Hennessy Completes the Acquisition of the Rainier U.S. Equity Funds

January 12, 2018 - Hennessy Advisors, Inc., the investment manager of the Hennessy Funds, today announced that it has completed the acquisition of assets related to the management of the Rainier Small/Mid Cap Equity Fund, the third and final of the Rainier U.S. Equity Funds. As a result, the Rainier Small/Mid Cap Equity Fund will be reorganized into the Hennessy Cornerstone Mid Cap 30 Fund effective for shareholders on January 16, 2018, based on closing prices as of January 12, 2018, as follows:

                                                                                                        NAV as of Jan. 12                  Conversion Ratio

Rainier Small/Mid Cap Equity, Original (RIMSX)                      $37.4758                 1.83935723 shares of HFMDX

Rainier Small/Mid Cap Equity, Institutional (RAISX)               $40.3208                1.92688311 shares of HIMDX

Hennessy Cornerstone Mid Cap 30, Investor (HFMDX)         $20.3744                                 ___

Hennessy Cornerstone Mid Cap 30, Institutional (HIMDX)  $20.9254                                 ___

“I want to welcome the shareholders of the Rainier Funds to the Hennessy family of funds,” said Neil Hennessy, Chairman, CEO and President of Hennessy Advisors, Inc. and President and Chief Investment Officer of Hennessy Funds. “We are honored to have the opportunity to serve these shareholders and look forward to helping them meet their investment goals,” he added.  

Hennessy Advisors, Inc. previously completed the acquisition of assets related to the management of the Rainier Large Cap Equity Fund and Rainier Mid Cap Equity Fund, which were reorganized into the Hennessy Cornerstone Large Growth Fund and the Hennessy Cornerstone Mid Cap 30 Fund, respectively, on December 1, 2017.  For more information on that transaction please refer to the press release dated Dec. 1, 2017.

For more information, please read the FAQs regarding the reorganization.

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The prices of MLP units may fluctuate abruptly and trading volume may be low, making it difficult for a Fund to sell its units at a favorable price. MLP general partners have the power to take actions that adversely affect the interests of unit holders. Most MLPs do not pay U.S. federal income tax at the partnership level, but an adverse change in tax laws could result in MLPs being treated as corporations for federal income tax purposes, which could reduce or eliminate distributions paid by MLPs to the Fund. If the Energy Transition Fund’s MLP investments exceed 25% of its assets, it may not qualify for treatment as a regulated investment company (“RIC”) under the Internal Revenue Code (“Code”), and the Fund would be taxed as an ordinary corporation, which could substantially reduce its net assets and its distributions to shareholders. The Midstream Fund is treated as a regular corporation, or “C” corporation, for U.S. federal income tax purposes, and therefore, is subject to U.S. federal income tax on its taxable income at the graduated rates applicable to corporations (currently a maximum rate of 21%) as well as state and local income taxes. The Midstream Fund will not benefit from current favorable federal income tax rates on long-term capital gains, and Fund income and losses will not be passed on to shareholders. The Midstream Fund accrues deferred income taxes for future tax liabilities associated with the portion of MLP distributions considered to be a tax-deferred return of capital and for any net operating gains as well as capital appreciation of its investments. This deferred tax liability is reflected in the daily NAV, and as a result, the Fund’s after-tax performance could differ significantly from the underlying assets even if the pre-tax performance is closely tracked.

Glossary of Terms contains definitions and additional information.

To view the top 10 holdings of a Fund, please click the Fund name: Cornerstone Growth, Focus, Cornerstone Mid Cap 30, Cornerstone Large Growth, Cornerstone Value, Total Return, Equity and Income, Balanced, Energy Transition, Midstream, Gas Utility, Japan, Japan Small Cap, Large Cap Financial, Small Cap Financial, Technology. Fund holdings are subject to change and not recommendations to buy or sell any security.

Opinions expressed are subject to change at any time, are not guaranteed, and should not be considered investment advice.

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To view the Morningstar ratings for the Japan Fund, please click here. (Media - TD Ameritrade)

To view the Morningstar ratings for the Focus Fund, please click here. (Media - CNBC-B. Macualey).

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Tom White is a TD Ameritrade Network contributor and is not affiliated with the Hennessy Funds. Content is not investment advice, or a recommendation of any security, strategy, or account type. Options involve risks and are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses.(Media - TD Ameritrade-Rothberg)

To view the Morningstar ratings, please click here.

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