund. In order to use the "manager or managers" authority discussed above, DMC,
the Trust, and certain Delaware Investments affiliates requested and received an
exemptive order from the SEC on November 7, 2006 (the "SEC Order"). The SEC
Order exempts DMC, the Trust and the other Delaware Investments affiliates from
certain of the shareholder approval requirements of Section 15(a) of the 1940
Act and allows the Trust's Board, subject to certain conditions, to appoint new,
unaffiliated subadvisers and approve new subadvisory agreements on behalf of the
Trust without shareholder approval.
Consistent with the SEC Order, the Board, including a majority of the
Trustees who are not "interested persons" of the Trust or of DMC under the 1940
Act ("Independent Trustees"), has approved the New Subadvisory Agreement among
the Trust, DMC and Marsico relating to the Fund. As discussed later in this
Information Statement, the Board carefully considered the matter and concluded
that the approval of the New Subadvisory Agreement was in the best interests of
the Fund and its shareholders.
As a condition to relying on the SEC Order, DMC and the Trust are required
to furnish Fund shareholders with notification of the New Subadvisory Agreement
within ninety days from the date that the subadviser is hired. This Information
Statement provides that notice and gives details of the new arrangement.
THE TRANSACTION
On June 14, 2007, Thomas F. Marsico, Chief Executive Officer ("CEO") and
Chief Investment Officer ("CIO") of Marsico, and Marsico Parent Company, LLC
(the "Company"), a company controlled by Mr. Marsico, signed a definitive
agreement to repurchase Marsico from a subsidiary of BOA, which constitutes a
"change of control" of Marsico under applicable provisions of the 1940 Act. The
1940 Act provides that a "change of control" of a fund's adviser or subadviser
results in an "assignment," and a consequent automatic termination, of an
investment advisory agreement between a fund and its adviser or subadviser, as
the case may be. Accordingly, as a result of the Transaction, the prior
subadvisory agreement dated July 31, 2003 among DMC, as the Funds' investment
manager, the Trust, and Marsico, as the Fund's subadviser, terminated on
December 14, 2007. In anticipation of the Transaction and consequent automatic
termination of the prior subadvisory agreement with Marsico, the Board, at its
September 20, 2007 regular meeting (the "Board Meeting"), approved the New
Subadvisory Agreement with Marsico, having terms substantively similar to the
terms of the prior subadvisory agreement.
Under the terms of the New Subadvisory Agreement, Marsico makes investment
decisions for the segment of the Fund's assets allocated to Marsico by the
Manager, and continuously reviews, supervises and administers the Fund's
investment programs with respect to these assets.
DMC'S RECOMMENDATION AND THE BOARD OF TRUSTEES' DECISION
DMC recommended the approval of the New Subadvisory Agreement between DMC,
Marsico and the Trust. Because Marsico was an existing subadviser to the Fund,
the Board took into account information furnished and discussed throughout the
year at quarterly Board meetings when discussing the New Subadvisory Agreement,
as well as information furnished specifically for the contract approval
considerations being conducted at the Board Meeting. Information furnished at
Board meetings throughout the year included: an analysis by DMC (with the
assistance of its consultant, LPL Financial Corporation ("LPL")) of the
investment performance of Marsico and the sleeve of the Fund it sub-advised; a
report prepared by Lipper Inc. ("Lipper") comparing the Fund's investment
performance and expenses with those of other mutual funds deemed comparable
("Lipper Report"); and compliance reports and related certifications furnished
by Marsico and DMC. Material furnished specifically in connection with the
review of the New Subadvisory Agreement included: memoranda discussing and
analyzing the performance of Marsico's sleeve of the Fund and the Transaction
between Marsico and a subsidiary of BOA; a description of fees charged by
Marsico showing them to be competitive with those charged other comparable
investment companies or accounts; a copy of the New Subadvisory Agreement; and a
"due diligence" report describing various material items in relation to the
personnel, organization and policies of Marsico. Lastly, representatives of
Marsico (including its CEO) were present at the Board meeting to provide a
presentation and answer any Board questions.
In considering such information and materials, the independent Trustees
received assistance from and met separately with independent counsel. The
materials prepared by DMC specifically in connection with the approval of the
New Subadvisory Agreement were sent to the independent Trustees in advance of
the meeting and were discussed at an executive session of the independent
Trustees and their counsel prior to the Board Meeting. While attention was given
to all information furnished, the following discusses under separate headings
the primary factors taken into account by the Board in its contract approval
considerations.
Nature, Extent and Quality of Services. In considering the nature, extent
and quality of the services to be provided by Marsico, the Board specifically
considered that the New Subadvisory Agreement contains substantially similar
provisions to those in the prior Marsico subadvisory agreement for the Fund. The
Board also considered the benefits of providing consistency of portfolio
management. The Board reviewed materials provided by Marsico regarding its
experience and the qualifications of its personnel, and placed weight on
Marsico's representation that there were no planned changes with respect to
Marsico's personnel responsible for security selection and portfolio management
of the portion of the Fund managed by Marsico after the completion of the
Transaction. The quality of the services of Marsico was considered primarily in
respect to the investment performance on its sleeve of the Fund. The Board was
also satisfied with the adherence by Marsico with the investment policies and
restrictions of the Fund it advised, as well as their adherence to various
compliance and other procedures based on personal presentations made by
representatives of Marsico and DMC reports of its discussions with Marsico, as
well as certificates and materials furnished at Board meetings and in connection
with the approval of the New Subadvisory Agreement.
Investment Performance. The Board placed significant emphasis on Marsico's
prior investment performance on its sleeve of the Fund. While consideration was
given to performance reports and discussions throughout the year (including the
Lipper Report described above), particular attention in assessing performance
was given to Marsico's performance on its portion of the sleeve to date relative
to the Fund's peers and benchmark. The Board was satisfied with such
performance. In addition, the Board placed weight on Marsico's representation
that there were no planned changes with respect to the Marsico personnel
responsible for security selection and portfolio management of its portion of
the Fund after the completion of the Transaction. Based upon these
considerations, the Board determined that the performance of Marsico on the Fund
provides evidence of the high quality of portfolio management services expected
to be provided by Marsico under the New Subadvisory Agreement.
Subadvisory Fee; Profitability; and Economies of Scale. The Board was
provided with a description of fees to be charged by Marsico under the New
Subadvisory Agreement which showed them to be identical to the subadvisory fees
from the prior Marsico subadvisory agreement for the Fund, and to be competitive
with those charged by Marsico to other comparable investment companies or
accounts. Trustees were also given information on profits being realized by
Marsico in relation to Marsico's overall investment advisory business. The Board
noted that the fees payable to Marsico for the investment subadvisory services
provided by it to the Fund would be paid out of the fee received by DMC in its
role as investment manager. The Board also noted that the materials provided to
them regarding the Transaction stated that the management fee paid by the Fund
to DMC would stay the same, and that DMC's profitability will not be impacted by
the terms of the New Subadvisory Agreement. The Board also noted that economies
of scale may be shared with a fund and its shareholders through investment
management fee breakpoints, so that as a fund grows in size, its effective
management fee rate declines. The investment management fees for the Fund
contained breakpoints with the Fund's asset size being at a high enough level to
benefit from such breakpoints, and to the extent economies of scale may be
realized in the management of the Fund, the Trustees believed such schedule of
fees provided a sharing of benefits with the Fund and its shareholders.
THE NEW SUBADVISORY AGREEMENT
The New Subadvisory Agreement has terms substantially similar to the prior
subadvisory agreement between DMC, the Trust and Marsico. Marsico will make all
investment decisions for the portion of the Fund's assets allocated to it, and
will continuously review, supervise and administer the Fund's investment program
with respect to those assets. Marsico is not affiliated with DMC, and as noted
above, Marsico's subadvisory fee is paid out of the fee received by DMC in its
role as investment manager. Marsico discharges its responsibilities subject to
the supervision of DMC and the Board, and has agreed to do so in a manner
consistent with the Fund's investment objective, policies and limitations.
Additionally, the New Subadvisory Agreement clarifies each party's
responsibilities concerning compliance reporting and regulations, as well as
assisting in the updating of the Fund's prospectuses and statement of additional
information.
The prior subadvisory agreement was dated July 31, 2003 with an initial
term ending July 31, 2005. The New Subadvisory Agreement is dated December 14,
2007 and has an initial term ending December 14, 2009. Thereafter, continuance
of this New Subadvisory Agreement requires the annual approval of the Trust's
Board, including a majority of the independent Trustees.
ADDITIONAL INFORMATION ABOUT MARSICO
Marsico Capital Management, LLC is located at 1200 17th Street, Suite 1600,
Denver, CO 80202. Marsico was organized in September 1997 as a registered
investment adviser. Marsico provides investment services to other mutual funds
and private accounts and, as of December 31, 2007, had approximately $106
billion under management. Thomas F. Marsico is the founder and CEO of Marsico
and manages the investment program for Marsico's portion of the Optimum Large
Cap Growth Fund. Mr. Marsico has over 20 years of experience as a securities
analyst and a portfolio manager. He has held his Fund responsibilities since the
inception of the Fund.
The portfolio manager and key executives of Marsico and their principal
occupations are listed in Appendix A. Unless otherwise noted, the address of
each person listed is 1200 17th Street, Suite 1600, Denver, CO 80202.
Marsico currently serves as subadviser to 19 other mutual funds with
similar objectives to the Fund. The chart at Appendix B contains a description
of these funds and the compensation paid to Marsico for its subadvisory
services.
THE INVESTMENT MANAGER AND THE MANAGEMENT AGREEMENT
DMC, located at 2005 Market Street, Philadelphia, Pennsylvania 19103-7094,
is a series of Delaware Management Business Trust, which is an indirect
subsidiary of Delaware Management Holdings, Inc ("DMH"), which in turn is an
indirect subsidiary, and subject to the ultimate control, of Lincoln National
Corporation ("LNC"). The Manager, together with its predecessors, have been
managing mutual funds since 1938. As of December 31, 2007, DMC and its
affiliates had more than $150 billion in assets under management.
As the Fund's investment manager, DMC has overall responsibility for the
general management of the Trust and all of its funds, which includes selecting
the funds' subadvisers and monitoring each fund and subadviser to ensure that
investment activities remain consistent with a fund's investment objective. A
team is responsible for conducting ongoing investment reviews with each
subadviser and for developing the criteria by which fund performance is
measured. The Manager has hired LPL, a registered broker/dealer and investment
adviser, as a consultant to assist with this process.
The key executives and each trustee of DMC and their principal occupations
are listed in Appendix A. Unless otherwise noted, the address of each person
listed is 2005 Market Street, Philadelphia, Pennsylvania 19103-7094.
The Trust and the Manager have entered into an investment management
agreement (the "Management Agreement"), which was initially approved by the
Board of Trustees at a meeting held on July 17, 2003. Under the Management
Agreement, the Manager has full discretion and responsibility, subject to the
overall supervision of the Trust's Board of Trustees, to select and contract
with one or more investment subadvisers, to manage the investment operations and
composition of each fund, and to render investment advice for each fund,
including the purchase, retention, and dispositions of investments, securities
and cash contained in each fund. The Management Agreement obligates the Manager
to implement decisions with respect to the allocation or reallocation of each
fund's assets among one or more current or additional subadvisers, and to
monitor the subadvisers' compliance with the relevant fund's investment
objective, policies and restrictions. Under the Management Agreement, the Trust
will bear the expenses of conducting its business. The Trust and the Manager may
share facilities in common to each, which may include legal and accounting
personnel, with appropriate pro ration of expenses between them. In addition,
the Manager pays the salaries of all officers and Trustees of the Trust who are
officers, directors or employees of the Manager or its affiliates.
Pursuant to the Management Agreement, the Trust compensates DMC for these
services to the Fund by paying DMC an annual advisory fee assessed against
average daily net assets under management of: 0.8000% of assets up to $250
million, 0.7875% of assets from $250 million to $300 million, 0.7625% of assets
from $300 million to $400 million, 0.7375% of assets from $400 million to $500
million, and 0.7250% of assets over $500 million. For services to the Fund, DMC
received, after fee waivers, $4,549,157 in advisory fees for the fiscal year
ended March 31, 2007, and $3,369,431 in advisory fees for the six months ended
September 30, 2007.
SUBADVISORY FEES PAID
The Fund has two subadvisers: Marsico and T. Rowe Price Associates, Inc.
(T. Rowe Price"). Marsico and T. Rowe Price earned $2,951,709 in the aggregate
for sub-advisory services provided for the Fund for the fiscal year ended March
31, 2007. For the six months ended September 30, 2007, Marsico and T. Rowe Price
earned $1,934,668 for services provided to the Fund.
PAYMENTS TO AFFILIATED BROKERS
The Fund did not make any payments to an affiliated broker for the fiscal
year ended March 31, 2007.
RECORD OF BENEFICIAL OWNERSHIP
As of February 25, 2008, the Fund believes that there were no accounts
holding 5% or more of the outstanding shares of any Class of the Fund. As of
February 25, 2008, the Fund's officers and Trustees owned less than 1% of the
outstanding shares of each Class of the Fund.
GENERAL INFORMATION DISTRIBUTOR
The Distributor, Delaware Distributors, L.P. ("Distributor"), located at
2005 Market Street, Philadelphia, PA 19103-7094, serves as the national
distributor of the Trust's shares under a Distribution Agreement dated July 17,
2003. The Distributor is an affiliate of the Manager and bears all of the costs
of promotion and distribution, except for payments by the Class A, Class B and
Class C shares under their respective Rule 12b-1 Plans. The Distributor is an
indirect subsidiary of DMH, and, therefore, of LNC. The Distributor has agreed
to use its best efforts to sell shares of the Fund. Shares of the Fund are
offered on a continuous basis by the Distributor and may be purchased through
authorized investment dealers or directly by contacting the Distributor or the
Trust. The Board of Trustees annually reviews fees paid to the Distributor.
TRANSFER AGENT AND ADMINISTRATOR
Delaware Service Company, Inc. ("DSC"), located at 2005 Market Street,
Philadelphia, PA 19103-7094, serves as the Trust's shareholder servicing,
dividend disbursing and transfer agent. DSC provides fund accounting and
financial administration oversight services to the Fund. Those services include
overseeing the Fund's pricing process, the calculation and payment of Fund
expenses, and financial reporting in shareholder reports, registration
statements and other regulatory filings. Additionally, DSC manages the process
for the payment of dividends and distributions and the dissemination of Fund net
asset values and performance data. DSC is an affiliate of the Manager, and is an
indirect subsidiary of DMH and, therefore, of LNC.
Mellon Bank, N.A. ("Mellon"), One Mellon Center, Pittsburgh PA 15258,
provides fund accounting and financial administration services to the Fund.
Those services include performing functions related to calculating the Fund's
net asset value and providing financial reporting information, regulatory
compliance testing and other related accounting services.
HOUSEHOLDING
Only one copy of this Information Statement may be mailed to households,
even if more than one person in a household is a Fund shareholder of record;
unless the Trust has received instructions to the contrary. If you need
additional copies of this Information Statement, please contact your
participating securities dealer or other financial intermediary. If you do not
want the mailing of an Information Statement to be combined with those for other
members of your household in the future, or if you are receiving multiple copies
and would rather receive just one copy for the household, please contact your
participating securities dealer or other financial intermediary.
FINANCIAL INFORMATION
Shareholders can obtain a copy of the Trust' most recent Annual Report and
any Semi-Annual Report following the Annual Report, without charge, by
contacting their participating securities dealer or other financial
intermediary, or if a shareholder owns Trust shares directly through the Trust's
service agent, by calling toll free at 800-914-0278.
APPENDIX A
Marsico Capital Management, LLC
Name Principal Occupation
- --------------------------------------------------------------------------------
Thomas F. Marsico Chief Executive Officer and Chief
Investment Officer
Christopher J. Marsico President
Neil L. Gloude Executive Vice President, Chief
Financial Officer and Treasurer
Kenneth M. Johnson Executive Vice President and Director
of Marketing and Client Services
Steven R. Carlson Executive Vice President and Chief
Compliance Officer
Thomas M. J. Kerwin Executive Vice President, General
Counsel and Secretary
James G. Gendelman Vice President and Portfolio Manager
Corydon J. Gilchrist Vice President and Portfolio Manager
Delaware Management Company
Name Principal Occupation
- --------------------------------------------------------------------------------
Patrick P. Coyne Trustee and President
John C.E. Campbell Trustee and Executive Vice President /
Global Marketing & Client Services
See Yeng Quek Trustee and Executive Vice President /
Managing Director / Chief Investment
Officer, Fixed Income
David P. O'Connor Trustee and Senior Vice President /
Strategic Investment Relationships and
Initiatives / General Counsel
Michael J. Hogan Executive Vice President / Head of
Equity Investments
Philip N. Russo Executive Vice President / Chief
Administrative Officer
APPENDIX B
APPROXIMATE FUND
ASSETS ($ million) SUBADVISORY FEE PAID TO MARSICO** AS OF 12/31/07
NAME OF FUND AS OF 12/31/07 (ANNUALLY, AS % OF FUND ASSETS)
- ------------------------------------------------------------------------------------------------------------------------------------
AEGON/Transamerica & Transamerica IDEX
ATST Marsico Growth Fund $724.4 0.40%
TA IDEX Marsico Growth Fund $421.7 0.40%
Advanced Series Trust (AST) /
Prudential Investments
AST Marsico Capital Growth $5,540.7 0.40% on aggregate up to $1.5 billion
AST Advanced Strategies Portfolio 295.1* 0.35% on aggregate assets > $1.5 billion
Target Portfolio Trust - Large Cap Growth 171.4* on the AST / Prudential funds listed herein
Target Conservative Allocation Fund 21.3*
Target Moderate Allocation Fund 67.9*
Target Growth Allocation Fund 71.9*
Prudential Series Fund Global Portfolio 253.5*
BlackRock
Marsico Growth FDP Fund of FDP Series, Inc. $169.6 0.40%
Columbia Funds (formerly Nations Funds)
Columbia Marsico Growth $7,054.8 0.45% on aggregate up to $18 billion
Master Portfolio 0.40% on aggregate > $18 billion and < $21 billion
Columbia Marsico Growth Fund, $1,341.3
Variable Series 0.35% on aggregate > $21 billion aggregated across the
Columbia funds listed herein and others managed by
Marsico
GuideStone Funds
Growth Equity Fund 432.4* 0.45% on first $400 million
0.40% on assets >$400 million
ING Investors Trust
ING Marsico Growth Portfolio $1,022.3 0.45% on first $500 million
0.40% on $500 million to $1.5 billion
0.35% on assets >$1.5 billion
Merrill Lynch
Roszel/Marsico Large Cap Growth Portfolio $76.2 0.40%
Northern Multi-Manager Funds
Multi-Manager Large Cap Fund $20.7 0.40% on first $1.5 billion
0.35% on assets > $1.5 billion
Russell Investment Company
Equity I Fund 191.6* 0.325% on aggregate up to $500 million
Diversified Equity Fund $450.2 0.275% on aggregate assets > $500 million
to < $750 million
0.225% on aggregate assets > $750 million across the
Russell funds listed herein and others managed by
Marsico
USAA
USAA Aggressive Growth Fund $1,374.3 0.35%
* Denotes multi-manager fund. Assets reflect the Marsico-managed portion
only.
** A principal investment manager other than Marsico typically charges
management fees to these mutual funds that include both sub-advisory fees
paid to Marsico and additional management fees paid to the principal
investment manager.
