The Mutual Fund Directors Forum recently released guidance to fund directors for when a fund’s investment advisor is acquired by another investment advisor (for example, Invesco’s recent acquisition of OppenheimerFunds). In such cases, the agreement between the fund and the original advisor is, by law, automatically terminated, and both the fund’s board and shareholders must approve a new agreement with the new advisor in order to establish the relationship. Under these circumstances, the MFDF’s guidance suggests a number of issues for fund directors to consider, including the potential disruption to the fund’s operations or personnel, the capabilities of the new advisor, and the potential changes to the composition of the board.

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