Tortoise Capital Advisors L.L.C.

Proposed Agreement with Mariner Holdings, LLC


Questions and Answers Regarding Agreement with Mariner Holdings, LLC

We are committed to sharing pertinent information about this agreement in an open and timely manner. Please do not hesitate to contact Investor Relations at 1-866-362-9331 with any additional questions.

Please note that the following agreement is subject to stockholder approval by Tortoise Energy Infrastructure Corp., Tortoise Energy Capital Corp., Tortoise North American Energy Corp., Tortoise Capital Resources Corp. and two privately-held funds managed by Tortoise (referred to herein as the Tortoise funds).

What are the terms of the agreement between non-management owners and Managing Directors of Tortoise Capital Advisers LLC (Tortoise) and Mariner Holdings, LLC (Mariner)? [top]

Mariner and Tortoise Managing Directors have entered into an agreement to purchase all of the ownership interests in Tortoise from Kansas City Equity Partners, one of its affiliates, and FCM Tortoise. As part of the transaction, Mariner will purchase a majority stake in Tortoise, with the intention to provide growth capital and resources, and a complementary strategic partner in the asset management business. The agreement further aligns the business with the interests of management and a strategic partner.

Why are the current non-management owners of Tortoise selling?[top]

FCM Tortoise, L.L.C. (FCM) and Kansas City Equity Partners (KCEP) have concluded that this is an appropriate time to monetize their investment.

What are the potential benefits of the Agreement to the Tortoise funds' stockholders? [top]

We believe there are several benefits of the Agreement, including:

  • Growth Capital and Support—Additional resources from a well capitalized partner with (i) significant financial wherewithal with strategic commitment to stability and growth; (ii) deep resources to further develop Tortoise funds and growth initiatives; (iii) expanded breadth of marketing and distribution resources; and (iv) the potential for realization of economies of scale over time as part of a larger asset management platform.
  • Continuity—Same Tortoise investment team and processes with continued focus on investments providing yield, growth & quality and a high level of client service.
  • Complementary Strategic Partnership—Tortoise and Mariner know each other well. Both firms are private, entrepreneurial companies that have independently developed through strategic growth and innovative thinking. This is a strategic partnership that will provide one dynamic team dedicated to providing clients with innovative products and thought leadership.
  • Strategic Partner and Managing Directors Replace Non-Active Owners—The Agreement includes the purchase of all of the ownership interests of Tortoise investors that are not involved in the management of Tortoise by Mariner and certain Tortoise Managing Directors. This is a strategic agreement that further aligns the interests of Tortoise management and a strategic partner focused on growing the business and provides liquidity to stockholders of Tortoise.

Will the Managing Directors of Tortoise change following the Agreement? [top]

No—The current Managing Directors of Tortoise are Kevin Birzer, Zachary Hamel, Ken Malvey, Terry Matlack, and David Schulte and they will continue to run the business.

What are the potential benefits of the Agreement to Mariner? [top]

The Agreement helps propel Mariner further into the asset management business, a key pillar of its strategic vision. The Tortoise team will strengthen Mariner's asset management capabilities, bringing significant expertise in closed-end fund and separate account thought leadership, development and management. Tortoise's platform adds four publicly traded closed-end funds as well as private funds and separate accounts to Mariner's asset management business. The Tortoise team brings expertise in closed-end fund development and management, portfolio management, client services and operational support, which will provide a well established platform for continued growth.

Will any of the Tortoise funds have strategy or portfolio manager changes as part of the Agreement? [top]

Tortoise's portfolio management, strategy and investment process will remain the same. The current Managing Directors, Kevin Birzer, Zachary Hamel, Ken Malvey, Terry Matlack and David Schulte, will continue to manage Tortoise and serve as its Investment Committee. There will be no major changes to Tortoise's business model except for the potential for additional capital and strategic support provided by Mariner.

Why are the Tortoise funds having a Special Meeting of Stockholders? [top]

Under the Investment Company Act of 1940, consummation of the Agreement will result in a change of control of Tortoise and an assignment of each Tortoise fund's advisory agreement with Tortoise. Before consummation of the Agreement with Mariner, this deemed assignment will require new advisory contracts to be presented to the stockholders of the Tortoise funds for their approval at special meetings of stockholders. Those meetings are expected to be held in the 3rd calendar quarter 2009. The funds expect to soon file proxy statements for these special meetings. The independent directors of each of the Tortoise funds have approved the new advisory agreements.

Are there any anticipated changes to the Tortoise funds' Board of Directors? [top]

In order to comply with a safe harbor under Section 15(f) of the 1940 Act, the Boards of each Tortoise fund will be required to be comprised of at least 75% independent directors for a period of at least 3 years following consummation of the Agreement. Accordingly, upon the consummation of the Agreement, we expect Terry Matlack to resign from the Board of Directors of each Tortoise fund.

Mr. Matlack will remain the Chief Financial Officer of the Tortoise funds and a Managing Director of Tortoise Capital Advisors.

Kevin Birzer is expected to continue to serve as Chairman of each of the Tortoise funds and there will be no additional changes made to the Tortoise funds' Boards with all of the current independent directors remaining on the Tortoise funds' Boards.

Mr. Matlack will remain the Chief Financial Officer of the Tortoise funds and a Managing Director of Tortoise Capital Advisors.

Will Fund names or ticker symbols change as a result of the Agreement? [top]

The Tortoise funds will continue to be branded and labeled as Tortoise funds with no expected name changes to current funds. Fund ticker symbols will remain the same.

Will there be any changes to the Tortoise employee base? [top]

Tortoise employees are one of the company's most important assets. We expect to retain all employees.

Will there be fee changes to the Tortoise funds? [top]

Management fees for the Tortoise funds are not expected to change as a result of the Mariner transaction.