TORONTO (HedgeWorld.com)–Tremont Capital Management Corp.* will be releasing its first CSFB/Tremont Hedge Fund Index offering in Canada in the form of a unit trust.
The Tremont Hedge Fund Index Linked Trust will have the investment objective of providing an investment return linked to the performance of the CSFB/Tremont Investable Hedge Fund Index. The return will depend on the performance of the index by virtue of one or more forward agreements.
A structure relying on forward agreements will allow investors to defer income and taxes over a seven-year period ending Dec. 31, 2010. TD Global Finance will handle the forward agreement transaction with Toronto-Dominion Bank providing the guarantee on the agreement. The forward agreement technique is similar to that of the Tremont Capital Opportunity Trust, which was offered earlier this year .
The investable index is an asset-weighted sub-index of the CSFB/Tremont Hedge Fund Index. The index is comprised of 10 hedge fund strategies, while the investable portion is composed of the six largest hedge funds in each strategy Previous HedgeWorld Story.
The closed-end investable offering could close as early as mid-December and start trading soon after. Tremont has filed a preliminary prospectus with the securities commissions of all Canadian provinces for an initial public offering of units of the trust. The offering will have investment minimum of C$5,000 (US$3,791) and an annual management fee of 0.55%.
The Tremont Hedge Fund Index Linked Trust will be distributed by: TD Securities Inc.; CIBC World Markets Inc.; BMO Nesbitt Burns Inc.; National Bank Financial Inc.; Scotia Capital Inc.; HSBC Securities (Canada) Inc.; Raymond James Ltd.; Dundee Securities Corporation; Desjardins Securities Inc.; Canaccord Capital Corporation; and First Associates Investments Inc.
*Tremont Capital Management Corp. is the Canadian subsidiary of Tremont Capital Management Inc., Rye, N.Y., which is a strategic partner of and a minority investor in HedgeWorld.