M&A - STONE RIDGE TRUST

Form Type: CORRESP

Filing Date: 2020-09-11

Corporate Action: Merger

Type: Update

Accession Number: 000119312520243879

Filing Summary: On September 11, 2020, a letter was filed by Stone Ridge All Asset Variance Risk Premium Fund, part of Stone Ridge Trust, responding to SEC staff comments regarding their Registration Statement on Form N-14, originally filed on August 13, 2020. The letter discusses a proposed reorganization of Existing AVRPX into New AVRPX and addresses the potential for a further reorganization of New AVRPX into the Stone Ridge Diversified Alternatives Fund (SRDAX). Although the initial reorganization's approval is being sought, the Adviser has not finalized or submitted the proposal for the second reorganization to the Board of Trustees, creating uncertainty about its execution. Key insights reveal that should the second reorganization proceed post-approval, provisions for liquidity will be available for shareholders opting out. Legal justifications are provided concerning the exemption from requiring shareholder approval for the proposed merger under Rule 17a-8 of the 1940 Act, alongside clarity on expense estimates which only pertain to the initial reorganization. The correspondence serves to affirm the Trust’s commitment to ensuring shareholders have all necessary information regarding these developments, emphasizing transparency and shareholder interests.

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Form Type: N-14

Filing Date: 2020-08-13

Corporate Action: Merger

Type: New

Accession Number: 000119312520219252

Filing Summary: Stone Ridge Trust is proposing to reorganize the Stone Ridge All Asset Variance Risk Premium Fund (Existing AVRPX) into a new open-end mutual fund series (New AVRPX) maintaining identical investment objectives and strategies. This merger will allow Existing AVRPX shareholders to exchange their shares for Class I shares of New AVRPX on a tax-free basis, maintaining the same total net asset value. The reorganization aims to increase liquidity as New AVRPX allows for easier buying and selling of shares compared to the more limited repurchase offers of Existing AVRPX. The management fee for New AVRPX will be reduced to 1.50% from Existing AVRPX's 2.00%, providing lower net expenses. Shareholders must approve the proposed reorganization in a meeting on December 2, 2020. If approved, the reorganization will occur around December 4, 2020. The proposal is viewed to be in the best interest of shareholders according to the Board of Trustees, who recommend a vote in favor of the reorganization.

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