O'Leary Funds Management LP announces proposed transaction with Canoe Financial LP

MONTREAL, Oct. 15, 2015 /CNW Telbec/ - O'Leary Funds Management LP ("O'Leary" or the "Manager"), the manager of certain investment funds ("O'Leary Funds") has entered into an agreement (the "Asset Purchase Agreement") with Canoe Financial LP ("Canoe") pursuant to which Canoe has agreed to purchase the rights to manage the O'Leary Funds from the Manager, along with certain related assets, and Canoe has agreed to retain Stanton Asset Management Inc. ("Stanton") to act as sub-advisor in respect of certain O'Leary Funds and for Kevin O'Leary to enter into a part-time consulting agreement with Canoe pursuant to which he will act as Vice Chairman of Canoe following closing of the proposed transaction ("Proposed Transaction").

The Proposed Transaction is expected to be completed in January 2016, subject to, among other matters, receiving all necessary unitholder and regulatory approvals, as well as satisfying other conditions of closing.

Upon completion of the Proposed Transaction and subject to receipt of all necessary approvals, Canoe will become the trustee, manager and portfolio manager of the O'Leary Funds and all funds will undergo a name change to continue under the Canoe banner.  Certain of the O'Leary Funds will be merged into mutual funds managed by Canoe, while the remaining O'Leary Funds ("Continuing Funds") will change their investment objectives and strategies and adopt the form of master declaration of trust governing the Canoe mutual funds.  The Continuing Funds will also be asked to approve a proposal to replace the method in which certain operating expenses are charged to each fund with a fixed-rate administration fee which would be equal to a percentage of the net asset value ("NAV") of a series, calculated and paid in the same manner as the management fee for the series.  The rate of the annual administration fee will be tiered: one rate will apply to the first $250 million of NAV of the series, a lower rate will apply to the next tier where the NAV of the series is above $250 million and up to $750 million, and the lowest rate will apply to the amount in excess of $750 million of NAV of the series. The administration fee will be subject to GST, PST, HST and other applicable taxes.

Below is a summary of the proposed material changes to each of the O'Leary Funds:

 

Mutual Funds

Proposed material changes

O'Leary Canadian Balanced Income Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe Canadian Monthly Income Class on or about April 2016

O'Leary Canadian Bond Yield Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe Bond Advantage Fund on or about April 2016

O'Leary Canadian Dividend Fund
(to be renamed Canoe Canadian Dividend Fund)

  • Change of manager, trustee and portfolio manager
  • Amendment to master declaration of trust
  • Adopt a fixed administration fee in lieu of floating expenses
  • Change of investment strategies

O'Leary Canadian High Income Fund
(to be renamed Canoe Canadian High Income Fund) 

  • Change of manager, trustee and portfolio manager
  • Amendment to master declaration of trust
  • Adopt a fixed administration fee in lieu of floating expenses
  • Change of investment objectives and strategies
  • Merger into Canoe Equity Income Class no later than end of July 2016

O'Leary Conservative Income Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe Enhanced Income Fund on or about April 2016

O'Leary Emerging Markets Income Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe Global Equity Income Class on or about April 2016

O'Leary Floating Rate Income Fund
(to be renamed Canoe Floating Rate Income Fund)

  • Change of manager, trustee and portfolio manager
  • Appointment of Stanton as sub-advisor
  • Amendment to master declaration of trust
  • Adopt a fixed administration fee in lieu of floating expenses
  • Change of investment objectives and strategies

O'Leary Global Bond Yield Advantaged Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe Global Income Fund on or about April 2016

O'Leary Global Bond Yield Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe Strategic High Yield Fund on or about April 2016

O'Leary Global Dividend Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe Global Equity Income Class on or about April 2016

O'Leary Global Infrastructure Income Fund
(to be renamed Canoe Global Enhanced Income Fund)

  • Change of manager, trustee and portfolio manager
  • Amendment to master declaration of trust
  • Adopt a fixed administration fee in lieu of floating expenses
  • Change of investment objectives and strategies

O'Leary Global Growth & Income Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe North American Monthly Income Class on or about April 2016

O'Leary Tactical Income Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe Global Income Fund on or about April 2016

O'Leary US Strategic Yield Fund

  • Change of manager, trustee and portfolio manager
  • Merger into Canoe North American Monthly Income Class on or about April 2016

 

Closed-End Funds

Proposed material changes

Convertible Debentures Income Fund

  • Change of manager, trustee and portfolio manager
  • Merger into open-end fund, Canoe Canadian Asset Allocation Class on or about April 2016

Floating Rate Income Fund

  • Change of manager, trustee and portfolio manager
  • Merger into open-end fund, O'Leary Floating Rate Income Fund (to be renamed Canoe Floating Rate Income Fund) no later than end of July 2016

O'Leary Floating Rate Portfolio Trust (reference fund)

  • Change of manager, trustee and portfolio manager
  • Termination or wind-up into Floating Rate Income Fund no later than end of July 2016

O'Leary Canadian Diversified Income Fund

 

  • Change of manager, trustee and portfolio manager
  • Merger into open-end fund, Canoe Equity Income Class on or about April 2016

O'Leary US Strategic Yield Advantaged Fund

  • Change of manager, trustee and portfolio manager
  • Merger into open-end fund, Canoe North American Monthly Income Class no later than end of May 2016

O'Leary U.S. Portfolio Trust (reference fund)

  • Change of manager, trustee and portfolio manager
  • Termination or wind-up into O'Leary US Strategic Yield Advantaged Fund no later than end of May 2016

 

Unitholders of the relevant O'Leary Funds will be asked to approve the change of manager (and in certain cases the change of trustee), the mergers, the investment objectives change, the implementation of the fixed administration fee and the amendment to the declaration of trust at special meetings.  Details about the changes will be contained in the meeting materials to be mailed to unitholders.

The Manager has referred the Proposed Transaction to the Independent Review Committee (the "IRC") of the O'Leary Funds, which acts in an advisory capacity representing the interests of the funds and unitholders with respect to conflict of interests matters.  The IRC has been asked to review the proposals and determine that, if implemented, each proposal would achieve a fair and reasonable result for the O'Leary Funds.

Change to hedged/unhedged strategies

The Manager has also determined to amend the strategies of all Hedged and Unhedged series of units (as such terms are defined in the Simplified Prospectus of the O'Leary Funds) in order to allow the Manager the flexibility to hedge or not hedge such portion of the foreign currency exposure of the assets of any series of each of the O'Leary Funds (from 0% to 100%) as the Manager determines is in the best interests of the relevant O'Leary Fund, given market conditions from time to time.

More information about the Proposed Transaction and other changes is set out in the simplified prospectus of the O'Leary mutual funds, which will become available on SEDAR at www.sedar.com and the Manager's website at www.olearyfunds.com.

Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to the future outlook of the Funds and anticipated distributions, events or results and may include statements regarding the future financial performance of the Funds. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "anticipate", "believe", "intend" or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information.

About O'Leary Funds Management LP

O'Leary Funds Management LP is a Canadian investment fund manager of mutual funds and closed-end funds striving to provide Canadian investors with reliable and strategic income solutions. Based on its value-yield investment philosophy, Canadian and global investment opportunities are identified through a disciplined investment process. Its core principles, Income, Capital Appreciation and Capital Preservation, are driven by each portfolios investment objectives. Our portfolios are diversified by sector, region and asset class. For more details about O'Leary Funds, visit www.olearyfunds.com.

About Canoe Financial LP

Founded in 2008, Canoe Financial LP is an investment management firm focused on building financial wealth for Canadians. Canoe is Canada's fastest-growing independent mutual fund company and currently manages approximately $3 billion in assets across a diversified range of award-winning mutual funds, flow-through limited partnerships and private energy equity products.  Canoe has expanded from its Calgary head office to across Canada, including a significant presence in Toronto and offices in Vancouver, Winnipeg and Ottawa. To learn more about Canoe Financial and its investment products, visit www.canoefinancial.com.

 

SOURCE O'LEARY FUNDS MANAGEMENT LP

For further information: For media inquiries or additional information, please contact Louise Anne Poirier, Investor Relations at info@olearyfunds.com or at 877-849-2004 or 514-849-1056.

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O'LEARY FUNDS MANAGEMENT LP

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Canoe Financial LP

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