MONTREAL, May 10, 2013 /CNW Telbec/ - O'Leary Funds Management LP, the
manager (the "Manager") of O'Leary Strategic Yield Advantaged Class (a
corporate class of O'Leary Funds Inc., the "Terminating Fund") and
O'Leary Strategic Yield Plus Fund (the "Continuing Fund" and together
with the Terminating Fund, the "Funds") announces that it will seek
approval of the Terminating Fund's shareholders to merge the
Terminating Fund into the Continuing Fund (the "Merger").
Alternatively, in the event the Merger is not approved, the Manager
will seek shareholder approval for the termination of the Terminating
On March 21, 2013 the federal budget of the Government of Canada
proposed amendments to the Income Tax Act which are expected to
eliminate the tax advantages of character conversion transactions
employed by tax forward structures at the end of the term of the
relevant forward contract. The Terminating Fund's forward contract is
set to expire on December 29, 2014.
The Government of Canada has given some guidance with respect to the
interpretation of the budget proposals and the Manager's current
understanding is that the Terminating Fund may continue to use the
Forward Contract until the expiration of its term but that no new
subscriptions in the Fund may be used to extend the size of the forward
contract. Given the fact that the Terminating Fund is relatively small
in size, with approximately $10 million of assets under management, and
given that the Terminating Fund cannot grow significantly in size
through the use of its alternate strategy to "invest directly in fixed
income and/or dividend paying equity securities" as set out in its
objectives, without eroding the tax benefits of the forward contract
for the Terminating Fund and the unitholders as a whole, the Manager
has determined that it is in the best interests of the Terminating
Fund's investors to merge the Terminating Fund into the Continuing
Fund, which has investment objectives which are substantially similar
to the reference fund of the Terminating Fund.
The Manager has obtained approval from the Investment Review Committee
of the Terminating Fund for the Merger, which has determined that the
Merger achieves a fair and reasonable result for each of the Funds. The
Merger has also been approved by the Boards of Directors of O'Leary
Funds Inc. and of the Manager, which is the manager of both Funds. A
meeting of the shareholders of the Terminating Fund will be held on
June 28, 2013, in order to obtain approval of the Merger and subsequent
winding up and dissolution of the Terminating Fund and O'Leary Funds
Inc. For the purpose of the Meeting, the record date will be May 28,
2013. The Merger will be implemented on or about June 28, 2013, upon
receipt of all necessary approvals from the shareholders and, if
required, from the securities regulatory authorities under applicable
regulation. Pursuant to the Merger, the assets of the Terminating Fund
will be transferred to the Continuing Fund and existing shareholders of
the Terminating Fund will receives units of corresponding series of the
Continuing Fund in exchange for their shares of the Terminating Fund.
Upon completion of the Merger, the Terminating Fund and O'Leary Funds
Inc. will be dissolved. Should the shareholders of the Terminating
Fund vote not to proceed with the Merger, the shareholders will be
asked to approve the winding up and dissolution of the Terminating Fund
and O'Leary Funds Inc.
The Merger should eliminate the administrative and regulatory costs of
operating the Terminating Fund as a separate mutual fund, which is a
greater burden on smaller funds.
Shareholders of the Terminating Fund may redeem their shares prior to
the Merger in compliance with the redemption provisions of the
Terminating Fund, and will continue to have the right to redeem their
shares up to the close of business on the last business day before the
date of the Merger.
Post-Merger, shareholders of the Terminating Fund will benefit from the
same management fees as they currently pay pre-Merger.
Once all operational steps required to implement the Merger are
completed, former shareholders of the Terminating Fund will be able to
redeem the new series of units of the Continuing Fund on a daily basis
at their net asset value via FundSERV and will benefit from the same
rights with respect to switches, reclassifications and conversions into
other mutual funds managed by the Manager.
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 our
value-yield investment philosophy, Canadian and global investment
opportunities are identified through a disciplined investment process.
Our core principles, Income, Capital Appreciation and Capital
Preservation, are driven by each portfolio's investment objectives. Our
portfolios are diversified by sector, region and asset class. For more
details about O'Leary Funds, visit www.olearyfunds.com.
SOURCE: O'Leary Funds Management LP
For further information:
for media inquiries or additional information, please contact Louise Anne Poirier, Investor Relations at firstname.lastname@example.org or at 877-849-2004 or 514-849-1056.