Board Approval of Management Agreement and Investment Advisory Agreements (unaudited)
Brinker Capital Destinations Trust (“Trust” and, each series thereof a “Fund,” and together, the “Funds”) and Orion Portfolio Solutions, LLC (d/b/a Brinker Capital Investments) (formerly known as Brinker Capital Investments) (the “Adviser”), have entered into an investment advisory agreement (the “Advisory Agreement”), pursuant to which the Adviser selects investments in third-party funds and serves as “manager of managers” for the Funds in that it selects and oversees professional money managers (each, a “Sub-Adviser” and collectively, the “Sub-Advisers”) who are responsible for investing the portion of assets of the Funds allocated to each of them pursuant to a separate investment advisory agreement (a “Sub-Advisory Agreement” and collectively, the “Sub-Advisory Agreements” and, together with the Advisory Agreement, the “Agreements”) between Adviser and each Sub-Adviser.
Section 15 of the Investment Company Act of 1940, as amended (the “Investment Company Act”) requires that the initial approval of a Fund’s investment advisory agreements be specifically approved by the vote of a majority of the outstanding shareholders of the Fund and the vote of a majority of the Trustees who are not “interested persons” (as defined in the Investment Company Act) of any party to the Agreements (the “Independent Trustees”) cast in person (or otherwise, as consistent with applicable laws, regulations and related guidance and relief) at a meeting called for such purpose. In addition, the Investment Company Act requires that the continuation or renewal of any investment advisory agreement be approved at least annually (after an initial period of up to two years), which requires the vote of a majority of the Board of Trustees (the “Board”), including a majority of the Independent Trustees. In the case of the initial approval of a Sub-Advisory Agreement, only the approval of a majority of the Board, including a majority of the Independent Trustees, is required because of an exemptive order that was granted to the Trust by the U.S. Securities and Exchange Commission (“SEC”). In addition, as a result of the impact of the coronavirus and COVID-19 pandemic, the SEC issued three Orders in 2020 that conditionally exempt registered investment companies and their investment advisers, as well as principal underwriters from in-person voting requirements. The relief provided by those Orders has not yet been withdrawn by the SEC Staff, and the Trust remains able to rely on that relief under certain circumstances.
Board Considerations of the Sub-Advisory Agreements
During the period covered by this Semi-Annual Report, the Board considered the renewal of certain Sub-Advisory Agreements with existing Sub-Advisers and the approval of new Sub-Advisory Agreements. In particular, at a meeting of the Board held on March 5-6, 2024 (the “March Meeting”), the Adviser recommended and the Board, including all of the Independent Trustees, approved the renewal of the existing Sub-Advisory Agreements (i) for the management of the Destinations International Equity Fund by BAMCO, Inc., Barrow, Hanley, Mewhinney & Strauss, LLC, Causeway Capital Management, LLC, Loomis Sayles & Company, L.P., MFS Investment Management, T. Rowe Price Associates, Inc. (“T. Rowe Price”), and Wasatch Advisors, Inc.; (ii) for the management of the Destinations Equity Income Fund by Federated Equity Management Company of Pennsylvania; and (iii) for the management of the Destinations Shelter Fund by Gateway Investment Advisers, LLC (“Gateway”). In addition, at the March Meeting, the Adviser recommended and the Board, including all of the Independent Trustees, approved a new Sub-Advisory Agreement for the management of the Destinations Small-Mid Cap Equity Fund by Driehaus Capital Management, LLC (“Driehaus”) to replace Driehaus’ Small-Cap Growth strategy with Driehaus’ Small-Mid-Cap Growth strategy.
Further, at a meeting of the Board held on June 4-5, 2024 (the “June Meeting”), the Adviser recommended and the Board, including all of the Independent Trustees, approved new Sub-Advisory Agreements for the management of the Destinations Global Fixed Income Opportunities Fund by GLG Partners, LP (“GLG”) and Numeric Investors, LLC (“Numeric”). In addition, at the June Meeting, the Adviser recommended and the Board, including all of the Independent Trustees, approved the renewal of the existing Sub-Advisory agreements (i) for the management of the Destinations Large Cap Equity Fund by Columbia Management Investment Advisers, LLC, Newton Investment Management North America, LLC, River Road Asset Management LLC, and William Blair Investment Management, LLC; (ii) for the management of the Destinations Equity Income Fund by Neuberger Berman Investment Advisers LLC; and (iii) for the management of the Destinations Shelter Fund by Gateway. The Adviser also recommended and the Board, including all of the Independent Trustees, approved a Delegation Agreement between T. Rowe Price and one of its affiliates for certain services to be provided in connection with T. Rowe Price’s provision of sub-advisory services to a portion of the Destinations International Equity Fund.
Pursuant to the Sub-Advisory Agreements, the Sub-Advisers will provide (or will continue to provide) day-to-day management for the portion of the applicable Funds’ assets proposed to be allocated to them. In the context of Sub-Advisory Agreement renewals, the Board also considered information provided by the Adviser during prior meetings, and in the
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