PURPOSE INVESTMENTS INC. ANNOUNCES FUND CHANGES AND ENHANCEMENTS TO FUNDS MANAGED BY REDWOOD ASSET MANAGEMENT INC.

Purpose Investments Inc. (“Purpose”) is pleased to announce the next phase of enhancements to certain Redwood Asset Management Inc. (“Redwood”) investment funds. In an effort to significantly improve and simplify the experience for investors and advisors, Redwood – a wholly owned subsidiary of Purpose – has recently lowered fees, enhanced strategies, and announced plans to launch ETF series or classes of select funds.  Purpose is now proposing to further streamline the fund lineup, subject to applicable regulatory and securityholder approvals.

“Our vision at Purpose is to provide investors with access to innovative solutions that help drive better portfolio outcomes,” said Som Seif, Purpose President and Chief Executive Officer. “When we took over management of these assets on behalf of our clients and investors in December 2017, we shared our vision to improve the products through strategy enhancements and lower fees. Today, we are delivering on those promises with immediate benefits to our clients and investors. The proposed changes are expected to provide total cost savings of approximately 20% on average.”

Specifically, and subject to all required securityholder and regulatory approvals, Redwood is proposing the following fund mergers (the “Mergers”):

 

TERMINATING FUND CONTINUING FUND
Redwood Global Resource Fund

(formerly LOGiQ Global Resource Fund)

Purpose Global Resource Fund

(formerly Redwood Resource Growth & Income Fund and LOGiQ Resource Growth and Income Class)

Redwood Energy Income Fund

(formerly LOGiQ Advantage Oil & Gas Income Fund)

Purpose Global Resource Fund

(formerly Redwood Resource Growth & Income Fund and LOGiQ Resource Growth and Income Class)

Redwood Tactical Equity Fund

(formerly LOGiQ Tactical Equity Class)

 

Purpose Global Innovators Fund

(formerly Redwood Global Innovators Fund,

Redwood Global Opportunities Fund and LOGiQ Global Opportunities Class)

Redwood Total Return Fund

(formerly LOGiQ Total Return Fund)

 

Purpose Global Innovators Fund

 (formerly Redwood Global Innovators Fund,

Redwood Global Opportunities Fund and LOGiQ Global Opportunities Class)

Redwood Growth Fund

(formerly LOGiQ Growth Fund)

Purpose Special Opportunities Fund

(formerly Redwood Special Opportunities Fund and LOGiQ Special Opportunities Class)

Redwood Global Balanced Income Fund

(formerly LOGiQ Global Balanced Income Class)

Purpose Multi-Asset Income Fund

(formerly Redwood High Income Fund

and LOGiQ High Income Fund)

Redwood  Balanced Income Fund

(formerly LOGiQ Balanced Monthly Income Class)

Purpose Multi-Asset Income Fund

(formerly Redwood High Income Fund

and LOGiQ High Income Fund)

Redwood Monthly Income Fund

(formerly LOGiQ VIP Income Fund)

Purpose Multi-Asset Income Fund

(formerly Redwood High Income Fund

and LOGiQ High Income Fund)

Redwood Advantage Monthly Income Fund

(formerly LOGiQ Advantage VIP Income Fund)

Purpose Multi-Asset Income Fund

(formerly Redwood High Income Fund

and LOGiQ High Income Fund)

Redwood Global Financials Income Fund

(formerly Global Capital Securities Trust)

Purpose US Preferred Share Fund

(formerly Redwood U.S. Preferred Share Fund)

Redwood Floating Rate Bond Fund

(formerly Voya Diversified Floating Rate Senior Loan Fund)

Purpose Floating Rate Income Fund

(formerly Redwood Floating Rate Income Fund

and Voya Floating Rate Senior Loan Fund)

If all necessary approvals are obtained, the Mergers will be effective on or about April 23, 2018 (the “Effective Date”).

In accordance with applicable legal requirements, securityholders of each of the Terminating Funds and of Purpose Global Innovators Fund, Purpose US Preferred Share Fund, Purpose Multi-Asset Income Fund and Purpose Floating Rate Income Fund will be required to approve their Mergers.  Such securityholders will receive a Notice of Meeting and a Management Information Circular in accordance with applicable securities laws. The required securityholder approvals will be sought at special meetings to be held on or about April 17, 2018 for securityholders of record as of March 12, 2018.

Redwood Energy Income Fund, Redwood Monthly Income Fund, Redwood Advantage Monthly Income Fund, Redwood Global Financials Income Fund and Redwood Floating Rate Bond Fund are each Terminating Funds structured as closed-end funds (the “Closed-End Terminating Funds”).  Should the Mergers involving the Closed-End Terminating Funds be approved, it is expected their units will be delisted from the Toronto Stock Exchange (“TSX”) at the close of business on the day prior to the Effective Date, subject to the approval of the TSX and in accordance with any conditions of such approval.  Securityholders of the Closed-End Terminating Funds will not be able to trade their units on the TSX after the de-listing date.

Should a Merger receive all required approvals, the right of securityholders of the Terminating Funds, other than Closed-End Terminating Funds, to purchase or switch their securities of the Terminating Fund will cease as of the close of business two (2) days prior to the Effective Date.  Securityholders of a Terminating Fund, other than the Closed-End Terminating Funds, will have the right to redeem their securities up to the close of business on the Effective Date.  Following a Merger, pre-authorized chequing plans, systematic withdrawal plans and any other optional service that had been established with respect to the Terminating Fund will be re-established with respect to the Continuing Fund.

As noted above, the Mergers are expected to result in cost savings to fund investors.  Other than in respect of the Merger of Redwood Global Financials Income Fund into Purpose US Preferred Share Fund, the management fees of each series of each Continuing Fund will be the same as or lower than the corresponding series of a Terminating Fund.

If approved, Redwood Floating Rate Bond Fund will be merged into Purpose Floating Rate Income Fund.  Purpose Floating Rate Income Fund is currently a closed-end fund; however, securityholders of this fund previously approved its conversion into an open-end exchange traded fund.  Such conversion is expected to occur shortly after the Effective Date.

In the case of the Merger of Redwood Global Resource Fund into Purpose Global Resource Fund, if approved, Redwood Global Resource Fund securityholders will move from a fund with a risk rating of “medium to high” to a Continuing Fund with a risk rating of “high”.

Redwood Energy Income Fund and Redwood Advantage Monthly Income Fund each currently pursue their investment objectives by using a forward agreement to obtain tax-advantaged returns.  Each fund’s forward agreement will be completed on March 21, 2018 in accordance with its terms and, under current Canadian tax laws, such funds cannot thereafter continue to use forward agreements for tax-advantaged exposure.  Accordingly, commencing on or about March 21, 2018, each fund will obtain exposure to the portfolio of its reference fund without the use of a forward agreement.  However, each fund will continue to provide tax-advantaged returns in accordance with its investment objectives up until the Effective Date owing to loss-carry-forwards available to each fund.  In addition, each fund will save costs as neither will continue to incur the annual costs associated with its forward agreement.  Any distribution of capital gains by these funds resulting from the completion of their forward agreements will be announced in a future press release.

 

 

 

This press release is for information purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein. 

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