TORONTO, June 19 /CNW/ - The Northwater Market-Neutral Trust (the
"Trust") announced today that the net asset value of the Trust per unit as at
May 31, 2009 is $7.20. The return of the Trust for the month of May is 0.48%.
The rolling 12-month return for the Trust is -30.81%. The Trust also announced
that it has declared a regular quarterly distribution to be payable to
unitholders of record on June 30, 2009 in the amount of $0.15 per unit. This
distribution is expected to be paid on July 29, 2009.
For the month of May, 13 of the Trust's 20 managers posted positive
returns, while all 9 market-neutral strategies included within the Trust's
portfolio added to the bottom line. Specifically, the Trust's Structured
Finance strategy was the largest positive contributor to the estimated return
of the Trust for the month.
The Trust relies on estimates provided by administrators or managers of
each of the Trust's underlying hedge funds. Occasionally, these estimates may
be revised and the Trust will be required to capture these revisions in
subsequent net asset value calculations. The net asset value of the Trust is
also affected by the finalization of the net asset value by the administrators
of the underlying hedge funds.
Subject to limits set out in the Trust's prospectus, the Trust is
required to purchase its units in the market in the event that the market
price falls below 92.5% of the net asset value of the Trust. The Trust also
makes purchases of its units pursuant to a normal course issuer bid. The Trust
did not purchase any units under these programs during the month.
Initial Termination Distribution
As announced previously, the Trust has started to affect the monetization
of the hedge fund portfolio in anticipation of the termination of the Trust on
December 31, 2009 (the "Termination Date"). The Trust will be making an
initial termination distribution ("Initial Termination Distribution") in
anticipation of the Termination Date in the amount of $3.14 per unit to
unitholders of record on June 30, 2009. The Initial Termination Distribution
is expected to be paid on July 29, 2009.
Potential Tax Implications following Initial Termination Distribution
As previously announced in press releases released by the Manager since
January 2009, it is anticipated that the percentage of certain illiquid
holdings in relation to the Trust's assets is likely to exceed the 10%
concentration limits required in order for the Trust to continue to qualify as
a unit trust for Canadian income tax purposes.
If and when the Trust fails to qualify as a unit trust it will no longer
qualify as a mutual fund trust for Canadian income tax purposes and the Trust
will no longer be a "qualified investment" for registered accounts, including
without limitation, RRIF's, RRSP's and RESP's. The Manager anticipates that
the Trust will lose its "qualified investment" status on or about June 30th,
2009. Investors are advised to speak with their advisors as soon as possible
to obtain tax advice regarding the anticipated failure of the Trust to
maintain its "qualified investment" status, and the appropriate movement of
any investment in the Trust out of registered accounts.
The Northwater Market-Neutral Trust is a fund of hedge funds. Units are
listed on The Toronto Stock Exchange under the symbol NMN.UN.
For further information:
For further information: Mohamed Khaki at Northwater Capital Management
Inc. at (416) 360-5435