Folio Asset Management Limited

Folio Asset Management Limited

November 26, 2008 09:22 ET

Canadian Diversified Resource Investment Listed Liquidity Fund ("DRILL") Files Preliminary Prospectus

TORONTO, ONTARIO--(Marketwire - Nov. 26, 2008) - Folio Asset Management Limited (the "Manager") is pleased to announce that a preliminary prospectus for the Canadian Diversified Resource Investment Listed Liquidity Fund ("DRILL" or the "Fund') has been filed with the securities regulatory authorities of Ontario.

DRILL's investment objective of the Fund is to provide investors with exposure to an actively managed portfolio (the "Portfolio") and to also provide holders ("Investors") of Trust Units with the opportunity for long-term capital appreciation.

Benefits of the Offering include:

- An extensive list of Exchange Eligible Issuers which may provide current investors with additional liquidity given current market conditions,

- Investors will realize a capital loss/gain for tax purposes on the Exchange Option,

- Opportunity to reposition an existing portfolio,

- Enhanced liquidity to Investors by combining the holdings of the Exchange Eligible Issuers, some of which do not currently offer significant liquidity, and

- Active management of the Fund.

The Manager has retained Fiera Capital Inc. to provide investment advisory and portfolio management services to the firm. Fiera is an independent Canadian investment management firm with more than $17 billion in assets under management.

The Fund has been created to invest in:

1) publicly traded equity and convertible debt securities of Canadian oil and gas and service company issuers;


2) investments in private Canadian oil and gas and service company issuers.

The Portfolio Advisor will use a combination of a value-based, bottom-up fundamental analysis and top-down analysis to identify Oil & Gas Issuers, as well as Private Issuers, for the Portfolio that the Portfolio Advisor believes will offer the potential for capital appreciation.

The Portfolio Advisor initially intends to focus on securities with:

- high cash flow and free cash flow yields on invested capital;

- those with low multiples to cash flow and net asset value based on below market price assumptions;

- those that have undervalued, in-development oil and gas reserves that are expected to grow in value as they advance to production;

- those at the pre-development stage with reserves that the Portfolio Advisor considers to have a high probability of commercial viability;

- those that represent trading opportunities driven by financing needs and liquidity events related to capital structure; and

- those that represent discounted financing opportunities, particularly those with additional leverage from warrants.

The Fund proposes to issue units (the "Units") of the Fund (the "Offering") at a price of $10.00 per Unit. Each Unit consists of one transferable trust unit ("Trust Unit") and one Trust Unit purchase warrant ("Warrant"). The Units will separate into Trust Units and Warrants upon the earlier of the closing of the Over-Allotment Option and the 30th trading day following the closing of the Offering. Each Warrant entitles the holder to purchase one Trust Unit at a subscription price of, (i) $10.00 on May 15, 2009, (ii) $11.00 on May 17, 2010, and (iii) $12.00 on May 16, 2011. Warrants not exercised on or before 5:00 p.m. (Toronto time) on May 16, 2011 will be void and of no value.

The Fund will use the net proceeds of the Offering (including any net proceeds from the exercise of the Over-Allotment Option), together with any borrowings, to invest in the Portfolio in accordance with the investment objective, strategy and restrictions of the Fund as soon as possible after closing.

Research Capital Corporation along with a syndicate consisting of Canaccord Capital Corporation, Blackmont Capital Inc., Desjardins Securities Inc., GMP Securities L.P., Raymond James Ltd., Wellington West Capital Markets Inc., Haywood Securities Inc. and MGI Securities Inc. (collectively the 'Agents") will act as agent for the Offering.

For more information or a list of the Exchange Eligible Issuers, please visit

Certain statements included in this news release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect", "intend", "will" and similar expressions to the extent they relate to the Fund. The forward-looking statements are not historical facts but reflect the Fund's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although the Manager believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. The Manager undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

A preliminary amended and restated prospectus dated November 25, 2008 containing important information relating to these securities has been filed with securities commissions or similar authorities in certain jurisdictions of Canada. The preliminary prospectus is still subject to completion or amendment. Copies of the preliminary prospectus may be obtained from any of the Agents. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.

All capitalized terms noted herein but not defined are as per the preliminary amended and restated prospectus dated November 20, 2008.

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