TORONTO, Jan. 22 /CNW/ - The Northwater Market-Neutral Trust (the
"Trust") announced today that the net asset value of the Trust per unit as at
December 31, 2008 is $7.40. This net asset value reflects the distribution of
$0.16 per Unit previously declared to unitholders of record on December 31,
2008. The return of the Trust for the month of December is -4.97%. The rolling
12-month return for the Trust is -31.23%.
In addition, the Trust has concluded that no special distribution of the
Trust's net income and realized capital gains will be required to ensure that
the Trust will not be liable to pay income tax under Part I of the Income Tax
For the month of December, 7 of the Trust's 24 managers posted positive
returns, while 4 of the 10 market-neutral strategies included within the
Trust's portfolio added to the bottom line. Specifically, the Trust's mortgage
structured finance managers, in aggregate, were the largest negative
contributors to the estimated return of the Trust for the month.
The hedge fund industry, like other market participants, has been subject
to the exceptional and unprecedented turmoil in the markets due to the ongoing
credit crisis that has resulted in losses in the Trust's hedge fund portfolio,
particularly during the last four months of 2008.
Based on the redemptions that have been submitted, the Manager
anticipates that, as of December 31, 2008, approximately 48% of the hedge fund
portfolio will no longer retain exposure to underlying hedge fund market
Based on the information that the Manager has available to it as of the
date hereof, the Manager anticipates that approximately 41% of the net asset
value of the Trust may be subject to restrictions on liquidity that could
extend beyond December 31, 2009 (the "Termination Date"). The Manager will be
actively seeking an orderly liquidation of the underlying funds prior to the
Termination Date. In some instances, the Trust will have exposure to the
particular investment strategy engaged in by a hedge fund until the Trust's
redemption in the hedge fund has been paid. The Manager will periodically
update investors as to its progress in liquidating the Trust's portfolio in
subsequent press releases as additional information becomes available.
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.
The Northwater Market-Neutral Trust is a well-diversified fund of
market-neutral 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