Marret Multi-Strategy Income Fund to terminate; portfolio’s bonds tied to firms in bankruptcy

By Toni Weeks

San Luis Obispo, Calif., Dec. 18 – Marret Asset Management Inc. said that Marret Multi-Strategy Income Fund will terminate, according to a press release.

The decision to terminate the fund was made after receipt of annual redemption requests for about C$14.5 million, which, if processed, would result in the fund becoming too small to obtain adequate diversification when divided across four investment portfolios.

The private portfolio consists of bonds issued by Toronto-based Cline Mining Corp., a resource development company with coal, gold, iron ore, oil and gas and uranium assets, and Vaughan, Ont.-based Data & Audio-Visual Enterprises Holdings Inc., which owns and operates a mobile communications network under the Mobilicity name. Both Cline and Data & Audio-Visual are involved in bankruptcy proceedings.

The private portfolio is about C$3 million in size. It currently makes up 9.13% of the net asset value but if the redemption requests were processed on Dec. 31 it would make up 16.75% of the net asset value.

The net assets of the fund will be distributed to unitholders in two stages. First, unitholders of record as of Jan. 19 will receive on or about Jan. 22 a distribution of their pro rata amount of the net proceeds received by the fund from redeeming securities of the reference trust equal to the value of the liquid assets of the trust, less the liabilities of the fund. Secondly, the fund will redeem its remaining securities of the trust and distribute to unitholders the net proceeds at a later date, once the trust has liquidated the asset not included in its liquid portfolio.

Marret also announced that the fund will pay a distribution of C$0.15 per unit on or before Jan. 15 to holders of class A and class F units as of Dec. 31.

Toronto-based Marret Asset Management specializes in fixed-income, high-yield debt strategies.

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