SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
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Goldman Sachs Trust II
(Name of Registrant as Specified in Its Charter)
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Goldman Sachs Trust II
Goldman Sachs Multi-Manager Alternatives Fund
200 West Street
New York, New York 10282
May 21, 2018
Dear Shareholder,
Goldman Sachs Asset Management, L.P. (“GSAM” or the “Investment Adviser”), the investment adviser of Goldman Sachs Multi-Manager Alternatives Fund (the “Fund”), selects investment managers (“Underlying Managers”) for the Fund, a series of Goldman Sachs Trust II (the “Trust”), subject to approval of the board of trustees of the Trust (the “Board”). We are pleased to inform you that, at the recommendation of GSAM, the Board has appointed River Canyon Fund Management LLC (“River Canyon”) to serve as a new, additional Underlying Manager for the Fund. The Board approved thesub-advisory agreement between GSAM and River Canyon (the“Sub-Advisory Agreement”) on March 20, 2018. Acadian Asset Management LLC, Algert Global LLC, Ares Capital Management II LLC, Atreaus Capital, LP, Brigade Capital Management, LP, Crabel Capital Management, LLC, Emso Asset Management Limited, First Pacific Advisors, LLC, GQG Partners LLC, Halcyon Arbitrage IC Management LLC, One River Asset Management, LLC, QMS Capital Management LP, Russell Investments Commodity Advisor, LLC, Sirios Capital Management, L.P. and Wellington Management Company LLP continue to serve as the Fund’s other Underlying Managers. Each Underlying Manager is approved to manage a portion of the Fund’s portfolio (which may change over time) as allocated by GSAM and overseen by the Board.
Please note that this appointment does not require a shareholder vote.Therefore, we are not asking you for a proxy, and you are requested not to send us a proxy. The purpose of this document is to provide you with additional information about these changes that we are required to make available to you.
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Additional Information About GSAM and the Fund’s Other Service Providers | 3 | |||
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GOLDMAN SACHS MULTI-MANAGER ALTERNATIVES FUND
In connection with its duties as the investment adviser for the Fund, GSAM reviews and evaluates the Fund’s Underlying Managers on an ongoing basis. At a meeting held on March 20, 2018 and pursuant to GSAM’s recommendation, the Board approved River Canyon as a new Underlying Manager for the Fund and approved theSub-Advisory Agreement.
The Board determined to initially approve theSub-Advisory Agreement after a thorough analysis of the proposed services to be provided by River Canyon. The material factors considered by the Board in approving theSub-Advisory Agreement are set forth below under “Goldman Sachs Multi-Manager Alternatives Fund—Trustees’ Considerations.”
Investment Strategies of River Canyon
Pursuant to theSub-Advisory Agreement, GSAM may allocate a portion of the Fund’s assets employing an “Event Driven and Credit” strategy to River Canyon. Event Driven and Credit strategies seek to achieve gains from market movements in security prices caused by specific corporate events or changes in perceived relative value. These strategies may include, among others, Merger Arbitrage, Distressed Credit, Opportunistic Credit, and Value With a Catalyst investing styles. Merger Arbitrage investing involves long and/or short investments in securities affected by a corporate merger or acquisition. Distressed Credit investing typically involves the purchase of securities or other financial instruments—usually bonds or bank loans—of companies that are in, or are about to enter, bankruptcy or financial distress. Opportunistic Credit investing generally involves investing across the capital structure (which could include, investing in both mezzanine debt and convertible securities of an issuer and/or adjusting exposures across fixed income and floating rate market segments based on perceived opportunity and current market conditions). This can be done by taking a long position in a credit security or other financial instrument that is believed to be underpriced or a short position in a credit security or other financial instrument that is believed to be overpriced. Value With a Catalyst investing involves taking a view on the likelihood and potential stock price outcome of corporate events such as divestitures, spin-offs, material litigation, changes in management, or large share buybacks.
River Canyon focuses on structured credit investments, including mortgage- and other asset-backed securities and collateralized loan obligations.
Under theSub-Advisory Agreement, subject to the supervision and oversight of GSAM, River Canyon, with respect to those assets that GSAM allocates to it (the “Allocated Assets”), provides the Fund with investment research, advice and supervision and furnishes a continuous investment program for, and manages the investment and reinvestment of, the Allocated Assets. River Canyon determines in its discretion the securities, cash and other financial instruments to be purchased, retained or sold for the Fund within the parameters of the investment approach, policies, restrictions and guidelines applicable to the Allocated Assets as provided by GSAM, the provisions of theSub-Advisory Agreement, all applicable laws, rules and regulations and the Fund’s registration statement on FormN-1A under the Investment Company Act of 1940, as amended (the “1940 Act”).
Under theSub-Advisory Agreement, River Canyon pays for all expenses incurred by it in connection with its services to the Allocated Assets. As compensation for its services, River Canyon is entitled to receive fees from GSAM (not the Fund) each calendar quarter based on an annual percentage of the average daily net assets of the Allocated Assets.
TheSub-Advisory Agreement will remain in effect for two years after its effective date and will continue thereafter for successive periods of twelve months, provided that its continuance is approved at least annually (i) by the vote of a majority of those Trustees of the Trust who are not parties to theSub-Advisory Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (ii) by either the vote of (A) the Board or (B) a majority of the outstanding voting securities of the Fund (within the meaning of the 1940 Act).
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TheSub-Advisory Agreement provides for termination, without payment of any penalty, (i) by vote of a majority of the Board or by a vote of a majority of the outstanding voting securities of the Fund; (ii) by GSAM on 60 days written notice to River Canyon (or immediately in the event of a material breach by River Canyon), or (iii) by River Canyon on not less than 60 days written notice to GSAM and the Trust. Notwithstanding the above, River Canyon may not terminate theSub-Advisory Agreement during the24-month period immediately following the effective date. TheSub-Advisory Agreement shall automatically terminate in the event of its assignment or change of control of River Canyon or the assignment of the Fund’s management agreement with GSAM. TheSub-Advisory Agreement shall also terminate in the event that the Fund’s management agreement with GSAM is terminated.
As described below under “Additional Information—SEC Exemptive Order,” GSAM has received an exemptive order from the U.S. Securities and Exchange Commission (the “SEC”) enabling it to enter into an investmentsub-advisory agreement with an Underlying Manager that has not been approved by a vote of the majority of the outstanding voting securities of the Fund if certain conditions are met.
The Fund is an investment portfolio of the Trust that commenced investment operations on April 30, 2013. The Fund employs a “manager of managers” structure, whereby the Investment Adviser is responsible for selecting Underlying Managers (subject to Board approval), allocating the Fund’s assets among them, and overseeing theirday-to-day management of Fund assets. Upon the recommendation of the Investment Adviser, at a meeting held on March 20, 2018 (the “Meeting”), the Trustees, including the Trustees who are not parties to the Fund’s investment management agreement or anysub-advisory agreement or “interested persons” (as defined in the 1940 Act) of any party thereto (the “Independent Trustees”), unanimously approved aSub-Advisory Agreement between the Investment Adviser and River Canyon. In connection with the Meeting, the Trustees received written materials and oral presentations on the topics covered, and were advised by their independent legal counsel. In addition, River Canyon provided information in response to a request from the Investment Adviser.
Nature, Extent and Quality of the Services to be Provided Under theSub-Advisory Agreement
In evaluating the nature, extent and quality of services to be provided by River Canyon, the Trustees considered information about River Canyon’s (a) personnel and their compensation structure; (b) track record in managing another mutual fund with an investment strategy similar to that to be employed on behalf of the Fund; (c) policies and procedures in place to address potential conflicts of interest; and (d) compliance program and code of ethics. In this regard, they considered assessments provided by the Investment Adviser of River Canyon, River Canyon’s investment strategies and personnel, and its compliance program. The Trustees considered that River Canyon currently manages other assets for the Investment Adviser’s clients. They noted that, because River Canyon had not previously provided services to the Fund, there was no performance information to evaluate with respect to the Fund.
Costs of Services to be Provided
The Trustees reviewed the terms of theSub-Advisory Agreement and the proposed fee schedule. They noted that the compensation paid to River Canyon would be paid by the Investment Adviser, not by the Fund. They also noted that the terms of theSub-Advisory Agreement were the result of arms’ length negotiations between the Investment Adviser and River Canyon. The Trustees reviewed the anticipated blended average of allsub-advisory fees to be paid by the Investment Adviser with respect to the Fund and how it would change upon hiring River Canyon. They considered this information in light of the overall management fee to be paid by the Fund.
Conclusion
In connection with their consideration of theSub-Advisory Agreement, the Trustees gave weight to various factors, but did not identify any particular factor as controlling their decision. After deliberation and consideration of the information provided, including the factors described above, the Trustees, including the Independent Trustees, unanimously concluded, in the exercise of their business judgment, that the sub advisory fees to be paid by the Investment Adviser to River Canyon were reasonable in light of the factors considered, and that the Sub Advisory Agreement, and the terms thereof, should be approved for a period of two years from its effective date.
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On May 29, 2013, GSAM and the Trust received an exemptive order (the “Order”) from the SEC exempting them from certain provisions of the 1940 Act. Specifically, the Order permits the Trust and GSAM, so long as certain conditions are satisfied, to enter into and materially amend an investmentsub-advisory agreement with an Underlying Manager without shareholder approval. The Order generally requires that shareholders of the Fund be notified of an investmentsub-advisory agreement that has been entered into within 90 days of the hiring of the Underlying Manager, and that the Fund make available to shareholders information similar to that which would have been included in a proxy statement to shareholders.
Additional Information About GSAM and the Fund’s Other Service Providers
GSAM, a Delaware limited partnership registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended, is the Fund’s investment adviser. GSAM is an indirect, wholly-owned subsidiary of The Goldman Sachs Group, Inc., a public company that is a bank holding company, financial holding company and a world-wide, full-service financial services organization. GSAM Holdings LLC is the general partner and principal owner of GSAM. GSAM’s and The Goldman Sachs Group Inc.’s current business address is 200 West Street, New York, NY 10282. As of December 31, 2017, GSAM, including its investment advisory affiliates, had approximately $1.29 trillion in assets under supervision.
Goldman Sachs & Co. LLC, an affiliate of GSAM, located at 200 West Street, New York, New York 10282, serves as the exclusive distributor of shares of the Fund.
State Street Bank and Trust Company, located at One Lincoln Street, Boston, Massachusetts 02111, serves as the Fund’s custodian and administrator.
Additional Information About River Canyon
River Canyon, located at 2000 Avenue of the Stars, 11th Floor, Los Angeles, CA 90067, is an investment adviser registered with the SEC. River Canyon is the wholly-owned subsidiary of Canyon Capital Advisors, LLC (“Canyon Capital”). Total assets under management by River Canyon and Canyon Capital were approximately $29.1 million and $17.3 billion, respectively, as of December 31, 2017. Canyon Capital is directly and indirectly wholly-owned and controlled by River Canyon’sco-founders andco-Chief Investment Officers, Joshua S. Friedman and Mitchell R. Julis.
The principal executive officers of River Canyon, as of the date of this document, are set forth below. The business address of each person is 2000 Avenue of the Stars, 11th Floor, Los Angeles, CA 90067.
Name | Position(s) with River Canyon1 | |
| Joshua S. Friedman | Co-Founder,Co-Chairman,Co-Chief Investment Officer andCo-Chief Executive Officer | |
| Mitchell R. Julis | Co-Founder,Co-Chairman,Co-Chief Investment Officer andCo-Chief Executive Officer | |
| John P. Plaga | Chief Financial Officer | |
| Douglas A. Anderson | Chief Compliance Officer | |
| Jonathan M. Kaplan | General Counsel | |
| 1 | None of the principal executive officers of River Canyon listed above have other principal employment other than his or her respective position(s) with River Canyon and its affiliated managers. |
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The Fund’s annual and semi-annual reports are available free upon request. Shareholders may obtain a copy of either report by writing to Goldman Sachs & Co. LLC, P.O. Box 219711, Kansas City, MO 64121 or by calling1-800-526-7384 (for Class A, Class C, Investor, Class R and Class T Shareholders) or1-800-621-2550 (for Institutional and Class R6 Shareholders). You may also access and download these reports at the Fund’s website: www.GSAMFUNDS.com/mutualfunds.
If you have any questions, please contact your investment professional or authorized dealer.
May 21, 2018
200 West Street
New York, New York 10282
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Goldman Sachs Trust II
Goldman Sachs Multi-Manager Alternatives Fund
200 West Street
New York, New York 10282
IMPORTANT NOTICE OF INTERNET AVAILABILITY OF INFORMATION STATEMENT
May 21, 2018
This communication presents only an overview of the more complete Information Statement that is available to you on the Internet relating to Goldman Sachs Multi-Manager Alternatives Fund (the “Fund”), a series of Goldman Sachs Trust II (the “Trust”). We encourage you to access and review all of the important information contained in the Information Statement.
Goldman Sachs Asset Management, L.P. (“GSAM”), the investment adviser of the Fund, selects investment managers (“Underlying Managers”) for the Fund subject to approval of the board of trustees (the “Board”) of the Trust. We are pleased to inform you that, at the recommendation of GSAM, the Board has appointed River Canyon Fund Management LLC (“River Canyon”) to serve as a new, additional Underlying Manager for the Fund. The Board approved the sub-advisory agreement between GSAM and River Canyon (the “Sub-Advisory Agreement”) on March 20, 2018. Acadian Asset Management LLC, Algert Global LLC, Ares Capital Management II LLC, Atreaus Capital, LP, Brigade Capital Management, LP, Crabel Capital Management, LLC, Emso Asset Management Limited, First Pacific Advisors, LLC, GQG Partners LLC, Halcyon Arbitrage IC Management LLC, One River Asset Management, LLC, QMS Capital Management LP, Russell Investments Commodity Advisor, LLC, Sirios Capital Management, L.P. and Wellington Management Company LLP continue to serve as the Fund’s other Underlying Managers. Each Underlying Manager is approved to manage a portion of the Fund’s portfolio (which may change over time) as allocated by GSAM and overseen by the Board. Additional information about GSAM, River Canyon, the Sub-Advisory Agreement, and the Board’s approval of the Sub-Advisory Agreement is contained in the Information Statement.
Please note that, in reliance on exemptive relief obtained by GSAM and the Trust from the Securities and Exchange Commission, the hiring of River Canyon on the Fund’s behalf does not require a shareholder vote.Therefore, we are not asking you for a proxy, and you are requested not to send us a proxy.
This Notice of Internet Availability of the Information Statement is being mailed on or about June 5, 2018. The full Information Statement will be available for printing on the Fund’s website at www.gsamfunds.com until at least 90 days from the date of this Notice and the Information Statement. To access the full Information Statement, navigate to www.gsam.com/content/gsam/us/en/advisors/literature-and-forms/literature.html, where the full Information Statement is available to view and print by utilizing the search feature to locate literature specific to River Canyon. A paper or email copy of the full Information Statement may be obtained, without charge, by contacting the Fund at 1-800-526-7384 (for Class A, Class C, Investor, Class R and Class T Shareholders) or 1-800-621-2550 (for Institutional and Class R6 Shareholders). If you would like to receive a paper or e-mail copy of the full Information Statement, you must request one. If you have any questions about this Notice, please contact your financial advisor (if applicable) or contact the Fund at the appropriate phone number provided above.
Please Note: If (i) you are a member of a household in which multiple shareholders of the Fund share the same address, (ii) your shares are held in “street name” and (iii) your broker or bank has received consent to household material, then your broker or bank may have sent to your household only one copy of this Notice of Internet Availability of Information Statement unless your broker or bank previously received contrary instructions from a shareholder in your household. If you are part of a household that has received only one copy of this Notice of Internet Availability of Information Statement, the Fund will deliver promptly a separate copy of this Notice of
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Internet Availability of Information Statement to you upon written or oral request. To receive a separate copy of this Notice of Internet Availability of Information Statement, please contact the Fund by calling toll free1-800-526-7384 (for Class A, Class C, Investor, Class R and Class T Shareholders) or 1-800-621-2550 (for Institutional and Class R6 Shareholders) or by writing Goldman Sachs Funds, P.O. Box 219711, Kansas City, MO 64121. If your shares are held with certain banks, trust companies, brokers, dealers, investment advisers and other financial intermediaries (each, an “Intermediary”) and you would like to receive a separate copy of future notices of internet availability of information statements, prospectuses or annual reports or you are now receiving multiple copies of these documents and would like to receive a single copy in the future, please contact your Intermediary.
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