Sterling Capital Seeks Shareholder Nod for New Advisory Deal, Options Flexibility

Sterling Capital Funds DEF 14A Filing Summary
FieldDetail
CompanySterling Capital Funds
Form TypeDEF 14A
Filed DateDec 18, 2025
Risk Levellow
Pages15
Reading Time18 min
Key Dollar Amounts$69 billion
Sentimentneutral

Sentiment: neutral

Topics: Investment Advisory Agreement, Shareholder Vote, Options Trading, Fund Governance, Acquisition, Regulatory Compliance, Investment Flexibility

TL;DR

**Sterling Capital Funds is getting acquired, and they want shareholders to rubber-stamp the new advisory agreement and give them more options trading freedom – vote FOR both for continuity and potential upside.**

AI Summary

Sterling Capital Funds is seeking shareholder approval for a new Investment Advisory Agreement and the removal of fundamental investment restrictions on options trading for 16 of its 17 funds. This proxy statement, filed on December 18, 2025, outlines a special meeting scheduled for February 27, 2026, to address these proposals. The new Investment Advisory Agreement is necessitated by an indirect change of control of Sterling Capital Management LLC, the investment adviser, following Guardian Capital Group Limited's definitive agreement on August 28, 2025, to be taken private by Desjardins Global Asset Management Inc. The new agreement maintains identical advisory fees and terms as the current agreement, ensuring continuity. Additionally, Sterling Capital recommends removing options trading restrictions for all funds except Sterling Capital Behavioral Small Cap Value Equity Fund, aiming to provide greater investment flexibility and competitive advantage in the evolving fund industry. The Board of Trustees unanimously recommends voting 'FOR' both proposals.

Why It Matters

This DEF 14A filing is crucial for Sterling Capital Funds' investors as it directly impacts the governance and investment strategies of their holdings. The proposed new Investment Advisory Agreement, while maintaining current fees, is a direct consequence of a significant ownership change, ensuring regulatory compliance and operational continuity. The removal of options restrictions could enhance fund performance and risk management capabilities, potentially offering a competitive edge against other funds not subject to such limitations. For employees of Sterling Capital Management LLC, the filing indicates stability, with management and senior professionals expected to remain post-acquisition by Desjardins Global Asset Management Inc.

Risk Assessment

Risk Level: low — The risk level is low because the proposed Investment Advisory Agreement maintains identical advisory fees and terms as the current agreement, ensuring no immediate financial impact on shareholders. The change is primarily a regulatory formality due to an indirect change of control of Sterling Capital Management LLC, with management continuity expected. The removal of options restrictions is intended to provide additional investment flexibility, not to introduce higher-risk strategies without oversight.

Analyst Insight

Investors should vote 'FOR' both proposals to ensure the continued operation of Sterling Capital Funds under the new ownership structure and to grant the funds greater flexibility in their investment strategies. This move is largely administrative due to the acquisition, and the options flexibility could be beneficial.

Key Numbers

  • 17 — Number of Sterling Capital Funds (Funds involved in the proposals)
  • 16 — Number of Funds seeking options restriction removal (All funds except Sterling Capital Behavioral Small Cap Value Equity Fund)
  • August 28, 2025 — Date of Guardian Capital Group Limited acquisition announcement (Trigger for the new Investment Advisory Agreement)
  • December 1, 2025 — Record Date for shareholders entitled to vote (Determines eligibility for voting at the Special Meeting)
  • 50% — Quorum requirement for each Fund (Over 50% of shares outstanding needed for a quorum)
  • 10:00 a.m. — Time of Special Meeting (Eastern Time on February 27, 2026)
  • 1-800-228-1872 — Toll-free number for annual report requests (Shareholders can call for information)
  • (888) 596-1876 — Toll-free number for proxy solicitor (Shareholders can call Broadridge Financial Solutions, Inc. with questions)

Key Players & Entities

  • Sterling Capital Funds (company) — Registrant and subject of the proxy statement
  • Sterling Capital Management LLC (company) — Investment Adviser to the Funds
  • Guardian Capital Group Limited (company) — Indirect parent company of Sterling Capital, being acquired
  • Desjardins Global Asset Management Inc. (company) — Acquirer of Guardian Capital Group Limited
  • Fédération des caisses Desjardins du Québec (company) — Parent company of Desjardins Global Asset Management Inc.
  • Drew T. Kagan (person) — Chair of the Board of Sterling Capital Funds
  • Todd M. Miller (person) — Treasurer and Secretary of Sterling Capital Funds
  • Broadridge Financial Solutions, Inc. (company) — Fund's proxy solicitor
  • Investment Company Act of 1940 (regulator) — Governing act for investment companies
  • February 27, 2026 (date) — Date of the Special Meeting of Shareholders

FAQ

Why is Sterling Capital Funds proposing a new Investment Advisory Agreement?

Sterling Capital Funds is proposing a new Investment Advisory Agreement because Guardian Capital Group Limited, the indirect parent company of Sterling Capital Management LLC, is being acquired by Desjardins Global Asset Management Inc. This transaction, announced on August 28, 2025, constitutes an 'assignment' under the Investment Company Act of 1940, automatically terminating the current agreement. The new agreement, approved by the Board on November 19, 2025, has identical terms and advisory fees.

What are the key proposals for the Sterling Capital Funds Special Meeting on February 27, 2026?

The Special Meeting on February 27, 2026, has two main proposals: first, for shareholders of each Fund to approve a new Investment Advisory Agreement with Sterling Capital Management LLC, and second, for shareholders of 16 out of 17 Funds (excluding Sterling Capital Behavioral Small Cap Value Equity Fund) to approve the removal of fundamental investment restrictions on options and options-related transactions.

How will the acquisition of Guardian Capital Group Limited affect Sterling Capital Management LLC's operations?

Following the acquisition of Guardian Capital Group Limited by Desjardins Global Asset Management Inc., Sterling Capital Management LLC is anticipated to continue operating as a standalone entity indirectly owned by Desjardins. Its management and senior professionals are expected to continue servicing clients, including the Funds, and the investment objectives and strategies of each Fund are expected to remain the same.

Why does Sterling Capital Funds want to remove options trading restrictions?

Sterling Capital Funds seeks to remove options trading restrictions for 16 of its 17 funds to gain additional investment flexibility. This flexibility would allow the Funds to engage in options and options-related transactions to generate income, obtain investment exposures, or hedge against risks, consistent with their investment objectives. Sterling Capital believes this will enhance its ability to achieve fund objectives and address a competitive disadvantage within the fund industry.

What is the Board of Trustees' recommendation for the proposals?

The Board of Trustees of Sterling Capital Funds unanimously recommends that shareholders vote 'FOR' the approval of the new Investment Advisory Agreement and 'FOR' the approval of the removal of each applicable Fund's Options Restrictions. This recommendation was made after careful consideration.

What happens if a quorum is not met at the Sterling Capital Funds Special Meeting?

If a quorum, defined as over 50% of outstanding shares entitled to vote as of December 1, 2025, is not present for a Fund, the Special Meeting for that Fund may be adjourned. This would require additional solicitations of proxies, leading to potential delays and increased costs for the Funds.

When is the Sterling Capital Funds Special Meeting and where will it be held?

The Special Meeting of Shareholders for Sterling Capital Funds is scheduled for February 27, 2026, at 10:00 a.m., Eastern Time. It will be held at the offices of Sterling Capital Management LLC, located at 434 Fayetteville Street, Suite 500, Raleigh, North Carolina 27601.

How can Sterling Capital Funds shareholders vote on the proposals?

Sterling Capital Funds shareholders can vote in four ways: over the Internet via the website on the proxy card, by telephone using the toll-free number on the proxy card, by mail using the enclosed postage-paid proxy card, or in person at the Shareholder Meeting on February 27, 2026.

Will the advisory fees change under the new Investment Advisory Agreement for Sterling Capital Funds?

No, the advisory fees will not change under the new Investment Advisory Agreement. The proposed New Agreement consists of substantially identical terms as the Current Agreement, including identical advisory fees, ensuring continuity for shareholders.

Which Sterling Capital Fund is not seeking to remove its options trading restrictions?

Sterling Capital Behavioral Small Cap Value Equity Fund is the only fund among the 17 Sterling Capital Funds that is not seeking to remove its fundamental investment restrictions regarding the use of options and options-related transactions.

Risk Factors

  • Change of Control and Investment Advisory Agreement Approval [high — regulatory]: The indirect change of control of Sterling Capital Management LLC, the investment adviser, due to the acquisition by Desjardins Global Asset Management Inc. necessitates shareholder approval of a new Investment Advisory Agreement. Failure to obtain this approval could lead to the termination of the current agreement and impact the adviser's ability to serve the funds.
  • Removal of Options Trading Restrictions [medium — market]: The proposal to remove fundamental investment restrictions on options trading for 16 of the 17 funds aims to provide greater investment flexibility. However, the inability to use options could place these funds at a competitive disadvantage compared to peers not subject to similar restrictions.
  • Quorum Requirements for Special Meeting [medium — operational]: A quorum of over 50% of the shares outstanding as of December 1, 2025, is required for each fund to conduct the special meeting. If a quorum is not met for a specific fund, the proposals for that fund cannot be voted upon, potentially delaying or preventing necessary approvals.

Industry Context

The fund industry is continuously evolving, with investment managers seeking greater flexibility to enhance performance and remain competitive. The use of derivatives, such as options, has become more sophisticated and commonplace. Funds that are restricted from utilizing these tools may face a competitive disadvantage against peers with broader investment mandates.

Regulatory Implications

The proposed change of control of the investment adviser triggers regulatory requirements under the Investment Company Act of 1940, specifically mandating shareholder approval for a new investment advisory agreement. Additionally, the removal of fundamental investment restrictions requires shareholder consent to ensure compliance with fund governance rules.

What Investors Should Do

  1. Vote 'FOR' the new Investment Advisory Agreement.
  2. Vote 'FOR' the removal of options trading restrictions for applicable funds.
  3. Ensure your proxy is submitted by the deadline.

Key Dates

  • 2025-08-28: Guardian Capital Group Limited announced definitive agreement to be taken private by Desjardins Global Asset Management Inc. — This event triggered the need for a new Investment Advisory Agreement due to an indirect change of control of the investment adviser.
  • 2025-12-18: Sterling Capital Funds filed the Definitive Proxy Statement (DEF 14A). — This filing officially informed shareholders of the upcoming special meeting and the proposals to be voted on.
  • 2025-12-01: Record Date for shareholders entitled to vote. — Determines which shareholders are eligible to vote at the Special Meeting.
  • 2026-02-27: Special Meeting of Shareholders scheduled. — The date on which shareholders will vote on the proposed Investment Advisory Agreement and the removal of options trading restrictions.
  • 2026-01-01: Expected closing of the Transaction (first half of 2026). — The anticipated date for the change of control of the investment adviser, which is contingent on various approvals and conditions.

Glossary

DEF 14A
A filing with the U.S. Securities and Exchange Commission (SEC) that provides detailed information to shareholders about matters to be voted on at a special meeting. (This document contains the official proposals and rationale for the shareholder vote regarding the Investment Advisory Agreement and options trading restrictions.)
Investment Advisory Agreement
A contract between an investment company (like a fund) and an investment adviser that outlines the terms and conditions under which the adviser will manage the company's assets. (Shareholders are being asked to approve a new agreement due to a change in control of the investment adviser, Sterling Capital Management LLC.)
Fundamental Investment Restrictions
Certain investment policies that a fund's registration statement states can only be changed with shareholder approval. (Shareholders are being asked to remove these restrictions for 16 funds to allow for greater flexibility in options trading.)
Options Restriction
A specific fundamental investment restriction that prohibits a fund from engaging in certain types of options and options-related transactions. (The removal of these restrictions is a key proposal for 16 of the 17 funds, aiming to enhance investment flexibility.)
Assignment
In the context of the Investment Company Act of 1940, an assignment of an investment advisory contract typically occurs upon a change of control of the investment adviser, leading to the contract's termination. (The indirect change of control of Sterling Capital Management LLC is considered an 'assignment' of the current advisory agreement, necessitating shareholder approval of a new one.)
1940 Act
The Investment Company Act of 1940, a federal law that regulates the organization and operation of mutual funds and other investment companies. (This act dictates the requirement for shareholder approval of investment advisory agreements and defines terms like 'assignment'.)
Quorum
The minimum number of shareholders or shares required to be present at a meeting for business to be legally transacted. (Over 50% of outstanding shares must be represented for the special meeting to proceed for each fund.)

Year-Over-Year Comparison

This filing is a proxy statement for a special meeting, not an annual report. Therefore, direct year-over-year comparisons of financial metrics like revenue or net income are not applicable. The key focus is on the proposed changes to the investment advisory agreement and investment restrictions, driven by a change in control of the investment adviser, rather than changes in the funds' financial performance.

Filing Stats: 4,407 words · 18 min read · ~15 pages · Grade level 16.3 · Accepted 2025-12-18 13:24:24

Key Financial Figures

  • $69 billion — 0, 2025, Sterling Capital has more than $69 billion in assets under management. On August

Filing Documents

From the Filing

DEF 14A 1 fp0096676-1_def14a.htm UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A Information Required in Proxy Statement Schedule 14A Information Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)). [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to §240.14a-12 STERLING CAPITAL FUNDS (Name of Registrant as Specified in its Charter) (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee paid previously with preliminary materials. [ ] Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11 STERLING CAPITAL FUNDS STERLING CAPITAL BEHAVIORAL LARGE CAP VALUE EQUITY FUND STERLING CAPITAL BEHAVIORAL SMALL CAP VALUE EQUITY FUND STERLING CAPITAL SPECIAL OPPORTUNITIES FUND STERLING CAPITAL EQUITY INCOME FUND STERLING CAPITAL MID CAP RELATIVE VALUE FUND STERLING CAPITAL REAL ESTATE FUND STERLING CAPITAL SMALL CAP VALUE FUND STERLING CAPITAL ULTRA SHORT BOND FUND STERLING CAPITAL SHORT DURATION BOND FUND STERLING CAPITAL INTERMEDIATE U.S. GOVERNMENT FUND STERLING CAPITAL TOTAL RETURN BOND FUND STERLING CAPITAL LONG DURATION CORPORATE BOND FUND STERLING CAPITAL QUALITY INCOME FUND STERLING CAPITAL NORTH CAROLINA INTERMEDIATE TAX-FREE FUND STERLING CAPITAL SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND STERLING CAPITAL VIRGINIA INTERMEDIATE TAX-FREE FUND STERLING CAPITAL WEST VIRGINIA INTERMEDIATE TAX-FREE FUND 434 Fayetteville Street, Suite 500 Raleigh, North Carolina 27601 December 18, 2025 Dear Shareholder: On behalf of the Board of Trustees (the “Board”) of Sterling Capital Funds, a Massachusetts Trust, we are pleased to invite you to a special meeting of shareholders (the “Special Meeting”) of Sterling Capital Behavioral Large Cap Value Equity Fund, Sterling Capital Behavioral Small Cap Value Equity Fund, Sterling Capital Special Opportunities Fund, Sterling Capital Equity Income Fund, Sterling Capital Mid Cap Relative Value Fund, Sterling Capital Real Estate Fund, Sterling Capital Small Cap Value Fund, Sterling Capital Ultra Short Bond Fund, Sterling Capital Short Duration Bond Fund, Sterling Capital Intermediate U.S. Government Fund, Sterling Capital Total Return Bond Fund, Sterling Capital Long Duration Corporate Bond Fund, Sterling Capital Quality Income Fund, Sterling Capital North Carolina Intermediate Tax-Free Fund, Sterling Capital South Carolina Intermediate Tax-Free Fund, Sterling Capital Virginia Intermediate Tax-Free Fund, and Sterling Capital West Virginia Intermediate Tax-Free Fund (each a “Fund” and collectively, the “Funds”). The Special Meeting is scheduled for February 27, 2026, at 10:00 a.m., Eastern Time, at the offices of Sterling Capital Management LLC (“Sterling Capital” or the “Adviser”), at 434 Fayetteville Street, Suite 500, Raleigh, North Carolina 27601. The Special Meeting is being held for the following purposes, which are more fully described in the accompanying Proxy Statement: 1. For Shareholders of each Fund, to approve an Investment Advisory Agreement between Sterling Capital Funds, on behalf of each series thereof, and Sterling Capital Management LLC; 2. For Shareholders of each Fund other than Sterling Capital Behavioral Small Cap Value Equity Fund, to approve the removal of the Fund’s fundamental investment restrictions that prohibit the Fund from engaging in specified type(s) of options and options related transactions; and 3. To transact any such other business as may properly come before the Special Meeting or any adjournment or postponement thereof. For the reasons discussed in the enclosed materials, the Funds’ Board recommends that you vote to “FOR ” each of the above proposals . We appreciate your participation and prompt response in this matter and thank you for your continued support. Sincerely, /s/ Drew T. Kagan Drew T. Kagan Chair of the Board of Sterling Capital Funds PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD(S) IS REQUESTED. A SELF ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE ALONG WITH INSTRUCTIONS ON HOW TO VOTE OVER THE INTERNET OR BY TELEPHONE SHOULD YOU PREFER TO VOTE BY ONE OF THOSE METHODS. 2 QUESTIONS AND ANSWERS The following “Questions and Answers” section is a summary and is not intended to be as detailed as the discussion found in the proxy materials. For this reason, the information is qualified in its entirety by reference to the enclosed proxy

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