Diversified Alpha Fund II has closed its initial public offering, raising $48 million, reports the fund’s manager, Toronto-based Propel Capital Corp.
The units began trading Thursday on the Toronto Stock Exchange under the symbol AFT.UN.
The fund provides unitholders exposure to a diversified portfolio of investments managed by GMP Investment Management.
GMP uses its proprietary process of capital allocation and risk management to invest both long and short, across its four core asset strategies of equities, credit, quantitative (primarily options and futures contracts), and cash.
The fund’s investment objectives are to: preserve capital; maximize risk adjusted absolute returns while minimizing down-side volatility; and provide investors with quarterly, tax-advantaged distributions.
The distributions are initially targeted to be 6.0% per year on the subscription price of $10.00 per unit ($0.15 per Unit per quarter or $0.60 per year).
The fund will not have a fixed distribution amount but will determine and announce in June and December of each year an indicative distribution amount for the following two quarters.
The syndicate of agents for this offering is being led by CIBC, GMP Securities L.P., and RBC Capital Markets, and includes BMO Capital Markets, Scotia Capital Inc., TD Securities Inc., Canaccord Genuity Corp., HSBC Securities (Canada) Inc., Macquarie Private Wealth Inc., Raymond James Ltd., Desjardins Securities Inc., Dundee Securities Ltd and Manulife Securities Inc.
The fund has granted the agents for the offering an over-allotment option to acquire up to an additional 15% of units issued at a price of $10 per share exercisable at any time during the next 30 days.