UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
(Amendment No. )
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| ☐ | Preliminary Information Statement | |
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Columbia Funds Series Trust I
(Name of Registrant As Specified In Its Charter)
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MULTI-MANAGER ALTERNATIVE STRATEGIES FUND
A SERIES OF COLUMBIA FUNDS SERIES TRUST I
290 Congress Street
Boston, MA 02210
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF INFORMATION STATEMENT
March 25, 2022
As a shareholder of the Multi-Manager Alternative Strategies Fund (the “Fund”), a series of Columbia Funds Series Trust I, you are receiving this notice regarding the internet availability of an information statement (the “Information Statement”) relating to, among other changes, the termination of a former subadviser and the hiring of a new subadviser. This notice presents only an overview of the more complete Information Statement that is available to you on the internet or, upon request, by mail. We encourage you to access and review all of the important information contained in the Information Statement. As described below, the Information Statement is for informational purposes only and, as a shareholder of the Fund, you need not take any action.
Summary of Information Statement
The Information Statement details the replacement of a subadviser and related changes. At a meeting of the Fund’s Board of Trustees (the “Board”) on September 16, 2021, the Board approved, among other things: (i) the termination of the subadvisory agreement between Columbia Management Investment Advisers, LLC (the “Investment Manager”) and AQR Capital Management, LLC (“AQR”) with respect to the Fund; (ii) a subadvisory agreement (the “Subadvisory Agreement”) between the Investment Manager and Crabel Capital Management, LLC (“Crabel”) with respect to the Fund; (iii) modifications to the Fund’s principal investment strategies to reflect Crabel’s investment process for the portion of the Fund it would manage; and (iv) Crabel’s code of ethics and compliance program. The Subadvisory Agreement went into effect on January 12, 2022.
The Investment Manager has received an exemptive order (the “Manager of Managers Order”) from the U.S. Securities and Exchange Commission that permits the Investment Manager, subject to the approval of the Board, to appoint unaffiliated subadvisers by entering into subadvisory agreements with them, and to change in material respects the terms of those subadvisory agreements, including the fees paid thereunder, for the Fund without first obtaining shareholder approval, thereby avoiding the expense and delays typically associated with obtaining shareholder approval. Although approval by the Fund’s shareholders of a new subadvisory agreement or material changes to an existing agreement is not required, the Manager of Managers Order requires that an Information Statement be made available to the Fund’s shareholders.
By sending you this notice, the Fund is notifying you that it is making the Information Statement available to you via the internet in lieu of mailing you a paper copy. You may view and print the full Information Statement on the Fund’s website at https://www.columbiathreadneedleus.com/investor/resources/literature/fund-information-statements/. The Information Statement will be available on the website until at least June 23, 2022. To view and print the Information Statement, click on the link for the Information Statement. You may request a paper copy or PDF via email of the Information Statement be sent to you, free of charge, by contacting the Fund in writing at Columbia Funds, c/o Columbia Management Investment Services Corp., P.O. Box 219104, Kansas City, MO 64121-9104 or by calling (toll-free) 800-345-6611 by March 25, 2023. If you do not request a paper copy or PDF via email by this date, you will not otherwise receive a paper or email copy. The Fund’s most recent annual and semiannual reports are available upon request, without charge, by contacting your financial intermediary, writing to Columbia Funds, c/o Columbia Management Investment Services Corp., P.O. Box 219104, Kansas City, MO 64121-9104 or calling 800-345-6611.The Fund will mail only one copy of this notice to a household, even if more than one person in a household is a Fund shareholder of record, unless the Fund has received contrary instructions from at least one of the shareholders. If you need additional copies of this notice and you are a holder of record of your shares, please contact the Fund in writing at Columbia Funds, c/o Columbia Management Investment Services Corp., P.O. Box 219104, Kansas City, MO 64121-9104 or by calling 800-345-6611. If your shares are held in broker street name, please contact your financial intermediary to obtain additional copies of this notice. If in the future you do not
want the mailing of notices to be combined with those of other members of your household, or if you have received multiple copies of this notice and want future mailings to be combined with those of other members of your household, please contact the Fund in writing at Columbia Funds, c/o Columbia Management Investment Services Corp., P.O. Box 219104, Kansas City, MO 64121-9104, or by calling 800-345-6611, or contact your financial intermediary. The Fund undertakes to deliver promptly upon written or oral request a separate copy of the Information Statement to a security holder at a shared address to which a single copy of the document was delivered.
If you want to receive a paper copy of the Information Statement, you must request one.
There is no charge to you for requesting a copy.
TAX100_08_007_(03/22)
MULTI-MANAGER ALTERNATIVE STRATEGIES FUND
A SERIES OF COLUMBIA FUNDS SERIES TRUST I
290 Congress Street
Boston, MA 02210
INFORMATION STATEMENT
NOTICE REGARDING SUBADVISER
An Important Notice Regarding the Internet Availability of Information Statement is being mailed on or about March 25, 2022. This Information Statement is being made available to shareholders of Multi-Manager Alternative Strategies Fund (the “Fund”), a series of Columbia Funds Series Trust I (the “Trust”), in lieu of a proxy statement, pursuant to the terms of an exemptive order (the “Manager of Managers Order”) that Columbia Management Investment Advisers, LLC (the “Investment Manager”) received from the U.S. Securities and Exchange Commission (the “SEC”). The Manager of Managers Order permits the Investment Manager, subject to certain conditions such as approval by the Fund’s Board of Trustees (the “Board”), and without approval by shareholders, to retain an unaffiliated subadviser (or subadvisers) to manage the Fund.
This Information Statement Is For Informational Purposes Only And No Action Is Requested On Your Part. We Are Not Asking You For A Proxy And You Are Requested Not To Send Us A Proxy.
THE FUND AND ITS MANAGEMENT AGREEMENT
The Investment Manager, located at 290 Congress Street, Boston, MA 02210, serves as investment manager to the Fund pursuant to a management agreement (the “Management Agreement”), amended and restated as of April 25, 2016 and most recently renewed at a meeting of the Board on June 15, 2021.
Under the Management Agreement, the Investment Manager, among other duties, monitors the performance of each subadviser on an ongoing basis. Factors it considers with respect to the selection and retention of a subadviser are, among others: the qualifications of the subadviser’s investment personnel, its investment philosophy and process, its compliance program, and its long-term performance results. As compensation for its services, the Investment Manager receives a management fee from the Fund and, from this management fee, the Investment Manager pays each subadviser a subadvisory fee.
Subadvisers serve pursuant to separate subadvisory agreements with the Investment Manager under which a subadviser manages all or a portion of a fund’s investment portfolio, as allocated to a subadviser by the Investment Manager, and provides related compliance and record-keeping services. In accordance with procedures adopted by the Board, affiliated broker-dealers of a subadviser may execute portfolio transactions for a subadvised fund and receive brokerage commissions in connection with those transactions as permitted by Rule 17e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”), or separate SEC exemptive relief. A subadviser is allowed to use soft dollar arrangements in which it directs brokerage commissions to brokers to pay for research services it receives, provided that the subadviser’s procedures are consistent with the Fund’s and the Investment Manager’s policies.
CRABEL CAPITAL MANAGEMENT, LLC AND THE NEW SUBADVISORY AGREEMENT
At meetings of the Board and its committees on September 15-16, 2021 (the “September Meeting”), the Board, including a majority of the Board members who are not interested persons of the Fund within the meaning of the 1940 Act (the “Independent Trustees”), approved, in accordance with the recommendations of the Investment Manager, (i) the termination of the subadvisory agreement between the Investment Manager and AQR Capital Management, LLC (“AQR”) with respect to the Fund; (ii) a subadvisory agreement (the “Subadvisory Agreement”) between the Investment Manager and Crabel Capital Management, LLC (“Crabel”) with respect to the Fund; (iii) modifications to the Fund’s principal investment strategies to reflect Crabel’s investment process for the portion of
the Fund it would manage; and (iv) Crabel’s code of ethics and compliance program. Crabel began managing a portion of the Fund on January 12, 2022, pursuant to the Subadvisory Agreement with the Investment Manager dated October 15, 2021. AlphaSimplex Group, LLC (“AlphaSimplex”), Manulife Investment Management (US) LLC (“Manulife”), TCW Investment Management Company LLC (“TCW”) and Water Island Capital, LLC (“Water Island”) continue to serve as subadvisers to the Fund, and there were no changes to the subadvisory agreements between the Investment Manager and AlphaSimplex, Manulife, TCW, and Water Island, respectively.
Management Fees Paid to the Investment Manager and Subadvisory Fees Paid to Crabel
Under the Management Agreement, the Fund pays the Investment Manager a management fee as follows:
| Multi-Manager Alternative Strategies Fund | ||
Net Assets | Annual rate at each asset level | |
| First $500 million | 1.10% | |
| Next $500 million | 1.05% | |
| Next $2 billion | 1.02% | |
| Next $3 billion | 0.99% | |
| Next $6 billion | 0.96% | |
| Over $12 billion | 0.95% | |
The table above represents the fee rate payable by the Fund to the Investment Manager, which has not changed as a result of the changes discussed above. The Investment Manager, in turn, pays Crabel a fee out of its own assets, calculated at the following rate:
| • | 0.50% per annum, provided assets are above $50 million. In the event that assets fall below $50 million for a sustained period, Crabel has the right to increase the subadvisory fee to 0.75%. Crabel is expected initially to manage at least $50 million of Fund assets. |
Fees Paid to Investment Manager for the Fiscal Year Ended 8/31/2021(1) in Dollars and as a % of Average Daily Net Assets of the Fund During the Fiscal Year Ended 8/31/2021 | Aggregate Subadvisory Fee Paid by the Investment Manager to AQR, AlphaSimplex, Manulife, TCW, and Water Island for the Fiscal Year Ended 8/31/2021 in Dollars and as a % of Average Daily Net Assets of the Fund During the Fiscal Year Ended 8/31/2021 | Estimated Aggregate Subadvisory Fee that Would Have Been Paid to AlphaSimplex, Crabel, Manulife, TCW, and Water Island if Their Subadvisory Agreements Had Been in Effect for the Fiscal Year Ended 8/31/2021 (the Estimated Aggregate Subadvisory Fee) in Dollars and as a % of Average Daily Net Assets of the Fund During the Fiscal Year Ended 8/31/2021 | Difference in the Aggregate Subadvisory Fee During the Fiscal Year Ended 8/31/2021 and the Estimated Aggregate Subadvisory Fee Ended 8/31/2021 in Dollars and as a Percentage of Subadvisory Fees Paid During Fiscal Year Ended 8/31/2021 | |||||||||||
| $5,432,519 | 1.10% | $ 2,348,070.63 | 0.475% | $ 2,266,439.72 | 0.459% | $ 81,630.91 | 0.016% | |||||||
| (1) | The Investment Manager uses these fees to pay the subadvisers. |
INFORMATION ABOUT CRABEL
Crabel is a global alternative investment firm specializing in systematic, automated trading of worldwide futures and foreign exchange instruments. Crabel is located at 10250 Constellation Boulevard, Suite 2650, Los Angeles, CA 90067. Founded in 1987, Crabel is registered with the SEC as an investment adviser, as well as with the Commodity Futures Trading Commission and is a member of the National Futures Association. It has delivered over 25 years of uncorrelated returns for its institutional clients. Crabel has $8.1 billion in assets under management ($6.6 billion unadjusted assets under management) as of December 31, 2021 and has four years of subadvisory experience related to registered investment companies.
The following table provides information on the principal executive officers and directors of Crabel:
Name | Title/Responsibilities | Address | ||
| William Harrison Crabel | Chief Investment Officer | 10250 Constellation Boulevard, Los Angeles, CA 90067 | ||
| Michael Richard Pomada | Chief Executive Officer and President | 10250 Constellation Boulevard Los Angeles, CA 90067 | ||
| Constance Rae Wick | Chief Compliance Officer | 10250 Constellation Boulevard Los Angeles, CA 90067 | ||
| Richard Swanson Rusin | Chief Operating Officer | 10250 Constellation Boulevard Los Angeles, CA 90067 | ||
| Stephen Wisdom | Senior Partner | 10250 Constellation Boulevard Los Angeles, CA 90067 | ||
| Alden Melbourne | Senior Partner | 10250 Constellation Boulevard Los Angeles, CA 90067 | ||
Other Funds with Similar Investment Objectives Managed by Crabel
Fund Name | Assets as of January 31, 2022 | Subadvisory Fee Rate | ||
| Subadviser Client A | $139,880,000 | 0.50% | ||
| Subadviser Client B | $15,160,000 | 0.50% |
BOARD CONSIDERATION AND APPROVAL OF THE SUBADVISORY AGREEMENT
At the September Meeting, the Fund’s Board of Trustees, including a majority of the Independent Trustees, upon the recommendation of the Investment Manager, unanimously approved the Subadvisory Agreement between the Investment Manager and Crabel with respect to the Fund.
At the September Meeting, independent legal counsel to the Independent Trustees reviewed with the Board the legal standards for consideration by directors/trustees of advisory and subadvisory agreements and referred to the various written materials and oral presentations received by the Board and its Contracts, Compliance, and Investment Oversight Committees in connection with the Board’s evaluation of Crabel’s proposed services.
The Trustees held discussions with the Investment Manager and Crabel and reviewed and considered various
written materials and oral presentations in connection with the evaluation of Crabel’s proposed services, including the reports from management with respect to the fees and terms of the proposed Subadvisory Agreement and Crabel’s investment strategy/style and performance and from the Compliance Committee, with respect to the code of ethics and compliance program of Crabel. In considering the Subadvisory Agreement, the Board reviewed, among other things:
| • | Terms of the Subadvisory Agreement; |
| • | Subadvisory fees payable by the Investment Manager under the Subadvisory Agreement; |
| • | Descriptions of various services proposed to be performed by Crabel under the Subadvisory Agreement, including portfolio management and portfolio trading practices; |
| • | Information regarding the experience and resources of Crabel, including information regarding senior management, portfolio managers and other personnel; |
| • | Information regarding the capabilities of Crabel’s compliance program; and |
| • | The profitability to the Investment Manager and its affiliates from their relationships with the Fund. |
Nature, Extent and Quality of Services
The Board considered its analysis of the reports and presentations received by it, detailing the services proposed
to be performed by Crabel as a subadviser for the Fund, as well as the history, expertise, resources and
capabilities, and the qualifications of the personnel of Crabel. The Board considered the diligence and
selection process undertaken by the Investment Manager to select Crabel, including the Investment
Manager’s rationale for recommending Crabel, and the process for monitoring Crabel’s ongoing
performance of services for the Fund. The Board observed that Crabel’s compliance program had been
reviewed by the Fund’s Chief Compliance Officer and was determined by him to be reasonably designed to
prevent violation of the federal securities laws by the Fund. The Board also observed that information had been
presented regarding Crabel’s ability to carry out its responsibilities under the proposed Subadvisory
Agreement. The Board also considered the information provided by management regarding the personnel, risk
controls, philosophy, and investment processes of Crabel. The Board also noted the presentation by Crabel to the Board’s Investment Oversight Committee.
The Board also discussed the acceptability of the terms of the proposed Subadvisory Agreement. Independent
legal counsel noted that the proposed Subadvisory Agreement was generally similar in scope and form to
subadvisory agreements applicable to other subadvised Funds. The Board noted the Investment Manager’s
representation that Crabel has experience subadvising registered mutual funds.
After reviewing these and related factors, the Board concluded, within the context of their overall conclusions,
that the expected nature, extent and quality of the services to be provided to the Fund supported the approval of
the Subadvisory Agreement.
Investment Performance of Crabel
The Board observed Crabel’s relevant performance results versus a broad-based benchmark and versus peers over various periods.
After reviewing these and related factors, the Board concluded, within the context of their overall conclusions,
that the performance of Crabel, in light of other considerations, supported the approval of the Subadvisory Agreement.
Comparative Fees, Costs of Services Provided and Profitability
The Board reviewed the proposed level of subadvisory fees under the proposed Subadvisory Agreement, noting that the proposed subadvisory fees payable to Crabel would be paid by the Investment Manager and would not impact the fees paid by the Fund. The Board observed that the proposed subadvisory fees for Crabel are within a reasonable range of subadvisory fees paid by the Investment Manager to the subadvisers of other Funds with similar strategies. The Trustees observed that management fees, which are not proposed to change, remain within the range of other peers and that the Fund’s expense ratio also remains within the range of other peers.
Additionally, the Board considered the expected slight increase in total profitability of the Investment Manager and its affiliates in connection with the hiring of Crabel. Because the Subadvisory Agreement was negotiated at arms-length by the Investment Manager, which is responsible for payments to the Subadviser thereunder, the Board did not consider the profitability to Crabel from its relationship with the Fund.
After reviewing these and related factors, the Board concluded, within the context of their overall conclusions, that the proposed level of subadvisory fees, anticipated costs of services provided and the expected profitability to the Investment Manager and its affiliates from their relationships with the Fund supported the approval of the Subadvisory Agreement.
Economies of Scale
The Board also considered the economies of scale that may be realized by the Investment Manager and its affiliates as the Fund grows and took note of the extent to which shareholders might also benefit from such growth. The Board considered, in this regard, the expected slight increase in profitability to the Investment Manager from its management agreement with the Fund as a result of the proposed engagement of Crabel. The Board took into account, in this regard, the significant oversight services provided by the Investment Manager to the Fund. The Board also observed that fees to be paid under the Subadvisory Agreement would not impact fees paid by the Fund (as subadvisory fees are paid by the Investment Manager and not the Fund). The Board observed that the Fund’s management agreement with the Investment Manager continues to provide for sharing of economies of scale as management fees decline as assets increase at pre-established breakpoints.
Conclusion
The Board reviewed all of the above considerations in reaching its decision to approve the Subadvisory Agreement. In reaching its conclusions, no single factor was determinative.
On September 16, 2021, the Board, including all of the Independent Trustees, determined that fees payable under the Subadvisory Agreement appeared fair and reasonable in light of the services proposed to be provided and approved the Subadvisory Agreement.
ADDITIONAL INFORMATION ABOUT THE FUND
In addition to acting as the Fund’s investment manager, the Investment Manager and certain of its affiliates also receive compensation for providing other services to the Fund.
Administrator
The Investment Manager serves as the administrator of the Fund.
Principal Underwriter
Columbia Management Investment Distributors, Inc., located at 290 Congress Street, Boston, MA 02210, serves as the principal underwriter and distributor of the Fund.
Transfer Agent
Columbia Management Investment Services Corp., located at 290 Congress Street, Boston, MA 02210, serves as the transfer agent of the Fund.
FINANCIAL INFORMATION
The Fund’s most recent annual report and semiannual report are available upon request, without charge, by contacting your financial intermediary, writing to Columbia Funds, c/o Columbia Management Investment Services Corp., P.O. Box 219104, Kansas City, MO 64121-9104, calling 800.345.6611 or online at https://www.columbiathreadneedleus.com/investor.
RECORD OF BENEFICIAL OWNERSHIP
For the Fund, as of February 28, 2022, American Enterprise Investment Service, 707 2nd Avenue S, Minneapolis, MN 55402-2405 owned 100% of the outstanding shares of the Fund.
As of February 28, 2022, Board members and officers of the Fund owned less than 1% of the Fund.
SHAREHOLDER PROPOSALS
The Fund is not required to hold regular meetings of shareholders each year. Meetings of shareholders are held from time to time and shareholder proposals intended to be presented at future meetings must be submitted in writing to the Fund in a reasonable time prior to the solicitation of proxies for any such meetings.
HOUSEHOLDING
If you request a mailed copy of this information statement, the Fund will mail only one copy of this information statement to a household, even if more than one person in a household is a Fund shareholder of record, unless the Fund has received contrary instructions from one or more of the shareholders. If you need additional copies of this information statement and you are a holder of record of your shares, please contact the Fund in writing at Columbia Funds, c/o Columbia Management Investment Services Corp., P.O. Box 219104, Kansas City,
MO 64121-9104 or by calling 800-345-6611. If your shares are held in broker street name, please contact your financial intermediary to obtain additional copies of this information statement. If in the future you do not want the mailing of information statements to be combined with those of other members of your household, or if you have received multiple copies of this information statement and want future mailings to be combined with those of other members of your household, please contact the Fund in writing at Columbia Funds, c/o Columbia Management Investment Services Corp., P.O. Box 219104, Kansas City, MO 64121-9104, or by calling 800-345-6611, or contact your financial intermediary. The Fund undertakes to deliver promptly upon written or oral request a separate copy of the information statement to a security holder at a shared address to which a single copy of the document was delivered.
TAX100_08_008_(03/22)
