GMP Capital Trust posted a net loss for the fourth quarte, hurt mainly by investment losses and charges.

GMP also announced Friday that its board has decided to convert the fund from an income trust to a “growth-oriented, dividend-paying corporation.”

It expects to pay an initial dividend of 5¢ a share.

GMP reported a net loss of $17.5 million for the fourth quarter, compared with a net profit of c$23.8 million a year earlier.

The financial crisis intensified during the quarter, resulting in significant equity market volatility, which led to sudden broad-based declines in equity valuations and a sharp contraction in overall business activity, the company said.

GMP said latest-quarter results include losses of $13.4 million related to principal activities and a $9.8 million non-cash goodwill impairment charge related to its 2006 acquisition of private equity firm EdgeStone Capital Partners.

“Fiscal 2008, and particularly fourth quarter 2008, will undoubtedly be remembered as one of the most challenging times that financial services industry participants have ever experienced,” said CEO Kevin Sullivan.

Full-year revenue was $291.9 million, with net income of $26.2 million, while the trust’s distributable cash tumbled to $55.78 million, or 91¢ per unit from $171 million, $2.73 per unit.

The proposed conversion is subject to unitholder, Toronto Stock Exchange, court, regulatory and other approval. A special meeting of unitholders will be held in conjunction with the fund’s annual general meeting on May 8.

If approved, the conversion is expected to occur by mid-May.

GMP Capital Trust carries on business through GMP Securities L.P., Griffiths McBurney Corp., GMP Securities Europe LLP, GMP Private Client L.P., EdgeStone Capital Partners, L.P. and GMP
Investment Management L.P.

IE