Marret Asset Management Inc.

Marret Asset Management Inc.

September 08, 2014 08:59 ET

Marret Asset Management Announces Proposal to Extend Marret Investment Grade Bond Fund

TORONTO, ONTARIO--(Marketwired - Sept. 8, 2014) - NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Marret Asset Management Inc. ("Marret") as the manager of the Marret Investment Grade Bond Fund (the "Fund") has announced a meeting of unitholders of the Fund to consider a proposed extension to the termination date of the Fund by five (5) years to October 31, 2019 (the "Continuation").

Absent unitholder approval of the Continuation, the Fund is expected to terminate on October 31, 2014. In connection with the Continuation, Marret is also proposing to: (i) amend the investment objectives, investment strategies and investment restrictions of the Fund to reflect generally the current investment objectives, investment strategies and investment restrictions of the underlying investment fund (the "Portfolio Trust"); (ii) amend the management fee provision in the management agreement between the Fund and the Marret in order to reflect the current aggregate management fee paid by the Fund and the Portfolio Trust; and (iii) set the annual redemption rights on the last business day of May of each year, beginning with May 31, 2016, in connection with the Continuation and extend the monthly redemption privileges set out in the declaration of trust of the Fund (collectively, the "Business of the Meeting").

In the event that the Business of the Meeting does not receive the requisite approval of unitholders of the Fund, or the Continuation is approved but the Fund receives redemption requests on the Termination Date resulting in the net asset value of the Fund decreasing below $50 million, then Marret shall not implement the Continuation and the Fund will terminate.

The reasons for the proposed Continuation are as follows: (i) the strong performance of the Fund equal to 5.57% per annum since inception; (ii) Marret believes that this is an opportune time to invest in investment grade debt securities; and (iii) many unitholders have expressed their interest in maintaining their investment in the Fund beyond October 31, 2014.

As a result of federal income tax changes in March 2013, the forward agreement (the "Forward Agreement") through which the Fund receives exposure to the portfolio of assets held by the Portfolio Trust (the "Portfolio") cannot be extended past its termination date of October 31, 2014 and the investment structure of the Fund must be modified to reflect direct investments in assets comprising the Portfolio after that date. Accordingly, the investment objectives, strategies and restrictions which currently govern the Fund must be modified, and Marret is proposing that they be modified to reflect generally the investment objectives, strategies and restrictions of the Portfolio Trust. The costs associated with the Continuation will be borne by the Fund.

On or before the Termination Date, the Fund will dispose of all of its assets that are subject to the Forward Agreement. This will trigger a realization of all accrued capital gains and losses in the Fund. The Fund is expected to realize net capital gains as a result of such dispositions under the Forward Agreement. As a result the Fund may be required to make a special distribution on or before the Termination Date.

The Fund has agreed to pay a fee to properly designated soliciting brokers equal to $0.10 per unit voted in favour of the Resolution, provided that such units are not redeemed on the October 31, 2014 redemption date and the Continuation is implemented.

The independent review committee of the Fund has reviewed the proposed Continuation and the process to be followed in connection with the proposed Continuation, including the proposed changes to the investment objectives, investment strategies and investment restrictions of the Fund and the proposed changes to the management fee payable by the Fund and, after due consideration and reasonable inquiry, concluded that the Continuation achieves a fair and reasonable result for the Fund.

Securityholder Meetings

Marret is proposing to hold a special meeting of unitholders of the Fund on October 2, 2014 in connection with the Business of the Meeting. The board of directors of Marret has fixed September 2, 2014 as the record date for determining those persons entitled to notice of and to attend and vote at the special meeting. Marret intends to mail a notice of meeting, management information circular containing information about the Business of the Meeting and form of proxy to unitholders of the Fund on or about September 11, 2014, copies of which will also be filed on SEDAR.

About Marret

Marret Asset Management Inc. specializes in fixed income and particularly in high-yield debt strategies. The experienced team of investment professionals is led by Barry Allan, President and Chief Investment Officer. He founded Marret in 2000, following a career at Altamira, Nesbitt Thomson and a Canadian chartered bank, and has over 30 years of experience in credit and fixed-income markets. Marret is 65% owned by CI Financial Corp.

About CI Financial Corp.

CI Financial Corp. (TSX:CIX) is an independent, Canadian-owned wealth management company with $131.8 billion in assets as of August 31, 2014. CI offers a broad range of investment products and services, including an industry-leading selection of investment funds, and is on the Web at www.cifinancial.com.

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