IA Clarington Investments Inc. has filed a preliminary prospectus for an initial public offering of units for IA Clarington Aston Hill Tactical Yield Fund, the company announced Thursday.
The fund will be actively managed by Catapult Financial Management Inc., and Ben Cheng will be the lead portfolio manager responsible for the fund.
The fund’s investment strategy is to invest primarily in: Canadian common and preferred equity securities and income trust units that provide a consistent and stable source of current income; and fixed income securities, including high yield corporate debt securities, cash and cash equivalents.
Each of the equity portion and the fixed income portion generally will represent between one-third and two-thirds of the portfolio. Catapult will determine the allocation based on its view of market opportunities at the time of investment.
The fund aims to provide unitholders with monthly cash distributions, initially targeted to be 5¢ per unit, or 6 per cent per unit annually on the original offering price of $10.
It also aims to maximize total returns for unitholders, consisting of both cash distributions and capital appreciation, while reducing risk and preserving capital.
The fund proposes to issue units at $10.00 a piece. Each unit consists of one transferable trust unit and one trust unit purchase warrant. The units will separate into trust units and warrants upon the earlier of the closing of the over-allotment option and the 30th day following the closing of the offering.
Each warrant entitles the holder to purchase one trust unit at $10.00 per trust unit on or before 17:00 ET on April 29, 2011. Warrants not exercised by that date will be void and of no value.
On or before April 30, 2012, the fund will automatically either convert to an open-ended mutual fund, or merge with an open-ended mutual fund on a tax-deferred basis, to be managed by IA Clarington or an affiliate.
Prospective purchasers may purchase units either by cash payment or an exchange of freely-tradable securities. Click here for a list of eligible securities.
Prospective purchasers under the exchange option will be required to deposit their eligible exchange securities prior to 17:00 ET on March 26.
IE