Proxy Voting Policy
Funds Advised Solely by Hennessy Advisors, Inc.
The proxy voting policy of the Hennessy Funds that are
advised solely by Hennessy Advisors, Inc. (the “Manager”) is as follows:
When the Hennessy Funds that follow a quantitative or
index strategy vote proxies relating to securities that they own, they follow
the “Wall Street Rule,” which means that they vote in accordance with
management’s recommendation. Based on
the quantitative management strategy of such Funds, the Portfolio Managers believe that following
the “Wall Street Rule” is consistent with the economic best interests of the Funds'
investors. When the Hennessy Funds that
are actively managed vote proxies relating to securities that they own, they
will generally follow the “Wall Street Rule,” but the Portfolio Managers of
such Funds have discretion to vote in a manner that is different than
management’s recommendation where they believe doing so would be in the economic best interests of the Funds' investors.
Conflicts of Interest
There may be instances where the interests of the Manager
may conflict, or appear to conflict, with the interests of one of the Hennessy
In such instances, the Manager
will vote in accordance with the Wall Street Rule regardless of whether the
Fund follows a quantitative or index strategy or is actively managed.
Broad Run Investment Management, LLC (Hennessy Focus Fund)
The proxy voting policies and procedures of Broad Run
Investment Management, LLC (“Broad Run”) address the responsibility of
Broad Run to ensure that proxies received for portfolio securities held by the
Hennessy Focus Fund (the “Fund”) are voted in the best interest of the
Fund, including in those situations involving a conflict of interest between
the Fund on the one hand, and Broad Run or its affiliated persons, on the other
hand. Such voting responsibilities will
be exercised in a manner that is consistent with the general antifraud
provisions of the Advisers Act, as well as Broad Run’s fiduciary duties under
the federal and state law to act in the best interest of its clients.
Proxies solicited for items of business with respect to
issuers whose voting securities are owned by the Fund must be voted in the best
interests of the Fund. Proxies are voted
on a case-by-case basis in the best economic interest of the Fund’s investors
taking into consideration all relevant contractual obligations and other
circumstances at the time of the vote.
Broad Run may abstain from voting a proxy when the effect on the
economic interests of investors in the Fund or the value of the Fund’s
portfolio holding is indeterminable or insignificant; or when the cost of
voting the proxies outweighs the benefits, e.g., when voting certain non-U.S.
RBC Global Asset Management (U.S.) Inc. (Hennessy Large Value Fund)
RBC Global Asset Management (U.S.) Inc. ("RBC GAM-US
") relies on proxy research and voting recommendations services provided by a third-party vendor to assist it in exercising the discretion to vote proxies for the Hennessy Large Value Fund (the "Fund
"). For the Fund, RBC GAM-US utilizes customized proxy guidelines and engages (1) Institutional Shareholder Services Inc. (“ISS”) as its primary research and voting service provider and (2) RBC Global Asset Management Inc., an affiliate, to review ISS’ recommendations and votes to ensure that they are in line with the customized proxy guidelines.
RBC GAM-US has satisfied itself that the analysis of proxy issues provided to it by its third-party vendors is consistent with its belief that proxies should be voted in investors' long-term interests. The engagement of third-party vendors to assist RBC GAM-US with its proxy voting process is not intended to be a delegation of its proxy voting responsibilities and does not relieve it of its fiduciary obligations to the Fund with respect to the voting of proxies. Accordingly, it retains the right to vote the Fund's proxies in a manner that is different from what its vendors recommend, where it believes doing so would be in the Fund's best interests and is not contrary to the terms of the sub-advisory agreement for the Fund.
RBC GAM-US has established a Proxy Committee, which is responsible for establishing, monitoring and reviewing its policies and guidelines with respect to proxy voting, but which does not generally consider the manner in which specific proxies are or have been voted. The Proxy Committee is also responsible for providing oversight of RBC GAM-US's relationship with the provider of its proxy voting policy and proxy research.
Financial Counselors, Inc. (Hennessy Equity and Income Fund - fixed
The proxy voting policies and procedures of Financial
Counselors, Inc. (“FCI”) provide that it is FCI’s intention to vote on
all proxy proposals for all securities held by the Hennessy Equity and Income
Fund (the"Fund") in its fixed income sleeve in a timely manner, unless abstaining on a particular
ballot is seen to be in the best interests of the investors.
In some instances, a proxy vote may present a conflict
between the interests of the Fund, on the one hand, and FCI’s interests or the
interests of a person affiliated with FCI, on the other hand. In such a case, FCI will disclose this
conflict to the Fund when the conflict arises and obtain its consent before
voting. After the potential conflict
analysis has been completed, all proxies that contain only routine director and
auditor votes will be voted automatically on FCI’s behalf by a proxy advisory
service. FCI has proxy voting guidelines
that address proxy voting on other types of matters, such as corporate
governance, equity-based compensation plans, corporate structure, and
shareholder rights plans. For example,
FCI will generally:
- vote for measures that act to increase the
independence of the board of directors;
- support measures intended to increase stock ownership by executives and the use of employee stock purchase plans to increase company stock ownership by employees;
- vote for proposals that promote the exercise of investors' rights; and
- vote against shareholder rights plans.
The London Company of Virginia, LLC (Hennessy Equity and Income Fund - equity
The London Company of Virginia, LLC (the “London
Company”) will vote all proxies and act on other corporate actions for all
securities held by the Hennessy Equity and Income Fund (the “Fund”) in
its equity sleeve in a timely manner, as part of its full discretionary
authority over the equity sleeve of the Fund.
London Company will vote the recommendation of Glass
Lewis, a leading provider of independent, global proxy research, unless
otherwise directed by the Fund or the Manager.
London Company’s utmost concern when voting proxies for the Fund is that
all decisions are made in the best interest of the equity sleeve of the
Fund. London Company will act in a
prudent and diligent manner intended to enhance the economic value of the
assets of the Fund’s account, and will give substantial weight to the
recommendation of management on any issue.
London Company also considers whether there are specific
facts and circumstances that may give rise to a material conflict of interest
on the part of London Company voting the proxy.
Should a proxy proposal raise a material conflict between the interests
of London Company and the Fund, it will resolve the matter on a case-by-case
basis, by abstaining from the vote, voting in accordance with the guidelines
set forth by Glass Lewis, or voting the way London Company feels is in the best
interest of the Fund.
SPARX Asset Management Co., Ltd. (Hennessy Japan Fund and Hennessy
Japan Small Cap Fund)
SPARX Asset Management Co., Ltd. ("SPARX Japan") has adopted a proxy voting policy (the "Policy") that provides as follows:
- SPARX Japan generally votes proxies in a manner
consistent with decisions of the Investment Committee of SPARX Japan (the “Committee”),
which makes voting decisions pursuant to its Equity Voting Guidelines (the “Guidelines”),
unless as otherwise permitted by the Policy (such as when specific interests
and issues require that a client’s vote be cast differently from the
Committee’s decision in order to act in the best economic interests of
- Where a material conflict of interest has been identified and the matter is covered by the Guidelines, proxies are voted in accordance with the Guidelines. Where a conflict of interest has been identified and the matter is not covered in the Guidelines, SPARX Japan will disclose the conflict and the determination of the manner in which to vote to the Board.
The Guidelines address proxy voting on particular types of matters such as elections for directors, adoption of option plans, and antitakeover proposals. For example, the Committee's decisions generally will:
- support management in most elections for
directors, unless there are clear concerns about the past performance of the
company or the board fails to meet minimum corporate governance standards;
- support option plans that motivate participants to focus on long-term investor value and returns, encourage employee stock ownership and more closely align employee interests with those of investors; and
- vote for mergers, acquisitions, and sales of business operations, unless the impact on earnings or voting rights for one class or group of investors is disproportionate to the relative contributions of the group or the company's structure following the acquisition or merger does not reflect good corporate governance, and vote against such actions if the companies do not provide sufficient information upon request concerning the transaction.