TORONTO, Jan. 6 /CNW/ - The Northwater Market-Neutral Trust (the "Trust") announced today that the projected net asset value of the Trust per unit as at December 31, 2009 is $3.76. This net asset value reflects the quarterly cash distribution of $0.08 per unit previously declared to unitholders of record on December 31, 2009 but does not take into account any additional special distribution that the Trust may be required to make so that the Trust will not be liable to pay income tax under Part I of the Income Tax Act. It is not currently anticipated that any such special distribution will be required to be made.
The return of the Trust for the month of December is estimated at 0.02%. The rolling 12-month return for the Trust is approximately -0.70%. The Trust relies on estimates provided by administrators and/or managers of each of the Trust's underlying hedge funds. The estimates received by the Trust from such administrators and/or managers of the Trust's underlying hedge funds may differ from the final reported monthly returns of such underlying hedge funds.
The Trust will firm up its net asset value per unit and the return of the Trust for the month as reports from administrators and managers are updated. The final net asset value per unit and the final return of the Trust will be provided to investors once they are available. It is possible that the final net asset value per unit and the final return of the Trust for the month may differ from the preliminary estimates provided herein.
Update on Status of Wind-up
The Trust today is also providing investors with a further update on the scheduled termination of the Trust on December 31, 2009 (the "Termination Date") and the Trust's expectations regarding the Trust's ongoing efforts to liquidate the remaining assets of the Trust.
As announced previously, market conditions have caused many underlying hedge funds held by the Trust to invoke various restrictions on redemptions including, without limitation, restricting redemptions to a limited percentage of the aggregate net asset value of such underlying hedge funds, the temporary suspension of redemptions altogether, or the commencement of a controlled liquidation and wind-up of the underlying hedge fund's business. This has prevented the Trust from being able to proceed with the distribution of the remaining assets of the Trust to unitholders and has forced the Trust to continue to exist beyond the Termination Date.
Based on the information that Northwater Fund Management Inc. (the "Manager") had available to it at the time, the Manager anticipates that approximately 50% of the underlying assets of the Trust were subject to restrictions on liquidity at December 31, 2009. However, the Manager continues to actively seek alternative means of affecting the monetization of the underlying hedge fund portfolio of the Trust in an effort to distribute the proceeds to unitholders as soon as practicable. The elimination of the currency hedging program at year end will allow the Trust to release cash that was previously required to be reserved for the purposes of settling the Trust's obligations under the currency hedging program.
In accordance with the terms of the prospectus and other offering documents of the Trust, the Trust will release the final net asset value of the Trust at December 31, 2009 not later than 15 business days after December 31, 2009. It is necessary for the Trust to determine the final net asset value of the Trust in order to determine the amount of cash available for distribution to unitholders.
As previously announced by the Manager, the Toronto Stock Exchange ("TSX") delisted units of the Trust and the Trust ceased trading on the TSX effective as of December 31, 2009. Regardless of the delisting of units of the Trust on December 31, 2009, the Trust will continue to exist and unitholders will have a right to the return of their pro rata share of the assets of the Trust as such assets are liquidated and cash becomes available for distribution to unitholders.
SOURCE Northwater Market-Neutral Trust
For further information: For further information: Dan Mills, at Northwater Capital Management Inc., at (416) 360-2101