UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22979

 

 

Goldman Sachs MLP and Energy Renaissance Fund

(Exact name of registrant as specified in charter)

 

 

200 West Street

New York, NY 10282

(Address of principal executive offices) (Zip code)

 

Copies to:

  Stephen H. Bier, Esq.

Caroline Kraus, Esq.

  Allison M. Fumai, Esq.

Goldman Sachs & Co. LLC

  Dechert LLP

200 West Street

  1095 Avenue of the Americas

New York, New York 10282

  New York, NY 10036-6797

 

(Name and address of agents for service)

Registrant’s telephone number, including area code: (212) 902-1000

 

 

Date of fiscal year end: November 30

 

 

Date of reporting period: May 31, 2022

 

 

 

ITEM 1.

REPORTS TO STOCKHOLDERS.

 

    

The Semi-Annual Report to Shareholders is filed herewith.


Goldman Sachs Closed-End Fund

 

 

 
Semi-Annual Report      

May 31, 2022

 
     

MLP and Energy Renaissance Fund

 

 

LOGO


Goldman Sachs MLP and Energy Renaissance Fund

 

TABLE OF CONTENTS

 

Portfolio Management Discussion and Performance Summary

    1  

Fund Basics

    5  

Schedule of Investments

    7  

Financial Statements

    8  

Financial Highlights

    11  

Notes to Financial Statements

    12  

Additional Information

    23  

Privacy Notice

    25  

Voting Results

    26  

 

     
NOT FDIC-INSURED   May Lose Value   No Bank Guarantee


PORTFOLIO RESULTS

 

Goldman Sachs MLP and Energy Renaissance Fund

 

Investment Objective and Principal Investment Strategy

The Fund seeks a high level of total return with an emphasis on current distributions to shareholders. The Fund seeks to achieve its investment objective by investing primarily in master limited partnership (“MLP”) and other energy investments. The Fund intends to selectively use leverage to seek to achieve its investment objective. It concentrates its investments in the energy sector, with an emphasis on midstream MLP investments. Under normal market conditions, the Fund will invest at least 80% of its managed assets in MLPs and other energy investments. The Fund’s MLP investments may include, but are not limited to, MLPs structured as limited partnerships (“LPs”) or limited liability companies (“LLCs”); MLPs that are organized as LPs or LLCs, but taxed as “C” corporations; equity securities that represent an indirect interest in an MLP issued by an MLP affiliate, including institutional units and MLP general partner or managing member interests; “C” corporations whose predominant assets are interests in MLPs; MLP equity securities, including MLP common units, MLP subordinated units, MLP convertible subordinated units and MLP preferred units; private investments in public equities issued by MLPs; MLP debt securities; and other U.S. and non-U.S. equity and fixed income securities and derivative instruments that provide exposure to the MLP market, including pooled investment vehicles that primarily hold MLP interests and exchange-traded notes. The Fund’s other energy investments may include equity and fixed income securities of U.S. and non-U.S. companies other than MLPs that (i) are classified by a third party as operating within the oil and gas storage, transportation, refining, marketing, drilling, exploration or production sub-industries or (ii) have at least 50% of their assets, income, sales or profits committed to, or derived from, the exploration, development, production, gathering, transportation (including marine), transmission, terminal operation, processing, storage, refining, distribution, mining or marketing of natural gas, natural gas liquids (including propane), crude oil, refined petroleum products, coal, electricity or other energy sources, energy-related equipment or services.

Portfolio Management Discussion and Analysis

Below, the Goldman Sachs Energy and Infrastructure Team (the “Team”) discusses the Goldman Sachs MLP and Energy Renaissance Fund’s (the “Fund”) performance and positioning for the six-month period ended May 31, 2022 (the “Reporting Period”).

 

Q   How did the Fund perform during the Reporting Period?

 

A   During the Reporting Period, the Fund’s cumulative total return based on its net asset value (“NAV”) was 31.11%. The Fund’s cumulative total return based on market price was 29.04% for the same period. By way of reference, the Alerian MLP Index1 had a cumulative total return of 32.43% during the Reporting Period. As of May 31, 2022, the Fund’s NAV was $16.09, and its market price was $13.10.

 

Q   What was the Fund’s current distribution rate at the end of the Reporting Period?

 

A   During the Reporting Period, the Fund declared two quarterly distributions. On February 11, 2022, the Fund declared a quarterly distribution of $0.175 per share, a 6% increase from the $0.165 per share quarterly distribution on November 12, 2021. A second quarterly distribution of the same amount — $0.175 per share — was announced on May 13, 2022. The increased distributions, in our view, reflect the energy market’s improving fundamentals as well as the Fund’s cash flow generation. On May 31, 2022, the Fund’s current annualized distribution rate based on its NAV was 4.35%, and the Fund’s current annualized distribution rate based on its market price was 5.34%.

 

 

1    Source: Alerian. The Alerian MLP Index is the leading gauge of energy infrastructure MLPs. The capped, float-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-return basis (AMZ) and on a total-return basis (AMZX). It is not possible to invest directly in an unmanaged index.

 

1


PORTFOLIO RESULTS

 

Q   How did energy-related equities overall perform during the Reporting Period?

 

A   Energy-related equities posted strong gains during the Reporting Period, as crude oil and natural gas prices rose. The prices of West Texas Intermediate (“WTI”) crude oil and natural gas climbed 73.27% and 86.55%, respectively, during the Reporting Period overall.

 

   

In December 2021, as the Reporting Period began, commodities and energy-related equities broadly rebounded from a brief but sharp sell-off. The sell-off had been driven by worries around the spread of the COVID-19 Omicron variant and how it might impact near-term demand for commodities. Data suggesting that Omicron was “less severe” than previous variants helped to ease market fears.

 

   

During the first quarter of 2022, commodities and energy-related equities advanced as underlying fundamentals strengthened. U.S. oil demand ticked higher, while supply struggled to keep pace after years of upstream2 capital expenditure cuts in the face of strong discipline from OPEC+3 and as U.S. producers remained focused on maximizing free cash flow. The result: undersupplied energy markets, which were further pressured by the Russian invasion of Ukraine on February 24th, given that Russia was a major global exporter of crude oil and natural gas. After the invasion, crude oil prices rose, with WTI reaching $128 per barrel — its highest level since 2008 — in early March 2022.

 

   

During April and May 2022, energy-related equities and the broader midstream4 energy sector, in particular, traded alongside volatility in crude oil prices, driven, in turn, by developments surrounding the Russia/Ukraine conflict, the possibility of a European Union ban on Russian oil and potential oil demand-side concerns stemming from rising COVID-19 cases and lockdown procedures in China.

 

   

For the Reporting Period overall, energy infrastructure master limited partnerships (“MLPs”), as measured by the Alerian MLP Index, produced a total return of 32.43%. The broader midstream sector, as measured by the Alerian Midstream Energy Index5 (“ANMA Index”) (which includes both energy MLPs and “C” corporations), posted a total return of 28.79%.

 

Q   What key factors were responsible for the Fund’s performance during the Reporting Period?

 

A   During the Reporting Period, the Fund’s performance was driven by continued strength in the commodities and energy-related equity markets as well as by effective security selection.

 

   

In terms of its exposures, the Fund was helped most by its positions in the petroleum pipeline transportation and the gathering and processing subsectors. 6 The petroleum pipeline transportation subsector benefited from a constructive macro backdrop, as crude oil demand, commodity prices and volume expectations improved. The gathering and processing subsector benefited from the strong recovery in crude oil and natural gas liquid prices during the Reporting Period, given that this subsector is closer to the wellhead and therefore tends to be more sensitive to commodity price movements.

 

Q   What individual holdings added to the Fund’s performance during the Reporting Period?

 

A   The Fund was helped most during the Reporting Period by its investments in Energy Transfer LP; Western Midstream Partners, LP; and Enterprise Products Partners.

 

   

The Fund’s top contributor was Energy Transfer LP (ET), which operates a diversified portfolio of energy assets, including natural gas midstream, crude oil, natural gas liquids and refined products, as well as transportation and storage services. During the Reporting Period, ET recorded gains alongside the broad recovery in the midstream energy sector. With its integrated, diversified asset base, the company saw continued improvement in its earnings expectations as energy prices rose. ET also improved its balance sheet and began to

 

 

2    The upstream component of the energy industry is usually defined as those operations stages in the oil and gas industry that involve exploration and production. Upstream operations deal primarily with the exploration stages of the oil and gas industry, with upstream firms taking the first steps to first locate, test and drill for oil and gas. Later, once reserves are proven, upstream firms will extract any oil and gas from the reserve.

 

3    OPEC+ is comprised of the Organization of the Petroleum Exporting Countries (“OPEC”) and Russia.

 

4    The midstream component of the energy industry is usually defined as those companies providing products or services that help link the supply side (i.e., energy producers) and the demand side (i.e., energy end-users for any type of energy commodity). Such midstream businesses can include, but are not limited to, those that process, store, market and transport various energy commodities.

 

 

5    Source: Alerian. The Alerian Midstream Energy Index is a broad-based composite of North American energy infrastructure companies. The capped, float-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-return (AMNA), total-return (AMNAX), net total-return (AMNAN), and adjusted net total-return (AMNTR) basis.

 

6    Sector and subsector allocations are defined by GSAM and may differ from sector allocations used by the Alerian MLP Index.

 

2


PORTFOLIO RESULTS

 

  return more cash to investors by increasing distributions by almost 33% during the Reporting Period.

 

   

Western Midstream Partners, LP (WES) develops and operates midstream energy assets focused on gathering, compressing, treating, processing and transporting natural gas and crude oil. WES benefited from the improving operating momentum of its gathering and processing assets in the Permian and Niobrara Basins, as rising commodity prices increased production expectations around its asset base. In addition, the company significantly increased the cash it returned to investors, growing its distribution by 55% during the Reporting Period.

 

   

Enterprise Products Partners (EPD) operates an integrated and diversified portfolio of natural gas and natural gas liquid midstream, intrastate and interstate transportation, terminalling and storage and export assets. Its shares benefited from improving midstream fundamentals, helping the company’s 2022 and 2023 earnings expectations to rise considerably. EPD also continued to source and develop additional infrastructure investment opportunities that should, in our view, deliver earnings growth in the future.

 

Q   What individual holdings detracted from the Fund’s performance during the Reporting Period?

 

A   During the Reporting Period, Fast Radius Inc., Equitrans Midstream Corp., and Atlantica Sustainable Infrastructure PLC detracted from the Fund’s performance.

 

   

The Fund’s leading detractor was Fast Radius Inc. (FSRD), a provider of cloud-based manufacturing platform solutions that deliver data and insights for design, production and supply chain management. Its shares fell after FSRD significantly reduced its 2022 revenue expectations, as the economic slowdown and supply-chain disruptions impaired customer demand for its cloud-based manufacturing process. The decline jeopardized the company’s ability to raise the capital it needed to build out its operations. By the end of the Reporting Period, we had sold the Fund’s position in FSRD common stock.7

   

Equitrans Midstream Corp. (ETRN) is an operator of natural gas transmission, storage and gathering systems in the Appalachian Basin. During the Reporting Period, the viability of certain environmental permits for ETRN’s key growth project, the Mountain Valley Pipeline, was threatened by unexpected court rulings. As a result, the probability of the pipeline being put into service on time and on budget was greatly reduced, in our view. Without Mountain Valley Pipeline, the company’s existing dividend levels were also in jeopardy, we believed, and by the end of the Reporting Period, we had eliminated the Fund’s position in ETRN.

 

   

Atlantica Sustainable Infrastructure PLC (AY) provides transmission, transportation infrastructure and water asset solutions to the renewable energy industry. Its shares were volatile during the Reporting Period in response to challenges related to some of the company’s operations as well as to cost inflation that led to reductions in earnings expectations for the next several years. Additionally, rising global interest rates reduced earnings multiples for AY and other renewable energy peers, pushing down their share prices during the Reporting Period.

 

Q   Were there any notable purchases or sales during the Reporting Period?

 

A   During the Reporting Period, the Fund established a position in Enlink Midstream LLC (ENLC), an independent midstream energy services company involved in natural gas gathering, treating, processing, transmission, distribution, supply and marketing, and crude oil marketing. We initiated the position because we believe ENLC offers strong exposure to the recovery in midstream fundamentals. Specifically, the company has significant unutilized capacity across its asset portfolio that, in our opinion, should allow it to take advantage of volume growth with minimal capital expenditures.

 

   

Another notable Fund purchase during the Reporting Period was Diamondback Energy, Inc. (FANG), an independent operator with oil and natural gas production assets in the Permian Basin. In our view, FANG’s upstream asset base offers exposure to strong commodity price fundamentals at what we consider to be an inexpensive valuation.

 

   

In addition to the sales of FSRD and ETRN, mentioned earlier, we exited the Fund’s position in Canada-based Tidewater Renewables Ltd., which operates a renewable fuels business focused on diesel and natural gas. While the company continued to execute on its project backlog, both on time and on budget, we believed a lack of trading liquidity and the concentration of ownership by parent entity Tidewater Midstream and Infrastructure Ltd. resulted in weak stock performance during the Reporting Period. We decided to exit the Fund’s position and reallocate the proceeds to companies we thought were more exposed to the energy recovery theme and also offered yield.

 

 

7    The Fund maintained a small position in private investments in public equities (“PIPEs”), warrants and founder shares of FSRD at the end of the Reporting Period.

 

3


PORTFOLIO RESULTS

 

Q   How did the Fund use derivatives and similar instruments during the Reporting Period?

 

A   During the Reporting Period, the Fund did not use derivatives or similar instruments.

 

Q   How did the Fund use leverage during the Period?

 

A   The Fund is permitted to obtain leverage using any form or combination of financial leverage instruments, including through funds borrowed from banks or other financial institutions (i.e., a credit facility), margin facilities or notes issued by the Fund and the leverage attributable to similar transactions entered into by the Fund, and it reserves the right to obtain leverage to the extent permitted by the Investment Company Act of 1940.

 

   

At the beginning of the Reporting Period, the Fund held leverage representing 9.92% of its managed assets through a fixed/floating rate margin loan facility with a major financial institution. As general market conditions improved, we incrementally added a modest amount of leverage. Overall, the use of leverage added to the Fund’s performance during the Reporting Period. As of May 31, 2022, the margin facility represented 9.59% of the Fund’s managed assets. While we added to the Fund’s leverage during the Reporting Period, it is important to highlight that we expect our leverage strategy to remain more conservative compared to the Fund’s historic levels of leverage and that the strategy is intended to seek higher price returns, not to pay higher than market yields.

 

Q   What is the Fund’s tactical view and strategy for the months ahead?

 

A   At the end of the Reporting Period, we believed the world was in the early stages of a multi-year commodity super-cycle that might have positive implications for energy-related equities. In our view, Russia’s invasion of Ukraine highlighted the importance of energy security and could ultimately redefine the global energy landscape, with North American supply emerging as a preferred and reliable source for European countries. This would offer a notable opportunity for U.S. midstream energy companies, in our opinion, because it could dramatically increase their total available market.

 

   

Overall, we thought many U.S. midstream energy companies had experienced a paradigm shift after the outbreak of COVID-19 and, at the end of the Reporting Period, midstream fundamentals were the healthiest on record. Management teams were no longer prioritizing growth and were instead focusing on capital discipline, balance sheet strength, and, above all, generating free cash flow and returning it back to investors via dividends and buybacks. At the same time, the midstream energy sector continued to offer some of the highest yields in the equity asset class at the end of the Reporting Period, with the Alerian MLP Index yielding more than 6%, five times that of the S&P 500® Index and twice the yields of both utilities and real estate investment trusts. In addition, strong crude oil and natural gas prices continued to support earnings momentum across the sector, with the majority of the top U.S. midstream energy companies beating consensus expectations for earnings before interest, taxes, depreciation and amortization (“EBITDA”) in the fourth quarter of 2021.8

 

   

At the end of the Reporting Period, we believed the macro backdrop of high inflation and Federal Reserve interest rate hikes added to already constructive market sentiment towards energy-related equities, which have historically performed well during times of high inflation. We noted resumed investor interest in the broad energy sector, with the largest energy ETF receiving more than $10 billion in investment inflows during 2020 and 2021 collectively. In our view, this trend is likely to persist as perceptions around energy security and valuations shift and as investors consider increasing their energy exposure and rotate from growth to value stocks.

 

   

Broadly speaking, we believed the midstream energy sector presented a compelling investment opportunity at the end of the Reporting Period. Despite the sector’s already strong performance during the first five months of 2022, we thought it still had room to recover after multiple years of weak performance. We also felt the sector was trading at significant valuation discounts versus both its own history and the broader equity market at the end of the Reporting Period, suggesting to us that significant upside potential remained.

 

   

In managing the Fund, we intended to remain focused on generating risk-adjusted returns for shareholders through the ownership of high quality companies with strong dividend/distribution coverage, cash flow growth potential and what we saw as a robust outlook for free cash flow generation and healthy balance sheets. As always, we plan to continue monitoring U.S. and global economies, geopolitical factors, interest rates, supply/demand dynamics and equity market fundamentals as we actively manage the Fund.

 

4

 

8    Ten of the top 15 U.S. midstream energy companies in the Alerian US Midstream Energy Index beat consensus EBITDA expectations for the fourth quarter of 2021.


FUND BASICS

 

Goldman Sachs MLP and Energy Renaissance Fund

as of May 31, 2022

 

  FUND SNAPSHOT

 

     As of May 31, 2022       
  Net Asset Value (NAV)1   $ 16.09  
  Market Price1   $ 13.10  
  Premium (Discount) to NAV2     (18.58 )% 
  Leverage3     9.59
  Distribution Rate – NAV4     4.35
    Distribution Rate – Market Price4     5.34

 

1    The Market Price is the price at which the Fund’s common shares are trading on the NYSE. The Market Price of the Fund’s common shares will fluctuate and, at the time of sale, common shares may be worth more or less than the original investment or the Fund’s then current net asset value (“NAV”). The NAV is the market value of one share of the Fund. This amount is derived by dividing the total value of all the securities in the Fund’s portfolio, plus any other assets, less any liabilities, by the number of Fund shares outstanding. The Fund cannot predict whether its common shares will trade at, above or below NAV. Shares of closed-end investment companies frequently trade at a discount from their NAV, which may increase investors’ risk of loss.

 

2    The premium/discount to NAV is calculated as the market price divided by the NAV of the Fund minus 1, expressed as a percentage. If this value is positive, the Fund is trading at a premium to its NAV. If the value is negative, the Fund is trading at a discount to its NAV.

 

3    The Fund is permitted to obtain leverage using any form or combination of financial leverage instruments, including through funds borrowed from banks or other financial institutions (i.e., a credit facility), margin facilities or notes issued by the Fund and the leverage attributable to similar transactions entered into by the Fund. The Fund’s use of leverage through a credit facility is calculated as a percentage of the Fund’s Managed Assets. Managed Assets are defined as total assets of the Fund (including assets attributable to borrowings for investment purposes) minus the sum of the Fund’s accrued liabilities (other than liabilities representing borrowings for investment purposes).

 

4    The Distribution Rate is calculated by annualizing the most recent distribution amount declared divided by the most recent closing Market Price or NAV. The Distribution Rate is subject to change and is not an indication of Fund performance. A portion of the Fund’s distributions will likely be treated for tax purposes as a return of capital. A return of capital is not taxable and results in a reduction in the tax basis of a shareholder’s investment. The final determination regarding the nature of the distributions will be made after the end of the Fund’s fiscal year when the Fund can determine its earnings and profits. The final tax status of the distribution may differ substantially and will be made available to shareholders after the close of each calendar year. The proportion of distributions that are treated as taxable distributions may also vary and/or increase in future years. The ultimate composition of these distributions may vary due to a variety of factors including projected income and expenses, depreciation and depletion, and any tax elections made by the underlying MLP investments.

 

  PERFORMANCE REVIEW

 

     December 1, 2021—May 31, 2022   Fund Total Return
(based on NAV)5
       Fund Total Return
(based on Market Price)5
 
    Common Shares     31.11        29.04

 

5    Total returns are calculated assuming purchase of a share at the market price or NAV on the first day and sale of a share at the market price or NAV on the last day of each period reported. Dividends and distributions, if any, are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. The Total Returns based on NAV and Market Price do not reflect brokerage commissions or sales charges in connection with the purchase or sale of Fund shares, which if included would lower the performance shown above. The NAV used in the Total Return calculation includes all management fees, interest expense (if any) and operating expenses incurred by the Fund. Operating expenses include custody, accounting and administrative services, professional fees, transfer agency fees, registration, printing and mailing costs and Trustee fees. Total returns for periods less than one full year are not annualized.

 

The returns set forth in the tables above represent past performance. Past performance does not guarantee future results. The Fund’s investment returns and principal value will fluctuate. Current performance may be lower or higher than the performance quoted above. Please visit our web site at www.GSAMFUNDS.com/CEF to obtain the most recent month-end returns. Closed-end funds, unlike open-end funds, are not continuously offered. Once issued in a public offering, shares of closed-end funds are traded in the open market through a stock exchange.

 

5


FUND BASICS

 

  TOP TEN HOLDINGS AS OF 5/31/22‡
     Holding   % of Net Assets      Line of Business
 

Energy Transfer LP

    9.5   

Pipeline Transportation | Natural Gas

 

MPLX LP

    9.4     

Gathering + Processing

 

Magellan Midstream Partners LP

    9.1     

Pipeline Transportation | Petroleum

 

Western Midstream Partners LP

    8.6     

Gathering + Processing

 

Enterprise Products Partners LP

    7.3     

Pipeline Transportation | Natural Gas

 

Plains All American Pipeline LP

    6.3     

Pipeline Transportation | Petroleum

 

The Williams Cos., Inc.

    5.7     

Gathering + Processing

 

Crestwood Equity Partners LP

    5.0     

Gathering + Processing

 

DCP Midstream LP

    4.9     

Gathering + Processing

   

Targa Resources Corp.

    4.3     

Gathering + Processing

 

  The top 10 holdings may not be representative of the Fund’s future investments.

 

FUND SECTOR ALLOCATIONS†

 

LOGO

 

 

  The Fund is actively managed and, as such, its composition may differ over time. Consequently, the Fund’s overall sector allocations may differ from the percentages contained in the graph above. The percentage shown for each investment category reflects the value of investments in that category as a percentage of total net assets. As a result of borrowings, the percentages may add to an amount in excess of 100%. Sector allocations are defined by GSAM and may differ from sector allocations used by the Alerian MLP Index.

 

For more information about the Fund, please refer to www.GSAMFUNDS.com. There, you can learn more about the Fund’s investment strategies, holdings, and performance.

 

6


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Schedule of Investments

May 31, 2022 (Unaudited)

 

Shares     Description       
Value
 
Common Stocks – 109.9%  
Gathering + Processing – 40.3%  
  446,478     Crestwood Equity Partners LP   $ 13,010,369  
  352,690     DCP Midstream LP     12,665,098  
  263,125     EnLink Midstream LLC     2,999,625  
  101,335     Hess Midstream LP Class A     3,302,508  
  742,488     MPLX LP     24,464,980  
  155,228     Targa Resources Corp.     11,179,520  
  395,793     The Williams Cos., Inc.     14,668,088  
  802,254     Western Midstream Partners LP     22,182,323  
   

 

 

 
      104,472,511  

 

 

 
Marketing | Retail – 0.5%  
  79,781     Suburban Propane Partners LP     1,360,266  

 

 

 
Marketing | Wholesale – 4.2%  
  103,366     CrossAmerica Partners LP     2,321,600  
  210,775     Sunoco LP     8,692,361  
   

 

 

 
      11,013,961  

 

 

 
Other – 2.0%  
  87,938     Archaea Energy, Inc. (PIPE)     1,753,484  
  170,396     Archaea Energy, Inc. Class A*     3,397,696  
  13,407     Fast Radius, Inc. (PIPE)(a)     7,098  
  34,371     Fast Radius, Inc. Founder Shares*(a)     17,811  
   

 

 

 
      5,176,089  

 

 

 
Other | Liquefaction – 6.3%  
  157,935     Cheniere Energy Partners LP     8,492,165  
  56,360     Cheniere Energy, Inc.     7,708,357  
   

 

 

 
      16,200,522  

 

 

 
Pipeline Transportation | Natural Gas – 22.4%  
  170,833     DTE Midstream LLC*     9,925,397  
  2,108,450     Energy Transfer LP     24,584,527  
  692,554     Enterprise Products Partners LP     18,989,831  
  77,044     TC Energy Corp.     4,456,225  
   

 

 

 
      57,955,980  

 

 

 
Pipeline Transportation | Petroleum – 29.2%  
  79,899     Delek Logistics Partners LP     4,284,185  
  97,621     Enbridge, Inc.     4,505,209  
  119,488     Holly Energy Partners LP     2,270,272  
  454,399     Magellan Midstream Partners LP     23,492,428  
  364,856     NuStar Energy LP     5,855,939  
  164,871     PBF Logistics LP     2,684,100  
  245,264     Pembina Pipeline Corp.     9,869,423  
  1,441,225     Plains All American Pipeline LP     16,415,553  
  440,101     Shell Midstream Partners LP     6,223,028  
   

 

 

 
      75,600,137  

 

 

 
Power Generation – 2.1%  
  84,868     Atlantica Sustainable Infrastructure PLC     2,770,940  
  84,923     Northland Power, Inc.     2,575,520  
   

 

 

 
      5,346,460  

 

 

 
Common Stocks – (continued)  
Production + Mining | Hydrocarbon – 2.3%  
  15,623     Diamondback Energy, Inc.   2,375,009  
  13,228     Pioneer Natural Resources Co.     3,676,590  
   

 

 

 
      6,051,599  

 

 

 
Services | Midstream – 0.6%  
  90,338     Rattler Midstream LP     1,543,877  

 

 

 
  TOTAL COMMON STOCKS  
  (Cost $238,698,445)   $ 284,721,402  

 

 

 

 

Units     Expiration
Date
   

Strike

Price

    Value  
Warrant* – 0.0%  
Special Purpose Acquisition Company – 0.0%  
 

Fast Radius, Inc. Private

 
  56,189         $11.50     $ 4,467  
 

Fast Radius, Inc. (PIPE)(a)

   
  67,035       02/11/2028       11.50       5,168  

 

 

 
  TOTAL WARRANTS  
  (Cost $84,283)     $ 9,635  

 

 

 
  TOTAL INVESTMENTS – 109.9%  
  (Cost $238,782,728)     $ 284,731,037  

 

 

 
  BORROWINGS – (10.6)%       (27,500,000

 

 

 
 
OTHER ASSETS IN EXCESS OF
     OTHER LIABILITIES – 0.7%

 
    1,955,456  

 

 

 
  NET ASSETS – 100.0%     $ 259,186,493  

 

 

 

 

The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets.

*

  Non-income producing security.

(a)

  Restricted securities are not registered under the Securities Act of 1933, as amended, and are subject to legal restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are subsequently registered. Disposal of these securities may involve time consuming negotiations and prompt sale at an acceptable price may be difficult. Total market value of Restricted securities amounts to $30,077, which represents approximately 0.0% of the Fund’s net assets as of May 31, 2022. See additional details below:

 

    Restricted Security    Acquisition
Date
     Cost  
 

Fast Radius, Inc. Founder Shares

     02/11/21      $  
  Fast Radius, Inc. (PIPE)      02/11/21        134,070  
  Fast Radius, Inc. (PIPE) Warrants      02/11/21         

 

 

Investment Abbreviations:

LLC

 

—Limited Liability Company

LP

 

—Limited Partnership

PIPE

 

—Private Investment in Public Equity

PLC

 

—Public Limited Company

 

 

The accompanying notes are an integral part of these financial statements.   7


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Statement of Assets and Liabilities

May 31, 2022 (Unaudited)

 

       

    

    

    

    

 
  Assets:

 

 

Investments of unaffiliated issuers, at value (cost $238,782,728)

  $ 284,731,037  
 

Cash

    1,168,307  
 

Foreign currencies, at value (cost $5,283)

    5,287  
 

Receivables:

 
 

Current taxes

    1,308,724  
 

Dividends

    231,128  
 

Prepaid state and local franchise taxes

    320,211  
 

Other assets

    19,446  
  Total assets     287,784,140  
   
  Liabilities:  
 

Payables:

 
 

Borrowings on credit facility

    27,500,000  
 

Professional fees

    274,367  
 

Management fees

    235,375  
 

Fund shares repurchased

    197,764  
 

Interest on borrowing

    89,307  
 

Distributions payable

    19,020  
 

Accrued expenses

    281,814  
  Total liabilities     28,597,647  
   
  Net Assets:  
 

Paid-in capital

    1,271,888,069  
 

Total distributable earnings (loss)

    (1,012,701,576
  NET ASSETS   $ 259,186,493  
 

Shares Outstanding $0.001 par value (unlimited shares authorized):

    16,110,650  
 

Net asset value per share:

    $16.09  

 

8   The accompanying notes are an integral part of these financial statements.


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Statement of Operations

For the Six Months Ended May 31, 2022 (Unaudited)

 

       

    

    

    

    

 
  Investment income:  
 

Dividends — unaffiliated issuers (net of foreign withholding taxes of $76,485)

  $ 8,856,479  
 

Dividends — affiliated issuers

    848  
 

Less: Return of Capital on Dividends

    (7,227,943
  Total investment income     1,629,384  
   
  Expenses:  
 

Management fees

    1,293,281  
 

Professional fees

    332,287  
 

Interest on borrowings

    185,867  
 

Trustee fees

    61,776  
 

Printing and mailing costs

    54,814  
 

Custody, accounting and administrative services

    44,262  
 

Transfer Agency fees

    7,850  
 

Other

    22,512  
  Total operating expenses     2,002,649  
 

Less — expense reductions

    (311
  Net operating expenses, before income taxes     2,002,338  
  NET INVESTMENT LOSS, BEFORE INCOME TAXES     (372,954
  Current and deferred tax benefit     27  
  NET INVESTMENT LOSS     (372,927
   
  Realized and unrealized gain (loss):  
 

Net realized gain (loss) from:

 
 

Investments — unaffiliated issuers

    1,144,682  
 

Foreign currency transactions

    (1,011
 

Current and deferred tax expense

    (81
 

Net change in unrealized gain (loss) on:

 
 

Investments — unaffiliated issuers

    60,640,351  
 

Unfunded PIPE commitment

    96,563  
 

Foreign currency translation

    3,375  
 

Current and deferred tax expense

    (4,320
  Net realized and unrealized gain     61,879,559  
  NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS   $ 61,506,632  

 

The accompanying notes are an integral part of these financial statements.   9


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Statements of Changes in Net Assets

 

        For the
Six Months Ended
May 31, 2022
(Unaudited)
     For the Fiscal
Year Ended
November 30, 2021
 
  From operations:     
 

Net investment loss, net of taxes

  $ (372,927    $ (2,367,624
 

Net realized gain, net of taxes

    1,143,590        71,564,544  
 

Net change in unrealized gain (loss), net of taxes

    60,735,969        (12,925,973
  Net increase in net assets resulting from operations     61,506,632        56,270,947  
      
  Distributions to shareholders:     
 

From distributable earnings

    (5,661,220      (10,656,942
      
  From share transactions:     
 

Cost of shares repurchased as a result of the Share Repurchase Program

    (1,066,165      (9,999,989
  Net decrease in net assets resulting from share transactions     (1,066,165      (9,999,989
  TOTAL INCREASE     54,779,247        35,614,016  
      
  Net assets:     
 

Beginning of period

    204,407,246        168,793,230  
 

End of period

  $ 259,186,493      $ 204,407,246  

 

10   The accompanying notes are an integral part of these financial statements.


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Financial Highlights

Selected Share Data for a Share Outstanding Throughout Each Period

 

        Goldman Sachs MLP and Energy Renaissance Fund  
        Six Months Ended
May 31, 2022
(Unaudited)
    Year Ended November 30,  
        2021     2020     2019     2018     2017  
  Per Share Data*            
 

Net asset value, beginning of period

  $ 12.62     $ 9.80     $ 37.08     $ 52.20     $ 54.45     $ 68.04  
 

Net investment loss(a)

    (0.02     (0.14 )(b)      (4.06     (1.08     (1.35     (1.89
 

Net realized and unrealized gain (loss)

    3.82       3.48       (21.31     (8.28     4.86       (5.94
 

Total from investment operations

    3.80       3.34       (25.37     (9.36     3.51       (7.83
 

Distributions to shareholders from net investment income

    (0.35     (0.65           (0.18     (3.87     (3.15
 

Distributions to shareholders from return of capital

                (1.91     (5.58     (1.89     (2.61
 

Total distributions

    (0.35     (0.65     (1.91     (5.76     (5.76     (5.76
 

Fund Share Transactions from Share Repurchase Program

    0.02       0.13                          
 

Net asset value, end of period

    16.09       12.62       9.80       37.08       52.20       54.45  
 

Market price, end of period

  $ 13.10     $ 10.44     $ 7.69     $ 35.28     $ 47.79     $ 51.03  
  Total return based on net asset value(c)     31.11     36.93     (70.47 )%      (18.85 )%      6.31     (12.32 )% 
  Total return based on market price(c)     29.04     44.36     (75.64 )%      (15.66 )%      3.86     (12.38 )% 
 

Net assets, end of period (in 000s)

    259,186       204,407       168,793       327,684       460,938       479,443  
 

Ratio of net expenses to average net assets after interest expense and tax benefit/(expenses)(d)

    1.63 %(e)      2.07     26.26     2.78     3.46     2.79
 

Ratio of net expenses to average net assets after interest expense and before tax benefit/(expenses)

    1.63 %(e)      1.83     26.27     3.48     2.88     3.03
 

Ratio of total expenses to average net assets before interest expense and tax benefit/(expenses)

    1.56 %(e)      1.74     2.21     1.77     1.65     1.68
 

Ratio of net investment loss to average net assets(f)

    (0.32 )%(e)      (1.17 )%      (25.67 )%      (2.09 )%      (2.28 )%      (2.78 )% 
 

Portfolio turnover rate(g)

    12     248     61     69     61     31
 

Asset coverage, end of period per $1,000(h)

  $ 10,425     $ 10,085     $     $ 2,618     $ 2,983     $ 2,998  

 

   *   On April 13, 2020, the Fund effected a 9-for-1 reverse share split. All per share data prior to April 13, 2020 has been adjusted to reflect the reverse share split.
  (a)   Calculated based on the average shares outstanding methodology.
  (b)   Reflects income recognized from special dividends which amounted to $0.03 per share and 0.23% of average net assets.
  (c)   Total returns are calculated assuming purchase of a share at the market price or NAV on the first day and sale of a share at the market price or NAV on the last day of the period reported. Dividends and distributions, if any, are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total return does not reflect brokerage commissions or sales charges in connection with the purchase or sale of Fund shares. Total returns for periods less than one full year are not annualized.
  (d)   Current and deferred tax expense/benefit for the ratio calculation is derived from the net investment income (loss), and realized and unrealized gains (losses).
  (e)   Annualized with the exception of tax expenses/(benefit) and interest expense (including breakage fees).
  (f)   Current and deferred tax expense/benefit for the ratio calculation is derived from the net investment income (loss) only.
  (g)   The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short term investments. If such transactions were included, the Fund’s portfolio turnover rate may be higher. On September 25, 2020, Goldman Sachs MLP and Energy Renaissance Fund acquired all of the net assets of Goldman Sachs MLP Income Opportunities Fund pursuant to an Agreement and Plan of Reorganization. Portfolio turnover excludes purchases and sales of securities by Goldman Sachs MLP Income Opportunities Fund (acquired fund) prior to the reorganization date.
  (h)   Calculated by dividing the Fund’s Managed Assets by the amount of borrowings outstanding under the credit facility at period end.

 

The accompanying notes are an integral part of these financial statements.   11


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Notes to Financial Statements

May 31, 2022 (Unaudited)

 

1. ORGANIZATION

 

The Goldman Sachs MLP and Energy Renaissance Fund (the “Fund”) is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”) and the Securities Act of 1933, as amended (the “1933 Act”). The Fund was organized as a Delaware statutory trust on July 7, 2014. The shares of the Fund are listed on the New York Stock Exchange (“NYSE”) and trade under the symbol “GER”.

Goldman Sachs Asset Management, L.P. (“GSAM”), an affiliate of Goldman Sachs & Co. LLC, serves as investment adviser to the Fund pursuant to a management agreement (the “Agreement”) with the Fund.

 

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and require management to make estimates and assumptions that may affect the reported amounts and disclosures. Actual results may differ from those estimates and assumptions. The Fund is an investment company under GAAP and follows the accounting and reporting guidance applicable to investment companies.

A.  Investment Valuation — The Fund’s valuation policy is to value investments at fair value.

B.  Investment Income and Investments — Investment income includes interest income, dividend income, net of any foreign withholding taxes, and less any amounts reclaimable. Interest income is accrued daily and adjusted for amortization of premiums and accretion of discounts. Dividend income is recognized on ex-dividend date or, for certain foreign securities, as soon as such information is obtained subsequent to the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Investment transactions are reflected on trade date. Realized gains and losses are calculated using identified cost. Investment transactions are recorded on the following business day for daily net asset value (“NAV”) calculations. Distributions from master limited partnerships (“MLPs”) are generally recorded based on the characterization reported on a Fund’s schedule K-1 received from the MLPs. The Fund records its pro-rata share of the income/loss and capital gains/losses, allocated from the underlying partnerships and adjust the cost basis of the underlying partnerships accordingly.

C.  Expenses — Expenses incurred by the Fund, which may not specifically relate to the Fund, may be shared with other registered investment companies having management agreements with GSAM or its affiliates, as appropriate. These expenses are allocated to the Fund on a straight-line and/or pro-rata basis depending upon the nature of the expenses and are accrued daily.

D.  Distributions to Shareholders — While the Fund seeks to distribute substantially all of the Fund’s distributable cash flow received as cash distributions from MLPs, interest payments received on debt securities owned by the Fund and other payments on securities owned by the Fund, less Fund expenses, in order to permit the Fund to maintain more stable quarterly distributions, the distributions paid by the Fund may be more or less than the amount of net distributable earnings actually earned by the Fund. These distributions could include a return of a shareholder’s invested capital which would reduce the Fund’s NAV.

The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with federal income tax rules, which may differ from GAAP. Certain components of the Fund’s net assets on the Statement of Assets and Liabilities reflect permanent GAAP/Tax differences based on the appropriate tax character.

E.  Income Taxes — The Fund does not intend to qualify as a regulated investment company pursuant to Subchapter M of the Internal Revenue Code of 1986, as amended, but will rather be taxed as a corporation. As a result, the Fund is obligated to pay federal, state and local income tax on its taxable income. The Fund invests primarily in MLPs, which generally are treated as partnerships for federal income tax purposes. As a limited partner in the MLPs, the Fund must report its allocable share of the MLPs’ taxable income or loss in computing its own taxable income or loss.

The Fund’s tax expense or benefit is included in the Statement of Operations based on the component of income or gains/ losses to which such expense or benefit relates. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Such temporary differences are principally: (i) taxes on unrealized gains/losses, which are attributable to the temporary difference between fair market value and tax basis, (ii) the net tax effects of temporary differences between the carrying amounts of assets and

 

12


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

 

 

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

 

liabilities for financial reporting and income tax purposes, and (iii) the net tax benefit of accumulated net operating losses and capital loss carryforwards. The Fund will accrue a deferred income tax liability balance, at the currently effective statutory United States (“U.S.”) federal income tax rate plus an estimated state and local income tax rate, for its future tax liability associated with the capital appreciation of its investments and the distributions received by the Fund on interests of MLPs considered to be return of capital and for any net operating gains. The Fund may also record a deferred tax asset balance, which reflects an estimate of the Fund’s future tax benefit associated with net operating losses, capital loss carryforwards, and/or unrealized losses.

To the extent the Fund has a deferred tax asset, consideration is given to whether or not a valuation allowance, which would offset the value of some or all of the deferred tax asset balance, is required. A valuation allowance is required if based on the evaluation criterion provided by Accounting Standards Codification (“ASC”) 740, Income Taxes (ASC 740) it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The factors considered in assessing the Fund’s valuation allowance include: the nature, frequency and severity of current and cumulative losses, the duration of the statutory carryforward periods and the associated risks that operating and capital loss carryforwards may expire unutilized. From time to time, as new information becomes available, the Fund will modify its estimates or assumptions regarding the deferred tax liability or asset. Unexpected significant decreases in cash distributions from the Fund’s MLP investments or significant declines in the fair value of its investments may change the Fund’s assessment regarding the recoverability of their deferred tax assets and may result in a valuation allowance. If a valuation allowance is required to reduce any deferred tax asset in the future, it could have a material impact on the Fund’s NAV and results of operations in the period it is recorded. The Fund will rely to some extent on information provided by MLPs, which may not be provided to the Fund on a timely basis, to estimate operating income/loss and gains/losses and current taxes and deferred tax liabilities and/or asset balances for purposes of daily reporting of NAVs and financial statement reporting. In addition, sales of MLP investments will result in allocations to the Fund of taxable ordinary income or loss and capital gain or loss, each in amounts that will not be reported to the Fund until the following year, in magnitudes often not readily estimable before such reporting is made.

It is the Fund’s policy to classify interest and penalties associated with underpayment of federal and state income taxes, if any, as income tax expense on its Statement of Operations. The Fund anticipates filing income tax returns in the U.S. federal jurisdiction and various states, and such returns are subject to examination by the tax jurisdictions. The Fund has reviewed all major jurisdictions and concluded that there is no significant impact on its net assets and no tax liability resulting from unrecognized tax benefits or expenses relating to uncertain tax positions expected to be taken on its tax returns.

Return of Capital Estimates — Distributions received from the Fund’s investments in MLPs generally are comprised of income and return of capital. The Fund records investment income and return of capital based on estimates made at the time such distributions are received. Such estimates are based on historical information available from each MLP and other industry sources. These estimates may subsequently be revised based on information received from MLPs after their tax reporting periods are concluded.

 

3. INVESTMENTS AND FAIR VALUE MEASUREMENTS

U.S. GAAP defines the fair value of a financial instrument as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price); the Fund’s policy is to use the market approach. GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. The levels used for classifying investments are not necessarily an indication of the risk associated with investing in these investments. The three levels of the fair value hierarchy are described below:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

 

13


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Notes to Financial Statements (continued)

May 31, 2022 (Unaudited)

 

3. INVESTMENTS AND FAIR VALUE MEASUREMENTS (continued)

 

Level 2 — Quoted prices in markets that are not active or financial instruments for which significant inputs are observable (including, but not limited to, quoted prices for similar investments, interest rates, foreign exchange rates, volatility and credit spreads), either directly or indirectly;

Level 3 — Prices or valuations that require significant unobservable inputs (including GSAM’s assumptions in determining fair value measurement).

The Board of Trustees (“Trustees”) has approved Valuation Procedures that govern the valuation of the portfolio investments held by the Fund, including investments for which market quotations are not readily available. The Trustees have delegated to GSAM day-to-day responsibility for implementing and maintaining internal controls and procedures related to the valuation of the Fund’s portfolio investments. To assess the continuing appropriateness of pricing sources and methodologies, GSAM regularly performs price verification procedures and issues challenges as necessary to third party pricing vendors or brokers, and any differences are reviewed in accordance with the Valuation Procedures.

A.  Level 1 and Level 2 Fair Value Investments The valuation techniques and significant inputs used in determining the fair values for investments classified as Level 1 and Level 2 are as follows:

Equity Securities — Equity securities traded on a United States (“U.S.”) securities exchange or the NASDAQ system, or those located on certain foreign exchanges, including but not limited to the Americas, are valued daily at their last sale price or official closing price on the principal exchange or system on which they are traded. If there is no sale or official closing price or such price is believed by GSAM to not represent fair value, equity securities will be valued at the valid closing bid price for long positions and at the valid closing ask price for short positions (i.e. where there is sufficient volume, during normal exchange trading hours). If no valid bid/ask price is available, the equity security will be valued pursuant to the Valuation Procedures approved by the Trustees and consistent with applicable regulatory guidance. To the extent these investments are actively traded, they are classified as Level 1 of the fair value hierarchy, otherwise they are generally classified ss Level 2. Certain equity securities containing unique attributes may be classified as Level 2.

Unlisted equity securities for which market quotations are available are valued at the last sale price on the valuation date, or if no sale occurs, at the last bid price, and are generally classified as Level 2.

Private Investments in Public Equities — The Fund invests in equity securities of an issuer that are issued through a private investment in public equity (“PIPE”) transaction. PIPE transactions typically involve the purchase of securities directly from a publicly traded company or its affiliates in a private placement transaction, typically at a discount to the market price of the issuer’s common stock. Securities purchased through PIPE transactions will be restricted from trading and generally considered illiquid until a registration statement for the shares is filed and declared effective. These securities are valued the same as other equity securities as noted above and generally include a Liquidity Valuation Adjustment (LVA), which is a discount to the market price of an issuer’s common stock, to reflect trading restrictions. The LVA is based on the length of the lock-up time period and volatility of the underlying security. Securities purchased through PIPE transactions are classified as Level 2 until such time as the trading restriction is removed.

Money Market Funds — Investments in the Goldman Sachs Financial Square Government Fund — Institutional Shares (“Underlying Money Market Fund”) are valued at the NAV on the day of valuation. These investments are generally classified as Level 1 of the fair value hierarchy. For information regarding an Underlying Money Market Fund’s accounting policies and investment holdings, please see the Underlying Money Market Fund’s shareholder report.

B.  Level 3 Fair Value Investments — To the extent that significant inputs to valuation models and other alternative pricing sources are unobservable, or if quotations are not readily available, or if GSAM believes that such quotations do not accurately reflect fair value, the fair value of the Fund’s investments may be determined under Valuation Procedures approved by the Trustees. GSAM, consistent with its procedures and applicable regulatory guidance, may make an adjustment to the most recent valuation prices of either domestic or foreign securities in light of significant events to reflect what it believes to be the fair value of the securities at the time of determining a Fund’s NAV. To the extent investments are valued using single source broker quotations obtained directly from the broker or passed through from third party pricing vendors, such investments are classified as Level 3 investments.

 

14


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

 

 

3. INVESTMENTS AND FAIR VALUE MEASUREMENTS (continued)

 

Special Purpose Acquisition Companies — The Fund invests in stock of, warrants to purchase stock of, and other interests in, special purpose acquisition companies or similar special purpose entities that pool funds to seek potential merger and acquisition opportunities (collectively, “SPACs”). SPACs are companies that have no operations but go public with the intention of merging with or acquiring a company using the proceeds of the SPAC’s initial public offering. Stock purchased in a SPAC’s initial public offering are valued the same as other equity securities as noted above. Certain private SPAC investments (e.g. “founder shares” and private warrants), however, may be subject to forfeiture or expire worthless if certain events do not take place. A Probability Value Adjustment (PVA) is applied to such securities until such contingencies have been satisfied. An LVA may also be applied to securities which are subject to externally imposed and legally enforceable trading restrictions. Such positions are generally classified as Level 3. The Fund may enter into an unfunded commitment to purchase securities in a PIPE transaction and will satisfy the commitment if and when the SPAC completes its merger or acquisition. The Fund may purchase securities in a SPAC PIPE transaction only upon such contingencies being satisfied. Such investments are valued similar to founder shares mentioned above and are generally classified as Level 3.

C. Fair Value Hierarchy — The following is a summary of the Fund’s investments classified in the fair value hierarchy as of May 31, 2022:

 

Investment Type    Level 1        Level 2        Level 3  
Assets             

Common Stock(a)

 

MLPs

            

North America

   $ 202,835,408        $        $         —  

Corporations

            

Europe

     2,770,940                    

North America

     79,090,145          24,909           

Warrants

              9,635           
Total    $ 284,696,493        $ 34,544        $  

 

(a)   Amounts are disclosed by continent to highlight the impact of time zone differences between local market close and the calculation of net asset value. Security valuations are based on the principal exchange or system on which they are traded, which may differ from country of domicile.

For further information regarding security characteristics, see the Schedule of Investments.

 

4. TAXATION

Total income taxes are computed by applying the federal statutory rate plus a blended state income tax rate. During the six months ended May 31, 2022, the Fund reevaluated its blended state income tax rate, decreasing the rate from 1.27% to 1.20% due to anticipated changes in state apportionment of income and gains and changes in the corporate tax rates. The reconciliation between the federal statutory income tax rate of 21% and the effective tax rate on net investment income/loss and realized and unrealized gain/loss is as follows:

 

Application of statutory income tax rate

   $ 12,916,490       21.00

State income taxes, net of federal benefit

     738,085       1.20

Change in estimated deferred tax rate

     216,413       0.35

Effect of permanent differences

     (130,178     (0.21 )% 

Provision to Return Adjustments

     3,565,709       5.80

Change in Valuation Allowance

     (17,302,145     (28.13 )% 

Total current and deferred income tax expense/(benefit), net

   $ 4,374       0.01

 

15


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Notes to Financial Statements (continued)

May 31, 2022 (Unaudited)

 

4. TAXATION (continued)

 

Deferred tax assets and liabilities are measured using effective tax rates expected to apply to taxable income in the years such temporary differences are realized or otherwise settled. At May 31, 2022, components of the Fund’s deferred tax assets and liabilities are as follows:

 

   
Deferred tax assets:   

Federal and state net operating loss carryforward — see table below for expiration

   $ 12,066,218  

State net operating loss carryforward

     689,498  

Capital loss carryforward (tax basis) — see table below for expiration

     70,612,609  

Other tax assets

     1,285,136  

Valuation Allowance

     (65,515,996

Total Deferred Tax assets

   $ 19,137,465  
Deferred tax liabilities:   

Book vs. tax partnership income to be recognized

   $ (5,021,778

Net unrealized gain on investment securities (tax basis)

     (14,115,687

Total Deferred Tax Liabilities

   $ (19,137,465

Net Deferred Tax Asset/(Liability)

   $  

At May 31, 2022, the Fund had net operating loss carryforwards, subject to expiration and limitation based on the fiscal year generated, as follows:

 

Expiration    Amount  

November 30, 2034

   $ 4,065  

November 30, 2035

     5,073,916  

November 30, 2036

     11,085,035  

November 30, 2037

     18,966,377  

November 30, 2038

     10,122,513  

Indefinite

     12,206,273  

The Tax Cuts and Jobs Act (“TCJA”) was signed into law on December 22, 2017. The TCJA made modifications to the net operating loss (“NOL”) deduction. The TCJA eliminated the NOL carryback ability and replaced the 20 year carryforward period with an indefinite carryforward period for any NOLs arising in tax years beginning after December 31, 2017. The TCJA also established a limitation for any NOLs generated in tax years beginning after December 31, 2017 to the lesser of the aggregate of available NOLs or 80% of taxable income before any NOL utilization.

The Coronavirus Aid, Relief, and Economic Stability Act (CARES Act) was signed into law on March 27, 2020. The CARES Act delays the application of the 80% net operating loss limitation, established under TCJA, to tax years ending November 30, 2022 and beyond.

At May 31, 2022, the Fund had capital loss carryforwards, subject to expiration and limitation based on the fiscal year generated, as follows:

 

Expiration    Amount  

November 30, 2024

   $ 80,555,708  

November 30, 2025

     237,519,106  

 

16


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

 

 

4. TAXATION (continued)

 

The Fund reviews the recoverability of its deferred tax assets based upon the weight of the available evidence. When assessing, the Fund’s management considers available carrybacks, reversing temporary taxable differences, and tax planning, if any. As a result of its analysis of the recoverability of its deferred tax assets, the Fund recorded the following valuation allowances as of May 31, 2022:

 

Goldman Sachs MLP and Energy Renaissance Fund

   $ 65,515,996  

As of May 31, 2022, components of the Fund’s current and deferred tax expense/(benefit) are as follows:

 

      Current        Deferred        Total  

Federal

   $        $ 16,120,648        $ 16,120,648  

State

     4,374          1,181,497          1,185,871  

Valuation Allowance

              (17,302,145        (17,302,145

Total

   $ 4,374        $        $ 4,374  

At May 31, 2022, gross unrealized appreciation and depreciation of investments, based on cost for federal income tax purposes was as follows:

 

Tax Cost

   $ 198,523,818  

Gross unrealized gain

     97,877,625  

Gross unrealized loss

     (11,670,406

Net unrealized gain (loss)

   $ 86,207,219  

Any difference between cost amounts for financial statement and federal income tax purposes is due primarily to wash sales and timing differences related to the tax treatment of partnership investments.

For the six months ended May 31, 2022, the Fund’s distributions are estimated to be comprised of 100% from taxable income and 0.00% return of capital. Shareholders will be informed of the final tax characterization of the distributions in February 2023. The Fund’s tax years ended November 30, 2018 through November 30, 2021 remain open for examination by U.S. and state tax authorities. Management of the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits or expenses will significantly change in the next 12 months.

 

5. AGREEMENTS AND AFFILIATED TRANSACTIONS

A.  Management Agreement — Under the Fund’s Agreement, GSAM manages the Fund, subject to the general supervision of the Board of Trustees.

As compensation for the services rendered pursuant to the Agreement, the assumption of the expenses related thereto and administration of the Fund’s business affairs, including providing facilities, GSAM is entitled to a management fee, accrued daily and paid monthly, equal to an annual percentage rate of 1.00% of the Fund’s average daily managed assets for the six months ended May 31, 2022. Managed assets are defined as total assets of the Fund (including any assets attributable to borrowings for investment purposes) minus the sum of all accrued liabilities (other than liabilities representing indebtedness for investment purposes).

The Fund invests in Institutional Shares of the Goldman Sachs Financial Square Government Fund, which is an affiliated Underlying Money Market Fund. GSAM has agreed to waive a portion of its management fee payable by the Fund in an amount equal to the management fee it earns as investment adviser to the affiliated Underlying Money Market Fund in which the Fund invests. For the six months ended May 31, 2022, GSAM waived $311 of the Fund’s management fees.

 

17


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Notes to Financial Statements (continued)

May 31, 2022 (Unaudited)

 

5. AGREEMENTS AND AFFILIATED TRANSACTIONS (continued)

 

B. Other Transactions with Affiliates — For the six months ended May 31, 2022, Goldman Sachs earned $9,248 in brokerage commissions from portfolio transactions on behalf of the Fund.

The table below shows the transactions in and earnings from investments in all affiliated fund as of and for the six months ended May 31, 2022:

 

Underlying Money Market Fund   

Beginning
Value as of

November 30, 2021

       Purchases
at Cost
       Proceeds
from Sales
      

Ending

Value as of

May 31, 2022

       Shares as of
May 31, 2022
       Dividend
Income
 

Goldman Sachs Financial Square Government Fund — Institutional Shares

   $        $ 9,367,819        $ (9,367,819      $                 $ 848  

C.  Financing Agreement The Fund has entered into an evergreen fixed/floating rate margin loan facility (the “Credit Facility”) with a major U.S. financial institution. The Credit Facility provides for borrowings in an aggregate amount up to $30,000,000. Borrowings under the Credit Facility, which are secured by certain assets of the Fund, bear interest subject to a Fund’s election of fixed rate and/or floating rate borrowings. The interest rates for the fixed rate borrowings are based on the lender’s internal fixed rates plus a mutually agreed-upon spread. The interest rates for the floating rate borrowings are based on variable rates (i.e., LIBOR) plus market spreads. The Fund also pays an unused commitment fee of 0.20% per annum. Interest is accrued daily and paid quarterly. Under the terms of the Credit Facility, in the event of an early termination of any fixed rate

borrowing(s), the Fund will receive or pay any gain or loss associated with the lender’s interest rate hedge, which could be material in certain circumstances, as well as any related termination costs (“Breakage Fees/Expenses”). For the six months ended May 31, 2022, the fund did not have any Breakage Fees.

The Fund had borrowings from December 1, 2021 through May 31, 2022. During this period the Fund had an average outstanding balance and weighted average annual interest rate of $25,068,681 and 1.404%, respectively. As of May 31, 2022, there was $27,500,000 of outstanding borrowings under the Credit Facility at a weighted average annual interest rate of 1.919%.

 

6. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long-term securities for the six months ended May 31, 2022, were $32,466,664 and $30,500,394, respectively.

 

7. OTHER RISKS

The Fund’s risks include, but are not limited to, the following:

Investments in Other Investment Companies — As a shareholder of another investment company, the Fund will indirectly bear its proportionate share of any net management fees and other expenses paid by such other investment companies, in addition to the fees and expenses regularly borne by the Fund.

Leverage Risk — The Fund may use leverage to seek to achieve its investment objective. The use of leverage creates an opportunity for increased net investment income dividends, but also creates risks for the investors. There is no assurance that the Fund’s intended leveraging strategy will be successful. Leverage involves risks and special considerations, including the likelihood of greater volatility of NAV, market price and dividend rate than a comparable portfolio without leverage; the risk that fluctuations in interest rates on borrowings and short-term debt or in the interest or dividend rates on any leverage that the Fund must pay will reduce the Fund’s return; the effect of leverage in a declining market, which is likely to cause a greater decline in the NAV than if the Fund were not leveraged, which may result in a greater decline in the market price; the investment advisory fees payable to the Investment Adviser will be higher than if the Fund did not use financial leverage; and that leverage may increase operating costs, which may reduce total return. The use of leverage may impact the Fund’s ability to declare dividends and distributions; the Fund

 

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GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

 

 

7. OTHER RISKS (continued)

 

is generally not permitted to declare cash dividends or other distributions unless, at the time of such declaration, the value of the Fund’s assets, less liabilities other than the principal amount of borrowings, is at least 300% of such principal amount (after deducting the amount of such dividend or distribution). This prohibition does not apply to privately arranged debt that is not intended to be publicly distributed (i.e., the Fund’s Credit Facility, as discussed above). Under the terms of the Credit Facility, in the event of an early termination of any fixed rate borrowing, the Fund will receive or pay any gain or loss associated with the lender’s interest rate hedge, which could be material in certain circumstances, as well as any related termination costs.

Liquidity Risk — The Fund may make investments that are illiquid or that may become less liquid in response to market developments or adverse investor perceptions. Illiquid investments may be more difficult to value.

Market and Credit Risks — An investment in the Fund represents an indirect investment in the securities owned by the Fund, a significant portion of which are traded on a national securities exchange. The value of these securities, like other investments, may move up or down, sometimes rapidly and unpredictably. The Fund may utilize leverage, which magnifies the market risk.

Additionally, the Fund may also be exposed to credit risk in the event that an issuer fails to perform or that an institution or entity with which the Fund has unsettled or open transactions defaults.

Market Discount Risk — Shares of closed-end investment companies frequently trade at a discount from their NAV. This characteristic is a risk separate and distinct from the risk that the Fund’s NAV could decrease as a result of its investment activities and may be greater for investors expecting to sell their shares in a relatively short period of time following completion of the Fund’s initial offering. Although the value of the Fund’s net assets is generally considered by market participants in determining whether to purchase or sell shares, whether investors will realize gains or losses upon the sale of their shares will depend entirely upon whether the market price of the shares at the time of sale is above or below the investor’s adjusted tax cost basis for the shares. Because the market price of the shares will be determined by factors such as (i) NAV, (ii) dividend and distribution levels and their stability (which will in turn be affected by levels of dividend and interest payments by the Fund’s portfolio holdings, the timing and success of the Fund’s investment strategies, regulations affecting the timing and character of Fund distributions, Fund expenses and other factors), (iii) supply of and demand for the shares, (iv) trading volume of the shares, (v) general market, interest rate and economic conditions and (vi) other factors that may be beyond the control of the Fund. The Fund cannot predict whether the shares will trade at, below or above NAV or at, below or above the initial public offering price.

Master Limited Partnership Risk — Investments in securities of MLPs involve risks that differ from investments in common stocks, including risks related to limited control and limited rights to vote on matters affecting the MLP, risks related to potential conflicts of interest between the MLP and the MLP’s general partner, cash flow risks, dilution risks, limited liquidity and risks related to the general partner’s right to require unit-holders to sell their common units at an undesirable time or price.

MLP Tax Risk. MLPs are generally treated as partnerships for U.S. federal income tax purposes. Partnerships do not pay U.S. federal income tax at the partnership level. Rather, each partner is allocated a share of the partnership’s income, gains, losses, deductions and expenses. A change in current tax law or a change in the underlying business mix of a given MLP could result in an MLP being treated as a corporation for U.S. federal income tax purposes, which would result in the MLP being required to pay U.S. federal income tax (as well as state and local income taxes) on its taxable income. This would have the effect of reducing the amount of cash available for distribution by the MLP and could result in a reduction in the value of the Fund’s investment in the MLP and lower income to the Fund.

To the extent a distribution received by the Fund from an MLP is treated as a return of capital, the Fund’s adjusted tax basis in the interests of the MLP will be reduced, which may increase the Fund’s tax liability upon the sale of the interests in the MLP or upon subsequent distributions in respect of such interests.

Non-Diversification Risk — The Fund is non-diversified, meaning that it is permitted to invest a larger percentage of its assets in one or more issuers or in fewer issuers than diversified mutual funds. Thus, the Fund may be more susceptible to adverse developments affecting any single issuer held in its portfolio, and may be more susceptible to greater losses because of these developments.

 

19


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Notes to Financial Statements (continued)

May 31, 2022 (Unaudited)

 

7. OTHER RISKS (continued)

 

Private Investment Risk — The Fund may invest in PIPE securities. PIPE transactions typically involve the purchase of securities directly from a publicly traded company or its affiliates in a private placement transaction, typically at a discount to the market price of the company’s common stock. In a PIPE transaction, the Fund may bear the price risk from the time of pricing until the time of closing. Equity issued in this manner is often subject to transfer restrictions and is therefore less liquid than equity issued through a registered public offering. The Fund may be subject to lock-up agreements that prohibit transfers for a fixed period of time. In addition, because the sale of the securities in a PIPE transaction is not registered under the Securities Act, the securities are “restricted” and cannot be immediately resold into the public markets. The ability of the Fund to freely transfer

restricted shares is conditioned upon, among other things, the SEC’s preparedness to declare the resale registration statement effective and the issuer’s right to suspend the Fund’s use of the resale registration statement if the issuer is pursuing a transaction or some other material non-public event is occurring. Accordingly, PIPE securities may be subject to risks associated with illiquid securities.

Sector Risk — To the extent the Fund focuses its investments in securities of issuers in one or more sectors (such as the energy sector), the Fund will be subject, to a greater extent than if its investments were diversified across different sectors, to the risks of volatile economic cycles and/or conditions and developments that may be particular to that sector, such as: adverse economic, business, political, environmental or other developments.

Special Purpose Acquisition Companies Risk — The Fund may invest in stock, warrants, and other securities of special purpose acquisition companies (“SPACs”) or similar special purpose entities that pool funds to seek potential acquisition opportunities. Because SPACs and similar entities are in essence blank check companies without operating history or ongoing business other than seeking acquisitions, the value of their securities is particularly dependent on the ability of the entity’s management to identify and complete a profitable acquisition. An investment in a SPAC is subject to a variety of risks, including that (i) a portion of the monies raised by the SPAC for the purpose of effecting an acquisition or merger may be expended prior to the transaction for payment of taxes and other purposes; (ii) prior to any acquisition or merger, a SPAC’s assets are typically invested in government securities, money market funds and similar investments whose returns or yields may be significantly lower than those of the Fund’s other investments; (iii) the Fund generally will not receive significant income from its investments in SPACs (both prior to and after any acquisition or merger) and, therefore, the Fund’s investments in SPACs will not significantly contribute to the Fund’s distributions to shareholders; (iv) an attractive acquisition or merger target may not be identified at all, in which case the SPAC will be required to return any remaining monies to shareholders; (v) if an acquisition or merger target is identified, the Fund may elect not to participate in the proposed transaction or the Fund may be required to divest its interests in the SPAC due to regulatory or other considerations, in which case the warrants or other rights with respect to the SPAC held by the Fund may expire worthless or may be repurchased or retired by the SPAC at an unfavorable price; (vi) any proposed merger or acquisition may be unable to obtain the requisite approval, if any, of SPAC shareholders; (vii) under any circumstances in which the Fund receives a refund of all or a portion of its original investment (which typically represents a pro rata share of the proceeds of the SPAC’s assets, less any applicable taxes), the returns on that investment may be negligible, and the Fund may be subject to opportunity costs to the extent that alternative investments would have produced higher returns; (viii) to the extent an acquisition or merger is announced or completed, shareholders who sell their shares prior to that time may not reap any resulting benefits; (ix) the Fund may be delayed in receiving any redemption or liquidation proceeds from a SPAC to which it is entitled; (x) an acquisition or merger once effected may prove unsuccessful and an investment in the SPAC may lose value; (xi) an investment in a SPAC may be diluted by additional later offerings of interests in the SPAC or by other investors exercising existing rights to purchase shares of the SPAC; (xii) only a thinly traded market for shares of or interests in a SPAC may develop, or there may be no market at all, leaving the Fund unable to sell its interest in a SPAC or to sell its interest only at a price below what the Fund believes is the SPAC interest’s intrinsic value; and (xiii) the values of investments in SPACs may be highly volatile and may depreciate significantly over time.

Strategy Risk — The Fund’s strategy of investing primarily in MLPs, resulting in its being taxed as a corporation, or a “C” corporation, rather than as a regulated investment company for U.S. federal income tax purposes, involves complicated accounting,

 

20


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

 

 

7. OTHER RISKS (continued)

 

tax and valuation issues. Volatility in the NAV may be experienced because of the use of estimates at various times during a given year that may result in unexpected and potentially significant consequences for the Fund and its shareholders.

Tax Risks — Tax risks associated with investments in the Fund include but are not limited to the following:

Fund Structure Risk. Unlike traditional mutual funds that are structured as regulated investment companies for U.S. federal income tax purposes, the Fund will be taxable as a regular corporation, or “C” corporation, for U.S. federal income tax purposes. This means the Fund generally will be subject to U.S. federal income tax on its taxable income at the rates applicable to corporations, and will also be subject to state and local income taxes.

Tax Estimation/NAV Risk. In calculating the Fund’s daily NAV, the Fund will, among other things, include its current taxes and deferred tax liability and/or asset balances and related valuation balances, if any. The Fund may accrue a deferred income tax liability balance, at the currently effective statutory U.S. federal income tax rate (currently 21%) plus an estimated state and local income tax rate, for its future tax liability associated with the capital appreciation of its investments and the distributions received by the Fund on interests of MLPs considered to be return of capital and for any net operating gains. Any deferred tax liability balance will reduce the Fund’s NAV which could have an effect on the market price of the shares. The Fund may also record a deferred tax asset balance, which reflects an estimate of the Fund’s future tax benefit associated with net operating losses, capital loss carryforwards, and/or unrealized losses. Any deferred tax asset balance will increase the Fund’s NAV to the extent it exceeds any valuation allowance which could have an effect on the market price of the shares. The Fund will rely to some extent on information provided by MLPs, which may not be provided to the Fund on a timely basis, to estimate current taxes and deferred tax liability and/or asset balances for purposes of financial statement reporting and determining its NAV. The daily estimate of the Fund’s current taxes and deferred tax liability and/or asset balances used to calculate the Fund’s NAV could vary significantly from the Fund’s actual tax liability or benefit, and, as a result, the determination of the Fund’s actual tax liability or benefit may have a material impact on the Fund’s NAV. From time to time, the Fund may modify its estimates or assumptions regarding its current taxes and deferred tax liability and/or asset balances as new information becomes available, which modifications in

estimates or assumptions may have a material impact on the Fund’s NAV.

 

8. INDEMNIFICATIONS

Under the Trust’s organizational documents, its Trustees, officers, employees and agents are indemnified, to the extent permitted by the Act and state law, against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the course of business, the Fund enters into contracts that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, GSAM believes the risk of loss under these arrangements to be remote.

 

9. OTHER MATTERS

Pursuant to an effort to consolidate the membership of the Board of Trustees of the Fund (the “Board”) with the Board of Trustees of each of Goldman Sachs Trust II, Goldman Sachs ETF Trust and Goldman Sachs Real Estate Diversified Income Fund, at a meeting held on July 22, 2021, the Board voted to nominate Cheryl K. Beebe and Lawrence Hughes for election as Class I Trustees and John F. Killian and Steven D. Krichmar as Class III Trustees (the “Nominees”) of the Fund at a virtual special joint meeting of shareholders held on December 3, 2021. Each of the Nominees currently serves as a Trustee of Goldman Sachs Trust II. If elected, the Nominees will serve as Trustees alongside the current Trustees of the Fund. The Fund will bear a portion of the proxy solicitation, shareholder meeting and other related costs and GSAM has agreed to reimburse the Fund if such expenses increase the Fund’s total expense ratio by more than a specified percentage. This annual report is not a proxy statement. Information regarding the election of the Nominees is contained in the proxy materials filed with the SEC. The proxy statement has been mailed to shareholders of record, and shareholders can also access the proxy statement, and any other relevant documents, on the SEC’s website.

 

21


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Notes to Financial Statements (continued)

May 31, 2022 (Unaudited)

 

10. SUMMARY OF SHARE TRANSACTIONS

 

Share Repurchase Program — At a meeting held on December 2, 2020, the Board of Trustees of the Fund approved a share repurchase program effective from January 2, 2021 through December 31, 2021 (the “Prior Repurchase Program”). Under the Prior Repurchase Program, the Fund was authorized to repurchase in the open market, up to $10 million of its outstanding common shares, if such shares were trading at a discount to NAV per share in excess of 10%, subject to certain conditions and in accordance with procedures approved by the Fund’s Board of Trustees. The share repurchases under the Prior Repurchase Program were completed on June 17, 2021. At a meeting held on April 19, 2022, the Board of Trustees of the Fund approved another share repurchase program effective from May 15, 2022 through April 30, 2023 (the “Current Repurchase Program”). Under the Current Repurchase Program, the Fund is authorized to repurchase in the open market, up to $10 million of its outstanding common shares, if such shares are trading at a discount to NAV per share in excess of 10%, subject to certain conditions and in accordance with procedures approved by the Fund’s Board of Trustees. The number of shares repurchased and their total costs for the six months ended May 31, 2022 and the fiscal year ended November 30, 2021 are reported in the table below.

Share activity is as follows:

 

    MLP and Energy Renaissance Fund
 

 

    For the Six Months Ended
May 31, 2022
(Unaudited)
   For the Fiscal Year Ended
November 30, 2021
 

 

Common Shares   Shares   Dollars    Shares    Dollars
 

 

Shares repurchased as a result of the Share Repurchase Program

  (83,754)   $(1,066,165)    (1,025,126)    $(9,999,989)

 

11. SUBSEQUENT EVENTS

Subsequent events after the Statement of Assets and Liabilities date, other than above have been evaluated and GSAM has concluded that there is no impact requiring adjustment or disclosure in the financial statements.

 

22


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

ADDITIONAL INFORMATION (Unaudited)

A.  Dividend Reinvestment Plan — Under the Dividend Reinvestment Plan (the “Plan”) for the Fund, dividends and/or distributions to a shareholder will automatically be reinvested in additional shares of the Fund. Each registered shareholder may elect to have dividends and distributions distributed in cash (i.e., “opt-out”) rather than participate in the Plan. For any registered shareholder that does not so elect (each, a “Participant” and collectively, “Participants”), dividends and/or distributions on such shareholder’s shares will be reinvested by the Computershare Trust Company, N.A (the “Plan Agent”), as agent for shareholders in administering the Plan, in additional shares, as set forth below. Participation in the Plan is completely voluntary, and may be terminated or resumed at any time without penalty by Internet, telephone or written notice if received and processed by the Plan Agent prior to the dividend record rate; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. Participants who hold their shares through a broker or other nominee and who wish to elect to receive any dividends and distributions in cash must contact their broker or nominee.

The Plan Agent will open an account for each shareholder under the Plan in the same name in which such shareholder is registered. Whenever the Fund declares a dividend or other distribution (together, a “Dividend”) payable in cash, non-participants in the Plan will receive cash and Participants will receive the equivalent in shares. The shares will be acquired by the Plan Agent for the Participants’ accounts, depending upon the circumstances described below, either through (i) receipt of additional unissued but authorized shares from the Fund (“Newly Issued Shares”) or (ii) by purchase of outstanding shares on the open market (“Open-Market Purchases”) on the NYSE or elsewhere.

If, on the payment date for any Dividend (the “Dividend Payment Date”), the NAV per share is equal to or less than the closing market price plus estimated per share fees (which include any applicable brokerage commissions the Plan Agent is required to pay) (such condition often referred to as a “premium”), the Plan Agent will invest the Dividend amount in Newly Issued Shares on behalf of the Participants. The number of Newly Issued Shares to be credited to each Participant’s account will be determined by dividing the dollar amount of the Dividend by the NAV per share on the Dividend Payment Date, provided that, if the NAV is less than or equal to 95% of the closing market price on the Dividend Payment Date, the dollar amount of the Dividend will be divided by 95% of the closing market price per share on the Dividend Payment Date. If, on the Dividend Payment Date, the NAV per share is greater than the closing market price per share plus per share fees (such condition referred to as a “market discount”), the Plan Agent will invest the Dividend amount in shares acquired on behalf of the Participants in Open-Market Purchases. During the Open Market Purchase Period (as defined below), the Plan Agent will purchase shares only if the market price of the shares plus estimated per share fees (which include any applicable brokerage commissions the Plan Agent is required to pay) is lower than the NAV per share as of the previous business day. Such Open-Market Purchases shall continue on each successive business day until the entire Dividend amount has been invested pursuant to Open-Market Purchases; provided, however, that if (a) the market discount shifts to a market premium, or (b) the Open Market Purchases have not been completed by the “Last Purchase Date” (as defined below), the Plan Agent will cease making Open-Market Purchases and shall invest the entire uninvested portion of the Dividend amount in Newly Issued Shares in the manner contemplated above.

The term “Last Purchase Date” shall mean the last business day before the next date on which the shares trade on an “ex-dividend” basis or 30 days after the Dividend Payment Date, whichever is sooner.

Open-market purchases may be made on any securities exchange where shares are traded, in the over-the-counter market or in negotiated transactions, and may be on such terms as to price, delivery and otherwise as the Plan Agent shall determine. It is contemplated that the Fund will pay quarterly Dividends.

The Plan Agent maintains all Participants’ accounts in the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by Participants for tax records. Shares in the account of each Participant will be held by the Plan Agent on behalf of the Participant in book entry form in the Plan Agent’s name or the Plan Agent’s nominee. Each shareholder proxy will include those shares purchased or received pursuant to the Plan. The Plan Agent will forward all proxy solicitation materials to Participants and vote proxies for shares held under the Plan in accordance with the instructions of the Participants.

In the case of shareholders such as banks, brokers or nominees which hold shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by the record shareholder and held for the account of beneficial owners who participate in the Plan.

Any stock dividends or split of shares distributed by the Fund on shares held by the Plan Agent for Participants will be credited to their accounts. In the event that the Fund makes available to its shareholders rights to purchase additional shares or other securities, the shares held for each Participant under the Plan will be added to other shares held by the Participant in calculating the number of rights to be issued to each Participant.

The Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by the Fund. However, each Participant will pay a per share (currently $0.05) fee incurred in connection with Open Market Purchases. If a Participant elects by telephone, Internet or written notice to the Plan Agent to have the Plan Agent sell all or a part of his or her shares and remit the

 

23


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

proceeds to the Participant, the Plan Agent is authorized to deduct a $15 sales transaction fee per trade and a per share fee of $0.12 from such proceeds. All per share fees include any applicable brokerage commissions the Plan Agent is required to pay.

If a Participant elects by telephone, Internet or written notice to the Plan Agent to have the Plan Agent sell all or a part of his or her shares and remit the proceeds to the Participant, the Plan Agent will process all sale instructions received no later than five (5) business days after the date on which the order is received. Such sale will be made through the Plan Agent’s broker on the relevant market and the sale price will not be determined until such time as the broker completes the sale. In each case, the price to each Participant shall be the weighted average sale price obtained by the Plan Agent’s broker net of fees for each aggregate order placed by the Plan Agent and executed by the broker. To maximize cost savings, the Plan Agent will seek to sell shares in round lot transactions. For this purpose, the Plan Agent may combine a Participant’s shares with those of other selling Participants.

Each Participant may withdraw shares or terminate his or her account under the Plan by so notifying the Plan Agent by telephone, through the internet or in writing prior to the dividend record date (each such notification, a “Termination Notice”). Such Termination Notice will be effective immediately so long as the Plan Agent receives a Termination Notice prior to any dividend or distribution record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. Upon any withdrawal or termination, the Plan Agent will cause to be delivered to each terminating Participant a statement of holdings for the appropriate number of the Fund’s whole book-entry shares and a check for the cash adjustment of any fractional share at the market value per share as of the close of business on the day the termination is effective less any applicable fee.

Upon receipt of a Dividend by a Participant, the Participant will be treated for federal income tax purposes as receiving a taxable distribution. As such, the automatic reinvestment of Dividends does not relieve Participants of any taxes which may be payable (or required to be withheld) on Dividends, even though no cash is received by the Participants. Participants will receive tax information annually for their personal records and to help them prepare their federal income tax return. For further information as to tax consequences of participation in the Plan, Participants should consult with their own tax advisors.

The Fund reserves the right to amend or terminate the Plan upon notice in writing to each Participant at least 30 days prior to any record date for the payment of any dividend or distribution by the Fund. There is no direct transaction fee to Participants with regard to purchases in the Plan; however, the Fund reserves the right to amend the Plan to include a transaction fee payable by the Participants. Notice will be sent to Participants of any amendments as soon as practicable after such action by the Fund.

All correspondence from a registered owner of shares concerning the Plan should be directed to the Plan Agent at Computershare Trust Company, N.A, P.O. 505000, Louisville, KY 40233, with overnight correspondence being directed to the Plan Agent at Computershare Trust Company, N.A, 462 South 4th Street, Suite 1600, Louisville, KY 40202; by calling 855-807-2742; or through the Plan Agent’s website at www.computershare.com/investor. Participants who hold their shares through a broker or other nominee should direct correspondence or questions concerning the Plan to their broker or nominee.

Fund Certification — The Fund is listed for trading on the NYSE. The Fund will continue to file their annual chief executive officer certifications regarding compliance with the NYSE’s listing standards no more than 30 days after the Fund’s annual shareholder meeting.

 

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GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

PRIVACY NOTICE

(Applicable only to individual, joint, and individual retirement account (IRA) investors)

The Goldman Sachs financial services companies endeavor to maintain the highest standards of confidentiality and to respect the privacy of our client relationships. In that regard, we are providing this Privacy Notice to our clients in accordance with Title V of the Gramm-Leach-Bliley Act of 1999 and its implementing regulations. This notice supplements any privacy policies or statements that we may provide in connection with specific products or services.

The Information We Collect About You. The non-public personal information we collect about you (your “Information”) comes primarily from the account applications or other forms you submit to us. We may also collect Information about your transactions and experiences with us, our affiliates, or others relating to the products or services we provide. Also, depending on the products or services you require, we may obtain additional Information from consumer reporting agencies.

Our Disclosure Policies. We do not disclose your Information to anyone, except as permitted by law. This may include sharing your Information with non-affiliated companies that perform support services for your account or process your transactions with us or our affiliates. It may also include sharing your Information with our affiliates to bring you the full range of services and products available from the Goldman Sachs family of financial services companies, including our U.S. and international brokerage, asset management, advisory, and trust services companies. Additionally, it may include disclosing your Information pursuant to your express consent, to fulfill your instructions, or to comply with applicable laws and regulations.

Our Information Security Policies. We limit access to your Information to those of our employees and service providers who are involved in offering or administering the products or services that we offer. We maintain physical, electronic, and procedural safeguards that are designed to comply with federal standards to safeguard your Information. If our relationship ends, we will continue to treat your Information as described in this Privacy Notice.

This notice is being provided on behalf of the following affiliates of The Goldman Sachs Group, Inc.:

Goldman Sachs Asset Management, L.P.

Goldman Sachs Asset Management International

GS Investment Strategies, LLC

Goldman Sachs Hedge Fund Strategies, LLC

The family of funds managed by the affiliates listed above

 

25


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Voting Results of Special Meeting of Shareholders (Unaudited)

 

A Special Meeting (the “Meeting”) of the Goldman Sachs MLP and Energy Renaissance Fund (the “Fund”) was held on December 3, 2021 to consider and act upon the proposal below. At the Meeting, Cheryl K. Beebe and Lawrence Hughes were elected as Class I Trustees and John F. Killian and Steven D. Krichmar were elected as Class III Trustees to the Fund’s Board of Trustees.

The shareholders of the Fund voted as follows:

 

Proposal 1

Election of Trustees

   For      Against/Withheld      Abstain  

Cheryl K. Beebe

     12,288,192        892,139        0  

Lawrence Hughes

     12,502,956        677,375        0  

John F. Killian

     12,254,107        926,224        0  

Steven D. Krichmar

     12,509,463        670,868        0  
        

Voting Results of Annual Meeting of Shareholders (Unaudited)

The Annual Meeting (the “Meeting”) of the Goldman Sachs MLP and Energy Renaissance Fund (the “Fund”) was held on March 24, 2022 to consider and act upon the proposal below. At the Meeting, Cheryl K. Beebe, Lawrence Hughes and Michael Latham were elected Class I Trustees to the Board of Trustees of the Fund.

The shareholders of the Fund voted as follows:

 

Proposal

Election of Trustees

   For      Against/Withheld      Abstain  

Cheryl K. Beebe

     12,647,892        644,337        0  

Lawrence Hughes

     12,601,604        690,625        0  

Michael Latham

     12,646,702        645,527        0  
        

In addition to the individuals named above, John F. Killian, Steven D. Krichmar, Linda A. Lang, Lawrence W. Stranghoener and James A. McNamara continued to serve on the Board of Trustees of the Fund.

 

26


GOLDMAN SACHS MLP AND ENERGY RENAISSANCE FUND

 

Impact of Russian Invasion of Ukraine (Unaudited)

 

The Russian invasion of Ukraine has negatively affected the global economy and has resulted in significant disruptions in financial markets and increased macroeconomic uncertainty. In addition, governments around the world have responded to Russia’s invasion by imposing economic sanctions and export controls on certain industry sectors, companies and individuals in or associated with Russia. Russia has imposed its own restrictions against investors and countries outside Russia and has proposed additional measures aimed at non-Russian-owned businesses. Businesses in the U.S. and globally have experienced shortages in materials and increased costs for transportation, energy and raw materials due, in part, to the negative effects of the war on the global economy. The escalation or continuation of the war between Russia and Ukraine or other hostilities presents heightened risks relating to cyber-attacks, the frequency and volume of failures to settle securities transactions, supply chain disruptions, inflation, as well as the potential for increased volatility in commodity, currency and other financial markets. The extent and duration of the war, sanctions and resulting market disruptions, as well as the potential adverse consequences for the Funds’ operations are difficult to predict.

 

27


FUNDS PROFILE

 

Goldman Sachs Closed-End Fund

 

Goldman Sachs is a premier financial services firm, known since 1869 for creating thoughtful and customized investment solutions in complex global markets.

Today, the Consumer and Investment Management Division of Goldman Sachs serves a diverse set of clients worldwide, including private institutions, public entities and individuals. With approximately $2.13 trillion in assets under management as of March 31, 2022, Goldman Sachs Asset Management (“GSAM”) has portfolio management teams located around the world and our investment professionals bring firsthand knowledge of local markets to every investment decision. GSAM’s assets under management includes assets managed by Goldman Sachs Asset Management, L.P. and its Investment Advisory Affiliates.

 

GOLDMAN SACHS CLOSED-END FUND

MLP and Energy Renaissance Fund

 

 

LOGO


TRUSTEES

Cheryl K. Beebe, Chair

Lawrence Hughes

John F. Killian

Steven D. Krichmar

Linda A. Lang

Michael Latham

James A. McNamara

Lawrence W. Stranghoener

 

OFFICERS

James A. McNamara, President

Joseph F. DiMaria, Principal Financial Officer, Principal Accounting Officer and Treasurer

Caroline L. Kraus, Secretary

Goldman Sachs Asset Management, L.P.

Investment Adviser

 

Dechert LLP

Legal Counsel

Computershare Trust Company, N.A.

and Computershare Inc.

Transfer Agent, Registrar and

Dividend Reinvestment Plan Agent

 

State Street Bank and Trust Company

Custodian

 

PricewaterhouseCoopers LLP

Independent Registered Public Accounting Firm

Goldman Sachs Asset Management, L.P., 200 West Street, New York, New York 10282

 

The reports concerning the Fund included in this shareholder report may contain certain forward-looking statements about the factors that may affect the performance of the Fund in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Fund, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Fund. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how a Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30, are available (I) without charge, upon request by calling 1-855-807-2742; and (II) on the Securities and Exchange Commission (“SEC’’) web site at http://www.sec.gov.

The Fund will file its portfolio holdings for each month in a fiscal quarter within 60 days after the end of the relevant fiscal quarter on Form N-PORT. Portfolio holdings information for the third month of each fiscal quarter will be made available on the SEC’s web site at http://www.sec.gov. Portfolio holdings information may be obtained upon request and without charge by calling 1-855-807-2742.

Fund holdings and allocations shown are as of May 31, 2022 and may not be representative of future investments. Fund holdings should not be relied on in making investment decisions and should not be construed as research or investment advice regarding particular securities. Current and future holdings are subject to risk.

The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice.

Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance.

Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only. This communication is not an offer to sell these securities and is not a solicitation to buy these securities in any jurisdiction where the offer or sale is not permitted.

“Alerian MLP Index”, and “AMZ” are trademarks of Alerian and their use is granted under a license from Alerian.

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time, each Fund may purchase, at market prices, shares of its common stock in the open market.

The Cushing® MLP High Income Index (the “Index”) is the exclusive property of Swank Capital, LLC, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) (“S&P Dow Jones Indices”) to maintain and calculate the Index. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed to S&P Dow Jones Indices. “Calculated by S&P Dow Jones Indices” and its related stylized mark(s) have been licensed for use by Swank Capital, LLC. Neither S&P Dow Jones Indices, SPFS, Dow Jones S&P nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.

This report is transmitted to the Fund’s shareholders only. It is not a prospectus. Investors should consider their investment goals, time horizons and risk tolerance before investing in the Fund. An investment in the Fund is not appropriate for all investors, and the Fund is not intended to be complete investment programs. Investors should carefully review and consider the Fund’s investment objective, risks, charges and expenses before investing.

© 2022 Goldman Sachs. All rights reserved. 284674-OTU-1636996 MLPCEFSAR-22


ITEM 2.

CODE OF ETHICS.

 

  (a)

As of the end of the period covered by this report, the Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Registrant or a third party (the “Code of Ethics”).

 

  (b)

Not applicable.

 

  (c)

During the period covered by this report, no amendments were made to the provisions of the Code of Ethics.

 

  (d)

During the period covered by this report, the Registrant did not grant any waivers, including an implicit waiver, from any provision of the Code of Ethics.

 

  (e)

Not applicable.

 

  (f)

A copy of the Code of Ethics is available as provided in Item 13(a)(1) of this report.

 

ITEM 3.

AUDIT COMMITTEE FINANCIAL EXPERT.

 

    

The Registrant’s board of trustees has determined that the Registrant has at least one “audit committee financial expert” (as defined in Item 3 of Form N-CSR) serving on its audit committee. Michael Latham is the “audit committee financial expert” and is “independent” (as each term is defined in Item 3 of Form N-CSR).

 

ITEM 4.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information required by this Item is only required in an annual report on this Form N-CSR.


ITEM 5.

AUDIT COMMITTEE OF LISTED REGISTRANTS.

 

    

The information required by this Item is only required in an annual report on this Form N-CSR.

 

ITEM 6.

SCHEDULE OF INVESTMENTS.

 

    

Schedule of Investments is included as part of the Report to Shareholders filed under Item 1.

 

ITEM 7.

DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

    

The information required by this Item is only required in an annual report on this Form N-CSR.

 

ITEM 8.

PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

  (a)

The information required by this Item is only required in an annual report on this Form N-CSR.

 

  (b)

Not applicable.

 

ITEM 9.

PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

 

    

There have been no purchases of equity securities by or on behalf of the Registrant of shares or other units of any registered class of the Registrant’s equity securities.


ITEM 10.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

 

    

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.

 

ITEM 11.

CONTROLS AND PROCEDURES.

 

  (a)

The registrant’s principal executive and principal financial officers, or persons performing similar functions have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934, as amended.

 

  (b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 12.

DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

    

The Registrant did not engage in securities lending activities during the fiscal period reported on this Form N-CSR.

 

ITEM 13.

EXHIBITS.

 

      (a)(1)   The Registrant’s Code of Ethics for Principal Executive and Senior Financial Officers is incorporated by reference to Exhibit 13(a)(1) of the Registrant’s Form N-CSR filed on February 4, 2022.
      (a)(2)   Exhibit 99.CERT    Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 filed herewith.
      (a)(3)      Not applicable.
      (a)(4)      There was no change in the registrant’s independent public accountant for the period covered by this report.
      (b)   Exhibit 99.906CERT    Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

         Goldman Sachs MLP and Energy Renaissance Fund
By:     /s/ James A. McNamara
    James A. McNamara
    President/Chief Executive Officer
    Goldman Sachs MLP and Energy Renaissance Fund
Date:     August 4, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:          /s/ James A. McNamara
    James A. McNamara
    President/Chief Executive Officer
    Goldman Sachs MLP and Energy Renaissance Fund
Date:     August 4, 2022
By:     /s/ Joseph F. DiMaria
    Joseph F. DiMaria
    Principal Financial Officer
    Goldman Sachs MLP and Energy Renaissance Fund
Date:     August 4, 2022
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