Northwater Market-Neutral Trust update on fund termination

Date: Monday, November 17, 2008
Author: Northwater Capital Management Press Release

TORONTO, Nov. 13 /CNW/ - The Northwater Market-Neutral Trust (the "Trust") announced today that it is actively raising cash in anticipation of the Trust's termination on December 31, 2009. The Trust's investment advisor, Northwater Capital Management Inc. (the "Advisor"), has submitted redemptions for all of the hedge funds in which the Trust is invested. The majority of the redemptions that have been submitted are for a December 31, 2008 redemption date.

Given the turmoil in the markets and conditions affecting many of the hedge funds in which the Trust is invested, certain of the hedge funds for which redemptions have been submitted have invoked gates or other liquidity constraints. Others may do so. The Manager is monitoring the liquidity of the Trust's investments as the market turmoil continues. The Trust will provide periodic updates on its progress in redeeming from the hedge funds held in its portfolio.

Cash received from the hedge funds from which it has redeemed is being used to: << - support its currency hedging program, which has been necessary given recent declines in the Canadian dollar - reduce the Trust's leverage by paying down its investment borrowing facility - fund its re-purchase programs - make quarterly distributions, and - pay the Trust's expenses >> Cash remaining will be invested by the Trust in highly rated Canadian money market instruments prior to it being distributed.

Units of the Northwater Market-Neutral Trust are listed on The Toronto Stock Exchange under the symbol NMN.UN.