Northwater Market-Neutral Trust issues update on loss of qualfied investment status

Date: Thursday, July 23, 2009
Author: Investment Executive

Northwater Market-Neutral Trust will no longer qualify as a “qualified investment” for registered accounts as of July 29, Northwater Capital Management Inc. said Wednesday.

The Trust is a fund of hedge funds, units of which are listed on The
Toronto Stock Exchange under the symbol NMN.UN.

As previously announced by Northwater, it is anticipated that, as of the effective date of the initial termination distribution to unitholders on June 30, the percentage of certain illiquid holdings in relation to the trust’s assets is likely to exceed the 10% concentration limits required to qualify as a unit trust for Canadian income tax purposes.

This means the turst will no longer qualify as a mutual fund trust for Canadian income tax purposes and will no longer be a “qualified investment” for registered accounts,

While the effective date of the initial termination distribution is June 30, the actual payment of the initial termination distribution is anticipated to be made on or about July 29, the company said in a release

The 5rust said Wednesday that its net asset value per unit as at June 30 was $3.92. This net asset value reflects the quarterly cash distribution of 15¢ a unit and the initial termination distribution of $3.14 a unit previously declared to unitholders of record on June 30.

The return of the trust for the month of June is 0.27%. The rolling 12-month return for the Trust is -30.48%.