The Northwater Five-Year Market-Neutral Trust is actively raising cash in Northwater Five-Year Market-Neutral Fund Ltd., the hedge fund portfolio to which it has exposure, in anticipation of the trust’s termination on June 30, 2009, the trust announced Thursday.

The fund’s investment advisor, Northwater Capital Management Inc. has submitted redemptions for all of the hedge funds in which the fund is invested and to which the trust has exposure. The majority of the redemptions that have been submitted are for a Dec. 31, 2008 redemption date.

Given the turmoil in the markets and conditions affecting many of the hedge funds in which the trust is invested, certain of the hedge funds for which redemptions have been submitted have invoked gates or other liquidity constraints. Others may do so. Northwater Capital Managment is monitoring the liquidity of the fund’s investments as the market turmoil continues, the trust said in a release.

The frust will provide periodic updates on the fund’s progress in redeeming from the hedge funds held in its portfolio.

Units of the Northwater Five-Year Market-Neutral Trust are listed on the Toronto Stock Exchange under the symbol NYF.UN.

IE