Northwater Market-Neutral Trust - Preliminary net asset value - November 30, 2007 and year-end distribution

    TORONTO, Dec. 5 /CNW/ - The Northwater Market-Neutral Trust (the "Trust")
announced today that the projected net asset value of the Trust per unit as at
November 30, 2007 is $13.74.
    The return of the Trust for the month of November is estimated at -1.07%.
The rolling 12-month return for the Trust is approximately 4.83%. The Trust
will finalize its net asset value per unit as reports from administrators and
managers are finalized. The final net asset value per unit will be provided to
investors once it is available.
    For the month of November, 16 of the Trust's 38 hedge funds posted
positive returns, while four of the 12 market-neutral strategies included
within the Trust's portfolio added to the bottom line. Specifically, the
Trust's reinsurance strategy managers, in aggregate, were the largest
contributors to the estimated return of the Trust for the month.
    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 Trust is required to distribute all of its income and realized gains
so that it is not liable to pay income taxes. The Manager anticipates that
there will be an announcement of a special distribution to unitholders of
record on December 31, 2007. This distribution will enable the Trust to pay
out all of its income and realized gains and will be in addition to the
Trust's regular fourth-quarter distribution. The extent of this special
distribution is largely a result of foreign currency gains realized as a
result of the Trust's currency hedging program. The Trust's currency hedging
program was established at the Trust's inception to reduce the foreign
currency risk associated with the underlying hedge fund investments, which are
denominated in U.S. dollars. The amount of the special distribution, currently
estimated to be $2.80 per unit, is very preliminary and is likely to change,
possibly significantly, particularly as a result of continuing volatility in
the currency markets. Unitholders will be notified of the full amount of the
special distribution on or about January 22, 2008. The special distribution
and the regular fourth quarter distribution will be paid together and are
expected to be paid to unitholders on or about January 29, 2008.
    It is anticipated that a substantial portion of this distribution will be
income for tax purposes.
    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, including
the impact of its trading and currency hedging programs up to and including
December 31, 2007.

    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 or Stephen Foote at Northwater
Capital Management Inc. at (416) 360-5435

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Northwater Market-Neutral Trust

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