TORONTO, Dec. 18 /CNW/ - The Northwater Market-Neutral Trust (the "Trust") announced today that the net asset value of the Trust per unit as at November 30, 2009 is $3.84. This reflects a return of the Trust for the month of November of 0.26%. The rolling 12-month return for the Trust is -6.04%.
The Trust also announced today that it has declared the final regular quarterly distribution to be payable to unitholders of record on December 31, 2009 in the amount of $0.08 per unit. This distribution is expected to be paid on January 29, 2010.
As previously announced, the initial termination distribution in anticipation of the December 31, 2009 (the "Termination Date") scheduled termination date of the Trust was paid to unitholders of record as of June 30, 2009. Upon the year-end termination of the currency hedge program in anticipation of the Termination Date and through further liquidation of the illiquid underlying hedge fund positions held by the Trust, it is anticipated that additional cash will become available to allow the Trust to make additional termination distributions to unitholders.
In addition, the Trust is required to distribute all of its net income and realized capital gains, so that the Trust will not be liable to pay income tax under Part I of the Income Tax Act. The Trust cannot, therefore, finalize the amount of the distribution declared until all of its net income and realized capital gains for 2009, if any, have been ascertained. It is not currently anticipated that any such special distribution will be required for 2009. However, if such a special distribution is required to be made after the Trust's net income and realized capital gains for 2009 have been ascertained, the special distribution would be expected to be paid on January 29, 2010.
The final character of the distribution for tax purposes and the amount will be determined in accordance with the agreement establishing the Trust and in accordance with the Income Tax Act (Canada). The Trust will finalize the amount of the distribution after its results have been determined for the year ending December 31, 2009.
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.
The Manager continues to actively seek to monetize the underlying hedge funds in the portfolio and distribute the proceeds to unitholders as quickly as is practicable. In the event that the Manager pursues an alternative means of monetizing any underlying hedge fund positions, it is likely that the value achieved through such alternative monetization of underlying hedge fund positions may differ substantially from the net asset values and estimates received from administrators or managers of the Trust's 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 did not purchase any units under this program during the month.
Northwater Fund Management Inc. (the "Manager"), in its capacity as manager of the Trust, previously advised unitholders that the Trust lost its "qualified investment" status for registered accounts with effect from July 29, 2009. The Trust has provided investors with periodic updates on the Net Asset Values and the status of the termination of the Trust. Investors are advised to refer to the press releases containing these updates.
Delisting of Trust Units from the TSX
As previously advised by the Manager, the Toronto Stock Exchange (the "TSX") has expressed concern about the continued listing of units of the Trust on the TSX and suggested that it may be necessary to delist the units of the Trust on or about December 31, 2009. The TSX informed the Manager this morning of its decision to delist the units of the Trust effective as of December 31, 2009.
The Manager continues to actively seek to monetize the underlying hedge fund portfolio and distribute the proceeds to unitholders as quickly as is practicable. 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.
Notwithstanding the fact that the Trust will continue to exist until all of its assets are able to be liquidated and returned to unitholders, the TSX has determined that, in order to maintain the listing, a formal unitholder meeting would have been required. The Manager's view is that the cost of holding such a unitholder meeting would have outweighed the benefit of maintaining the listing. The Manager is keen to minimize the costs of the Trust in an effort to maximize proceeds to unitholders.
The Trust has provided investors with periodic updates on the scheduled termination of the Trust on December 31, 2009, and on the Net Asset Value of the Trust. Investors are advised to refer to the press releases containing these updates.
SOURCE Northwater Market-Neutral Trust
For further information: For further information: Dan Mills at Northwater Capital Management Inc. at (416) 360-2101