No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus constitutes a public offering of
these securities only in those jurisdictions where they may be lawfully offered for sale and only by persons permitted to sell these securities. The securities offered by this
prospectus have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and, subject to certain exceptions, may not be offered or
sold within the United States of America or to U.S. persons. See “Plan of Distribution”.
Initial Public Offering
PROSPECTUS
January 31, 2008
TRIDENT PERFORMANCE CORP.
$100,000,000 (Maximum)
10,000,000 Class A Units
$10.00 per Class A Unit
$20,000,000 (Maximum)
2,000,000 Class F Units
$10.00 per Class F Unit
Each Class A Unit consisting of one Class A Share
and one Class A Warrant to acquire one Class A Share
Each Class F Unit consisting of one Class F Share
and one Class F Warrant to acquire one Class F Share
Trident Performance Corp. (the “Corporation”), a corporation incorporated under the laws of the Province of Ontario, is offering
(the “Offering”) up to 10,000,000 Class A units (the “Class A Units”) and up to 2,000,000 Class F units (the “Class F Units” and, together
with the Class A Units, the “Units”) under this prospectus at a price of $10.00 per Unit. Each Class A Unit consists of one redeemable
Class A share of the Corporation (each a “Class A Share”) and one transferable Class A share purchase warrant (each a “Class A
Warrant”). Each Class A Warrant entitles the holder to purchase one Class A Share of the Corporation at a subscription price of $10.25 on
or before 4:00 p.m. (Toronto time) on February 28, 2011 (the “Expiry Time”). Each Class F Unit consists of one redeemable Class F share
of the Corporation (each a “Class F Share” and, together with the Class A Shares, “the “Shares”) and one transferable Class F share
purchase warrant (each a “Class F Warrant”). Each Class F Warrant entitles the holder to purchase one Class F Share of the Corporation at
a subscription price of $10.25 on or before the Expiry Time. Class A Warrants and Class F Warrants (collectively, “Warrants”) are
exercisable only on the last day of every month and Warrants not exercised by the Expiry Time will be void and of no value. The
Class A Shares and Class A Warrants comprising the Class A Units, and the Class F Shares and Class F Warrants comprising the Class F
Units, will separate immediately following the earlier of the closing of the Over-Allotment Option (as defined below) or 30 days after the
closing of the Offering, and thereafter may be transferred separately.
The Corporation will be managed by CI Investments Inc. (in such capacity, the “Manager”). The Manager will be responsible for
managing all of the Corporation’s activities and the execution of the Corporation’s investment strategy, which includes acquiring the
Common Share Portfolio and entering in the Forward Agreement (as those terms are defined below). See “Investments of the
Corporation”. CI Investments Inc. also acts as the trustee of the Trust (as defined below). See “Management of the Trust”.
The Corporation’s investment objective is to provide tax-efficient risk-adjusted long term rates of return by obtaining exposure to
the Global Macroeconomic Portfolio (as defined below). Trident Investment Management, LLC (“Trident” or the “Investment Advisor”)
is the investment advisor to the Global Macroeconomic Portfolio and seeks to identify and exploit significant global macroeconomic
trends. Using a top-down, global macroeconomic investment approach combined with investment strategies and techniques that
generally are not available to retail investors, Trident believes it can exploit macroeconomic trends to generate attractive risk-adjusted
rates of return with low or negative correlation to global equity markets.
The “Global Macroeconomic Portfolio” may consist of equity and fixed income securities, commodities, currencies and derivative
instruments which provide exposure to any or all of the foregoing or to general or specific market indices. See “Investments of the Trust”.
The Global Macroeconomic Portfolio will be acquired and held by a newly created investment trust, Trident Performance Trust (the
“Trust”), and actively managed by the Investment Advisor. The Investment Advisor is a U.S. investment manager that currently manages
assets in excess of US$152 million using a top-down, global macroeconomic investment methodology.
The returns to the Corporation and to the holders of Class A Shares (“Class A Shareholders”) and the holders of Class F Shares
(“Class F Shareholders” and, together with the Class A Shareholders, “Shareholders”) will be dependent upon the return on the Global
Macroeconomic Portfolio by virtue of the Forward Agreement. In order to provide the Corporation with the means to meet its investment
objective, the Corporation will invest the net proceeds of the Offering in a portfolio of common shares of Canadian public companies (the
“Common Share Portfolio”). The Corporation then will enter into one or more forward purchase and sale agreements (collectively, the
“Forward Agreement”) with a Canadian chartered bank or an affiliate thereof whose obligations under the Forward Agreement are
guaranteed by such Canadian chartered bank (the “Counterparty”) and the long-term debt of which Canadian chartered bank will have an
“approved credit rating” as defined in National Instrument 81-102 of the Canadian Securities Administrators. Pursuant to the Forward
Agreement, the Counterparty will agree to pay to the Corporation on or about February 28, 2018 (the “Forward Date”), as the purchase
price for the Common Share Portfolio, an amount equal to 100% of the redemption proceeds that would be paid by the Trust to holders of
an applicable number of units of the Trust. The Corporation will partially settle the Forward Agreement from time to time prior to the
Forward Date in order to fund redemptions of Shares and the payment of expenses and other liabilities of the Corporation. If the
Corporation has not terminated prior to the Forward Date, the Corporation may seek to extend the Forward Agreement beyond the
Forward Date and/or enter into additional and/or replacement forward purchase and sale agreements with the same or different
counterparties.
The Corporation does not expect to pay regular dividends or make other regular distributions. Distributions, if any, (which includes
dividends and other forms of distributions) on Shares are expected to consist primarily of returns of capital and capital gains dividends.
These distributions are characterized as tax-efficient because returns of capital are generally not subject to tax (returns of capital will,
however, reduce the adjusted cost base of Shares) and capital gains dividends are generally taxed at a lower effective rate than other types
of dividends. As well, gaining exposure to the Global Macroeconomic Portfolio by virtue of the Forward Agreement enables the
Corporation and the Shareholders to defer recognition of potential income and capital gains which would otherwise be recognized earlier
if the Global Macroeconomic Portfolio was held directly by the Corporation. See “Canadian Federal Income Tax Considerations”.
Price: $10.00 per Class A Unit
Minimum Purchase: 200 Class A Units
Price: $10.00 per Class F Unit
Minimum Purchase: 200 Class F Units
Class A Unit Offering
Per Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Maximum Offering(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Minimum Offering(3)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class F Unit Offering
Per Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Maximum Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1)
(2)
(3)
(4)
(5)
Price to the Public(1)
Agents’ Fees
Net Proceeds
to the Corporation(2)
$
10.00
$100,000,000
$ 20,000,000
$
0.525
$5,250,000
$1,050,000
$
9.475
$94,750,000
$18,950,000
$
10.00
$ 20,000,000
$
0.225
$ 450,000
$
9.775
$19,550,000
The Offering price was established by negotiation between the Manager and the Agents (as defined below).
Before deducting the expenses of the Offering, estimated to be $750,000 (subject to a maximum of 1.50% of the gross proceeds of the Offering), which, together with
the Agents’ fees, will be paid by the Corporation from the proceeds of the Offering. The Agents’ fees for selling Class A Units and Class F Units will be allocated to
the Class A Units and Class F Units, respectively. All other expenses of the Offering will be allocated pro rata between each class of Shares based upon the gross
proceeds of the Offering from each class of Shares.
The Corporation has granted to the Agents an option (the “Over-Allotment Option”), exercisable for a period of 30 days from the closing of the Offering, to purchase an
aggregate of up to 15% of the aggregate number of Class A Units issued at the closing of the Offering at a price of $10 per Class A Unit. This prospectus qualifies both the
grant of the Over-Allotment Option and the distribution of Class A Units issuable upon the exercise of the Over-Allotment Option. See “Plan of Distribution”.
If the Over-Allotment Option is exercised in full, under the maximum Offering, the price to the public, the Agents’ fees and the net proceeds to the Corporation in
respect of Class A Units will be $115,000,000, $6,037,500 and $108,962,500, respectively.
There will be no closing unless a minimum of 2,000,000 Class A Units are sold. If subscriptions for a minimum of 2,000,000 Class A Units have not been received
within 90 days following the date of issuance of a final receipt for this prospectus, the Offering may not continue without the consent of the securities regulatory
authorities and those who have subscribed for Units on or before such date.
Subject to the qualifications noted under the heading “Eligibility for Investment,” if issued on the date hereof, the Class A Shares,
Class F Shares, Class A Warrants and Class F Warrants would be qualified investments under the Income Tax Act (Canada) for a trust
governed by a registered retirement savings plan, registered retirement income fund, deferred profit sharing plan or registered disability
savings plan.
The Toronto Stock Exchange (the “TSX”) has conditionally approved the listing of the Class A Shares and Class A Warrants, subject
to the Corporation fulfilling all of the requirements of the TSX on or before April 29, 2008, including distribution of the Class A Shares
and Class A Warrants to a minimum number of public holders.
There is currently no market through which the Units may be sold. There is no assurance that the Corporation will be able to
achieve its objective. See “Risk Factors” for a discussion of various risk factors that should be considered by prospective
purchasers of Units. An investment in the Corporation is appropriate only for investors who have the capacity to absorb a loss of
some or all of their investment. If a holder of Shares sells or does not exercise Warrants, then the value of Shares held by that
holder may be diluted as a result of the exercise of Warrants by others. Within 30 days of the proper exercise of a Warrant, the
Corporation will pay a fee of $0.10 per Warrant to TD Securities Inc. for and on behalf of the Agents and, in addition in the case of
the exercise of a Class AWarrant, a fee of $0.15 per Class AWarrant to the dealer whose client has exercised the Class AWarrant.
The Agents may over-allot or effect transactions as described under “Plan of Distribution”.
TD Securities Inc., Blackmont Capital Inc., CIBC World Markets Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc.,
Scotia Capital Inc., Canaccord Capital Corporation, Dundee Securities Corporation, HSBC Securities (Canada) Inc., Raymond James
Ltd., Desjardins Securities Inc., Richardson Partners Financial Limited and Wellington West Capital Inc. (collectively, the “Agents”)
conditionally offer the Units, subject to prior sale, on a best efforts basis, if, as and when issued by the Corporation and accepted by the
Agents in accordance with the conditions contained in the Agency Agreement referred to under “Plan of Distribution”, and subject to the
approval of certain legal matters by Fasken Martineau DuMoulin LLP, on behalf of the Corporation, and McMillan Binch Mendelsohn
LLP, on behalf of the Agents. See “Plan of Distribution”.
Blackmont Capital Inc., which is one of the Agents, is an affiliate of the Manager. Consequently, the Corporation may be
considered a “connected issuer” of such Agent under applicable securities legislation. The Corporation also may be considered a
“connected issuer” of National Bank Financial Inc. because such Agent is an affiliate of the Counterparty. See “Plan of
Distribution”.
Subscriptions will be received for the Units offered hereby, subject to rejection or allotment in whole or in part, and the right is
reserved to close the subscription books at any time. Closing of this Offering is expected to occur on or about February 22, 2008 but in any
event no later than March 28, 2008. Book-based certificates representing the Shares and global definitive certificates representing the
Warrants will be issued in registered form to CDS Clearing and Depository Services Inc. (“CDS”) or its nominee and will be deposited
with CDS on the date of the closing of the Offering, although the Corporation may, in its sole discretion and upon the request of a holder
of Shares and/or Warrants, issue one or more certificates registered in the name of such holder, in which case any such certificates are
expected to be available for delivery within two weeks following the closing of this Offering. A purchaser of Units will receive a customer
confirmation from the registered dealer from or through whom the Units are purchased. See “Plan of Distribution”.
Although securities of the Trust are not being offered to the public, the Trust has agreed to obtain a receipt for a prospectus from the
Autorité des marchés financiers. A copy of such prospectus will be delivered to purchasers of Units in the Province of Québec prior to a
purchase of Units by a person resident in the Province of Québec.
TABLE OF CONTENTS
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . .
Rationale for Trident Performance Corp. . . . .
The Global Macroeconomic Outlook . . . . . . . .
The Global Macroeconomic Portfolio . . . . . . .
The Offering . . . . . . . . . . . . . . . . . . . . . . . . .
Corporation Features . . . . . . . . . . . . . . . . . . .
Eligibility for Investment . . . . . . . . . . . . . . . .
Canadian Federal Income Tax
Considerations . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . .
Summary of Fees and Expenses Payable by
the Corporation and the Trust . . . . . . . . . . .
Summary of Fees Payable by the Manager . . .
Forward Looking Statements . . . . . . . . . . . . . .
THE CORPORATION . . . . . . . . . . . . . . . . . . . .
Status of the Corporation . . . . . . . . . . . . . . . .
Rationale for the Corporation . . . . . . . . . . . . .
The Global Macroeconomic Outlook . . . . . . . .
GLOBAL MACROECONOMIC INVESTING . .
INVESTMENTS OF THE CORPORATION . . . .
Investment Objective . . . . . . . . . . . . . . . . . . .
Investment Strategy . . . . . . . . . . . . . . . . . . . .
Forward Agreement . . . . . . . . . . . . . . . . . . . .
Securities Lending . . . . . . . . . . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . .
INVESTMENTS OF THE TRUST . . . . . . . . . . .
Investment Objective . . . . . . . . . . . . . . . . . . .
Investment Strategy . . . . . . . . . . . . . . . . . . . .
Use of Derivative Instruments . . . . . . . . . . . . .
Securities Lending . . . . . . . . . . . . . . . . . . . . .
Short Selling and Uncovered Call Options . . . .
Loans and other Forms of Leverage . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . .
MANAGEMENT OF THE CORPORATION. . . .
Directors and Officers of the Corporation . . . .
The Manager . . . . . . . . . . . . . . . . . . . . . . . . .
MANAGEMENT OF THE TRUST . . . . . . . . . . .
The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting and Reporting . . . . . . . . . . . . . . .
Directors and Officers of the Trustee . . . . . . . .
The Investment Advisor . . . . . . . . . . . . . . . . .
CONFLICTS OF INTEREST . . . . . . . . . . . . . . .
Independent Review Committee . . . . . . . . . . .
Proxy Voting Procedures . . . . . . . . . . . . . . . . .
DESCRIPTION OF SECURITIES AND
SHAREHOLDER MATTERS . . . . . . . . . . . . .
Class A Shares and Class F Shares . . . . . . . . .
Redemptions . . . . . . . . . . . . . . . . . . . . . . . . .
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Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends and Distributions . . . . . . . . . . . . . .
Meetings of Shareholders and Extraordinary
Resolutions . . . . . . . . . . . . . . . . . . . . . . . . .
Termination of the Corporation . . . . . . . . . . . .
Information and Reports to Shareholders . . . . .
CALCULATION OF NET ASSET VALUE . . . . .
Net Asset Values of the Corporation and the
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Asset Value per Share . . . . . . . . . . . . . . .
Other Factors Affecting Calculations . . . . . . . .
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . .
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . .
FEES AND EXPENSES. . . . . . . . . . . . . . . . . . .
Initial Expenses . . . . . . . . . . . . . . . . . . . . . . .
Warrant Exercise Fee . . . . . . . . . . . . . . . . . . .
Fees and Other Expenses . . . . . . . . . . . . . . . .
Additional Services . . . . . . . . . . . . . . . . . . . .
CANADIAN FEDERAL INCOME TAX
CONSIDERATIONS. . . . . . . . . . . . . . . . . . . .
Tax Status of the Corporation . . . . . . . . . . . . .
Tax Treatment of the Corporation . . . . . . . . . .
Tax Treatment of Shareholders . . . . . . . . . . . .
Tax Treatment of Warrants . . . . . . . . . . . . . . .
Alternative Minimum Tax . . . . . . . . . . . . . . . .
ELIGIBILITY FOR INVESTMENT . . . . . . . . . .
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . .
No Assurance on Achieving Investment
Objective . . . . . . . . . . . . . . . . . . . . . . . . . .
Suitability for Investment . . . . . . . . . . . . . . . .
Operating History and Marketability . . . . . . . .
Fluctuations in Net Asset Value . . . . . . . . . . .
Trading Price of Shares and Warrants . . . . . . .
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Status of the Corporation . . . . . . . . . . . . . . . .
Risks Related to Redemptions . . . . . . . . . . . . .
Changes in Legislation . . . . . . . . . . . . . . . . . .
Counterparty Risk. . . . . . . . . . . . . . . . . . . . . .
Taxation of the Corporation . . . . . . . . . . . . . .
Securities Lending . . . . . . . . . . . . . . . . . . . . .
Foreign Currency Exposure . . . . . . . . . . . . . . .
Potential Conflicts of Interest . . . . . . . . . . . . .
Reliance on the Investment Advisor and Key
Personnel . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal and Statutory Rights . . . . . . . . . . . . . . .
Performance of the Global Macroeconomic
Investment Methodology . . . . . . . . . . . . . . .
General Risks of Investments . . . . . . . . . . . . .
Illiquid Securities . . . . . . . . . . . . . . . . . . . . . .
Commodity Trading . . . . . . . . . . . . . . . . . . . .
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Foreign Market Exposure . . . . . . . . . . . . . . . .
Interest Rate Sensitivity . . . . . . . . . . . . . . . . .
Use of Derivatives . . . . . . . . . . . . . . . . . . . . .
Short Selling and Uncovered Call Options . . . .
Use of Leverage . . . . . . . . . . . . . . . . . . . . . . .
Transaction Costs . . . . . . . . . . . . . . . . . . . . . .
Valuation of the Global Macroeconomic
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxation of the Trust . . . . . . . . . . . . . . . . . . .
INTEREST OF MANAGER AND OTHERS IN
MATERIAL TRANSACTIONS . . . . . . . . . . . .
PRINCIPAL SHAREHOLDER . . . . . . . . . . . . . .
MATERIAL CONTRACTS . . . . . . . . . . . . . . . .
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LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . 52
PROMOTER . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . 53
REGISTRAR AND TRANSFER AGENT . . . . . . 53
PURCHASER’S STATUTORY RIGHTS. . . . . . . 53
AUDITORS’ REPORT . . . . . . . . . . . . . . . . . . . . 54
STATEMENT OF FINANCIAL POSITION . . . . 55
AUDITORS’ CONSENT . . . . . . . . . . . . . . . . . . 57
CERTIFICATE OF THE CORPORATION AND
THE PROMOTER . . . . . . . . . . . . . . . . . . . . . C-1
CERTIFICATE OF THE AGENTS . . . . . . . . . . . C-2
PROSPECTUS SUMMARY
The following is a summary only of the principal features of this offering and is qualified in its entirety by, and should
be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. All references in this
prospectus to “dollars” or “$” are to Canadian dollars unless otherwise indicated.
Rationale for Trident Performance Corp.
Trident Performance Corp. (the “Corporation”) has been created to obtain exposure to the Global Macroeconomic
Portfolio (as defined below). Trident Investment Management, LLC (“Trident” or the “Investment Advisor”) is the
investment advisor to the Global Macroeconomic Portfolio and seeks to identify and exploit significant global
macroeconomic trends. Examples of such trends include the emergence of China as a significant economic power
and the adoption of capitalist-style policies by many developing countries. These trends result in financial imbalances that
have implications for global markets that are not immediately reflected in the prices of individual securities, currencies
and other investments.
Trident believes that by using sophisticated analysis, rapid decision-making and strong risk control measures, these
types of macroeconomic trends can be exploited to generate attractive risk-adjusted rates of return using a global
macroeconomic investment approach, such as that utilized by Trident. Trident seeks to identify investment opportunities
by analyzing macroeconomic and political conditions at the global and country levels to understand the broader forces
shaping world markets and to develop potential investment trends. Once a macroeconomic trend is identified, Trident
conducts a systematic analysis of the instruments available in the potentially affected markets to determine which
instruments it believes provide the best investment opportunity. Trident operates with a portfolio risk-management
framework that seeks to limit the amount of capital at risk in the event that specific investment trends do not materialize.
Trident believes that its global macroeconomic investment approach is best suited for situations where it can analyze and
react quickly to developing trends on a global basis. To this end, Trident has developed a number of decision-support tools
that are designed to facilitate performing the analysis described above on a rapid basis. Trident’s approach has a strong
focus on the developing countries and on commodities, particularly energy.
Trident is a U.S. investment manager that currently manages assets in excess of US$152 million using a top-down,
global macroeconomic investment methodology.
The Corporation offers investors the opportunity to diversify their portfolios through an investment with the potential
for low or negative correlation to global equity markets, as well as the opportunity for capital appreciation, using a global
macroeconomic investment approach. Trident has applied its global macroeconomic investment approach to Trident
Global Opportunities Fund which, since the inception of that investment fund in February 2001 to December 31, 2007, has
achieved a negative correlation with the returns of the MSCI World Index (in Canadian dollars) together with an annual
compound rate of return of approximately 12.3% before payment of performance fees (approximately 9.8% after payment
of performance fees). To the extent that the Global Macroeconomic Portfolio includes short positions, the Corporation
will provide investors with an opportunity to earn gains from such short positions which may offset losses such investors
are experiencing on traditional “long” investments within their portfolios.
The Global Macroeconomic Outlook
In Trident’s view, the following are the most significant current global macroeconomic trends:
Real Estate and Credit Deterioration: Credit markets are far from normal and significant losses are being suffered in
credit by both banks and brokerage firms. However, Trident believes that the losses so far declared by these financial
institutions are a small percentage of their true losses and that the losses declared by brokerage firms are particularly
vulnerable to understatement due to different scopes of regulatory oversight. These losses are being compounded by a
concurrent downturn in the U.S. housing market. Trident is seeking to exploit this trend of real estate and credit
deterioration through such investments as taking short positions in credit (particularly the credit of lenders to real estate
and mortgage insurers) and short positions in equity securities of financial institutions.
U.S. Economic Slowdown: The United States currently has a trade deficit that is over 5% of gross domestic product
(“GDP”), a fiscal deficit that is over 2% of GDP and a total credit to GDP ratio that is over 300%. The trade deficit has
persisted despite very strong global growth and a U.S. dollar that has been depreciating steadily over the past several
years. The fiscal deficit may be understated since, among other reasons, large expenditures (such as the Iraq war and new
Medicare drug benefits) are not factored into the deficit calculation. The credit creation has, in turn, produced an
unprecedented housing “bubble” that, in 2007, has been deflating rapidly with attendant destruction in credit values. In
Trident’s view, the combination of increasing inflation, the housing downturn and related reductions to consumer
spending in the United States are likely to create, at best, a prolonged economic slowdown and, at worst, a major
1
recession. As well, U.S. lawmakers face pivotal elections in 2008 and appear to Trident to be focused on campaigning
with a tendency to pursue short-term solutions rather than address structural economic problems with long-term solutions
that ultimately may prove more effective. Trident is seeking to exploit this trend of a general U.S. economic slowdown
through such strategies as taking short positions in equity securities of companies in consumer and leisure related
industries, taking long positions in defensive consumer stocks that may benefit from easy money and predictable earnings,
and taking long positions in short-term interest rates in anticipation of significant interest rate reductions during the next
twelve months.
Global Inflationary Trends: The growth model adopted by most of the Asian countries that were affected by the Asian
economic crisis of 1997-1998 was to focus on export growth to offset weak domestic demand in the aftermath of the
turmoil. In Trident’s view, the net result was effective pegging of most Asian currencies at hyper-competitive levels
against the U.S. dollar and other developed country currencies. The substantial wave of investment in China during the
past several years has served to further boost that country’s productivity. Trident believes that these trends have triggered a
wave of global deflation, particularly in manufactured goods. Further, the emergence of India as an important center for
services outsourcing has resulted in some deflation in the cost of services. As such, over the last decade there has been very
low global inflation which, in turn, has resulted in relatively low interest rates globally and led to a significant build-up of
debt. In Trident’s view, the continued pegging of the Asian currencies against the U.S. dollar has resulted in a large
accumulation of dollar reserves in the region and encouraged domestic investment booms. The effects of these investment
booms are now triggering a sustained increase in the prices of oil and most commodities. Should a U.S. economic
slowdown be addressed through lower interest rates in the U.S., Trident believes that more inflation likely will result
globally, especially for commodities, producing a global inflationary trend. Trident is seeking to exploit this trend of
general global inflation through such investments as long positions in gold and gold equity securities, short positions in
the U.S. dollar and long positions in the Japanese yen and equity securities of Japanese companies. Equity securities of
Japanese companies could benefit from a significant increase in the domestic inflation rate because it would encourage
Japanese banks to resume lending without the fear of deflation.
Other Global Macroeconomic Trends: The global macroeconomic trends described above are based on current global
conditions and may change at any time. These trends may lose their significance and other global macroeconomic trends
may emerge. Accordingly, Trident’s global market outlook may change in the future, which may trigger changes to the
investments that Trident seeks for its clients.
The Global Macroeconomic Portfolio
The Corporation’s returns will be dependent upon the return of the Global Macroeconomic Portfolio by virtue of the
Forward Agreement (as defined below). The “Global Macroeconomic Portfolio” will be acquired and held by Trident
Performance Trust (the “Trust) and actively managed by Trident to exploit what it identifies as global macroeconomic
trends. The Global Macroeconomic Portfolio may consist of equity and fixed income securities, commodities, currencies
and derivative instruments which provide exposure to any or all of the foregoing or to general or specific market indices. A
substantial amount of the Global Macroeconomic Portfolio’s assets may be invested in the emerging markets and/or
commodities if Trident determines that the investment opportunities so warrant. See “Global Macroeconomic Investing”
and “Investments of the Trust”. It is currently expected that more than 90% of the value of the Global Macroeconomic
Portfolio will be hedged back to the Canadian dollar. This hedging strategy may change based on the Investment Advisor’s
view of the currency markets.
The Investment Advisor intends to manage the Global Macroeconomic Portfolio using substantially the same topdown, global macroeconomic investment methodology as it employs for Trident Global Opportunities Fund which, since
its inception in February 2001 to December 31, 2007, has achieved a negative correlation with the returns of the MSCI
World Index (in Canadian dollars) together with an annual compound rate of return of approximately 12.3% before
payment of performance fees (approximately 9.8% after payment of performance fees). The following tables and charts
show the historical negative market correlation and annual compound returns achieved by the Investment Advisor with
respect to Trident Global Opportunities Fund for the periods shown, as at December 31, 2007. This information does not
reflect the expected performance of the Corporation and is provided only to illustrate the experience and historic
investment results obtained by the Investment Advisor using substantially the same top-down, global
macroeconomic investment methodology as the Investment Advisor will employ for the Global Macroeconomic
Portfolio. This information is not, and should not be construed as, indicative of the future performance of the
Shares or amounts which may be distributed by the Corporation. This information is provided solely for
illustrative purposes and should not be construed as a forecast or projection. Past performance does not guarantee
future investment results.
2
In the following tables and charts:
“Return” means the average annual compound rate of return.
“Standard Deviation” is a commonly used measure of volatility based on the dispersion of the set of data from its mean.
In simplified terms, it is the square root of the amount of variation in returns.
“Sharpe Ratio” is the measure of the results of an investment given the amount of risk taken to achieve that result. The
formula for the Sharpe ratio is: (X⫺R)/ D where “X” = average rate of return, “R” = risk-free rate, and “D” = the standard
deviation.
“Alpha” is the measure of risk-adjusted performance by regressing the investment’s return on the appropriate index’s
return. For example, if an investment has a beta of 2 and the market returns 9%, the investment’s expected return during
the same period is 18% (beta * market return). If, however, the investment’s actual return during the period is 20%, the
investment’s alpha would be the difference between the actual return and the expected return, namely 2% (20% - 18%).
Alpha is calculated for each month during the relevant period (in the case of Trident Global Opportunities Fund, from its
inception until December 31, 2007). The results are then averaged and annualized.
“Beta” is the measure of an investment’s risk in relation to a market or benchmark. For example, where an investment has
a “beta” of 1.5, then if the market return is 10%, the expected return on the investment is 15%.
“Capture Rates” is the measure of an investment’s ability to capture both the upside movement of the market as well as
the downside movement.
“Up Capture Ratio” is the performance of an investment during periods in which the market moves up, divided by the
performance of the market over the same periods.
“Down Capture Ratio” is the performance of an investment during periods in which the market moves down, divided by
the performance of the market over the same periods.
“Negative Periods (% total)” is the ratio of periods in which performance is less than or equal to zero divided by the total
number of periods observed.
3
Return %
Standard Deviation %
Sharpe Ratio
Alpha %
Beta
Up Capture Ratio
Down Capture Ratio
Negative Months (%total)
12.33
0.59
15.36
11.72
0.81
0.05
13.71
0.00
-0.10
1.00
0.07
1.00
-1.40
1.00
45.12
48.78
Performance Analysis
Inception* to December 31, 2007
Trident Global Opportunities Fund
MSCI World Index $C
Risk Return Analysis
Inception to December 31, 2007
15.00
Trident Global Opportunities
Fund
12.00
Return
9.00
6.00
3.00
MSCI World Index $C
0.00
5.00
8.00
11.00
14.00
17.00
20.00
*
Performance Analysis
Inception* to December 31, 2007
Best 3 Month Period
Worst 3 Month Period
Best 1 Year Period
Worst 1 Year Period
Best 3 Year Period
Worst 3 Year Period
Best 5 Year Period
Worst 5 Year Period
Standard Deviation (%)
Trident Global Opportunities Fund
MSCI World Index $C
43.5%
13.5%
-7.5%
-14.7%
89.0%
30.7%
-11.6%
-29.9%
26.0%
14.8%
0.6%
-4.8%
16.4%
9.2%
1.3%
-1.4%
Inception: February 2001
The foregoing financial data is calculated based on the performance of Trident Global Opportunities Fund before
payment of performance fees.
4
The negative correlation of Trident Global Opportunities Fund to the MSCI World Index ($C) is illustrated by the
fact that its Down Capture Ratio was ⫺1.40:1 while its Up Capture Ratio was only 0.07:1. This means that when the MSCI
World Index (CS) lost $1, Trident Global Opportunities Fund gained, on average, $1.40, and when the MSCI World Index
($C) gained $1, Trident Global Opportunities Fund gained, on average, only $0.07.
Annual Compound Returns for the Periods Indicated Ending December 31, 2007
1-Year
2-Year
3-Year
4-Year
5-Year
Inception
(1)(2)
Trident Global Opportunities Fund
Before Performance Fee . . . . . . .
After Performance Fee . . . . . . . .
MSCI World Index ($Cdn)(1)(3) . . . .
Outperformance
Before Performance Fee . . . . . . .
After Performance Fee . . . . . . . .
.................
.................
.................
89.0% 37.5%
61.3% 27.0%
(7.1)% 5.9%
26.0%
19.5%
6.1%
19.2%
14.6%
6.4%
16.4%
12.7%
7.0%
12.3%
9.8%
0.6%
.................
.................
96.1% 31.6%
68.4% 21.1%
19.9%
13.4%
12.8%
8.2%
9.4%
5.7%
11.8%
9.2%
Notes:
(1)
(2)
(3)
Source: Globe HySales and globefund.com, other than “After Performance Fee” data which is derived by recalculating the “Before Performance
Fee” data to take into account the performance fee paid by Trident Global Opportunities Fund on December 31, 2007. Data expressed “Before
Performance Fee” does not take into account the payment of such performance fee.
These returns are historical annual compound total returns (including reinvestment of all distributions) net of operating expenses and an annual
management fee of 2.25% and, for data expressed “After Performance Fee”, takes into account the performance fee paid by Trident Global
Opportunities Fund on December 31, 2007.
The MSCI World Index ($Cdn) is calculated by Morgan Stanley Capital International and comprised of approximately 1,600 companies listed on
stock exchanges in the 22 countries that make up the MSCI national indices and is converted into Canadian dollars.
(1) (2)
Trident Global Opportunities Fund
vs. MSCI World Index $C
Value of $10,000 invested from inception to December 31, 2007
$24,000
(1)
$22,000
$22,208
$20,000
$18,946
$18,000
$16,000
$14,000
$12,000
$10,410
$10,000
$8,000
Trident Global Opportunities Fund (Before Performance Fee)
(1)
(2)
MSCI World Index ($ Cdn)
Dec-07
Nov-07
Aug-07
Feb-07
May-07
Nov-06
Aug-06
Feb-06
May-06
Nov-05
Aug-05
Feb-05
May-05
Nov-04
Aug-04
May-04
Feb-04
Nov-03
Aug-03
May-03
Feb-03
Nov-02
Aug-02
May-02
Feb-02
Nov-01
Aug-01
May-01
Feb-01
$6,000
Trident Global Opportunities Fund (After Performance Fee)
Source: Globe HySales and globefund.com, other than “After Performance Fee” data which is derived by recalculating the “Before Performance
Fee” data to take into account the performance fee paid by Trident Global Opportunities Fund on December 31, 2007. Data expressed “Before
Performance Fee” does not take into account the payment of such performance fee.
These returns are historical annual compound total returns (including reinvestment of all distributions) net of operating expenses and an annual
management fee of 2.25%. The shaded area shows the performance of Trident Global Opportunities Fund before payment of a performance fee on
5
December 31, 2007. The line labelled “Trident Global Opportunities Fund (after performance fee)” shows the performance of Trident Global
Opportunities Fund after payment of such performance fee.
Since the inception of Trident Global Opportunities Fund, the U.S. dollar has declined in value relative to other
international currencies, including the Canadian dollar. As a result, the performance of the MSCI World Index, when
converted into Canadian dollars, is affected by the declining value of the U.S. dollar and results in a total return that is
approximately 57.2% less than the U.S. dollar version of the index before currency conversion. Trident Global
Opportunities Fund did not experience a similar decline in value since Trident actively managed the risk to the U.S. dollar
denominated investments of Trident Global Opportunities Fund through derivatives and currency transactions and by
limiting investments in U.S. dollar denominated securities.
Issuer:
Offering:
Class A Units:
Class F Units:
Warrants:
Maximum Issue:
Minimum Issue:
Price:
The Offering
Trident Performance Corp.
The Corporation hereby offers (the “Offering”) Class A units (the “Class A
Units”) and Class F units (the “Class F Units” and, together with the Class A
Units, the “Units”) under this prospectus at a price of $10.00 per Unit.
Each Class A Unit consists of one redeemable Class A share of the
Corporation (each a “Class A Share”) and one transferable Class A share
purchase warrant (each a “Class A Warrant”).
Each Class F Unit consists of one redeemable Class F share of the
Corporation (each a “Class F Share” and, together with the Class A Shares,
the “Shares”) and one transferable Class F share purchase warrant (each a
“Class F Warrant” and, together with the Class A Warrants, the “Warrants”).
Class F Units are intended for investors who invest in the Corporation
through a fee-based account with their broker or dealer. Unlike Class A
Units, Class F Shares and Class F Warrants will not be listed on any stock
exchange, but Class F Shares will be convertible into Class A Shares as
described below. The Agents’ fees and the fees payable by the Corporation
upon the exercise of Warrants will be allocated to the assets of the classes of
Shares to which they relate. The Service Fee described below under
“Summary of Fees and Expenses Payable by the Corporation and the
Trust — Management Fees” will be allocated to the assets of the Class A
Shares. Accordingly, the returns of Class F Shares are expected to be greater
than the returns on Class A Shares and the net asset values of the Class A
Shares and Class F Shares are expected to differ.
Each Class A Warrant entitles the holder to purchase one Class A Share of
the Corporation at a subscription price of $10.25 on the last day of any month
on or before 4:00 p.m. (Toronto time) on February 28, 2011 (the “Expiry
Time”). Each Class F Warrant entitles the holder to purchase one Class F
Share of the Corporation at a subscription price of $10.25 on the last day of
any month on or before the Expiry Time. Warrants not exercised by the
Expiry Time will be void and of no value. If a holder of Shares (a
“Shareholder”) sells or does not exercise Warrants, then the value of the
Shares held by that Shareholder may be diluted as a result of the exercise of
Warrants by others. The Class A Shares and Class AWarrants comprising the
Class A Units, and the Class F Shares and Class F Warrants comprising the
Class F Units, will separate immediately following the earlier of the closing
of the Over-Allotment Option (as defined below) or 30 days after closing of
the Offering, and thereafter may be transferred separately. See “Description
of Securities and Shareholder Matters — Warrants”.
Class A Units Offering — $100,000,000 (10,000,000 Class A Units)
Class F Units Offering — $20,000,000 (2,000,000 Class F Units)
Class A Units Offering — $20,000,000 (2,000,000 Class A Units)
$10.00 per Unit
6
Minimum Subscription:
Use of Proceeds:
200 Class A Units ($2,000) or 200 Class F Units ($2,000)
The net proceeds from the sale of Units (prior to the exercise of the overallotment option (the “Over-Allotment Option”) granted by the Corporation
to the Agents) will be as follows:
Maximum
Offering(1)
Minimum
Offering(2)
Gross proceeds to the Corporation . . . . .
Agents’ fees . . . . . . . . . . . . . . . . . . . . . .
Estimated expenses of issue(3) . . . . . . . . .
$120,000,000
$ 5,700,000
$
750,000
$20,000,000
$ 1,050,000
$ 300,000
Net proceeds to the Corporation . . . . . . .
$113,550,000
$18,650,000
Note:
(1)
10,000,000 Class A Units and 2,000,000 Class F Units.
(2)
(3)
2,000,000 Class A Units and no Class F Units.
The maximum issue expenses that will be paid by the Corporation are equal to 1.5% of the
gross proceeds of the Offering. The Agents’ fees for selling Class A Units and Class F
Units will be allocated to the Class A Units and Class F Units, respectively. All other
expenses of the Offering will be allocated pro rata between each class of Shares based
upon the gross proceeds of the Offering from each class of Shares.
The Corporation will use the net cash proceeds of the Offering (including
any net cash proceeds from the exercise of the Over-Allotment Option) to
(i) invest in securities for the Common Share Portfolio (as defined below) in
accordance with the Corporation’s investment objective, strategies and
restrictions as described herein as soon as practicable after the closing of
the Offering, and (ii) fund the ongoing fees and expenses of the Corporation
as described under “Fees and Expenses”.
Investment Objective:
Investment Strategy
Forward Agreement
Corporation Features
The Corporation’s investment objective is to provide tax-efficient riskadjusted long term rates of return by obtaining exposure to the Global
Macroeconomic Portfolio.
The returns to the Corporation and to the Shareholders will be dependent
upon the return on the Global Macroeconomic Portfolio by virtue of the
Forward Agreement (as defined below). The Corporation does not expect to
pay regular dividends or make other regular distributions. Distributions, if
any, (which includes dividends and other forms of distributions) on Shares
are expected to consist primarily of returns of capital and capital gains
dividends. These distributions are characterized as tax-efficient because
returns of capital are generally not subject to tax (returns of capital will,
however, reduce the adjusted cost base of Shares) and capital gains dividends
are generally taxed at a lower effective rate than other types of dividends. As
well, gaining exposure to the Global Macroeconomic Portfolio by virtue of
the Forward Agreement enables the Corporation and the Shareholders to
defer recognition of potential income and capital gains which would
otherwise be recognized earlier if the Global Macroeconomic Portfolio
was held directly by the Corporation.
See “Investments of the Corporation — Investment Strategy”, “Canadian
Federal Income Tax Considerations” and “Risk Factors”.
In order to provide the Corporation with the means to meet its investment
objective, the Corporation will invest the net proceeds of the Offering in a
portfolio of common shares of Canadian public companies (the “Common
Share Portfolio”). The Corporation then will enter into one or more forward
purchase and sale agreements (collectively, the “Forward Agreement”) with
7
a Canadian chartered bank or an affiliate thereof whose obligations under the
Forward Agreement are guaranteed by such Canadian chartered bank (the
“Counterparty”) and the long-term debt of which Canadian chartered bank
will have an “approved credit rating” as defined in National Instrument
81-102 of the Canadian Securities Administrators. Pursuant to the Forward
Agreement, the Counterparty will agree to pay to the Corporation on or
about February 28, 2018 (the “Forward Date”), as the purchase price for the
Common Share Portfolio, an amount equal to 100% of the redemption
proceeds that would be paid by the Trust to holders of the applicable number
of units of the Trust which, in turn, will acquire and hold the Global
Macroeconomic Portfolio. The Corporation will partially settle the Forward
Agreement from time to time prior to the Forward Date in order to fund
redemptions of Shares by Shareholders and the payment of expenses and
other liabilities of the Corporation. If the Corporation has not terminated
prior to the Forward Date, the Corporation may seek to extend the Forward
Agreement beyond the Forward Date and/or enter into additional and/or
replacement forward purchase and sale agreements with the same or
different counterparties.
See “Investments of the Corporation — Forward Agreement”.
Manager:
CI Investments Inc. (the “Manager”) is the manager of the Corporation. The
Manager is responsible for managing all of the Corporation’s activities
(subject to applicable law) and the execution of its investment strategy,
which includes acquiring the Common Share Portfolio and entering into the
Forward Agreement. The Manager is an independent, Canadian-owned
wealth management company that offers a broad range of investment
products and services, including an industry-leading selection of
investments funds. As at December 31, 2007, the Manager and its affiliates
had assets under management of approximately $67.2 billion and fee earning
assets of approximately $103.8 billion.
See “Management of the Corporation — The Manager”.
Redemptions:
Commencing in 2009, a Share may be surrendered for redemption on
December 31 in each year (each a “December Redemption Date”) and
must be surrendered at least 20 business days prior to the December
Redemption Date in order to be redeemed on such December
Redemption Date. A Class A Share properly surrendered by the holder
thereof (a “Class A Shareholder”) for redemption on a December
Redemption Date commencing in 2009 will be redeemed at the
Redemption Price per Class A Share and a Class F Share properly
surrendered by the holder thereof (a “Class F Shareholder”) for redemption
on a December Redemption Date commencing in 2009 will be redeemed at
the Redemption Price per Class F Share (as such terms are defined under
“Description of Securities and Shareholder Matters — Redemptions”). A
Shareholder who properly surrenders a Share for redemption on a December
Redemption Date will receive payment on or before the 15th business day
following such December Redemption Date, subject to the Corporation’s
right to suspend redemptions. Shares also may be redeemed on the last day
of each month (each a “Monthly Redemption Date”). See “Description of
Securities and Shareholder Matters — Redemptions”.
Conversion of Class F Shares:
A Class F Shareholder may convert Class F Shares into Class A Shares on
any Monthly Redemption Date (including a December Redemption Date) by
delivering a notice and surrendering such Class F Shares by 4:00 p.m.
(Toronto time) at least 20 business days prior to such Monthly
Redemption Date. For each Class F Share so converted, the holder will
8
receive a number of Class A Shares equal to the Net Asset Value per Class F
Share as of the Monthly Redemption Date divided by the Net Asset Value
per Class A Share as of the Monthly Redemption Date. For the purposes of
such conversion, the NAV per Share of a class will be the basic NAV per
Share of the class unless the diluted Net Asset Value per Share of such class
is calculated on such Monthly Redemption Date, in which case the Net Asset
Value per Share of such class will be the diluted NAV per Share of such class,
as described under “Calculation of Net Asset Value — Net Asset Value per
Share”. A holder of Class F Shares may convert such Shares and redeem the
Class A Shares which such holder is entitled to receive on the same Monthly
Redemption Date by so stating in the notice of conversion. Class F Warrants
are not convertible into Class A Warrants.
Dividends and Distributions:
The Corporation does not expect to pay regular dividends or make other
distributions. However, the Corporation may, at the recommendation of the
Manager and with the approval of the Corporation’s board of directors, pay
any dividends or make distributions of cash on Shares at any time in
accordance with applicable law if it considers it appropriate. The
Corporation also may pay dividends or make other distributions if, at the
end of any taxation year, the Corporation has net taxable capital gains, which
would otherwise be subject to tax, or where the Corporation needs to pay a
dividend to recover refundable tax.
See “Description of Securities and Shareholder Matters — Dividends and
Distributions”.
Termination:
The Corporation does not have a fixed termination date but may be
terminated at any time with the approval of Shareholders by an
Extraordinary Resolution (as defined under “Description of Securities
and Shareholder Matters — Meetings of Shareholders and Extraordinary
Resolutions”) passed at a duly convened meeting of Shareholders called for
the purpose of considering such Extraordinary Resolution.
The Manager may, in its discretion and subject to applicable laws, cause the
Corporation to be terminated at any time without the approval of
Shareholders if, in its opinion, it is no longer economically practical to
continue the Corporation or the Manager determines that it would be in the
best interest of the Shareholders to terminate the Corporation. See
“Description of Securities and Shareholder Matters — Termination of the
Corporation”.
Eligibility for Investment
In the opinion of counsel, if issued on the date hereof, (i) the Class A Shares would be qualified investments under the
Income Tax Act (Canada) (the “Tax Act”) for a trust governed by a registered retirement savings plan, registered
retirement income fund, deferred profit sharing plan or registered disability savings plan (each a “Deferred Plan”) if the
Corporation validly elects under the provisions of the Tax Act to be a “public corporation” since the time of its
incorporation, or if the Class A Shares are listed on the Toronto Stock Exchange (the “TSX”), (ii) the Class F Shares would
be qualified investments under the Tax Act for a Deferred Plan if the Corporation validly elects under the provisions of the
Tax Act to be a “public corporation” since the time of its incorporation, and (iii) the Class AWarrants and Class F Warrants
would be qualified investments under the Tax Act for a Deferred Plan if either (a) the Warrants are listed on the TSX, or
(b) the Corporation deals at “arm’s length” (for the purposes of the Tax Act) with each person who is an annuitant,
beneficiary, employer or subscriber, as the case may be, under the particular Deferred Plan, and the Shares that may be
acquired upon exercise of the Warrant are qualified investments for a Deferred Plan as described above. Trusts governed
by registered education savings plans should consult their own tax advisors as to the status of the Shares or Warrants as
qualified investments. See “Eligibility for Investment”.
9
Canadian Federal Income Tax Considerations
Provided the Corporation qualifies as a “mutual fund corporation” for the purposes of the Tax Act at all material
times, returns of capital paid to a holder of Shares will not be included in computing the income of the Shareholder, but
will reduce the Shareholder’s adjusted cost base of such Shares. To the extent that the adjusted cost base of a Share would
otherwise be less than zero, the negative amount will be deemed to be a capital gain realized by the Shareholder from a
disposition of such Share and the Shareholder’s adjusted cost base will be increased by the amount of such deemed capital
gain.
The amount of any “capital gains dividend” received by a holder of Shares will be considered to be a capital gain of
the holder from the disposition of capital property in the taxation year of the Shareholder in which the capital gains
dividend is received.
A disposition, whether by way of redemption, retraction or otherwise, of a Share held as capital property, or a
disposition (other than pursuant to the exercise thereof) of a Warrant held as capital property, will result in a capital gain
(or capital loss) to the holder of the Share or Warrant in the taxation year of the holder in which the disposition occurs to
the extent that the proceeds of disposition of the Share or Warrant, as applicable, net of any reasonable costs of disposition,
exceed (or are less than) the adjusted cost base to the holder of such Share or Warrant, as applicable.
The exercise of a Warrant will not constitute a disposition of property for purposes of the Tax Act and, consequently,
no gain or loss will be realized upon the exercise of a Warrant.
For a detailed explanation of the Canadian federal income tax considerations generally relevant to investors, see
“Canadian Federal Income Tax Considerations”.
Risk Factors
An investment in Units is subject to various risk factors, including:
(a) there is no assurance that the Corporation will be able to achieve its investment objective and, as a consequence
of entering into the Forward Agreement, the Corporation will forego the benefits of any increase in the value of
the Common Share Portfolio;
(b) an investment in the Corporation is appropriate only for investors who have the capacity to absorb the loss of
some or all of their investment;
(c) the Corporation has no previous operating history and there currently is no public market for the Shares or the
Warrants nor any assurance that an active public market will develop or be sustained;
(d) the Net Asset Value per Share will fluctuate for a variety of reasons and investors will realize gains or losses
upon the sale of Units (other than on a December Redemption Date based upon the Net Asset Value per Share)
based upon whether the market price of Class A Shares at the time of sale is above or below the investor’s
purchase price for Units;
(e) Class A Shares may trade in the market at a premium or a discount to the Net Asset Value per Class A Share. As
Class F Shares may be converted into Class A Shares, the eventual price at which an investor is able to realize
on an investment in Class F Shares will be affected by whether the Class A Shares are trading in the market at a
premium or a discount to the Net Asset Value per Class A Share;
(f)
there is no assurance that Warrants will trade or, if traded, will trade at a price equal to their intrinsic value and
Warrants may expire worthless. The value of Shares held by a Shareholder who sells or does not exercise
Warrants may be diluted as a result of the exercise of Warrants by others, which dilution will be greater to the
extent that others have redeemed their Shares and, in the case of Class F Shareholders, to the extent that others
have converted their Class F Shares into Class A Shares;
(g) the Corporation is not considered to be a mutual fund under Canadian securities legislation;
(h) the net asset value of the Corporation could be significantly reduced if a substantial number of Shares are
redeemed, which would increase the management expense ratio of the Corporation. In certain circumstances,
the Manager may suspend redemptions and may terminate the Corporation;
(i)
tax, securities and other laws may change in a manner which could adversely affect the Corporation,
Shareholders or the Trust;
(j)
the Corporation is exposed to the credit risk of the Counterparty. The Forward Agreement may be terminated
in certain circumstances and there is no assurance the Corporation would be able to enter into another
comparable transaction on acceptable terms;
(k) the Corporation could be subject to non-refundable tax, which would reduce after-tax returns to Shareholders;
10
(l)
(m)
(n)
(o)
(p)
(q)
(r)
(s)
(t)
(u)
(v)
(w)
(x)
(y)
(z)
(aa)
(bb)
See “Risk
borrowers may default on their obligations to return borrowed securities to the Corporation or the Trust;
transactions to hedge against changes to the exchange rates between Canadian and foreign currencies may not
be effective or profitable;
the Manager and the Investment Advisor may be subject to conflicts of interest;
employees of the Investment Advisor who will be primarily responsible for managing the Global
Macroeconomic Portfolio may not continue to be employees of the Investment Advisor throughout the life
of the Corporation;
it may be difficult to enforce legal rights against the Investment Advisor because all or a substantial portion of
its assets are located outside of Canada. Because the majority of the Global Macroeconomic Portfolio may be
held in accounts with sub-custodians in other jurisdictions, there may be additional defences available to any
judgement obtained by the Trust in Canada;
the Investment Advisor’s past performance using its global macroeconomic investment approach is not
necessarily indicative of future profitability, the Investment Advisor may use different strategies in the future,
and the Investment Advisor’s global macroeconomic investment approach may not be successful in the future;
the value of the Global Macroeconomic Portfolio will be affected by a variety of factors that are not within the
control of the Investment Advisor;
the Global Macroeconomic Portfolio may include illiquid securities and the Trust may be unable to acquire or
dispose of such securities at acceptable prices;
the prices of commodities contracts are highly volatile and subject to “daily price fluctuation limits” or “daily
limits” which may restrict trading;
the Global Macroeconomic Portfolio may include securities of issuers in foreign countries, including
emerging markets;
returns may vary based on changes in interest rates;
the Trust may use derivatives, which are subject to a number of risks;
the Trust may engage in short selling and may write uncovered call options, which are subject to a number of
risks, including that the Trust will incur a loss if the value of the securities sold short or subject to the uncovered
call option increases in value and that there is no assurance that such securities will be available in a
marketplace to be repurchased by Trust when necessary;
the Trust may use leverage, which has the effect of potentially increasing losses;
the Trust may incur high transaction costs;
the valuation of some investments in the Global Macroeconomic Portfolio may be estimated values provided
by third parties and subject to error; and
if, notwithstanding the investment restrictions of the Trust and the restrictions on the ownership of units of the
Trust, the Trust is found to be subject to tax in respect of one or more “non-portfolio properties”, as defined in
section 122.1 of the Tax Act, the value of the units of the Trust would be reduced, which would reduce the
value of the Forward Agreement, and thereby reduce the net asset value of the Corporation.
Factors”.
Summary of Fees and Expenses Payable by the Corporation and the Trust
The following table contains a summary of the fees and expenses payable by the Corporation and the Trust. For
further particulars, see “Fees and Expenses” and “Plan of Distribution”.
Type of Charge
Description
Fees payable to the Agents for selling
Class A Units: $0.525 per Class A Unit (5.25%), payable by the Corporation
Units
out of the assets attributable to the Class A Shares.
Class F Units: $0.225 per Class F Unit (2.25%), payable by the Corporation
out of the assets attributable to the Class F Shares.
Warrant Exercise Fee
Within 30 days of the proper exercise of a Warrant, the Corporation will pay
a fee of $0.10 per Warrant to TD Securities Inc. for and on behalf of the
Agents and, in addition in the case of the exercise of a Class A Warrant, a fee
of $0.15 per Class A Warrant to the dealer whose client has exercised the
Class A Warrant. Such fees will be paid by the Corporation out of the assets
11
Expenses of Issue
Management Fees
Performance Fee
Operating Expenses
Service Fee
attributable to the Class A Shares (in respect of the exercise of a Class A
Warrant) or out of the assets attributable to the Class F Shares (in respect of
the exercise of a Class F Warrant).
In addition to the Agents’ fees, the Corporation will pay the expenses
incurred in connection with the Offering, estimated to be $750,000 (subject
to a maximum of 1.50% of the gross proceeds of the Offering). All expenses
of the Offering (other than the Agents’ fees) will be allocated pro rata
between each class of Shares based upon the gross proceeds of the Offering
from each class of Shares.
As compensation for management services rendered to the Corporation, the
Manager is entitled to receive from the Corporation an annual management
fee of 0.25% of the Corporation’s NAV (calculated as described under
“Calculation of Net Asset Value”), calculated and payable monthly, based on
the average NAV for that month, plus applicable taxes, plus an amount equal
to the Service Fee (as described below) payable to the Manager by the
Corporation, plus applicable taxes. As compensation for services rendered to
the Trust, CI Investments Inc., as the trustee (in such capacity, the “Trustee”)
of the Trust, is entitled to receive from the Trust an annual management fee
of 1.1% of the net asset value of the Trust calculated and payable monthly,
based on the average net asset value of the Trust for that month, plus
applicable taxes, plus an amount equal to the performance fee described
below. The Investment Advisor is entitled to fees for its services relating to
the Global Macroeconomic Portfolio, which are payable by the Trustee (not
the Trust). See “Fees and Expenses — Fees and Other Expenses”.
The Trust will pay the Trustee a performance fee calculated as at
December 31 of each year. The performance fee will be an amount for
each unit of the Trust then outstanding equal to 20% of the amount by which
the net asset value per unit of the Trust (calculated without taking into
account the performance fee) exceeds the Threshold Amount. On or before
December 31, 2008, the Threshold Amount is the net asset value per unit of
the Trust immediately following the closing of the Offering. Thereafter, the
Threshold Amount is the greater of (i) the net asset value per unit of the Trust
immediately following the closing of the Offering, and (ii) the net asset value
per unit of the Trust on the most recent date that the performance fee was
paid to the Trustee (after payment of such performance fee). When a unit of
the Trust is redeemed on a day other than December 31, a performance fee
will be calculated and payable in an amount equal to 20% of the amount by
which the net asset value per unit of the Trust on the date of such redemption
(calculated without taking into account the performance fee) exceeds the
Threshold Amount then in effect.
Each of the Corporation and the Trust will pay all expenses incurred in
connection with its operation and administration, estimated to be $200,000
and $100,000 per annum for the Corporation and the Trust, respectively
(assuming an Offering size of approximately $100 million). The
Corporation also will pay to the Counterparty a fee under the Forward
Agreement equal to 0.50% per annum of the net asset value of an applicable
number of units of the Trust that will determine the purchase price for the
Common Share Portfolio under the Forward Agreement. See “Fees and
Expenses”.
Summary of Fees Payable by the Manager
The Corporation will pay to the Manager a service fee (calculated and paid
as soon as practicable after the end of each calendar quarter) equal to 0.40%
per annum of the Net Asset Value per Class A Share for all Class A Shares
12
Dealer Performance Fee
then outstanding, plus applicable taxes. The Manager will pay a comparable
service fee, plus applicable taxes, to investment dealers on a pro rata basis
based on the respective number of Class A Shares held by clients of the sales
representatives of such dealers. See “Fees and Expenses — Fees and Other
Expenses”.
The Manager will pay to investment dealers at the end of each calendar year
a dealer performance fee equal to their pro rata share, based on the Net Asset
Value per Class A Share of all Class A Shares held by their clients at the end
of the calendar year relative to the Corporation’s NAV, of 10% of an amount
equal to the performance fee that the Trustee is paid by the Trust at the end of
such calendar year. No dealer performance fees will be paid in respect of
Class F Shares.
Forward Looking Statements
Certain statements included in this prospectus constitute forward looking statements, including those identified by
the expressions “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend” and similar expressions (including
negative and grammatical variations) to the extent they relate to the Corporation, the Manager or the Investment
Advisor. The forward looking statements are not historical facts but reflect the Corporation’s, the Manager’s or the
Investment Advisor’s current expectations regarding future results or events. These forward looking statements are
subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current
expectations, including the matters discussed under “Risk Factors” and in other sections of this prospectus.
13
THE CORPORATION
Trident Performance Corp. (the “Corporation”) is a corporation incorporated under the laws of the Province of
Ontario. The registered office of the Corporation is at 2 Queen Street East, Twentieth Floor, Toronto, Ontario M5C 3G7.
The manager of the Corporation is CI Investments Inc. (in such capacity, the “Manager”). The Manager (or any
replacement thereof) will, at all times, be a resident of Canada for the purposes of the Income Tax Act (Canada) (the “Tax
Act”).
Status of the Corporation
The Corporation is not considered to be a mutual fund under the securities legislation of the provinces of Canada.
Consequently, the Corporation is not subject to the various policies and regulations that apply to mutual funds including
National Instrument 81-102 of the Canadian Securities Administrators (“NI 81-102”).
The Corporation differs from a mutual fund in a number of respects, most notably as follows: (i) the Class A shares
(“Class A Shares”) and Class F shares (“Class F Shares” and, together with the Class A Shares, “Shares”) of the
Corporation are redeemable only on the last day of every month at an amount that is calculated with reference to either the
net asset value (“NAV”) per Share in the case of a redemption on the last day of December in any year commencing in
2009 or to the market price of the Class A Shares in the case of a redemption on the last day of any month (see
“Description of Securities and Shareholder Matters — Redemptions”), whereas the securities of most mutual funds are
redeemable daily based upon their net asset value; (ii) the Class A Shares are to have a stock exchange listing whereas the
securities of most mutual funds do not; and (iii) unlike most mutual funds, the Shares will not be offered on a continuous
basis.
Rationale for the Corporation
The Corporation has been created to obtain exposure to the Global Macroeconomic Portfolio (as defined below).
Trident Investment Management, LLC (“Trident” or the “Investment Advisor”) is the investment advisor to the Global
Macroeconomic Portfolio and seeks to identify and exploit significant global macroeconomic trends. Examples of such
trends include the emergence of China as a significant economic power and the adoption of capitalist-style policies by
many developing countries. These trends result in financial imbalances that have implications for global markets that are
not immediately reflected in the prices of individual securities, currencies and other investments.
Trident believes that by using sophisticated analysis, rapid decision-making and strong risk control measures, these
types of macroeconomic trends can be exploited to generate attractive risk-adjusted rates of return using a global
macroeconomic investment approach, such as that utilized by Trident Investment Management, LLC (“Trident” or the
“Investment Advisor”). Trident seeks to identify investment opportunities by analyzing macroeconomic and political
conditions at the global and country levels to understand the broader forces shaping world markets and to develop
potential investment trends. Once a macroeconomic trend is identified, Trident conducts a systematic analysis of the
instruments available in the potentially affected markets to determine which instruments it believes provide the best
investment opportunity. Trident operates with a portfolio risk-management framework that seeks to limit the amount of
capital at risk in the event that specific investment trends do not materialize. Trident believes that its global
macroeconomic investment approach is best suited for situations where it can analyze and react quickly to developing
trends on a global basis. To this end, Trident has developed a number of decision-support tools that are designed to
facilitate performing the analysis described above on a rapid basis. Trident’s approach has a strong focus on the
developing countries and on commodities, particularly energy.
Trident is a U.S. investment manager that currently manages assets in excess of US$152 million using a top-down,
global macroeconomic investment methodology.
The Corporation offers investors the opportunity to diversify their portfolios through an investment with the potential
for low or negative correlation to global equity markets, as well as the opportunity for capital appreciation, using a global
macroeconomic investment approach. Trident has applied its global macroeconomic investment approach to Trident
Global Opportunities Fund which, since the inception of that investment fund in February 2001 to December 31, 2007, has
achieved a negative correlation with the returns of the MSCI World Index (in Canadian dollars) together with an annual
compound rate of return of approximately 12.3% before payment of performance fees (approximately 9.8% after payment
of performance fees). To the extent that the Global Macroeconomic Portfolio includes short positions, the Corporation
will provide investors with an opportunity to earn gains from such short positions which may offset losses such investors
are experiencing on traditional “long” investments within their portfolios.
14
The Global Macroeconomic Outlook
In Trident’s view, the following are the most significant current global macroeconomic trends:
Real Estate and Credit Deterioration
Credit markets are far from normal and significant losses are being suffered in credit by both banks and the brokerage
firms. However, Trident believes that the losses so far declared by these financial institutions are a small percentage of
their true losses and that the losses declared by brokerage firms are particularly vulnerable to understatement due to
different scopes of regulatory oversight. These losses are being compounded by a concurrent downturn in the U.S. housing
market. Trident is seeking to exploit this trend of real estate and credit deterioration through such investments as taking
short positions in credit (particularly the credit of lenders to real estate and mortgage insurers) and short positions in
equity securities of financial institutions.
U.S. Economic Slowdown
The United States currently has a trade deficit that is over 5% of gross domestic product (“GDP”), a fiscal deficit that
is over 2% of GDP and a total credit to GDP ratio that is over 300%. The trade deficit has persisted despite very strong
global growth and a U.S. dollar that has been depreciating steadily over the past several years. The fiscal deficit may be
understated since, among other reasons, large expenditures (such as the Iraq war and new Medicare drug benefits) are not
factored into the deficit calculation. The credit creation has, in turn, produced an unprecedented housing “bubble” that, in
2007, has been deflating rapidly with attendant destruction in credit values. In Trident’s view, the combination of
increasing inflation, the housing downturn and related reductions to consumer spending in the United States are likely to
create, at best, a prolonged economic slowdown and, at worst, a major recession. As well, U.S. lawmakers face pivotal
elections in 2008 and appear to Trident to be focused on campaigning with a tendency to pursue short-term solutions
rather than address structural economic problems with long-term solutions that ultimately may prove more effective.
Trident is seeking to exploit this trend of a general U.S. economic slowdown through such strategies as taking short
positions in equity securities of companies in consumer and leisure related industries, taking long positions in defensive
consumer stocks that may benefit from easy money and predictable earnings, and taking long positions in short-term
interest rates in anticipation of significant interest rate reductions during the next twelve months.
Global Inflationary Trends
The growth model adopted by most of the Asian countries that were affected by the Asian economic crisis of
1997-1998 was to focus on export growth to offset weak domestic demand in the aftermath of the turmoil. In Trident’s
view, the net result was effective pegging of most Asian currencies at hyper-competitive levels against the U.S. dollar and
other developed country currencies. The substantial wave of investment in China during the past several years has served
to further boost that country’s productivity. Trident believes that these trends have triggered a wave of global deflation,
particularly in manufactured goods. Further, the emergence of India as an important center for services outsourcing has
resulted in some deflation in the cost of services. As such, over the last decade there has been very low global inflation
which, in turn, has resulted in relatively low interest rates globally and led to a significant build-up of debt. In Trident’s
view, the continued pegging of the Asian currencies against the U.S. dollar has resulted in a large accumulation of dollar
reserves in the region and encouraged domestic investment booms. The effects of these investment booms are now
triggering a sustained increase in the prices of oil and most commodities. Should a U.S. economic slowdown be addressed
through lower interest rates in the U.S., Trident believes that more inflation likely will result globally, especially for
commodities, producing a global inflationary trend. Trident is seeking to exploit this trend of general global inflation
through such investments as long positions in gold and gold equity securities, short positions in the U.S. dollar and long
positions in the Japanese yen and equity securities of Japanese companies. Equity securities of Japanese companies could
benefit from a significant increase in the domestic inflation rate because it would encourage Japanese banks to resume
lending without the fear of deflation.
Other Global Macroeconomic Trends
The global macroeconomic trends described above are based on current global conditions and may change at any
time. These trends may lose their significance and other global macroeconomic trends may emerge. Accordingly,
Trident’s global market outlook may change in the future, which may trigger changes to the investments that Trident seeks
for its clients.
15
GLOBAL MACROECONOMIC INVESTING
Global Macroeconomic Investment Methodology
The returns to the Corporation and to the holders (“Shareholders”) of Shares will be dependent upon the return on the
Global Macroeconomic Portfolio by virtue of the Forward Agreement (as defined below). The “Global Macroeconomic
Portfolio” will be acquired and held by a newly created investment trust, Trident Performance Trust (the “Trust”), and
may consist of equity and fixed income securities, commodities, currencies and derivative instruments which provide
exposure to any or all of the foregoing or to general or specific market indices. Such positions may be initiated to express
macroeconomic views, to exploit inter-market pricing discrepancies, as well as to hedge as needed. The Global
Macroeconomic Portfolio may take long and short positions in the markets in which it participates.
The Global Macroeconomic Portfolio will be actively managed by the Investment Advisor using a top-down, global
macroeconomic investment methodology. The Investment Advisor’s global macroeconomic investment analysis is
described below.
Opportunity Analysis
Trident seeks to identify investment opportunities by analyzing macroeconomic and political conditions at the global
and country levels to understand the broader forces shaping world markets and to develop potential investment trends.
Trident tests these trends by constant observation and analysis of various key variables it has determined to be relevant.
Trident then identifies the markets around the world that, in its opinion, are most likely to be impacted by these
macroeconomic trends and assesses the probability of sustained trend moves in these identified sectors or markets.
Security Selection and Risk-Reward Analysis
Once a macroeconomic trend is identified, Trident conducts a systematic analysis of the instruments available in the
potentially affected markets to determine which instruments provide the best investment opportunity. Both the potential
upside for each investment alternative and the probability of obtaining such upside if the macroeconomic trend is realized
are assessed. As part of such assessment, Trident conducts microeconomic analysis, focusing on relative valuation,
historic price movements, earnings changes (to the extent stocks are involved) and other factors as needed. Risk factors
such as liquidity, suitability and volatility also are considered. The objective is to identify those investments that are likely
to result in the maximum profit with the least volatility. To obtain exposure to the macroeconomic view, Trident also
considers investments in the currency, fixed income, equity and other markets as long as the expected macroeconomic
trend is likely to have a significant impact on the pricing of these investments and the risks in these markets are
quantifiable.
Portfolio Construction and Risk Management
Trident operates with a portfolio risk-management framework that seeks to limit the amount of capital at risk in the
event that specific investment trends do not materialize. The amount of capital at risk in any one investment trend is
determined by Trident using a careful analysis of risk at the individual instrument, trend and portfolio levels. Instrumentspecific events, liquidity, market and industry-wide changes and correlations across macroeconomic trends are factors
that are evaluated by Trident in assessing the risk of a position in the context of an overall portfolio. Trident also considers
how correlations across portfolio trends might change under different macroeconomic scenarios.
Trident’s global macroeconomic investment approach is best suited for situations where Trident can analyze and
react quickly to developing trends on a global basis. To this end, Trident has developed a number of decision-support tools
that facilitate performing the analysis described above on a rapid basis including the following:
• an integrated global database with macroeconomic and market price information from virtually all of the major
countries and markets in the world;
• software which facilitates ad hoc analysis of macroeconomic trends on industry sector prices across the world;
• a system which allows for the construction of customized baskets of securities and permits analysis of the risk of
each basket and the behaviour of each basket against the macroeconomic trend of interest; and
• a trading and risk management system that allows for the analysis of volatilities and covariance and implements
real-time monitoring of investment positions and trends.
Trident’s approach has a strong focus on the developing countries and on commodities, particularly energy. As such,
a significant proportion of the investment positions within the Global Macroeconomic Portfolio are expected to result
from macroeconomic trends that have their genesis in these areas. A substantial amount of the Global Macroeconomic
Portfolio’s assets may be invested in the emerging markets and/or commodities if the Investment Advisor determines that
the investment opportunities so warrant.
16
Trident Global Opportunities Fund
The Investment Advisor intends to manage the Global Macroeconomic Portfolio using substantially the same
investment methodology and strategy that are described above and have been employed for Trident Global Opportunities
Fund since its inception in February 2001. Since inception to December 31, 2007, Trident Global Opportunities Fund has
achieved a negative correlation with the returns of the MSCI World Index (in Canadian dollars) together with an annual
compound rate of return of approximately 12.3% before payment of performance fees (approximately 9.8% after payment
of performance fees). The following tables and charts show the historical negative market correlation and annual
compound returns achieved by the Investment Advisor with respect to Trident Global Opportunities Fund for the periods
shown, as at December 31, 2007. This information does not reflect the expected performance of the Corporation and
is provided only to illustrate the experience and historic investment results obtained by the Investment Advisor
using substantially the same investment methodology and strategy as the Investment Advisor will employ for the
Global Macroeconomic Portfolio. This information is not, and should not be construed as, indicative of the future
performance of the Shares or of amounts which may be distributed by the Corporation. This information is
provided solely for illustrative purposes and should not be construed as a forecast or projection. Past performance
does not guarantee future investment results.
In the following tables and charts:
“Return” means the average annual compound rate of return.
“Standard Deviation” is a commonly used measure of volatility based on the dispersion of the set of data from its mean.
In simplified terms, it is the square root of the amount of variation in returns.
“Sharpe Ratio” is the measure of the results of an investment given the amount of risk taken to achieve that result. The
formula for the Sharpe ratio is: (X⫺R)/ D where “X” = average rate of return, “R” = risk-free rate, and “D” = the standard
deviation.
“Alpha” is the measure of risk-adjusted performance by regressing the investment’s return on the appropriate index’s
return. For example, if an investment has a beta of 2 and the market returns 9%, the investment’s expected return during
the same period is 18% (beta * market return). If, however, the investment’s actual return during the period is 20%, the
investment’s alpha would be the difference between the actual return and the expected return, namely 2% (20% - 18%).
Alpha is calculated for each month during the relevant period (in the case of Trident Global Opportunities Fund, from its
inception until December 31, 2007). The results are then averaged and annualized.
“Beta” is the measure of an investment’s risk in relation to a market or benchmark. For example, where an investment has
a “beta” of 1.5, then if the market return is 10%, the expected return on the investment is 15%.
“Capture Rates” is the measure of an investment’s ability to capture both the upside movement of the market as well as
the downside movement.
“Up Capture Ratio” is the performance of an investment during periods in which the market moves up, divided by the
performance of the market over the same periods.
“Down Capture Ratio” is the performance of an investment during periods in which the market moves down, divided by
the performance of the market over the same periods.
“Negative Periods (% total)” is the ratio of periods in which performance is less than or equal to zero divided by the total
number of periods observed.
17
Return %
Standard Deviation %
Sharpe Ratio
Alpha %
Beta
Up Capture Ratio
Down Capture Ratio
Negative Months (%total)
12.33
0.59
15.36
11.72
0.81
0.05
13.71
0.00
-0.10
1.00
0.07
1.00
-1.40
1.00
45.12
48.78
Performance Analysis
Inception* to December 31, 2007
Trident Global Opportunities Fund
MSCI World Index $C
Risk Return Analysis
Inception to December 31, 2007
15.00
Trident Global Opportunities
Fund
12.00
Return
9.00
6.00
3.00
MSCI World Index $C
0.00
5.00
8.00
11.00
14.00
17.00
20.00
*
Performance Analysis
Inception* to December 31, 2007
Best 3 Month Period
Worst 3 Month Period
Best 1 Year Period
Worst 1 Year Period
Best 3 Year Period
Worst 3 Year Period
Best 5 Year Period
Worst 5 Year Period
Standard Deviation (%)
Trident Global Opportunities Fund
MSCI World Index $C
43.5%
13.5%
-7.5%
-14.7%
89.0%
30.7%
-11.6%
-29.9%
26.0%
14.8%
0.6%
-4.8%
16.4%
9.2%
1.3%
-1.4%
Inception: February 2001
The foregoing financial data is calculated based on the performance of Trident Global Opportunities Fund before
payment of performance fees.
18
The negative correlation of Trident Global Opportunities Fund to the MSCI World Index ($C) is illustrated by the
fact that its Down Capture Ratio was ⫺1.40:1 while its Up Capture Ratio was only 0.07:1. This means that when the MSCI
World Index (CS) lost $1, Trident Global Opportunities Fund gained, on average, $1.40, and when the MSCI World Index
($C) gained $1, Trident Global Opportunities Fund gained, on average, only $0.07.
Annual Compound Returns for the Periods Indicated Ending December 31, 2007
1-Year
2-Year
3-Year
4-Year
5-Year
Inception
(1)(2)
Trident Global Opportunities Fund
Before Performance Fee . . . . . . .
After Performance Fee . . . . . . . .
MSCI World Index ($Cdn)(1)(3) . . . .
Outperformance
Before Performance Fee . . . . . . .
After Performance Fee . . . . . . . .
.................
.................
.................
89.0% 37.5%
61.3% 27.0%
(7.1)% 5.9%
26.0%
19.5%
6.1%
19.2%
14.6%
6.4%
16.4%
12.7%
7.0%
12.3%
9.8%
0.6%
.................
.................
96.1% 31.6%
68.4% 21.1%
19.9%
13.4%
12.8%
8.2%
9.4%
5.7%
11.8%
9.2%
Notes:
(1) Source: Globe HySales and globefund.com, other than “After Performance Fee” data which is derived by recalculating the “Before Performance
Fee” data to take into account the performance fee paid by Trident Global Opportunities Fund on December 31, 2007. Data expressed “Before
Performance Fee” does not take into account the payment of such performance fee.
(2) These returns are historical annual compound total returns (including reinvestment of all distributions) net of operating expenses and an annual
management fee of 2.25% and, for data expressed “After Performance Fee,” takes into account the performance fee paid by Trident Global
Opportunities Fund on December 31, 2007.
(3) The MSCI World Index ($Cdn) is calculated by Morgan Stanley Capital International and comprised of approximately 1,600 companies listed on
stock exchanges in the 22 countries that make up the MSCI national indices and is converted into Canadian dollars.
(1) (2)
Trident Global Opportunities Fund
vs. MSCI World Index $C
Value of $10,000 invested from inception to December 31, 2007
$24,000
(1)
$22,000
$22,208
$20,000
$18,946
$18,000
$16,000
$14,000
$12,000
$10,410
$10,000
$8,000
Trident Global Opportunities Fund (Before Performance Fee)
(1)
(2)
MSCI World Index ($ Cdn)
Dec-07
Nov-07
Aug-07
Feb-07
May-07
Nov-06
Aug-06
Feb-06
May-06
Nov-05
Aug-05
Feb-05
May-05
Nov-04
Aug-04
May-04
Feb-04
Nov-03
Aug-03
May-03
Feb-03
Nov-02
Aug-02
May-02
Feb-02
Nov-01
Aug-01
May-01
Feb-01
$6,000
Trident Global Opportunities Fund (After Performance Fee)
Source: Globe HySales and globefund.com, other than “After Performance Fee” data which is derived by recalculating the “Before Performance
Fee” data to take into account the performance fee paid by Trident Global Opportunities Fund on December 31, 2007. Data expressed “Before
Performance Fee” does not take into account the payment of such performance fee.
These returns are historical annual compound total returns (including reinvestment of all distributions) net of operating expenses and an annual
management fee of 2.25%. The shaded area shows the performance of Trident Global Opportunities Fund before payment of a performance fee on
19
December 31, 2007. The line labelled “Trident Global Opportunities Fund (after performance fee)” shows the performance of Trident Global
Opportunities Fund after payment of such performance fee.
Since the inception of Trident Global Opportunities Fund, the U.S. dollar has declined in value relative to other
international currencies, including the Canadian dollar. As a result, the performance of the MSCI World Index, when
converted into Canadian dollars, is affected by the declining value of the U.S. dollar and results in a total return that is
approximately 57.2% less than the U.S. dollar version of the index before currency conversion. Trident Global
Opportunities Fund did not experience a similar decline in value since Trident actively managed the risk to the U.S. dollar
denominated investments of Trident Global Opportunities Fund through derivatives and currency transactions and by
limiting investments in U.S. dollar denominated securities.
At the present time, more than 90% of the investment portfolio of Trident Global Opportunities Fund is hedged back
to the Canadian dollar.
INVESTMENTS OF THE CORPORATION
Investment Objective
The Corporation’s investment objective is to provide tax-efficient risk-adjusted long term rates of return by obtaining
exposure to the Global Macroeconomic Portfolio.
Investment Strategy
The returns to the Corporation and to Shareholders will be dependent upon the return on the Global Macroeconomic
Portfolio by virtue of the Forward Agreement (as defined below). As well, gaining exposure to the Global Macroeconomic
Portfolio, the Forward Agreement enables the Corporation and the Shareholders to defer recognition of potential income
and capital gains which would otherwise be recognized earlier if the Global Macroeconomic Portfolio was held directly
by the Corporation.
Forward Agreement
In order to provide the Corporation with the means to meet its investment objective, the Corporation will invest the
net proceeds of the Offering in a portfolio of common shares of Canadian public companies that are listed on the Toronto
Stock Exchange and that qualify as “Canadian securities” for purpose of the Tax Act (the “Common Share Portfolio”) .
The Corporation then will enter into one or more forward purchase and sale agreements (collectively, the “Forward
Agreement”) with a Canadian chartered bank or an affiliate thereof whose obligations under the Forward Agreement are
guaranteed by such Canadian chartered bank (the “Counterparty”) and the long-term debt of which Canadian chartered
bank has an “approved credit rating” as defined in NI 81-102. Pursuant to the Forward Agreement, the Counterparty will
agree to pay to the Corporation on or about February 28, 2018 (the “Forward Date”), as the purchase price for the
Common Share Portfolio, an amount equal to 100% of the redemption proceeds that would be paid by the Trust to holders
of an applicable number of units of the Trust. The Corporation may purchase additional securities for the Common Share
Portfolio and increase the applicable number of units of the Trust under the Forward Agreement from time to time upon
the exercise of Warrants by the holders thereof. The Corporation will partially settle the Forward Agreement prior to the
Forward Date in order to fund redemptions of Shares by Shareholders from time to time and the payment of expenses and
other liabilities of the Corporation. If the Corporation has not terminated prior to the Forward Date, the Corporation may
seek to extend the Forward Agreement beyond the Forward Date and/or enter into additional and/or replacement forward
purchase and sale agreements with the same or different counterparties.
Under the terms of the Forward Agreement, the Corporation and the Counterparty will agree that their settlement
obligations under the Forward Agreement with respect to the Common Share Portfolio will be discharged, at the election
of the Corporation, either by physical delivery of the Common Share Portfolio by the Corporation to the Counterparty
against cash payment or by the making of a net cash payment to the appropriate party. The amount payable by the
Counterparty for physical delivery of the Common Share Portfolio may be more or less than the aggregate original prices
paid by the Corporation to purchase the Common Share Portfolio. If the Corporation elects physical delivery of the
Common Share Portfolio under the Forward Agreement, the Counterparty will pay to the Corporation on the Forward
Date, as the purchase price for the Common Share Portfolio, an amount equal to 100% of the redemption proceeds that
would be paid by the Trust to holders of an applicable number of units of the Trust. Concurrent with entering into the
Forward Agreement, the Common Share Portfolio will be pledged to and may be held by the Counterparty or an affiliate
thereof as security for the obligations of the Corporation under the Forward Agreement.
The Forward Agreement may be terminated on a date (the “Early Termination Date”) prior to the Forward Date in
certain circumstances, including: (i) if an event of default or a termination event occurs with respect to the Corporation or
20
the Counterparty under the Forward Agreement; or (ii) if the Forward Agreement is pre-settled (as described below) in
whole.
The terms of the Forward Agreement will provide that the Forward Agreement may be pre-settled prior to the
Forward Date at the request of the Corporation by the Corporation tendering to the Counterparty securities from the
Common Share Portfolio or by the making of a net cash payment to the appropriate party. The Corporation may pre-settle
the Forward Agreement, in whole or in part, prior to the Forward Date: (i) to fund redemptions of Shares; (ii) to fund
expenses and other liabilities of the Corporation; and (iii) for any other reason.
Under the Forward Agreement, the forward purchase price may be reduced for all dividends and distributions,
including extraordinary distributions, declared and paid on securities in the Common Share Portfolio to the Corporation as
the owner of the Common Share Portfolio. If any such dividends or distributions are to be received by the Corporation or if
certain other events occur with respect to securities in the Common Share Portfolio, the Forward Agreement will provide
that replacement securities acceptable to the Counterparty may be substituted for shares in respect of which the dividend
or distributions has been declared or other event has occurred. In the event that such replacement securities are not
available, the Corporation may consider contributing additional securities to the Common Share Portfolio and/or entering
into additional forward, derivative or other transactions. The Forward Agreement will have similar provisions designed to
avoid adjustments of the amount to be paid on the Forward Date which might otherwise be required if the Corporation
receives consideration as a consequence of a merger transaction involving any of the securities in the Common Share
Portfolio. The Corporation may also reinvest excess cash from time to time by contributing additional securities to the
Common Share Portfolio and/or entering into additional forward, derivative or other transactions.
Events of default under the Forward Agreement will include, among others: (i) a party fails to make a payment or
perform an obligation when due under the Forward Agreement which is not cured within the applicable grace period; (ii) a
party makes a representation which is incorrect or misleading in any material respect; (iii) a party defaults in respect of a
specified transaction having a value in excess of a specified threshold which default is not cured within any applicable
grace period; (iv) certain events related to the bankruptcy or insolvency of a party; and (v) a party consolidates,
amalgamates or merges with or into, or transfers substantially all of its assets to, another entity and the resulting, surviving
or transferee entity fails to assume the obligations of such party under the Forward Agreement.
Termination events under the Forward Agreement, which would permit a party to terminate the Forward Agreement,
will include the following, among others: (i) it becomes unlawful for a party to perform its obligations under or comply
with any material provisions of the Forward Agreement; and (ii) certain tax events occur which require a party to
indemnify the other party in respect of certain taxes or reduce the amount that a party would otherwise have been entitled
to receive under the Forward Agreement. In addition, certain additional termination events that would permit the
Counterparty to terminate the Forward Agreement will include, among others: (i) certain regulatory, credit or legal events
occur which affect a party; (ii) if the Counterparty determines in its sole discretion, acting reasonably and in good faith,
that the cost of hedging its obligations under the Forward Agreement has increased, including, without limitation, as a
result of the adoption of or change in any applicable law or regulation (including, without limitation, any tax law) and the
Corporation is unwilling or unable to compensate the Counterparty for such additional cost, (iii) if either Trident ceases to
be the investment advisor to the Trust or Mr. Narayanan ceases to be one of the portfolio managers who is primarily
responsible for managing the Global Macroeconomic Portfolio, (iv) if CI Investments Inc. (or an affiliate thereof) ceases
to be the trustee of the Trust, (v) if the investment objective or investment strategy of the Trust is amended, (vi) if at any
time the net asset value of the Corporation falls below $5,000,000 for five consecutive business days, and (vii) if the
Counterparty is unable to maintain a hedge in respect of its obligations under the Forward Agreement.
The obligations of the Counterparty to the Corporation under the Forward Agreement will be determined by
reference to the performance of an applicable number of units of the Trust, including the distributions paid on such units.
The Counterparty may hedge its exposure under the Forward Agreement to the economic performance of the units of the
Trust. There is no assurance that the Counterparty will maintain a hedge or will do so with respect to the full amount or
term of the Forward Agreement. Neither the Corporation nor the Shareholders by virtue of their investment in Shares will
have any ownership interest in the Trust or the Global Macroeconomic Portfolio or any financial instrument used by the
Counterparty to hedge its exposure under the Forward Agreement. Shareholders will have no recourse or rights against the
assets of the Counterparty in respect of the Forward Agreement or arising out of the Forward Agreement. The Shares do
not represent an interest in, or an obligation of, the Counterparty or any affiliate thereof. The Corporation is exposed to the
credit risk associated with the Counterparty in respect of the Forward Agreement and will have no security interest or
special priority rights in or against any assets of the Counterparty in order to secure its obligations under the Forward
Agreement. See “Risk Factors — Counterparty Risk”. Under the terms of the Forward Agreement, the long-term debt of
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the Counterparty (or of a guarantor of the obligations of the Counterparty to the Corporation) must have an “approved
credit rating” as defined in NI 81-102. If the long-term debt of the Counterparty or its guarantor is no longer so rated, the
Corporation may replace the Counterparty with a counterparty with an approved credit rating which may include an
assignment of the Forward Agreement by the Counterparty to such replacement counterparty.
The Counterparty is at arm’s length to each of the Corporation, the Manager, the Investment Advisor and the Trust.
One or more affiliates of the Counterparty may be involved in the offering and sale, from time to time, of the Shares and
Warrants and may invest as principal in these securities. The Counterparty and its affiliates may, from time to time,
provide services to the Manager, the Investment Advisor or their respective affiliates which are unrelated to the activities
of the Corporation or the Trust. As a counterparty under the Forward Agreement, the interests of the Counterparty differ
from those of the Corporation, and the Counterparty can be expected to exercise its rights from time to time under the
Forward Agreement in its own best interests. The legitimate exercise of these rights may be contrary to the interests of the
Corporation and the holders of its Shares and Warrants.
Securities Lending
In order to generate additional returns, the Corporation may lend securities included in the Common Share Portfolio to
securities borrowers acceptable to the Corporation pursuant to the terms of a securities lending agreement between the
Corporation and such borrower (each a “Securities Lending Agreement”). Under a Securities Lending Agreement (i) the
borrower will pay to the Corporation a negotiated securities lending fee and will make compensation payments to the
Corporation equal to any distributions received by the borrower on the securities borrowed, (ii) the securities loans must qualify
as “securities lending arrangements” for the purposes of the Tax Act, and (iii) the Corporation will receive collateral security.
Investment Restrictions
After the closing of the Offering, the Corporation will use the net proceeds of the Offering to acquire the Common
Share Portfolio. The Corporation is subject to certain investment restrictions that, among other things, limit the securities
the Corporation may acquire. The Corporation’s investment restrictions may not be changed without the approval of
Shareholders by a two-thirds majority vote at a meeting called for such purpose. See “Description of Securities and
Shareholder Matters — Meetings of Shareholders and Extraordinary Resolutions”. The Corporation’s investment
restrictions provide the following:
(a) Investment in Canadian Securities. Except as described below, the Corporation will restrict its
investments to common shares of Canadian public companies that are “Canadian securities” for the purposes
of the Tax Act. The Corporation will not acquire an investment that is “taxable Canadian property” to the
Corporation for the purposes of the Tax Act or is “specified property” as defined in draft legislation to amend
the Tax Act.
(b) Forward Agreement. The Corporation will enter into the Forward Agreement and may enter into additional
and/or replacement forward purchase and sale agreements as described under “Investments of the
Corporation — Forward Agreement”.
(c) Securities Lending. The Corporation may engage in securities lending as described under “Investments of
the Corporation — Securities Lending”.
(d) Other Investments. The Corporation may invest in cash or cash equivalents including indebtedness that has
a remaining term to maturity of less than one year and that is issued or fully guaranteed by the government of
Canada or of a jurisdiction thereof, the government of the United States and of certain other foreign countries if
the indebtedness has an approved credit rating for the purposes of NI 81-102 (as if NI 81-102 were applicable),
and certain Canadian or foreign financial institutions if the indebtedness is rated as short-term debt and has an
approved credit rating for the purposes of NI 81-102 (as if NI 81-102 were applicable).
(e) Mutual Fund Corporation Status. The Corporation will not make any investment or conduct any activity
that would result in the Corporation failing to qualify as a “mutual fund corporation” within the meaning of the
Tax Act.
INVESTMENTS OF THE TRUST
Investment Objective
The Trust’s investment objective is to provide risk-adjusted long term rates of return by obtaining exposure to
securities, currencies and other investments in the global markets using a top-down, global macroeconomic investment
methodology.
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Investment Strategy
The Global Macroeconomic Portfolio may consist of equity and fixed income securities, commodities, currencies
and derivative instruments which provide exposure to any or all of the foregoing or to general or specific market indices.
Investments for the Global Macroeconomic Portfolio will be made by the Investment Advisor using the global
macroeconomic investment methodology described above under “Global Macroeconomic Investing — Global
Macroeconomic Investing Methodology”. The Global Macroeconomic Portfolio may use other investment techniques
and instruments, including, but not limited to, short sales, leverage, margin transactions, illiquid securities and over-thecounter derivatives.
The Global Macroeconomic Portfolio may make short-term investments for liquidity or defensive purposes. These
short-term investments may include, but shall not be limited to, interest-earning money market accounts, government
obligations, commercial paper, and short-term certificates of deposit.
The Global Macroeconomic Portfolio will not operate as a “commodity pool” in that it will not primarily trade and
obtain an investment return from trading in commodity futures contracts and commodity options (collectively,
“commodity interests”). However, there are no limitations on the Global Macroeconomic Portfolio’s trading in
commodity interests, and such trading may be undertaken by the Global Macroeconomic Portfolio for both hedging
and speculative purposes.
It is currently expected that more than 90% of the value of the Global Macroeconomic Portfolio will be hedged back
to the Canadian dollar. This hedging strategy may change based on the Investment Advisor’s view of the currency
markets.
Use of Derivative Instruments
The Global Macroeconomic Portfolio may invest in or use derivative instruments for hedging or non-hedging
purposes, consistent with the Trust’s investment strategy. Derivative instruments may include, but are not limited to,
options, swaps, index futures, synthetic futures, structured notes, forward contracts and over-the-counter derivatives.
Securities Lending
In order to generate additional returns, the Trust may lend securities included in the Global Macroeconomic Portfolio
to securities borrowers acceptable to the Trust pursuant to the terms of a securities lending agreement between the Trust
and such borrower (each a “Securities Lending Agreement”). Under a Securities Lending Agreement (i) the borrower will
pay to the Trust a negotiated securities lending fee and will make compensation payments to the Trust equal to any
distributions received by the borrower on the securities borrowed, (ii) the securities loans must qualify as “securities
lending arrangements” for the purposes of the Tax Act, and (iii) the Trust will receive collateral security.
Short Selling and Uncovered Call Options
One of the Trust’s investment strategies may be to engage in short selling of securities which the Investment Advisor
believes are overvalued. A “short sale” is where the Trust borrows securities from a lender and then sells the borrowed
securities in the open market. At a later date, the same number of securities are repurchased by the Trust at their market
price and returned to the lender. In the interim, the proceeds from the first sale are deposited with the lender and the Trust
pays compensation to the lender as well as any dividends or interest that accrues during the period of the short sale. The
Trust may take short sale positions only in respect of stocks which are listed on a recognized Canadian or international
stock exchange up to 35% (at the time of investment) of the Trust’s net asset value (less the amount of any other leverage
within the Global Macroeconomic Portfolio at the time of investment).
The Trust also may write uncovered call options provided: (a) all such options written by the Trust must be traded on
recognized options exchanges; (b) the options must be in respect of publicly listed stocks or bonds, a recognized stock or
bond index or currencies; (c) the option written must be sold through a broker and must conform with standardized rules
issued by applicable exchanges; and (d) such investments must not exceed 35% (at the time of investment) of the Trust’s
net asset value (less the amount of any other leverage within the Global Macroeconomic Portfolio at the time of
investment).
Loans and other Forms of Leverage
In order to provide the Investment Advisor with an opportunity to enhance the Global Macroeconomic Portfolio’s
return, the Trust may borrow pursuant to a loan facility (the “Loan Facility”) from a chartered bank (the “Lender”).
Borrowings may be used for various purposes, including purchasing additional investments for the Global
Macroeconomic Portfolio, maintaining liquidity and funding redemptions of units of the Trust. The Lender will be
at arm’s length to the Trust and the Manager and their respective affiliates and associates but may be affiliated with one of
23
the Agents (as defined under “Plan of Distribution”). The terms, conditions, interest rates, fees and expenses of and under
any Loan Facility are expected to be typical for loans of this nature.
Utilization of the Loan Facility will result in leverage within the Global Macroeconomic Portfolio. The aggregate
amount of borrowing by the Trust may not exceed 35% of the net asset value of the Trust at the time of the borrowing. The
Trust also may add leverage to the Global Macroeconomic Portfolio by utilizing a variety of additional strategies
including, but not limited to, the use of reverse repurchase agreements, credit derivatives, other derivative instruments,
margin purchases, short sales and writing uncovered call options. However, the aggregate amount of borrowings under the
Loan Facility and other forms of leverage may not exceed 35% of the net asset value of the Trust at the time the borrowing
or other transaction is entered into. In the event that the total amount borrowed, or otherwise subject to leverage, by the
Trust exceeds the 35% limit as a result of redemptions of units of the Trust, the Investment Advisor will reduce
indebtedness or other leverage on an orderly basis as soon as practicable so that the amount borrowed or otherwise subject
to leverage does not exceed such limit. Exposure created through derivatives used for purposes of “hedging” (as that term
is defined in NI 81-102) is not considered a form of leverage and therefore such derivatives are not included in the amount
of leverage of the Global Macroeconomic Portfolio for purposes of determining compliance with the foregoing limitation.
Similarly, leveraged investments within the Global Macroeconomic Portfolio are not included in the amount of its
leverage to the extent that the market exposure of such investments has been hedged.
Investment Restrictions
The Trust is not permitted to:
(a) invest more than 20% of the total assets of the Trust at the time of the investment in the securities of a single
private sector issuer;
(b) invest more than 20% of the total assets of the Trust at the time of the investment in equity securities that are
neither listed nor traded on an established market;
(c) invest any of the Trust’s assets directly in land or real estate;
(d) make investments with the explicit intention of exercising control over the issuer; or
(e) hold any property that is a “non-portfolio property” as defined in section 122.1 of the Tax Act.
MANAGEMENT OF THE CORPORATION
Directors and Officers of the Corporation
The following are the names, municipalities of residence, office and principal occupations in the last five years of the
directors and officers of the Corporation.
Name and Municipality of Residence
Office
Principal Occupation(1)
DAVID R. MCBAIN . . . . . . . . . . . . . . . . . . . . .
Toronto, Ontario
DOUGLAS J. JAMIESON . . . . . . . . . . . . . . . . . . .
Toronto, Ontario
Chief Executive Officer
Director
Senior Vice-President, CI
Investments Inc.
Senior Vice-President and Chief
Financial Officer, CI Financial
General Partner Corp. and
Senior Vice-President, Finance and
Chief Financial Officer,
CI Investments Inc.
Vice-President, Legal, CI
Investments Inc.
Managing Partner, Alpine Asset
Advisors AG
Corporate Director
Director
General Manager, KLQ Mechanical LTD.
Director
Director, The Ranson Group
CHRIS VON BOETTICHER . . . . . . . . . . . . . . . . . .
Toronto, Ontario
WILLIAM HARDING(2) . . . . . . . . . . . . . . . . . . .
Gstaad, Switzerland
STUART P. HENSMAN(2) . . . . . . . . . . . . . . . . . .
Toronto, Ontario
CHRISTOPHER HOPPER(2) . . . . . . . . . . . . . . . . .
Toronto, Ontario
SHARON M. RANSON(2) . . . . . . . . . . . . . . . . . .
Toronto, Ontario
(1)
Chief Financial Officer
Director and Corporate
Secretary
Director
Before June 2006, Mr. McBain also was President and Chief Executive Officer, Skylon Advisors Inc. since November 2003. Mr. Jamieson became
an officer of CI Financial General Partner Corp. in July 2006. Before July 2006, Mr. Jamieson was Senior Vice-President and Chief Financial
Officer, CI Financial Inc. since May 2005. Before August 2002, Mr. Hensman was Chairman and Chief Executive Officer, Scotia Capital (USA)
24
(2)
Inc. Before September 2007, Mr. Hopper was President and Chief Executive Officer, Northern Home Services. Before March 2004, Ms. Ranson
was Vice-President and Portfolio Manager, TAL Global Asset Management.
Member of the Audit Committee and Independent Review Committee.
All of the directors and officers of the Company have held the same principal occupation for the five years preceding
the date hereof, except as indicated in the notes above.
The Manager
Pursuant to a management agreement between the Corporation and CI Investments Inc. (the “Manager”) dated
January 31, 2008 (the “Management Agreement”), the Manager is the manager of the Corporation and, as such, is
responsible for providing or arranging for all portfolio management and administrative services required by the
Corporation including, without limitation, managing the Corporation’s investment portfolio in a manner consistent with
the investment objectives and investment strategies of the Corporation; authorizing the payment of operating expenses
incurred on behalf of the Corporation; preparing financial statements, income tax returns and financial and accounting
information as required by the Corporation; ensuring that Shareholders are provided with such financial statements
(including semi-annual and annual financial statements) as they have requested and such other reports as are from time to
time required by applicable law; ensuring that the Corporation complies with regulatory requirements and applicable
stock exchange listing requirements; preparing the Corporation’s reports to Shareholders and the Canadian securities
regulatory authorities; determining the amount of distributions to be paid by the Corporation; and negotiating contractual
agreements with third-party providers of services, including registrars, transfer agents, custodians, auditors and printers.
The Manager is responsible for managing all of the Corporation’s activities (subject to applicable law) and the execution
of the Corporation’s investment strategy, which includes acquiring the Common Share Portfolio and entering in the
Forward Agreement.
The Manager is an independent, Canadian-owned wealth management company that offers a broad range of
investment products and services, including an industry-leading selection of investments funds. As at December 31, 2007,
the Manager and its affiliates had assets under management of approximately $67.2 billion and fee earning assets of
approximately $103.8 billion. According to information provided by The Investment Funds Institute of Canada, as at
December 31, 2007 the Manager was the second largest independent (not owned by a chartered bank, insurance company
or major trust company) mutual fund group in Canada in terms of assets under management. The principal office address
of the Manager is at 2 Queen Street East, Twentieth Floor, Toronto, Ontario M5C 3G7.
The Manager is required to exercise the powers and discharge the duties of its office honestly, in good faith and in the
best interests of Shareholders and, in connection therewith, to exercise the degree of care, diligence and skill that a
reasonably prudent person would exercise in similar circumstances. The Management Agreement provides that the
Manager will not be liable in any way for any default, failure or defect in or diminution in the value of any of the securities
held by the Corporation if it has satisfied the standard of care, diligence and skill set forth above. The Manager will incur
liability for wilful misconduct, bad faith, negligence or other breach of this standard of care.
The Manager may resign upon 60 days notice to Shareholders and the Corporation or such lesser notice as the
Corporation may accept. If the Manager resigns, it may appoint its successor, but its successor must be approved by
Shareholders unless it is an affiliate of the Manager. The Manager will be deemed to have resigned if the Manager
becomes bankrupt or insolvent or makes a general assignment for the benefit of its creditors. If the Manager is in material
breach or default of its obligations under the Management Agreement and such breach or default has not been cured
within 30 days after notice of same has been given to the Manager, the Corporation shall give notice thereof to
Shareholders and the Shareholders may remove the Manager and appoint a successor manager. Except as described
above, the Manager cannot be terminated as manager of the Corporation.
The Manager is entitled to fees for its services under the Management Agreement as described under “Fees and
Expenses” and will be reimbursed for all reasonable costs and expenses incurred by it on behalf of the Corporation. In
addition, the Manager and each of its directors, officers, employees and agents will be indemnified by the Corporation
from and against all legal fees, judgments and amounts paid in settlement, actually and reasonably incurred by the
Manager or any of its officers, directors, employees or agents in the exercise of its duties as manager, unless those fees,
judgments or amounts paid in settlement were incurred as a result of a breach by the Manager of the standard of care
described above and provided the Corporation has reasonable grounds to believe that the action or inaction that caused the
payment of fee, judgment or amount paid in settlement was in the best interests of the Corporation.
The name and municipality of residence of each of the directors of the Manager and officers of the Manager who will
be principally involved in managing the activities of the Corporation, together with their respective principal occupations
during the last five years, are as set out below.
25
Name and Municipality of Residence
Office
Principal Occupation(1)
DAVID R. MCBAIN . . . . . . . . . . . . . .
Toronto, Ontario
DOUGLAS J. JAMIESON . . . . . . . . . . . .
Toronto, Ontario
Senior Vice-President
Senior Vice-President, CI Investments Inc.
Senior Vice-President,
Finance and Chief
Financial Officer
CHRIS VON BOETTICHER . . . . . . . . . . .
Toronto, Ontario
WILLIAM T. HOLLAND . . . . . . . . . . . .
Toronto, Ontario
STEPHEN A. MACPHAIL . . . . . . . . . . .
Toronto, Ontario
PETER W. ANDERSON . . . . . . . . . . . .
Markham, Ontario
Vice-President, Legal
Senior Vice-President and Chief Financial
Officer, CI Financial General Partner Corp. and
Senior Vice-President, Finance and
Chief Financial Officer, CI Investments Inc.
Vice-President, Legal, CI
Investments Inc.
Chief Executive Officer, CI Financial General
Partner Corp.
President, CI Financial General Partner Corp.
SHEILA A. MURRAY . . . . . . . . . . . . . .
Toronto, Ontario
Director, Senior VicePresident, General Counsel
and Corporate Secretary
(1)
Director and Chairman
Director
Director and Chief
Executive Officer
Executive Vice-President, CI Financial General
Partner Corp. and Chief Executive Officer, CI
Investments Inc.
Senior Vice-President and General Counsel,
CI Financial General Partner Corp. and
Senior Vice-President, General Counsel and
Corporate Secretary, CI Investments, Inc.
Before June 2006, Mr. McBain also was President and Chief Executive Officer, Skylon Advisors Inc. since November 2003. Mr. Jamieson became
an officer of CI Financial General Partner Corp. in July 2006. Before July 2006, Mr. Jamieson was Senior Vice-President and Chief Financial
Officer, CI Financial Inc. since May 2005. Before July 2006, Mr. Holland was a Director and Chief Executive Officer, CI Financial Inc. Before
August 2007, Mr. MacPhail was Chief Operating Officer, CI Financial General Partner Corp. Before July 2006 Mr. MacPhail was Chief Operating
Officer, CI Financial Inc. and was President, CI Financial Inc. since May 2005 and, before May 2005, was Chief Financial Officer and Executive
Vice-President, CI Financial Inc. Mr. Anderson became an officer of CI Financial General Partner Corp. in July 2006. Before July 2006,
Mr. Anderson was Executive Vice-President, CI Financial Inc., before September 2006 also was President, CI Investments Inc. and has been Chief
Executive Officer, CI Investments Inc. since October 2003. Before January 2008, Ms. Murray was a partner of Blake, Cassels & Graydon LLP.
All of the directors and officers of the Manager have held the same principal occupation for the five years preceding
the date hereof, except as indicated in the notes above.
MANAGEMENT OF THE TRUST
The Trust
Trident Performance Trust (the “Trust”) is an investment trust established under the laws of the Province of Ontario
pursuant to a declaration of trust dated January 31, 2008 (the “Declaration of Trust”) by CI Investments Inc., as trustee (in
such capacity, the “Trustee”) of the Trust. The address of the Trust is the address of the Trustee at 2 Queen Street East,
Twentieth Floor, Toronto, Ontario M5C 3G7. The Trust will acquire and hold the Global Macroeconomic Portfolio. See
“Investments of the Trust”.
The Trust is authorized to issue an unlimited number of redeemable, transferable units (“Trust Units”), each of which
represents an equal, undivided interest in the net assets of the Trust. Each Trust Unit entitles the holder thereof (a
“Trust Unitholder”) to the same rights and obligations as a holder of any other Trust Unit and no Trust Unitholder is
entitled to any privilege, priority or preference in relation to any other Trust Unitholder. Each Trust Unitholder must be a
“taxable Canadian corporation” as defined in the Tax Act. Each Trust Unitholder is entitled to one vote for each Trust Unit
held and is entitled to participate equally with respect to any and all distributions made by the Trust. On the termination of
the Trust, all Trust Unitholders of record holding outstanding Trust Units are entitled to receive any assets of the Trust
remaining after payment of all debts, liabilities and liquidation expenses of the Trust.
The Trustee
The Trustee will perform the management functions for the Trust pursuant to the Declaration of Trust. The Trustee
has exclusive authority to manage the operations and affairs of the Trust, to make all decisions regarding the operations of
the Trust and to bind the Trust. The Trustee may delegate certain of its powers to third parties, including by entering into a
management agreement, where, in the discretion of the Trustee, it would be in the best interests of the Trust to do so. The
Trustee will enter into the Investment Advisory Agreement (see “Management of the Trust — The Investment Advisor”).
Among other restrictions imposed on the Trustee, it may not dissolve the Trust or wind up the Trust’s affairs except in
accordance with the provisions of the Declaration of Trust.
The Trustee’s duties include: maintaining accounting records for the Trust; authorizing the payment of operating
expenses incurred on behalf of the Trust; calculating the amount and determining the frequency of distributions by the
26
Trust; preparing financial statements, income tax returns and financial and accounting information as required by the
Trust; ensuring that Trust Unitholders are provided with financial statements and other reports as are required form time to
time by applicable law; ensuring that the Trust complies with regulatory requirements including the continuous disclosure
requirements of the Trust under applicable securities laws; preparing the Trust’s reports to Trust Unitholders and to
applicable Canadian securities regulators; obtaining the information and reports necessary for it to fulfil its fiduciary
responsibilities; administering the redemption of Trust Units; arranging for any payment required on or about the
termination of the Trust; dealing and communicating with Trust Unitholders; and negotiating contracts with third party
providers of services including, but not limited to, investment advisors, custodians, transfer agents, auditors and printers.
The Trustee provides office facilities and personnel to carry out these services, together with clerical services which are
not furnished by the custodian of the Trust.
The Trustee, or any successor trustee of the Trust, may resign upon 60 days’ written notice to Trust Unitholders or
may be removed by an extraordinary resolution of the Trust Unitholders in the event the Trustee is in material breach or
default of the provisions of the Declaration of Trust and, if capable of being cured, such breach or default has not been
cured within 20 business days’ notice of such breach or default. Any such resignation or removal shall become effective
only on the acceptance of appointment by a successor trustee. The Trustee is deemed to have resigned if the Trustee
becomes bankrupt or insolvent or in the event the Trustee ceases to be resident in Canada for the purposes of the Tax Act.
If the Trustee resigns or is removed by Trust Unitholders, its successor must be approved by Trust Unitholders. If, after the
resignation or removal of the Trustee, no successor has been appointed within 60 days, the Trustee or any Trust Unitholder
may apply to a court of competent jurisdiction for the appointment of a successor trustee.
The Trustee is required to exercise its powers and discharge its duties honestly, in good faith and in the best interests
of the Trust Unitholders and to exercise the degree of care, diligence and skill that a reasonably prudent trustee would
exercise in comparable circumstances. The Declaration of Trust provides that the Trustee will not be liable in carrying out
its duties under the Declaration of Trust except in cases of wilful misconduct, bad faith, negligence or the disregard of its
obligations or duties or breach of its standard of care and duty. The Declaration of Trust provides that the Trustee will not
be liable in any way for any default, failure or defect in any of the securities or other property comprising the investment
portfolio of the Trust if it has satisfied the duties and the standard of care, diligence and skill set forth above. The Trustee
and each of its directors, officers and employees will be indemnified by the Trust for all liabilities and expenses
reasonably incurred in connection with any action, suit or proceeding that is proposed or commenced or other claim that is
made against the Trustee or any of its officers, directors or employees in the exercise of its duties under the Declaration of
Trust, except those resulting from such person’s wilful misconduct, bad faith, negligence, disregard of such person’s
obligations or duties or breach of their standard of care in relation to the matter in respect of which indemnification is
claimed.
The Trustee is entitled to receive fees from the Trust as described under “Fees and Expenses” and to be reimbursed
for all expenses and liabilities which are properly incurred by the Trustee in connection with the activities of the Trust.
Accounting and Reporting
The Trust’s fiscal year will be the calendar year or such other fiscal period permitted under the Tax Act as the Trustee
elects. The Trustee will ensure that the Trust complies with all applicable reporting and administrative requirements.
The Trustee will keep adequate books and records reflecting the activities of the Trust. A Trust Unitholder or his or
her duly authorized representative will have the right to examine the books and records of the Trust during normal
business hours at the offices of the Trustee. Notwithstanding the foregoing, a Trust Unitholder shall not have access to any
information which, in the opinion of the Trustee, should be kept confidential in the interest of the Trust.
Directors and Officers of the Trustee
The name and municipality of residence of each of the directors of the Trustee and officers of the Trustee who will be
principally involved in managing the activities of the Trust, together with their respective principal occupations during the
last five years, are the same as for the Manager of the Corporation. See “Management of the Corporation — The
Manager”.
The Investment Advisor
Pursuant to an investment advisory agreement (the “Investment Advisory Agreement”) to be entered into between
the Trustee and Trident on or prior to the closing of the Offering, Trident will act as the Investment Advisor to the Trust
and manage the Global Macroeconomic Portfolio. The Investment Advisor was founded in 1998 by Krishnamurthy
Narayanan and carries on business at 909 Third Avenue, 29th Floor, New York, New York, 10022.
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The portfolio managers of the Investment Advisor who will be primarily responsible for managing the Global
Macroeconomic Portfolio are the following:
Krishnamurthy Narayanan is the principal owner of the Investment Advisor and has 16 years of investment
advisory experience. He leads the Investment Advisor’s portfolio strategy and serves as Lead Portfolio Manager. Before
forming Trident, Mr. Narayanan was an Independent Investment Consultant on emerging markets to Credit Suisse Asset
Management. Previously, he was Chief Equity and Emerging Markets Strategist and Director for Macro Trading at
Caxton Corporation. Prior to working at Caxton Corporation, he was an Investment Analyst at Tiger Management.
Mr. Narayanan holds a Ph.D. in Economics from the Massachusetts Institute of Technology with concentrations in
Finance and International Economics, an M.S. in Management from MIT’s Sloan School of Management and a B.S.
(summa cum laude) with a double major in Economics and Computer Science from Yale.
John Lyman assists in the management of Trident’s non-equity investments in developed countries. Before joining
the Investment Advisor, Mr. Lyman started and managed a global macro fund as Founder and Chief Investment Officer of
Squam Capital. Prior to this, Mr. Lyman was the chief trader and a portfolio manager at MLC Investments, a macro hedge
fund. Before MLC, Mr. Lyman was a Senior Trader at Caxton Corporation assisting in the firm’s foreign exchange, nondollar fixed income, emerging markets and stock index futures trading activities. Mr. Lyman has also worked at the Bank
of Tokyo in the foreign exchange area and at the Federal Reserve Bank of New York as a currency analyst. Mr. Lyman
holds a Bachelor’s Degree in Mathematics from Vassar College.
The Investment Advisor will provide investment advice regarding the Global Macroeconomic Portfolio in a manner
consistent with the investment objective, strategy, criteria and restrictions of the Trust. Pursuant to the Investment
Advisory Agreement, the Investment Advisor will provide investment management advice in respect of securities
selection for the Global Macroeconomic Portfolio and will determine the allocation of the assets within the Global
Macroeconomic Portfolio.
Under the Investment Advisory Agreement, the Investment Advisor is required to act at all times on a basis which is
fair and reasonable to the Trust, to act honestly and in good faith with a view to the best interests of the Trust and, in
connection therewith, to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in
the circumstances. The Investment Advisory Agreement will provide that the Investment Advisor will not be liable in any
way for any default, failure or defect in, or any loss or diminution in value of, any of the securities of the Trust, nor will it
be liable if it has satisfied the duties and standard of care, diligence and skill set forth above. The Investment Advisor may,
however, incur liability in cases of wilful misconduct, bad faith, negligence, disregard of the Investment Advisor’s
standard of care or material breach or default by the Investment Advisor of its obligations under the Investment Advisory
Agreement.
The Investment Advisory Agreement, unless terminated as described below, will continue in effect until the Trust is
terminated. The Trustee may terminate the Investment Advisory Agreement if the Investment Advisor has committed
certain events of bankruptcy or insolvency or is in material breach or default of the provisions thereof and, if capable of
being cured, such breach has not been cured within 30 days after notice thereof has been given to the Investment Advisor
by the Trustee.
The Investment Advisor may terminate the Investment Advisory Agreement if the Trust is in material breach or
default of the provisions thereof and, if capable of being cured, such breach or default has not been cured within 30 days of
notice of same to the Trustee or if there is a material change in the investment objective, strategy or criteria of the Trust. If
the Investment Advisory Agreement is terminated, the Trustee will promptly appoint one or more successor investment
managers to carry out the activities of the Investment Advisor.
The Investment Advisor is entitled to fees for its services which are payable by the Trustee (and not the Trust) under
the Investment Advisory Agreement as described under “Fees and Expenses” and will be reimbursed by the Trustee for all
reasonable costs and expenses incurred by the Investment Advisor on behalf of the Trust. In addition, the Investment
Advisor, and each of its directors, officers, employees and agents, will be indemnified by the Trust for all liabilities, costs
and expenses incurred in connection with any action, suit or proceeding that is proposed or commenced, or other claim
that is made against, the Investment Advisor, or any of its officers, directors, employees or agents, in the exercise of its
duties as an investment advisor, except those resulting from the Investment Advisor’s wilful misconduct, bad faith,
negligence, disregard of the Investment Advisor’s standard of care or material breach or default by the Investment Advisor
of its obligations under the Investment Advisory Agreement.
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CONFLICTS OF INTEREST
The management services to be provided by the Manager to the Corporation and by the Trustee and Investment
Advisor to the Trust are not exclusive to the Corporation and the Trust and nothing in the Management Agreement,
Declaration of Trust or Investment Advisory Agreement prevents the Manager, the Trustee, the Investment Advisor or any
of their respective affiliates from providing similar services to other investment funds and other clients (whether or not
their activities are similar to those of the Corporation or the Trust) or from engaging in other activities.
The Investment Advisor’s investment decisions for the Global Macroeconomic Portfolio will be made independently
of those made for its other clients and independently of its own investments. On occasion, however, the Investment
Advisor may decide on the same investment for the Global Macroeconomic Portfolio and for one or more of its other
clients. If the Global Macroeconomic Portfolio and one or more of the other clients of the Investment Advisor or its
affiliates are engaged in the purchase or sale of the same security, the transactions will be effected on an equitable basis.
Independent Review Committee
An Independent Review Committee (the “IRC”) provides independent oversight and impartial judgment on conflicts
of interest involving the Corporation or the Trust. Among other matters, the IRC will prepare, at least annually, a report of
its activities for Shareholders and Trust Unitholders which will be available on the Internet at www.ci.com and upon
request by any Shareholder or Trust Unitholder, at no cost, by calling: 1-800-268-9374 or e-mailing to: [email protected].
The IRC currently is comprised of four members, each of whom is independent of the Manager, the Trustee, the
Investment Advisor, their respective affiliates, the Corporation and the Trust. The names of the members of the IRC are
provided above under “Management of the Corporation — Directors and Officers of the Corporation”. The IRC members
perform a similar function as the independent review committee for other investment funds managed by the Manager and
its affiliates. Each IRC member (other than the Chairman) currently is paid, as compensation for his or her services,
$30,000 per annum plus $7,500 for each meeting attended. The Chairman is paid $37,500 per annum plus $9,375 for each
meeting attended. The annual fees are allocated across all investment funds managed by the Manager and its affiliates
with the result that only a small portion of the annual fees of the IRC will be charged to the Corporation and the Trust. The
annual fees are determined by the IRC and disclosed in its annual reports to Shareholders and Trust Unitholders.
Additional information concerning the IRC and governance of the Corporation and the Trust will be available in the
annual information form of the Corporation and the Trust.
Proxy Voting Procedures
The Manager and Trustee has established Proxy Voting Policy and Guidelines (the “Guidelines”) that have been
designed to provide general guidance, in compliance with the applicable legislation, for the voting of proxies relating to
securities owned by the Corporation and the Trust. All such proxies must be voted in the best interest of the Shareholders
and the Trust Unitholders, as applicable, as determined solely by the Manager and Trustee, subject to the Guidelines and
applicable legislation.
The Guidelines set out the voting procedures to be followed in voting routine and non-routine matters, together with
general guidelines suggesting a process to be followed in determining how and whether to vote proxies. Although the
Guidelines allow for the creation of a standing policy for voting on certain routine matters, each routine and non-routine
matter must be assessed on a case-by-case basis to determine whether the applicable standing policy or general Guidelines
should be followed. The Guidelines also address situations in which the Manager or Trustee may not be able to vote, or
where the costs of voting outweigh the benefits. The Manager and Trustee is required to keep adequate records of all
matters voted or not voted.
Situations may exist in which, in relation to proxy voting matters, the Manager and Trustee may be aware of an
actual, potential, or perceived conflict between the interests of the Manager or Trustee and the interests of Shareholders or
Trust Unitholders. Where the Manager or Trustee is aware of such a conflict, the Manager or Trustee, as appropriate, must
bring the matter to the attention of the IRC. The IRC will, prior to the voting deadline date, review any such matter, and
will take the necessary steps to ensure that the proxy is voted in accordance with what the IRC believes to be the best
interests of the Shareholders and the Trust Unitholders, and in a manner consistent with the Guidelines. Where it is
deemed advisable to maintain impartiality, the IRC may choose to seek out and follow the voting recommendation of an
independent proxy research and voting service.
DESCRIPTION OF SECURITIES AND SHAREHOLDER MATTERS
The Corporation is authorized to issue an unlimited number of shares of the Corporation designated as Class A shares
(“Class A Shares”), an unlimited number of shares of the Corporation designated as Class F shares (“Class F Shares”) and
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100 shares of the Corporation designated as Class M shares (“Class M Shares”) of which, before giving effect to the
Offering, there are issued and outstanding 100 Class M Shares. The Class A Shares and Class F Shares are referred to,
collectively, as the “Shares”.
The holders of Class M Shares are not entitled to receive dividends. The holders of the Class M Shares will be entitled
to one vote per share. The Class M Shares are redeemable at the option of either the Corporation or a holder thereof at a
price of $1.00 per share. The Class M Shares rank subsequent to the Class A Shares and Class F Shares with respect to
distributions on the dissolution, liquidation or winding-up of the Corporation.
A trust established for the benefit of the holders from time to time of the Shares owns all of the issued and outstanding
Class M Shares. See “Principal Shareholder”.
Class A Shares and Class F Shares
Shares are transferable and, in certain circumstances, redeemable at the option of the Corporation. Shareholders have
rights of redemption and will be entitled to receive dividends and other distributions declared by the Corporation. See
“Description of Securities and Shareholder Matters — Redemptions” and “Description of Securities and Shareholder
Matters — Dividends and Distributions”.
Except as described under “Description of Securities and Shareholder Matters — Meetings of Shareholders and
Extraordinary Resolutions”, Shareholders will not have voting rights. On termination or liquidation of the Corporation,
Shareholders of record are entitled to receive on a pro rata basis based upon their relative NAV per Share all of the assets of
the Corporation remaining after payment of all debts, liabilities and liquidation expenses of the Corporation. See
“Description of Securities and Shareholder Matters — Termination of the Corporation”.
The Corporation will have the right (but not the obligation), exercisable in its sole discretion, at any time to purchase
Shares in the market, subject to any applicable regulatory requirements and limitations and applicable law.
Class F Shares are intended for investors who invest in the Corporation through a fee-based account with their broker
or dealer. Class F Shares will not be listed on any stock exchange but will be convertible into Class A Shares. It is expected
that liquidity for Class F Shares will be obtained primarily by means of conversion into Class A Shares and the subsequent
sale or redemption of such Class A Shares. The only other differences between Class F Shares and Class A Shares are the
fees payable to the Agents and the Service Fee described under “Fees and Expenses”. Accordingly, as a result of the
different allocation of fees between the two classes of Shares, the returns of Class F Shares are expected to be greater than
the returns on Class A Shares and the Net Asset Value per Class F Share will not be the same as the Net Asset Value per
Class A Share.
A holder (a “Class F Shareholder”) of Class F Shares may convert Class F Shares into Class A Shares on the last day
of each month (a “Monthly Redemption Date”) including a December Redemption Date by delivering a notice and
surrendering such Class F Shares by 4:00 p.m. (Toronto time) at least 20 business days prior to such Monthly Redemption
Date. Any such Class F Shares so surrendered shall be converted into Class A Shares as of the close of business on such
Monthly Redemption Date. For Class F Share so converted, the Class F Shareholder will receive a number of Class A
Shares equal to the product of (i) the number of Class F Shares so converted and (ii) a fraction, the numerator of which is
the Net Asset Value per Class F Share as of the Monthly Redemption Date and the denominator of which is the Net Asset
Value per Class A Share as of such Monthly Redemption Date. For the purposes of such conversion, the NAV per Share of
a class will be the basic NAV per Share of the class unless the diluted Net Asset Value per Share of such class is calculated
on such Monthly Redemption Date, in which case the NAV per Share of such class will be the diluted Net Asset Value per
Share of such class, as described under “Description of Securities and Shareholder Matters — Calculation of Net Asset
Value”. No fractional Class A Shares will be issued to a Shareholder on a conversion of Class F Shares into Class A
Shares. Instead, the number of Class A Shares issued to such Shareholder will be rounded down to the nearest whole
number of Class A Shares.
Redemptions
Subject to certain conditions described below, a Share may be surrendered for redemption in any month by 4:00 p.m.
(Toronto time) on a date that is at least 20 business days prior to the last day of such month in order for the Share to be
redeemed on the Monthly Redemption Date in such month, by giving proper notice thereof to Computershare Investor
Services Inc. (the registrar and transfer agent). If certificates have been issued in registered form representing the Shares to
be redeemed, such certificates must accompany the notice of redemption and must be duly completed with the signature
guaranteed. If certificates have been issued in registered form representing the Shares to be redeemed, such certificates
must accompany the notice of redemption and must be duly completed with the signature guaranteed. A Shareholder who
properly surrenders one or more Shares for redemption will receive payment on or before the 15th business day following
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such Monthly Redemption Date (the “Redemption Payment Date”), subject to the Corporation’s right to suspend
redemptions in certain circumstances described below.
The Manager may suspend redemptions (a) for the whole or part of a period during which normal trading is
suspended on one or more stock exchanges, options exchanges or future exchanges on which more than 50% of the
Corporation’s assets (by value) are listed and traded; (b) if the redemption is not permitted by applicable law; or (c) for any
period not exceeding 120 days during which the Manager determines that conditions exist which render impractical the
sale of any of the assets of the Corporation or which impair the ability of the Manager to determine the value of the assets
of the Corporation. The suspension may apply to all requests for redemption received prior to the suspension, but for
which payment has not been made, as well as to all requests received while the suspension is in effect. All Shareholders
who have requested redemptions shall have and shall be advised that they have the right to withdraw their requests for
redemption. The suspension shall terminate in any event on the first business day on which the condition giving rise to the
suspension has ceased to exist provided that no other condition under which a suspension is authorized then exists. If the
Corporation is unable to pay for all of the Shares surrendered for redemption on or before a Redemption Payment Date, it
will redeem such Shares as soon as practicable after the date on which such condition no longer exists. To the extent not
inconsistent with official rules and regulations promulgated by any government body having jurisdiction over the
Corporation, any declaration of suspension made by the Manager shall be conclusive.
In addition, if it is not possible to sell the assets of the Corporation due to the cessation or suspension of trading of the
assets, the Corporation will sell those assets which can then be sold and the applicable portion of the proceeds from such
sale will be paid on or before the Redemption Payment Date and the remaining assets required to be sold to fund the
redemption of the relevant Shares will be sold by the Corporation as soon as practicable following the resumption of
trading of such assets and the applicable portion of the proceeds therefrom paid within five business days following such
sale.
The Corporation may, from time to time, on not less than five business days’ notice to a Shareholder, redeem any
Shares held by the Shareholder at the Redemption Price per Class A Share (calculated as of the date of such redemption)
for each Class A Share being redeemed or the Redemption Price per Class F Share (calculated as of the date of such
redemption) for each Class F Share being redeemed, as applicable, (i) if the redemption of the Shares is considered
necessary by the board of directors of the Corporation to ensure that the Corporation maintains its status as a “mutual fund
corporation” under the provisions of the Tax Act, or (ii) to ensure that the Corporation complies with other legislation or
regulatory requirements applicable to the Corporation.
Class A Shares
A holder of Class A Shares (a “Class A Shareholder”) who properly surrenders one or more Class A Shares for
redemption will receive the following proceeds therefor:
(a)
in respect of Class A Shares properly surrendered for redemption on any December Redemption Date, each
Class A Share will be redeemed for an amount, if any, equal to the Redemption Price per Class A Share as of
the December Redemption Date; and
(b)
in respect of Class A Shares properly surrendered for redemption on a Monthly Redemption Date, other than
any December Redemption Date, each Class A Share will be redeemed for an amount, if any, equal to the
Monthly Redemption Price per Class A Share as of the relevant Monthly Redemption Date.
“Redemption Price per Class A Share” means the amount which is equal to (A) the NAV per Class A Share
(calculated in the manner described under the heading “Calculation of Net Asset Value — Net Asset Value per Share”) as
at the December Redemption Date less (B) any costs associated with the redemption including, without limitation, if the
Manager determines that it is not practicable or necessary for the Corporation to partially settle the Forward Agreement to
fund such redemption, the aggregate of all brokerage fees, commissions and other transaction costs that the Manager
estimates would have resulted from such a partial settlement (“Redemption Costs”), provided that, at the sole option of the
Manager for the purposes of calculating the Redemption Price per Class A Share, the Manager may value any security in
the Common Share Portfolio and, for purposes of valuing the Forward Agreement, any security to which the Corporation
has direct or indirect exposure by reason of the Forward Agreement, in either case which is listed or traded on a stock
exchange (or if more than one, on the stock exchange where the security primarily trades, as determined by the Manager)
by taking the volume weighted average trading price of the security on such exchange during the three most recent trading
days of such exchange ending on and including such December Redemption Date, or lacking any sales during such period
or any record thereof, the simple average of the latest available offer price and the latest available bid price (unless in the
opinion of the Manager such value does not reflect the value thereof and in which case the fair market value as determined
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by the Manager shall be used), all as reported by any means in common use. For the purposes of calculating the
Redemption Price per Class A Share, the NAV per Class A Share will be the basic NAV per Class A Share unless the
diluted NAV per Class A Share is calculated on such December Redemption Date, in which case the NAV per Class A
Share will be the diluted NAV per Class A Share.
“Monthly Redemption Price per Class A Share” means the amount, if any, equal to the lesser of (A) 94% of the
weighted average trading price of the Class A Shares on the TSX during the 15 trading days preceding the applicable
Monthly Redemption Date, and (B) the “closing market price” of the Class A Shares on the principal market on which the
Class A Shares are quoted for trading on the applicable Monthly Redemption Date, less (C) applicable Redemption Costs.
The “closing market price” means an amount equal to (i) the closing price of the Class A Shares if there was a trade on the
applicable Monthly Redemption Date and the market provides a closing price; (ii) the average of the highest and lowest
prices of the Class A Shares if there was trading on the applicable Monthly Redemption Date and the market provides only
the highest and lowest prices of the Class A Shares traded on a particular day; or (iii) the average of the last bid and last
asking prices of the Class A Shares if there was no trading on the applicable Monthly Redemption Date.
Any and all Class A Shares which have been surrendered properly to the Corporation for redemption are deemed to
be outstanding until (but not after) the close of business on the relevant December Redemption Date or Monthly
Redemption Date, unless the redemption proceeds are not paid on or before the applicable Redemption Payment Date in
which event such Class A Shares will remain outstanding.
Any unpaid dividend or distribution declared on or before a December Redemption Date or Monthly
Redemption Date in respect of Class A Shares redeemed on such date will be paid to the Class A Shareholder redeeming
such Class A Shares on the applicable date on which such dividend or distribution is payable to Class A Shareholders.
In addition, the Manager may, at its sole discretion and subject to receipt of any necessary regulatory approvals, allow
additional redemptions from time to time of Class A Shares (an “Additional Redemption”) for an amount equal to the
Redemption Price per Class A Share calculated as of the date set for such Additional Redemption, provided that the holder
thereof shall be required to use the full amount received on such redemption to purchase treasury securities of a new or
existing fund promoted by the Manager or an affiliate of the Manager then being offered to the public by prospectus.
Notice of any such additional redemption will be provided by the Manager.
Class F Shares
A Class F Shareholder who properly surrenders one or more Class F Shares for redemption will receive the following
proceeds therefor:
(a)
in respect of Class F Shares properly surrendered for redemption on any December Redemption Date, each
Class F Share will be redeemed for an amount, if any, equal to the Redemption Price per Class F Share as of the
relevant December Redemption Date; and
(b)
in respect of Class F Shares properly surrendered for redemption on any Monthly Redemption Date, other than
a December Redemption Date, each Class F Share will be redeemed for an amount, if any, equal to the
Monthly Redemption Price per Class F Share as of the relevant Monthly Redemption Date.
“Redemption Price per Class F Share” means the amount which is equal to (A) the NAV per Class F Share (calculated
in the manner described under the heading “Calculation of Net Asset Value — Net Asset Value per Share”) as at the
December Redemption Date less (B) any Redemption Costs, provided that, at the sole option of the Manager for the
purposes of calculating the Redemption Price per Class F Share, the Manager may value any security in the Common
Share Portfolio and, for purposes of valuing the Forward Agreement, any security to which the Corporation has direct or
indirect exposure by reason of the Forward Agreement, in either case which is listed or traded on a stock exchange (or if
more than one, on the stock exchange where the security primarily trades, as determined by the Manager) by taking the
volume weighted average trading price of the security on such exchange during the three most recent trading days of such
exchange ending on and including such December Redemption Date, or lacking any sales during such period or any
record thereof, the simple average of the latest available offer price and the latest available bid price (unless in the opinion
of the Manager such value does not reflect the value thereof and in which case the fair market value as determined by the
Manager shall be used), all as reported by any means in common use.
“Monthly Redemption Price per Class F Share” means the amount, if any, equal to the product of the Monthly
Redemption Price per Class A Share and a fraction (i) the numerator of which is the most recently calculated Net Asset
Value per Class F Share and (ii) the denominator of which is the most recently calculated Net Asset Value per Class A
Share.
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For the purposes of calculating the Redemption Price per Class F Share and Monthly Redemption Price per Class F
Share, the NAV per Share of a class will be the basic NAV per Share of the class unless the diluted NAV per Share of such
class is calculated on such Monthly Redemption Date or December Redemption Date, in which case the NAV per Share of
such class will be the diluted NAV per Share of such class, as described under “Description of Securities and Shareholder
Matters — Calculation of Net Asset Value”.
Any unpaid dividend or distribution declared on or before a December Redemption Date or Monthly
Redemption Date in respect of Class F Shares redeemed on such date will be paid to the Shareholder redeeming such
Class F Shares on the applicable date on which such dividend or distribution is payable to Class F Shareholders.
In addition, the Manager may, at its sole discretion and subject to receipt of any necessary regulatory approvals, allow
additional redemptions from time to time of Class F Shares (an “Additional Redemption”), for an amount equal to the
Redemption Price per Class F Share calculated as of the date set for such Additional Redemption, provided that the holder
thereof shall be required to use the full amount received on such redemption to purchase treasury securities of a new or
existing fund promoted by the Manager or an affiliate of the Manager then being offered to the public by prospectus.
Notice of any such additional redemption will be provided by the Manager.
Warrants
The following is a summary only and is subject to, and is qualified in its entirety by reference to, the detailed
provisions of the Warrant Indentures (as described below).
Subscription Basis and Warrant Expiry Time
Each Class A share purchase warrant (each a “Class A Warrant”) entitles the holder to purchase one Class A Share at
the subscription price of $10.25 (the “Subscription Price”) per Class A Share on or before 4:00 p.m. (Toronto time) on a
Monthly Redemption Date on or before February 28, 2011 (the “Expiry Time”). Each Class F share purchase warrant
(each a “Class F Warrant”) entitles the holder to purchase one Class F Share at the Subscription Price on or before
4:00 p.m. (Toronto time) on a Monthly Redemption Date on or before February 28, 2011. Class A Warrants and Class F
Warrants are referred to, collectively, as the “Warrants”. Warrants not exercised by the Expiry Time will be void and of
no value. The Class A Warrants will be governed by a Class A warrant indenture (the “Class A Warrant Indenture”) to be
entered into between the Corporation and Computershare Trust Company of Canada (the “Warrant Trustee”) on or before
the closing of the Offering and the Class F Warrants will be governed by a Class F warrant indenture (the “Class F Warrant
Indenture” and, together with the Class A Warrant Indenture, the “Warrant Indentures”) to be entered into between the
Corporation and the Warrant Trustee on or before the closing of the Offering.
If a Shareholder sells or does not exercise Warrants, then the value of the Shares held by that Shareholder may be
diluted as a result of the exercise of Warrants by others. Within 30 days of the proper exercise of a Warrant, the
Corporation will pay a fee of $0.10 per Warrant to TD Securities Inc. for and on behalf of the Agents (as defined under
“Plan of Distribution”) and, in addition in the case of the exercise of a Class A Warrant, a fee of $0.15 per Class A Warrant
to the dealer whose client has exercised the Class A Warrant.
The Class A Shares and Class A Warrants comprising the Class A Units, and the Class F Shares and Class F Warrants
comprising the Class F Units, will separate immediately following the earlier of the closing of the Over-Allotment Option
(as defined below) or 30 days after closing of the Offering, and thereafter may be transferred separately.
Holders of Warrants have no voting rights or pre-emptive rights or any other rights which a Shareholder may have.
Warrant Trustee
The Warrant Trustee has been appointed the agent of the Corporation to receive subscriptions and payments from
holders of Warrants and to perform certain services relating to the exercise and transfer of Warrants. Holders of Warrants
desiring to exercise such Warrants and purchase Shares should ensure that subscriptions and payment in full of the
aggregate Subscription Price therefor is received on or before the Exercise Time by the Warrant Trustee. The Corporation
may pay to the Warrant Trustee a fee consistent with industry practice for acting in such capacity.
Delivery Form and Denomination of the Warrants
Subject to limited exceptions, all holders of Warrants will hold their Warrants through a participant (a “CDS
Participant”) in CDS Clearing and Depository Services Inc. (“CDS”). Accordingly, the Corporation expects that one or
more global warrant certificates representing the Warrants will be issued in registered form to CDS and will be deposited
with CDS on the closing of the Offering. The Corporation expects that each purchaser of Units under the Offering will
receive a confirmation of the number of Warrants issued to it from its CDS Participant in accordance with the practices and
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procedures of that CDS Participant. CDS will be responsible for establishing and maintaining book-entry accounts for its
participants holding Warrants.
None of the Corporation, the Manager nor the Warrant Trustee will have any liability for (i) the records maintained
by CDS or CDS Participants relating to the Warrants or the book-entry accounts maintained by them, (ii) maintaining,
supervising or reviewing any records relating to such Warrants, or (iii) any advice or representations made or given by
CDS or CDS Participants with respect to the rules and regulations of CDS or any action to be taken by CDS or its
participants.
The ability of a person having an interest in Warrants held through a CDS Participant to pledge such interest or
otherwise take action with respect to such interest (other than through a CDS Participant) may be limited due to the lack of
a physical certificate.
Holders must arrange exercises, purchases or transfers of Warrants through CDS Participants. It is anticipated by the
Corporation that each such purchaser of a Warrant will receive a customer confirmation of issuance or purchase, as
applicable, from the CDS Participant through which such Warrant is issued or purchased in accordance with the practices
and policies of such CDS Participant.
Subscription Right
CDS Participants that hold Warrants for more than one beneficial holder may, upon providing evidence satisfactory
to the Corporation and the Warrant Trustee, exercise Warrants on behalf of its accounts on the same basis as if the
beneficial owners of Shares were holders of record on the date of closing of the Offering.
A subscriber may subscribe for the resulting whole number of Shares or any lesser whole number of Shares by
instructing the CDS Participant holding the subscriber’s Warrants to exercise all or a specified number of such Warrants
and forwarding $10.25 per whole Warrant for each Share subscribed for in accordance with the terms of the Offering to the
CDS Participant which holds the subscriber’s Warrants.
The Subscription Price for Shares is payable in Canadian funds by certified cheque, bank draft or money order drawn
to the order of a CDS Participant, by direct debit from the subscriber’s brokerage account or, by electronic funds transfer
or other similar payment mechanism. All payments must be forwarded to the appropriate office of the CDS Participant.
The entire Subscription Price for Shares subscribed for must be received by the Warrant Trustee prior to the Exercise
Time. Accordingly, a subscriber subscribing through a CDS Participant must deliver its payment and instructions
sufficiently in advance of the Exercise Time to allow the CDS Participant to properly exercise the Warrants on its
behalf. Shareholders are encouraged to contact their broker or other CDS Participant as each CDS Participant may have a
different cut-off time.
Payment of the Subscription Price will constitute a representation to the CDS Participant that the subscriber is not a
citizen or resident of the United States of America, its territories or possessions or the agent of any such person and is not
purchasing the Shares for resale to any such person.
Subscriptions for Shares made through a CDS Participant will be irrevocable and subscribers will be unable
to withdraw their subscriptions for Shares once submitted.
Holders of Warrants who wish to exercise their Warrants and receive Shares are reminded that if Warrants
are to be exercised through a CDS Participant, a significant amount of time may elapse from the date of exercise
and the date the Shares issuable upon the exercise thereof are issued to the holder.
Sale or Transfer of Warrants
Holders of Class A Warrants in Canada may, instead of exercising their Class A Warrants to subscribe for Class A
Shares, sell or transfer their Class A Warrants. Holders of Class A Warrants through CDS Participants who wish to sell or
transfer their Class A Warrants must do so in the same manner in which they sell or transfer Class A Shares, namely, by
providing instructions to the CDS Participant holding their Class A Warrants in accordance with the policies and
procedures of the CDS Participant.
Class F Warrants are transferable in the same manner as described above for Class AWarrants. However, no market is
expected to exist for Class F Warrants.
Dilution to Existing Shareholders
If a Shareholder wishes to retain its current percentage ownership in the Corporation and assuming that all Warrants
are exercised, it should purchase all of the Shares for which it may subscribe pursuant to the Warrants delivered under the
Offering. If that Shareholder does not do so and other holders of Warrants exercise any of their Warrants, that
34
Shareholder’s current percentage ownership in the Corporation will be diluted and the Net Asset Value per Share also may
be diluted.
The Warrants contain the following anti-dilution provisions. The subscription rights in effect under the Warrants for
Shares of the Corporation issuable upon the exercise of the Warrants shall be subject to adjustment from time to time if,
prior to the Exercise Time, the Corporation:
(a) subdivides, re-divides or changes its outstanding Shares into a greater number of Shares;
(b) reduces, combines or consolidates its outstanding Shares into a smaller number of Shares;
(c) distributes to holders of all or substantially all of the Corporation’s outstanding Shares any securities of the
Corporation, including rights, options or warrants to acquire Shares of the Corporation or securities
convertible into or exchangeable for Shares of the Corporation or property or assets, including evidence
of indebtedness (other than in connection with the distribution and exercise of the Warrants);
(d) reclassifies Shares or reorganizes the capital of the Corporation; or
(e) consolidates, amalgamates, or merges the Corporation with or into any other corporation or other entity, or
sells or conveys the property and assets of the Corporation as an entirety or substantially as an entirety (other
than in connection with the redemption of Shares).
Dividends and Distributions
The Corporation does not expect to pay regular dividends or make other distributions. However, the Corporation
may, at the recommendation of the Manager and with the approval of the Corporation’s board of directors, pay any
dividends or make other distributions of cash or Shares at any time in accordance with applicable law if it considers it
appropriate. Distributions, if any, to Shareholders will be characterized as capital gains dividends, taxable dividends and
returns of capital. The Corporation intends to pay additional taxable dividends and/or capital gains dividends annually to
maximize the refunds of any refundable taxes. Such additional dividends may be made in Shares and/or cash. A
distribution payable in Shares will increase the aggregate adjusted cost base to the Shareholders of their Shares.
Immediately following payment of such distribution in Shares, the number of Shares outstanding will be automatically
consolidated such that the number of Shares outstanding will be equal to the number of Shares outstanding immediately
prior to such payment, except in the case of a non-resident Shareholder if tax was required to be withheld in respect of the
distribution. See “Canadian Federal Income Tax Considerations”.
Meetings of Shareholders and Extraordinary Resolutions
Except as required by law or set out herein, Shareholders will not be entitled to receive notice of, to attend or to vote at any
meeting of securityholders of the Corporation. A quorum for any meeting of Shareholders will consist of two or more persons
present in person or by proxy and representing not less than 5% of the Shares outstanding. If a quorum is not present at a
meeting within 30 minutes after the time fixed for the meeting, the meeting will be cancelled if convened pursuant to a request
of Shareholders, but otherwise will be adjourned and will be held at the same time and place on the day which is 14 days later
(or if that date is not a business day, the first business day prior to that date). At a reconvened meeting, Shareholders present in
person or represented by proxy will constitute a quorum. Each Shareholder is entitled to one vote per Share held.
In addition to any matter which requires approval of Shareholders in accordance with applicable law, certain
additional matters will require the approval of Shareholders by extraordinary resolution (an “Extraordinary Resolution”)
passed by holders of not less than 662⁄3% of the Shares voting thereon at a meeting duly convened for the consideration of
such matter. The following matters may be undertaken only if the Corporation obtains the approval of Shareholders by an
Extraordinary Resolution:
(a) any change in the fundamental investment objective, investment strategy or investment restrictions of the
Corporation as set forth under “Investments of the Corporation”, unless such change is necessary to ensure
compliance with applicable laws, regulations or other requirements imposed by applicable regulatory
authorities from time to time;
(b) any change of the Manager (other than to an affiliate) or termination of the Management Agreement except in
accordance with its terms;
(c) any increase in the annual rate of the management fee payable to the Manager;
(d) any treasury issue of a Share, including any offering of rights, warrants, or options to existing Shareholders to
acquire Shares from treasury, where the net proceeds per Share to the Corporation is less than the Net Asset
Value per Share of that class of Shares, determined on the date prior to the entering into of the commitment by
the subscriber to purchase such Shares or prior to the pricing of the offering, as the case may be, other than
35
(a) pursuant to an issuance of Shares as a special dividend or a dividend paid to maximize the refund of
refundable taxes under the Tax Act, (b) pursuant to the Offering (including pursuant to the exercise of the
Over-Allotment Option), or (c) pursuant to the exercise of Warrants; or
(e) a change in the frequency of calculating the NAV to less often than twice monthly.
In addition, any proposal by the Corporation to change the capital structure of the Corporation or to effect a
reorganization or other transaction (including, without limitation, a merger with another entity), the effect of which
change, reorganization or transaction would result in there no longer being Class A Shares into which the Class F Shares
may be converted must be approved by a majority of votes cast by Class F Shareholders at a meeting called for that
purpose.
The Corporation does not intend to hold annual meetings of Shareholders.
Termination of the Corporation
The Corporation does not have a fixed termination date but may be terminated at any time with the approval of
Shareholders by an Extraordinary Resolution (as defined under “Description of Securities and Shareholder Matters —
Meetings of Shareholders and Extraordinary Resolutions”) passed at a duly convened meeting of Shareholders called for the
purpose of considering such Extraordinary Resolution. Upon termination of the Corporation, the net assets of the Corporation
will be distributed to the Shareholders. Prior to the date fixed for the termination of the Corporation (the “Termination Date”),
the Manager will, to the extent practicable, convert the assets of the Corporation to cash. The Manager may, in its discretion and
upon not less than 30 days prior written notice to Shareholders by press release, extend the Termination Date by a maximum of
180 days if the Manager would be unable to convert all the Corporation’s assets to cash and the Manager determines that it
would be in the best interests of the Shareholders to do so. Should the liquidation of certain securities not be practicable or
should the Manager consider such liquidation not to be appropriate prior to the Termination Date, such securities will be
distributed to Shareholders in kind rather than in cash subject to compliance with any securities or other laws applicable to such
distributions. Following such distribution, the Corporation will be dissolved.
In addition, the Manager may, in its discretion and subject to applicable laws, cause the Corporation to be terminated
at any time without the approval of Shareholders if, in its opinion, it is no longer economically practical to continue the
Corporation or the Manager determines that it would be in the best interests of Shareholders to terminate the Corporation.
In the event of the termination of the Corporation by the Manager in accordance with the preceding sentence, the Manager
will provide no less than 30 and no more than 60 days’ notice of the date of the termination of the Corporation and will
issue a press release at least 10 business days in advance of the Corporation’s termination, which press release will
generally disclose the entitlement of Shareholders upon termination.
Information and Reports to Shareholders
The fiscal year end of the Corporation is December 31. The Corporation will deliver to Shareholders annual audited
and interim unaudited financial statements of the Corporation and the Trust and other reports as from time to time are
required by applicable law. Each Shareholder will be mailed annually, on or about the last day of February, information
necessary to enable such holder to complete an income tax return with respect to dividends and returns of capital paid by
the Corporation in the prior calendar year. See “Canadian Federal Income Tax Considerations”. Annual audited and
interim unaudited financial statements of the Trust also will be available on the internet at www.sedar.com and at no
charge upon request to the Manager by calling 1-800-268-9374 or by sending an e-mail to [email protected].
Prior to any meeting of Shareholders, the Corporation will provide to Shareholders, together with the notice of such
meeting, all such information as is required by applicable law to be provided to such Shareholders.
CALCULATION OF NET ASSET VALUE
Net Asset Values of the Corporation and the Trust
The net asset value (the “Net Asset Value” or “NAV”) of the Corporation and the net asset value of the Trust is
calculated at 4:00 p.m. (Toronto time) (the “Valuation Time”) on each Valuation Date. A “Valuation Date” is the second
Friday of each month and each Monthly Redemption Date and December Redemption Date. The Net Asset Value on a
particular Valuation Date is equal to the aggregate value of the assets of the Corporation or the Trust, as applicable, less
(i) the aggregate value of the liabilities of the Corporation or the Trust (including, in the case of the Trust, any accrual of its
performance fee), as applicable, on such Valuation Date, including all indebtedness of the Corporation or the Trust, as
applicable, and any income, capital gains or other amounts payable to Shareholders or unitholders of the Trust, as
applicable, on or before such Valuation Date, and (ii) in the case of the Corporation, the stated capital of the Class M
Shares ($100).
36
In determining the NAV of the Corporation or net asset value of the Trust at any time:
(a) the value of any cash on hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses,
cash received (or declared to holders of record on a date before the day as of which the net asset value is being
determined and to be received) and interest accrued and not yet received, shall be deemed to be the full amount
thereof, provided that: (i) the value of any security which is a debt obligation which, at the time of acquisition,
had a remaining maturity of one year or less shall be the amount paid to acquire the obligation plus the amount
of any interest accrued on such obligation since the time of acquisition (for this purpose, interest accrued will
include amortization over the remaining term to maturity of any discount or premium from the face value of an
obligation at the time of its acquisition); (ii) any interest or other amount due in respect of an obligation in
respect of which an issuer has ceased paying interest on or has otherwise defaulted shall be excluded from such
calculation; and (iii) if the Manager or the Trustee, as applicable, has determined that any such deposit, bill,
demand note or account receivable is not otherwise worth the full amount thereof, the value thereof shall be
deemed to be such value as the Manager or the Trustee, as applicable, reasonably determines to be the fair
value thereof;
(b) the value of any security which is listed or traded upon a stock exchange (or if more than one, on the stock
exchange in which the security primarily trades, as determined by the Manager or the Trustee, as applicable)
shall be determined by taking the latest available sale price of recent date on the stock exchange in which the
security primarily trades, or lacking any recent sales or any record thereof, the simple average of the latest
available ask price and the latest available bid price (unless in the opinion of the Manager or the Trustee, as
applicable, any such price does not reflect the value thereof and in which case the Manager or the Trustee, as
applicable, will value such securities on such reasonable basis as it may determine to be appropriate), as at the
day as of which the net asset value is being determined, all as reported by any means in common use, or by
using such price as may otherwise be prescribed by applicable regulations or rules (including pursuant to
Canadian generally accepted accounting principles if so required);
(c) the value of any security, which is not listed or traded on a stock exchange or the resale of which is restricted by
reason of a representation, undertaking or agreement by the Corporation or the Trust, as applicable, (or by its
predecessor in title) or by law shall be determined on the basis of such price or yield equivalent quotations
(which may be public quotations or may be obtained from major market makers) as the Manager or the
Trustee, as applicable, reasonably determines best reflects fair value;
(d) the value of a forward contract (including the Forward Agreement) or a futures contract shall be the gain or loss
with respect thereto that would be realized if, on the day as of which the net asset value is being determined, the
position in the forward contract or the futures contract, as the case may be, were to be closed out in accordance
with its terms unless “daily limits” are in effect, in which case fair value shall be based on the current market
value of the underlying interest;
(e) margin paid or deposited in respect of futures contracts and forward contracts shall be reflected as an account
receivable, and margin consisting of assets other than cash shall be noted as held as margin;
(f)
notes, money market instruments and other debt securities shall be valued by taking the bid price at the
calculation time;
(g) if the day as of which the net asset value is being determined is not a business day, then the securities
comprising the assets and other property of the Corporation or the Trust, as applicable, will be valued as if such
day were the preceding business day; and
(h) the value of all assets quoted or valued in terms of foreign currency, the value of all funds on deposit and
contractual obligations payable to the Corporation or the Trust, as applicable, in foreign currency and the value
of all liabilities and contractual obligations payable by the Corporation or the Trust, as applicable, in foreign
currency shall be determined using the prevailing rate of exchange as determined by the Manager or the
Trustee, as applicable, on the day as of which the net asset value is being determined.
If an investment cannot be valued under the foregoing rules, or if the foregoing rules are at any time considered by the
Manager or the Trustee, as applicable, to be inappropriate under the circumstances, then notwithstanding such rules, the
Manager or the Trustee, as applicable, will make such valuation as it considers fair and reasonable and, if there is an
industry practice, in a manner consistent with industry practice for valuing such investment.
The total assets of the Corporation consist mostly of the aggregate value of the assets of the Common Share Portfolio
and the Forward Agreement. Since the value of the Corporation’s rights and obligations under the Forward Agreement is
37
determined by reference to the value of the Global Macroeconomic Portfolio, the NAVof the Corporation is influenced by
the value of the Global Macroeconomic Portfolio.
The total assets of the Trust will consist mostly of the Global Macroeconomic Portfolio assets. The net asset value per
Trust Unit on a Valuation Date is determined by dividing the net asset value of the Trust on such Valuation Date by the
total number of Trust Units outstanding on such Valuation Date.
The Trustee, together with Trident, will review and, if satisfactory, approve the valuation and will, from time to time,
consider the appropriateness of the valuation policies adopted by the Trustee, as such policies are modified from time to
time in the discretion of the Trustee, acting reasonably, and in the best interests of the holders of Trust Units.
Net Asset Value per Share
Net Asset Value per Class A Share and Net Asset Value per Class F Share
The net asset value per Class A Share (the “Net Asset Value per Class A Share” or “NAV per Class A Share”) is the
amount obtained by dividing the Class Net Asset Value (calculated as described below) of the Class A Shares on a
Valuation Date by the number of Class A Shares outstanding on such Valuation Date. The net asset value per Class F Share
(the “Net Asset Value per Class F Share” or “NAV per Class F Share”) is the amount obtained by dividing the Class Net
Asset Value of the Class F Shares on a Valuation Date by the number of Class F Shares outstanding on such Valuation
Date. The “Net Asset Value per Share” or “NAV per Share” is either the Net Asset Value per Class A Share or the Net
Asset Value per Class F Share, as the context requires.
Class Net Asset Value
A separate net asset value (a “Class Net Asset Value”) is calculated for each class of Shares by allocating a portion of
the assets, liabilities and expenses of the Corporation to the Class A Shares and Class F Shares. The Class Net Asset Value
is an amount equal to:
(a) the Class Net Asset Value last calculated for that class of Shares; plus
(b) the increase in the assets attributable to that class of Shares as a result of the issue of additional Shares of that
class since the last calculation; minus
(c) the decrease in the assets attributable to that class of Shares as a result of the redemption or conversion of
Shares out of that class since the last calculation; plus or minus
(d) a Proportionate Share of the Net Change in Non-Portfolio Assets attributable to that class of Shares since the
last calculation; plus or minus
(e) the Proportionate Share of the Net Change in Portfolio Assets attributable to that class of Shares since the last
calculation; plus or minus
(f)
the Proportionate Share of market appreciation or depreciation of the portfolio assets attributable to that class
of Shares since the last calculation; minus
(g) any Class Expenses attributable to that class of Shares since the last calculation.
The “Net Change in Non-Portfolio Assets” means the aggregate of all income accrued by the Corporation on that
Valuation Date, including cash dividends and distributions, interest and compensation; less (i) the Common Expenses to
be accrued by the Corporation on that Valuation Date; plus or minus, (ii) any change in the value of any non portfolio
assets or liabilities stated in any foreign currency accrued on that Valuation Date including, without limitation, cash,
accrued dividends or interest and any receivable or payables; plus or minus (iii) any gain or loss resulting from transfers of
currencies accrued on that Valuation Date; plus or minus (iv) any other item accrued on that Valuation Date determined by
the Manager to be relevant in determining Net Change in Non-Portfolio Assets;
The “Net Change in Portfolio Assets” means the impact of portfolio transactions and the adjustments to the assets as
a result of a stock dividend, stock split or other corporate action recorded on that Valuation Date.
A “Proportionate Share” of the Net Change in Non-Portfolio Assets or Net Change in Portfolio Assets, as the case
may be, is the portion of an amount obtained by multiplying that amount by a fraction, the numerator of which is the
Class Net Asset Value at the Valuation Time on the immediately preceding Valuation Date and the denominator of which
is the Net Asset Value at the Valuation time on the immediately preceding Valuation Date.
“Class Expenses” are expenses of the Corporation that are allocated to only one class of Shares. In the case of Class A
Shares, Class Expenses include: the Agents’ fee for selling Class A Units, the fees payable by the Corporation upon the
exercise of Class A Warrants, and the fee payable by the Corporation in the amount equal to the Service Fee. In the case of
Class F Shares, the Class Expenses include the Agents’ fee for selling Class F Units. “Common Expenses” are those
expenses of the Corporation that are not Class Expenses.
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Diluted Net Asset Value per Share
If the Net Asset Value per Class A Share is greater than $10.00 on any Valuation Date that Class A Warrants are
outstanding, the Corporation also will calculate the “diluted Net Asset Value per Class A Share” by (i) adding the total
number of Class AWarrants then outstanding to the total number of Class A Shares then outstanding, and (ii) adding to the
Class Net Asset Value for the Class A Shares the product of such number of outstanding Class A Warrants and $10.00. If
the Net Asset Value per Class F Share is greater than $10.15 on any Valuation Date that Class F Warrants are outstanding,
the Corporation also will calculate the “diluted Net Asset Value per Class F Share” by (i) adding the total number of
Class F Warrants then outstanding to the total number of Class F Shares then outstanding, and (ii) adding to the Class Net
Asset Value for the Class F Shares the product of such number of outstanding Class F Warrants and $10.15.
When calculated, the diluted Net Asset Value per Class A Share and diluted Net Asset Value per Class F Share (each
a “diluted Net Asset Value per Share”) will be made available through the internet at www.ci.com, together with an
explanation of its difference from Net Asset Value per Share.
Other Factors Affecting Calculations
The Net Asset Value, Net Asset Value per Share, net asset value of the Trust and net asset value of a Trust Unit
calculated as of a time on a day shall continue to be the calculation used until such time as the Net Asset Value, Net Asset
Value per Share, net asset value of the Trust or net asset value of a Trust Unit is next calculated. If, on any date upon which
NAV is being calculated, the Corporation is entitled to a refund of refundable taxes but such refund is not immediately
available, any refundable taxes not then available to the Corporation need not be included in determining the NAV, at the
Corporation’s discretion.
Pursuant to National Instrument 81-106 Investment Fund Continuous Disclosure (“NI 81-106”), investment funds
are required to calculate their net asset value in accordance with Canadian generally accepted accounting principles
(“’Canadian GAAP”). Canadian GAAP was modified by the introduction of section 3855 of the Canadian Institute of
Chartered Accountants Handbook which applies to financial years beginning on or after October 1, 2006. The primary
impact of section 3855 is to require that securities traded on an active market be valued using closing bid prices instead of
closing trade prices and that transaction costs, such as brokerage commissions, be expensed and not capitalized. The
Canadian securities regulatory authorities have provided relief from the requirement of NI 81-106 that investment funds
calculate their net asset values in accordance with Canadian GAAP for any purpose (including redemptions), other than
for the purpose of financial statements in respect of the financial year commencing January 1, 2007 and for all financial
years thereafter. As a result, the NAVof the Corporation and net asset value of the Trust will be calculated as described in
this section for the purposes of redemptions but will be calculated in accordance with Canadian GAAP for the purposes of
the Corporation’s and the Trust’s financial statements. The financial statements of the Corporation and the Trust will
include reconciliations of the NAVand net asset value of the Trust contained in the financial statements to the NAVand net
asset value of the Trust used for other purposes. On September 28, 2007, the Canadian securities regulatory authorities
granted a further one year extension to the above-mentioned relief. Accordingly, the Net Asset Value per Share and the net
asset value per unit of the Trust determined in accordance with the principles set out above may differ from the Net Asset
Value per Share and net asset value per unit of the trust, respectively, determined under Canadian GAAP.
PLAN OF DISTRIBUTION
Pursuant to an agency agreement dated as of January 31, 2008 (the “Agency Agreement”) between, among other
parties, the Corporation, the Manager and TD Securities Inc., Blackmont Capital Inc., CIBC World Markets Inc., BMO
Nesbitt Burns Inc., National Bank Financial Inc., Scotia Capital Inc., Canaccord Capital Corporation, Dundee Securities
Corporation, HSBC Securities (Canada) Inc., Raymond James Ltd., Desjardins Securities Inc., Richardson Partners
Financial Limited and Wellington West Capital Inc. (collectively, the “Agents”), the Agents have agreed to offer (the
“Offering”) the Units for sale, as agents of the Corporation, on a best efforts basis, if, as and when issued by the
Corporation. As negotiated between the Agents and the Manager, the Units will be issued at a price of $10.00 per Unit
with a minimum purchase of 200 Units. In consideration for their services in connection with the Offering, the Agents will
be paid a fee of $0.525 (5.25%) per Class A Unit sold under the Offering and a fee of $0.225 (2.25%) per Class F Unit sold
under the Offering, and will be reimbursed by the Corporation for reasonable out-of-pocket expenses incurred by them.
The Agents’ fees and expenses will be paid by the Corporation out of the proceeds of the Offering, subject to a maximum
of 1.5% of the gross proceeds of the Offering. The Agents may form a sub-agency group including other qualified dealers
and determine the fee payable to the members of such group, which fee will be paid by the Agents out of their fees. While
the Agents have agreed to use their best efforts to sell the Units offered hereby, the Agents will not be obligated to
purchase any Units that are not sold.
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The Corporation has granted to the Agents an option (the “Over-Allotment Option”), exercisable for a period of
30 days from the closing of the Offering, to purchase up to 15% of the aggregate number of Class A Units issued at the
closing of the Offering at a price of $10 per Class A Unit. To the extent that the Over-Allotment Option is exercised, the
Agents will be entitled to a fee of 5.25% of the gross proceeds realized in respect of the exercise of the Over-Allotment
Option. This prospectus qualifies the grant of the Over-Allotment Option and the distribution of Class A Units issuable
upon the exercise of the Over-Allotment Option.
If subscriptions for a minimum of 2,000,000 Class A Units (or $20,000,000) have not been received within a period
of 90 days following the date of issuance of a final receipt for this prospectus, the Offering may not continue without the
consent of the securities authorities and those who have subscribed for Units on or before such date. The maximum
number of Class A Units and Class F Units which will be sold pursuant to the Offering, excluding any Class A Units issued
should the Over-Allotment Option be exercised, is 10,000,000 Class A Units (or $100,000,000) and 2,000,000 Class F
Units (or $20,000,000) . Under the terms of the Agency Agreement, the Agents may, at their discretion on the basis of their
assessment of the state of the financial markets and upon the occurrence of certain stated events, terminate the Agency
Agreement and withdraw all subscriptions for Units on behalf of subscribers. In the event the minimum Offering is not
achieved or, if the closing of the Offering does not occur for any reason, subscription proceeds received from prospective
purchasers in respect of the Offering will be returned to such purchasers promptly without interest or deduction.
Subscriptions for Units will be received subject to rejection or allotment in whole or in part. The right is reserved to close
the subscriptions books at any time without notice. Closing of the Offering will take place on or about February 22, 2008
or such later date as the Corporation and the Agents may agree, but in any event not later than March 28, 2008.
Registration of interests in and transfers of the Units primarily will be made through a book-based system
administered by CDS, although the Manager may, in its sole discretion and upon the request of a holder of Units
and subject to the satisfaction of such conditions as the Manager determines appropriate (including a fee for the issuance
of certificates representing Shares and Warrants comprised of 500 or fewer Units), issue certificates representing the
Shares and Warrants comprising the Units held by such Shareholder registered in the name of the Shareholder. Shares and
Warrants that are held through CDS only may be purchased, transferred and surrendered for redemption through a CDS
Participant. All rights of Shareholders must be exercised through, and all payments or other property to which such holder
is entitled will be made or delivered by, CDS or the CDS Participant through which the holder holds such Shares and/or
Warrants.
The TSX has conditionally approved the listing of the Class A Shares and the Class A Warrants. Listing is subject to
the Corporation fulfilling all of the requirements of the TSX on or before April 29, 2008, including distribution of the
Class A Shares and Class A Warrants to a minimum number of public holders.
Blackmont Capital Inc., one of the Agents, is an affiliate of the Manager. Consequently, the Corporation may be
considered a “connected issuer” under applicable securities legislation. The Corporation also may be considered a
“connected issuer” of National Bank Financial Inc. because such Agent is an affiliate of the Counterparty.
Pursuant to policy statements of certain Canadian securities regulators, the Agents may not, throughout the period of
distribution, bid for or purchase Units. The foregoing restriction is subject to certain exceptions, on the conditions that the
bid or purchase not be engaged in for the purpose of creating actual or apparent active trading in, or raising the price of, the
Units. Such exceptions include a bid or purchase permitted under applicable by-laws and rules of the relevant selfregulatory authorities relating to market stabilization and passive market making activities and a bid or purchase made for
and on behalf of a customer where the order was not solicited during the period of distribution. Pursuant to the first
mentioned exception, in connection with the Offering, the Agents may over-allot and effect transactions in connection
with their over-allotted position. Such transactions, if commenced, may be discontinued at any time.
The Units are being offered by the Agents in the provinces of Canada pursuant to this prospectus. The Units may be
offered in the U.S. pursuant to certain exemptions from the registration requirements of the United States Securities Act of
1933, as amended (the “1933 Act”). The Units have not been, and will not be, registered under the 1933 Act. Accordingly,
except in limited circumstances, such Units may not be offered, sold or delivered in the United States except for sales in
accordance with exemptions from the requirements of the 1933 Act.
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USE OF PROCEEDS
The net proceeds from the sale of the Units (prior to the exercise of the Over-Allotment Option) will be as follows:
Maximum Offering(1)
Minimum Offering(2)
Gross proceeds to the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Agents’ fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated expenses of issue(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$120,000,000
$ 5,700,000
$
750,000
$20,000,000
$ 1,050,000
$ 300,000
Net proceeds to the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$113,550,000
$18,650,000
Note:
(1)
(2)
(3)
10,000,000 Class A Units and 2,000,000 Class F Units.
2,000,000 Class A Units and no Class F Units.
The maximum issue expenses that will be paid by the Corporation are equal to 1.5% of the gross proceeds of the Offering. The Agents’ fees for
selling Class A Units and Class F Units will be allocated to the Class A Units and Class F Units, respectively. All other expenses of the Offering
will be allocated pro rata between each class of Shares based upon the gross proceeds of the Offering from each class of Shares.
The Corporation will use the net cash proceeds of the Offering (including any net cash proceeds from the exercise of
the Over-Allotment Option) to (i) invest in securities for the Common Share Portfolio (as defined below) in accordance
with the Corporation’s investment objective, strategies and restrictions as described herein as soon as practicable after the
closing of the Offering, and (ii) fund the ongoing fees and expenses of the Corporation as described under “Fees and
Expenses”.
FEES AND EXPENSES
Initial Expenses
The expenses of the Offering (including the costs of creating and organizing the Corporation, the costs of printing
and preparing this prospectus, legal expenses of the Corporation, marketing expenses, certain expenses incurred by the
Agents and certain other expenses) will, together with the Agents’ fees, be paid from the gross proceeds of this Offering.
The initial expenses (excluding the Agents’ fees) are estimated to be $750,000 (subject to a maximum of 1.50% of the
gross proceeds of the Offering).
Warrant Exercise Fee
Within 30 days of the proper exercise of a Warrant, the Corporation will pay a fee of $0.10 per Warrant to TD
Securities Inc. for and on behalf of the Agents (as defined under “Plan of Distribution”) and, in addition in the case of the
exercise of a Class A Warrant, a fee of $0.15 per Class A Warrant to the dealer whose client has exercised the Class A
Warrant.
Fees and Other Expenses
As compensation for management services rendered to the Corporation, the Manager is entitled to receive from the
Corporation an annual management fee of 0.25% of the Corporation’s NAV calculated and payable monthly, based on the
average NAV for that month, plus applicable taxes, plus an amount equal to the Service Fee (as described below) payable
to the Manager by the Corporation, plus applicable taxes. As compensation for services rendered to the Trust, the Trustee
is entitled to receive from the Trust an annual management fee of 1.1% of the net asset value of the Trust calculated and
payable monthly, based on the average net asset value of the Trust for that month, plus applicable taxes, plus an amount
equal to the performance fee described below.
The Trust will pay the Trustee a performance fee calculated as at December 31 of each year. The performance fee will
be an amount for each unit of the Trust then outstanding equal to 20% of the amount by which the net asset value per unit
of the Trust (calculated without taking into account the performance fee) exceeds the Threshold Amount. On or before
December 31, 2008, the Threshold Amount is the net asset value per unit of the Trust immediately following the closing of
the Offering. Thereafter, the Threshold Amount is the greater of (i) the net asset value per unit of the Trust immediately
following the closing of the Offering, and (ii) the net asset value per unit of the Trust on the most recent date that the
performance fee was paid to the Trustee (after payment of such performance fee). When a unit of the Trust is redeemed on
a day other than December 31, a performance fee will be calculated and payable in an amount equal to 20% of the amount
by which the net asset value per unit of the Trust on the date of such redemption (calculated without taking into account
the performance fee) exceeds the Threshold Amount then in effect.
Pursuant to the terms of the Investment Advisory Agreement, the Investment Advisor is entitled to an advisory fee
which will be payable by the Trustee (not the Trust).
41
Fees payable to the Manager will be calculated and payable monthly based on the average NAV for that month. The
Manager and the Investment Advisor will be reimbursed by the Corporation for all reasonable costs and expenses incurred
by them on behalf of the Corporation (see “Management of the Corporation — The Management Agreement” and see
“Management of the Corporation — The Investment Advisor”).
The Corporation will pay to the Manager a service fee (calculated and paid as soon as practicable after the end of
each calendar quarter) equal to 0.40% of the Net Asset Value per Class A Share for all Class A Shares then outstanding,
plus applicable taxes. The Manager will pay a comparable service fee, plus applicable taxes, to investment dealers on a
pro rata basis based on the respective number of Class A Shares held by clients of the sales representatives of such dealers.
The Manager also will pay to investment dealers at the end of each calendar year a dealer performance fee equal to their
pro rata share, based on the Net Asset Value per Class A Share of all Class A Shares held by their clients at the end of the
calendar year relative to the Corporation’s NAV, of 10% of an amount equal to the performance fee that the Trustee is paid
by the Trust at the end of such calendar year. No dealer performance fees will be paid in respect of Class F Shares.
The Corporation and the Trust will pay for all their respective expenses incurred in connection with the operation and
management of the Corporation and the Trust. In addition to the fees and expenses referenced elsewhere in this prospectus, it
is expected that these expenses will include, without limitation: (a) financial reporting costs, and mailing and printing
expenses for periodic reports to Shareholders and Trust Unitholders and other Shareholder and Trust Unitholder
communications including marketing and advertising expenses; (b) any taxes payable by the Corporation and the Trust;
(c) fees payable to the Corporation’s and the Trust’s custodian; (d) fees payable to the registrar and transfer agent for
performing certain financial, record-keeping, Shareholder reporting, Trust Unitholder reporting and general administrative
services; (e) costs and fees payable to any agent, legal counsel, investment counsel, investment advisor, actuary, valuator,
technical consultant, accountant and auditor of the Corporation and the Trust; (f) ongoing regulatory filing fees, stock
exchange fees, listing fees and other fees; (g) any expenses incurred by the Corporation or the Trust in connection with any
legal proceedings in which the Manager or the Trustee participates on behalf of the Corporation or the Trust, respectively, or
any other acts of the Manager or the Trustee in connection with the protection of the Corporation’s or Trust’s assets or of any
investment included therein; (h) any fees payable to, and expenses incurred by, independent directors of the Corporation
including premiums for directors’ and officers’ insurance; (i) the fees and other expenses of members of the independent
review committee, as well as premiums for insurance coverage for such members, which fees will be paid on a pro rata basis
by the Corporation, the Trust and other applicable investment funds managed by the Manager of which the same individuals
form the independent review committee; (j) any additional fees payable to the Manager or the Trustee for performance of
extraordinary services on behalf of the Corporation or the Trust; (k) any expenditures which may be incurred upon the
termination of the Corporation or the Trust; (l) consulting fees including website maintenance costs and expenses associated
with the preparation of tax filings; and (m) other administrative expenses (including the calculation of NAV and any
administrative functions as may be outsourced by the Corporation or the Trust from time to time). The Corporation and the
Trust will be subject to an independent audit and report thereon to the Manager and the Trustee will provide reasonable
access to its books and records for such purpose. The aggregate annual amount of these fees and expenses of the Corporation
and the Trust are estimated to be $200,000 and $100,000, respectively, per annum (assuming an Offering size of
approximately $100 million). The Corporation also will pay to the Counterparty a fee under the Forward Agreement
equal to 0.50% per annum of the net asset value of an applicable number of units of the Trust that will determine the purchase
price for the Common Share Portfolio under the Forward Agreement. The Corporation and the Trust also will be responsible
for all commissions and other costs of securities transactions, debt service and costs relating to the Loan Facility (in the case
of the Trust) and any extraordinary expenses which it may incur from time to time.
Additional Services
Any arrangements for additional services between the Corporation, the Trust, the Manager, the Trustee or any
affiliate thereof, that have not been described in this prospectus shall be on terms that are no less favorable to the
Corporation or the Trust than those available from third parties for comparable services and the Corporation or the Trust
shall pay all expenses associated with such additional services.
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Fasken Martineau DuMoulin LLP, counsel to the Corporation, and McMillan Binch Mendelsohn
LLP, counsel to the Agents, the following is, as of the date hereof, a summary of the principal Canadian federal income tax
considerations generally applicable to holders of Shares or Warrants who, for purposes of the Tax Act, are resident in
Canada, deal at arm’s length with the Corporation, hold their Shares and Warrants as capital property, are not affiliated
with the Corporation and do not make a “functional currency” reporting election under the Tax Act (a “Holder”). This
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summary is based upon the facts set out in this prospectus, the current provisions of the Tax Act and the regulations
thereunder, and counsel’s understanding of the current published administrative policies and assessing practices of the
Canada Revenue Agency (the “CRA”) publicly available prior to the date hereof, and relies as to certain factual matters on
certificates of an officer of the Corporation, the Manager and the Agents.
Generally, the Shares and Warrants will be considered to be capital property to a purchaser, provided the purchaser does
not hold such securities in the course of carrying on a business of buying and selling securities and has not acquired them in
one or more transactions considered to be an adventure in the nature of trade. The Shares (but not the Warrants) will
generally qualify as “Canadian securities” for purposes of the irrevocable election of guaranteed capital gains treatment
provided for under certain circumstances under the Tax Act. Investors considering making the election to have all Canadian
securities (including Shares) owned by them deemed to be capital property should consult their own tax advisors.
This summary is based on the assumptions that:
(a) the Class A Shares and the Class A Warrants will at all times be listed on a designated stock exchange in
Canada (which currently includes the TSX);
(b) the investment objectives, investment strategy and investment restrictions of the Corporation will, at all
relevant times, be as set out under the heading “Investments of the Corporation” herein and that the
Corporation will at all times comply with such investment objectives, investment strategy and investment
restrictions; and
(c) the Corporation has elected, in accordance with the Tax Act, to have each of its “Canadian securities” (as
defined in subsection 39(6) of the Tax Act) treated as capital property.
This summary also takes into account specific proposals to amend the Tax Act announced prior to the date hereof by
or on behalf of the Minister of Finance (Canada) (the “Proposed Amendments”) and assumes that the Proposed
Amendments will be enacted as proposed. No assurances can be given that the Proposed Amendments will be enacted in
the form proposed or at all. Except for the Proposed Amendments, this summary does not take into account or anticipate
any changes in law, whether by legislative, governmental or judicial decision or action, nor does it take into account other
federal or any provincial, territorial or foreign income tax legislation or considerations.
This summary is not exhaustive of all possible Canadian federal tax considerations applicable to an investment in
Shares or Warrants and, in particular, does not describe tax considerations relating to the deductibility of interest on
money borrowed to acquire Shares or Warrants. Moreover, the income and other tax consequences of acquiring, holding
or disposing of Shares or Warrants will vary depending on an investor’s particular circumstances, including the province
in which the investor resides or carries on business. Accordingly, this summary is of a general nature only and is not
intended to be legal or tax advice to any investor. Investors should consult their own tax advisors for advice with
respect to the income tax consequences of an investment in Shares or Warrants, based on their particular
circumstances.
This summary does not apply to investors that are “financial institutions” as defined in section 142.2 of the Tax Act,
“specified financial institutions” as defined in the Tax Act, or to an investor, an interest in which would be a “tax shelter
investment” for purposes of the Tax Act. Any such prospective investors should consult with their own tax advisors before
acquiring Shares or Warrants.
Tax Status of the Corporation
This summary is based on the assumptions that the Corporation will qualify, at all times, as a “mutual fund
corporation” within the meaning of the Tax Act and that the Corporation will elect under the Tax Act to be a “public
corporation” from the date it was established. In order to qualify as a “mutual fund corporation”, the Corporation must be
a “public corporation”, the sole undertaking of the Corporation must, in general, be the investing of its funds in property
(other than real property or interests in real property), and at least 95% of the fair market value of all of the issued shares of
the capital stock of the Corporation must be redeemable at the demand of the holders of those shares. If the Corporation
were to fail to qualify as a “mutual fund corporation”, the income tax considerations described below would, in some
respects, be materially different.
Tax Treatment of the Corporation
The Corporation will not realize income, gain or loss as a result of entering into the Forward Agreement. Provided
the Corporation elects in accordance with the Tax Act to have each of its “Canadian securities” (as defined in the Tax Act)
treated as capital property, if the Corporation elects physical settlement under the Forward Agreement and thereupon
delivers securities in the Common Share Portfolio and receives a payment for such securities from the Counterparty equal
to the price stipulated in the Forward Agreement, the resulting gain or loss realized by the Corporation will be a capital
43
gain or loss. If the Corporation elects cash settlement under the Forward Agreement, the resulting gain or loss to the
Corporation may be on capital or income account depending on the relevant facts and circumstances. The Manager has
advised counsel that, on the basis of the information currently available to it, the Manager expects that the Corporation
will elect physical settlement of the Forward Agreement.
As a mutual fund corporation, the Corporation will be entitled, in certain circumstances, to a refund of tax paid by it
in respect of its net realized capital gains. Also, as a mutual fund corporation, the Corporation will maintain a capital gains
dividend account in respect of capital gains realized by the Corporation and from which it may elect to pay dividends
(“capital gains dividends”) which are treated as capital gains in the hands of its shareholders and not the Corporation (see
“Tax Treatment of Holders” below).
To the extent that the Corporation receives dividends on shares from taxable Canadian corporations for purposes of
the Tax Act (e.g., shares in the Common Shares Portfolio), such dividends will be included in the Corporation’s income
but will be deductible in computing its taxable income. The Corporation will generally be liable to pay a 331⁄3% refundable
tax under Part IV of the Tax Act on the amount by which such dividends received by it on such shares exceed the
Corporation’s non-capital losses claimed in a year. However, any Part IV tax that is paid will be fully refunded to the
Corporation on the payment by the Corporation of sufficient taxable dividends (other than capital gains dividends) in the
year or in subsequent taxation years, in accordance with the provisions of the Tax Act.
Based on a certificate from the Manager, it is expected that the Corporation will be a “financial intermediary
corporation” as defined in the Tax Act and, therefore, the Corporation will not be subject to tax under Part VI.1 of the Tax
Act on dividends that it pays on its shares.
To the extent the Corporation earns income (other than capital gains and dividends from taxable Canadian
corporations), the Corporation will be subject to income tax on such income and no refund will be available in respect
thereof. However, as a result of the deductions and refunds of tax described in this summary, the Manager has advised
counsel that it does not anticipate that the Corporation will be subject to any material net Canadian tax liability.
In computing its income for tax purposes, the Corporation may deduct reasonable administrative and other expenses
incurred by it for the purpose of earning income. The Corporation may deduct or otherwise recognize in accordance with
the rules in the Tax Act the costs and expenses of the Offering paid by the Corporation and not reimbursed.
Any non-capital losses incurred by the Corporation may generally be carried forward or back in accordance with the
rules and limitations contained in the Tax Act and deducted in computing the taxable income of the Corporation. Proposed
Amendments released for public comment on October 31, 2003 may deny losses realized in a year in respect of a business
or property if, in the year, it is not reasonable to expect that the taxpayer will realize cumulative profit from that business or
property for the period in which the taxpayer has carried on, and can reasonably be expected to carry on, that business or
has held, and can reasonably be expected to hold, that property. For these purposes, profit does not include capital gains. If
these Proposed Amendments applied to the Corporation, losses in respect of a business or property of the Corporation
could be denied. On February 23, 2005, the Department of Finance announced that it would release an alternative to this
Proposed Amendment for comment. To date, no such alternative Proposed Amendment has been publicly released.
Tax Treatment of Shareholders
The Manager has advised counsel that, due to the investment strategy of the Corporation, the Corporation expects to
earn primarily capital gains and will distribute primarily capital gains dividends and returns of capital.
The amount of any payment received by a Holder from the Corporation on a Share as a return of capital will not be
included in computing the income of the Holder, but will reduce the Holder’s adjusted cost base of the relevant Share. To
the extent that the adjusted cost base of a Share would otherwise be less than zero, the negative amount will be deemed to
be a capital gain realized by the Holder from a disposition of such Shares and the Holder’s adjusted cost base will be
increased by the amount of such deemed capital gain.
The amount of any capital gains dividend received by a Holder will be considered to be a capital gain of the Holder
from the disposition of capital property in the taxation year of the Holder in which the capital gains dividend is received.
Holders must also include in income any dividends, other than capital gains dividends, (“Ordinary Dividends”)
received from the Corporation. Ordinary Dividends received by a Holder who is an individual will generally be subject to
the gross-up and dividend tax credit rules applicable with respect to taxable dividends paid by taxable Canadian
corporations under the Tax Act. Ordinary Dividends received by a Holder that is corporation will generally be deductible
in computing its taxable income. A Holder that is a private corporation (as defined in the Tax Act) or any other corporation
controlled by or for the benefit of an individual (other than a trust) or a related group of individuals (other than trusts) will
44
generally be liable to pay a refundable tax under Part IV of the Tax Act on Ordinary Dividends at the rate of 331⁄3% to the
extent such dividends are deductible in computing the corporation’s taxable income.
Having regard to the stated dividend policy of the Corporation, a person acquiring Shares may become subject to tax
in respect of capital gains accrued or realized by the Corporation before such person acquired such Shares. The purchase
price for the Common Share Portfolio under the Forward Agreement from time to time may significantly exceed the
aggregate adjusted cost base of the securities comprising the Common Share Portfolio. Therefore, there may be
significant accrued gains in the Corporation prior to the settlement of the Forward Agreement on or about the Forward
Date.
The Corporation will partially settle the Forward Agreement in each taxation year prior to the termination date in
order to fund operating expenses and other liabilities of the Corporation. A partial settlement may result in the
Corporation realizing net capital gains from the disposition of securities in the Common Share Portfolio in such taxation
year. If this occurs, Holders will receive capital gains dividends in respect of the taxation year.
Disposition of Shares
Upon the redemption, retraction or other disposition of a Share, a capital gain (or a capital loss) will be realized to the
extent that the proceeds of disposition of the Share exceed (or are less than) the aggregate of the Holder’s adjusted cost
base of the Share less any reasonable costs of disposition.
Where the Holder is a corporation, a trust of which a corporation is a beneficiary, or a partnership of which a
corporation is a member, in certain circumstances, the amount of any capital loss otherwise determined may be reduced by
the amount of Ordinary Dividends previously received on a Share. These rules may also apply where a trust or partnership
is a member of a partnership or a beneficiary of a trust that owns shares.
The adjusted cost base of each Share will generally be the weighted average of the cost of the Shares acquired by a
Holder at a particular time and the aggregate adjusted cost base of any Shares of the same class already held as capital
property. The adjusted cost base of a Share will be reduced by amounts paid to the Holder on the reduction of the stated
capital of the Share.
In general, one-half of a capital gain (a “taxable capital gain”) is included in computing the income of a taxpayer and
one-half of a capital loss is deductible against taxable capital gains in accordance with the detailed provisions of the Tax
Act. A Holder that is a “Canadian-controlled private corporation” (as defined in the Tax Act) may be subject to an
additional refundable tax of 62⁄3% on investment income for the year, which is defined to include taxable capital gains.
If a Class F Shareholder converts Class F Shares into Class A Shares, the Shareholder will not be considered to have
disposed of the Class F Shares so converted for the purposes of the Tax Act. The cost to the Shareholder of the Class A
Shares received on the conversion will be deemed to be the adjusted cost base to the Shareholder of the Class F Shares that
were converted.
Tax Treatment of Warrants
A purchaser of a Unit offered under this prospectus will be required to allocate the price paid for a Unit on a
reasonable basis between the Share and the Warrant comprising the Unit in order to determine their respective costs to the
purchaser for purposes of the Tax Act. The Corporation will allocate $9.60 to each Share and $0.40 to each Warrant
comprising a Unit. Although the Corporation believes this allocation to be reasonable, it is not binding upon the CRA or a
Holder.
The exercise of a Warrant will not constitute a disposition of property for purposes of the Tax Act and, therefore, no
gain or loss will be realized by a holder upon the exercise of a Warrant. When a Warrant is exercised to a acquire a Share,
the cost to the Holder of the Share so acquired will be the aggregate of the adjusted cost base, to the Holder, of the Warrant
and the price paid for such Share upon the exercise of the Warrant. The cost to a Holder of a Share acquired upon the
exercise of a Warrant must be averaged with the adjusted cost base of all other Shares of the same class of the Corporation
held by the Holder as capital property at the time of the exercise of the Warrant to determine the adjusted cost base of each
Share thereafter.
The disposition of a Warrant (other than a disposition upon the exercise of the Warrant) will generally result in a
capital gain (or capital loss) to the Holder to the extent that the proceeds of disposition, net of any reasonable costs of
disposition, exceed (or are less than) the adjusted cost base of the Warrant to the Holder. The expiry of an unexercised
Warrant will generally result in a capital loss equal to the adjusted cost base of the Warrant to the Holder. See discussion of
capital gains and losses generally under “Disposition of Shares” above.
45
Alternative Minimum Tax
Individuals (other than certain trusts) may be subject to an alternative minimum tax under the Tax Act upon realizing
net capital gains on their Shares or Warrants or as a result of receiving dividends from the Corporation.
ELIGIBILITY FOR INVESTMENT
In the opinion of Fasken Martineau DuMoulin LLP, counsel for the Corporation, and McMillan Binch Mendelsohn
LLP, counsel for the Agents, if issued on the date hereof, (i) the Class A Shares would be qualified investments under the
Tax Act for a trust governed by a registered retirement savings plan, registered retirement income fund, deferred profit
sharing plan or registered disability savings plan (each a “Deferred Plan”) if the Corporation validly elects under the
provisions of the Tax Act to be a “public corporation” since the time of its incorporation, or if the Class A Shares are listed
on the TSX, (ii) the Class F Shares would be qualified investments under the Tax Act for a Deferred Plan if the
Corporation validly elects under the provisions of the Tax Act to be a “public corporation” since the time of its
incorporation, (iii) a Class A Warrant or Class F Warrant would be qualified investments under the Tax Act for a Deferred
Plan if either (a) the Warrant is listed on the TSX, or (b) the Corporation deals at “arm’s length” (for the purposes of the
Tax Act) with each person who is an annuitant, beneficiary, employer or subscriber, as the case may be, under the
particular Deferred Plan, and the shares that may be acquired upon exercise of the Warrant are qualified investments for a
Deferred Plan as described above. Trusts governed by registered education savings plans should consult their own tax
advisors as to the status of the Shares or Warrants as qualified investments.
RISK FACTORS
An investment in Units is subject to various risk factors, including the following risks which prospective purchasers
should consider before purchasing any Units.
No Assurance on Achieving Investment Objective
There is no assurance that the Corporation will be able to achieve its investment objective of providing tax-efficient
risk-adjusted long term rates of return. As a consequence of entering into the Forward Agreement, the Corporation will
forego the benefits of any increase in the value of the Common Share Portfolio.
Suitability for Investment
An investor should reach a decision to invest in the Corporation after careful consideration with her/his advisor(s) as
to the suitability of the Corporation in light of its investment objective and the information set out in this prospectus.
Investors should be cognisant that the return to the Corporation, and consequently to the Shareholders, will depend on the
return of the Global Macroeconomic Portfolio by virtue of the Forward Agreement and that the risks involved in exposure
to the returns of the Global Macroeconomic Portfolio are greater than those normally associated with other types of
investments, as the investments in the Global Macroeconomic Portfolio can be subject to sudden, unexpected and
substantial price movements. Consequently, the trading of investments can lead to substantial losses, as well as gains in
the Net Asset Value per Share within a short period of time. An investment in the Corporation is appropriate only for
investors who have the capacity to absorb the loss of some or all of their investment.
Operating History and Marketability
The Corporation is a newly organized corporation with no previous operating history. There is currently no public
market for the Shares or the Warrants and there can be no assurance that an active public market will develop or be
sustained after completion of the Offering.
Fluctuations in Net Asset Value
The Net Asset Value per Share will vary according, among other things, to the value of the Global Macroeconomic
Portfolio by virtue of the Forward Agreement, and any dividends or distributions paid by the Corporation. Fluctuations in
the market values of the Global Macroeconomic Portfolio and corresponding fluctuations in the Net Asset Value per Share
may occur for a number of reasons beyond the control of the Corporation and the Manager.
The NAV of the Corporation and Net Asset Value per Share for Class A Shares and Class F Shares will be reduced
immediately following the Offering by the amount of Agents’ fees and the amount of organization and offering costs paid
by the Corporation. Whether investors will realize gains or losses upon the sale of Units (other than a redemption on a
December Redemption Date based upon the Net Asset Value per Share) will depend not upon the NAV but entirely upon
whether the market price of Class A Shares at the time of sale is above or below the investor’s purchase price for the Units.
In addition, new standards prescribed by Canadian generally accepted accounting principles are expected to apply to
investment funds with financial years commencing on or after October 1, 2006, which, among other changes, will require
46
investment funds to refer to the closing bid price of an investment for net asset value calculation purposes, while the
current standard industry practice refers to the closing price of an investment. If the new standards are applicable to the
Corporation and no exemption therefrom is available, the NAV of the Corporation may decline as a result of the
implementation of such changes.
Trading Price of Shares and Warrants
Class A Shares may trade in the market at a premium or a discount to the Net Asset Value per Class A Share and there
can be no assurance that Class A Shares will trade at a price equal to the Net Asset Value per Class A Share. As Class F
Shares may be converted into Class A Shares, the eventual price at which an investor is able to realize on an investment in
Class F Shares will be affected by whether Class A Shares are trading in the market at a premium or a discount to the Net
Asset Value per Class A Share. Securities of closed-end investment funds frequently trade at a discount from their net
asset value, which creates a risk of loss for investors when they sell securities purchased in the initial public offering. This
characteristic is a risk separate and distinct from the risk that the NAV of the Corporation could decrease. Securities of
closed-end investment funds like the Corporation have during some periods traded at prices higher than net asset value
and have during other periods traded at prices lower than net asset value. Because the market price of Class A Shares will,
among other things, be determined by factors in addition to the Corporation’s NAV (such as relative supply of and demand
for the Class A Shares in the market, the Corporation’s investment performance, investor perception of the Corporation’s
overall attractiveness as an investment as compared with other investment alternatives, general market and economic
conditions, and other factors beyond the control of the Corporation), the Corporation cannot predict whether Class A
Shares will trade at, below or above the Net Asset Value per Class A Share or at, below or above the initial public offering
price.
Warrants
If a Shareholder sells or does not exercise Warrants, then the value of the Shares held by that Shareholder may be
diluted as a result of the exercise of Warrants by others. The dilution will be greater to the extent that others have redeemed
their Shares and, in the case of Class F Shareholders, to the extent that others have converted their Class F Shares into
Class A Shares.
Warrants may trade in the market at a premium or discount to the intrinsic value per Warrant prior to the Expiry Time
and there can be no assurance that Warrants will trade or, if traded, will trade at a price equal to their intrinsic value. This
risk is separate and distinct from the risk that the intrinsic value per Warrant may decrease or possibly be zero. The
intrinsic value per Warrant and the market price of the Warrants is subject to factors beyond the control of the Corporation
and the Manager.
In addition, there is a risk that, at the Expiry Time, the market price and/or Net Asset Value per Share will not exceed
their Subscription Price, in which case the Warrants may expire worthless.
Status of the Corporation
The Corporation is not considered to be a mutual fund under Canadian securities legislation. As a result, the
Corporation is not subject to the various policies and regulations that apply to mutual funds (such as NI 81-102), although
the Corporation is considered to be a non-redeemable investment fund under Canadian securities legislation and, as such,
is subject to NI 81-106.
Risks Related to Redemptions
If a substantial number of Shares are redeemed, the number of Shares outstanding and the NAV of the Corporation
could be significantly reduced. If a substantial number of Shares is redeemed, this could decrease the liquidity of the
Shares in the market and increase the management expense ratio of the Corporation. In any such circumstance, the
Manager may determine it appropriate to (i) suspend redemptions of Shares, (ii) merge, reorganize or otherwise combine
the Corporation with another investment fund, and/or (iii) terminate the Corporation without the approval of the
Shareholders if, in the opinion of the Manager, it is no longer economically practical to continue the Corporation or the
Manager determines that it would be in the best interests of Shareholders to terminate the Corporation. See “Description
of Securities and Shareholder Matters — Redemptions”.
Changes in Legislation
There can be no assurance that tax, securities, and other laws or the interpretation and application of such laws by
courts or government authorities will not be changed in a manner which adversely affects the taxation of the Corporation
or Shareholders.
47
Counterparty Risk
The Corporation will enter into the Forward Agreement with the Counterparty as described under “Investments of
the Corporation — Forward Agreement” pursuant to which the Corporation will be required to deliver to the Counterparty
on the Forward Date the Common Share Portfolio (or its cash value) in exchange for a payment in an amount equal to the
net redemption proceeds that would be paid by the Trust to holders of an applicable number of units of the Trust. In
entering into the Forward Agreement, the Corporation will be exposed to the credit risk of the Counterparty. Depending
on the value of the Common Share Portfolio and the Global Macroeconomic Portfolio, the Corporation’s exposure to the
credit risk of the Counterparty may be significant. In addition, the possibility exists that the Counterparty will default on
its payment obligations under the Forward Agreement or that the proceeds of the Forward Agreement will be used to
satisfy other liabilities of the Corporation, which liabilities could include obligations to third-party creditors in the event
the Corporation has insufficient assets, excluding the proceeds of the Forward Agreement, to pay its liabilities. The
Forward Agreement may be terminated in certain circumstances prior to the Forward Date. In the event of termination of
the Forward Agreement prior to the Forward Date, there is no assurance that the Corporation will be able to enter into
another comparable transaction on acceptable terms. Shareholders will have no recourse or rights against the Trust or the
assets of the Trust, including the Global Macroeconomic Portfolio or against the Counterparty in respect of, or arising out
of, the Forward Agreement. In addition, the Counterparty may terminate the Forward Agreement if the Counterparty is
unable to effectively hedge its position or is otherwise entitled to early termination. In addition, the Counterparty and its
affiliates may trade, on their own account or on behalf of other clients, in the same instruments included in the Global
Macroeconomic Portfolio.
Taxation of the Corporation
In determining its income for tax purposes, the Corporation will treat gains or losses on the disposition of securities
in the Common Share Portfolio under the Forward Agreement as capital gains and losses. The CRA’s practice is not to
grant advance income tax rulings on the characterization of items as capital gains or income and no advance income tax
ruling has been requested or obtained.
If, contrary to the advice of counsel to the Corporation and to the Agents or as a result of a change of law, upon
physical settlement of the Forward Agreement, the character and timing of the gain under the Forward Agreement were
other than a capital gain (pursuant to the application of the general anti-avoidance rule or otherwise) on the sale of the
securities thereunder, after-tax returns to Shareholders could be reduced, possibly to an amount less than that which would
have been realized by Shareholders if they had held a direct investment in the Global Macroeconomic Portfolio, and the
Corporation could be subject to non-refundable income tax from such transactions.
On October 31, 2003 the Department of Finance (Canada) released a Proposed Amendment relating to the
deductibility of losses under the Tax Act which is proposed to apply to taxation years beginning after 2004. Under
such Proposed Amendment, a taxpayer will be considered to have a loss from a business or property for a taxation year
only if, in that year, it is reasonable to assume that the taxpayer will realize a cumulative profit from the business or
property during the time that the taxpayer has carried on, or can reasonably be expected to carry on, the business or has
held, or can reasonably be expected to hold, the property. Profit, for this purpose, does not include capital gains or capital
losses. If such Proposed Amendment were to apply to the Corporation, certain losses of the Corporation may be limited
with after-tax returns to Shareholders reduced as a result. On February 23, 2005, the Minister of Finance announced that
an alternative proposal to replace this Proposed Amendment would be released. No such alternative proposal has been
released to date. There can be no assurance that such alternative proposal will not adversely affect the Corporation.
There can be no assurance that certain laws applicable to the Corporation or the Trust, including income tax laws,
will not be changed in a manner which could adversely affect the distributions received by the Shareholders. In addition,
there can be no assurance that the administrative policies and assessing practices of the CRA respecting the treatment of
mutual fund corporations will not be changed in a manner which adversely affects the Holders of Shares. If the
Corporation ceases to qualify as a mutual fund corporation under the Tax Act, the income tax considerations described
under the heading “Canadian Federal Income Tax Considerations” would be materially and adversely different in certain
respects.
Securities Lending
Both the Corporation and the Trust may engage in securities lending. Although the Corporation or the Trust, as
applicable, will receive collateral for the loans, and such collateral is marked to market, the Corporation or the Trust will
be exposed to the risk of loss should the borrower default on its obligation to return the borrowed securities and should the
48
collateral be insufficient to reconstitute the portfolio of loaned securities. In addition, the Corporation or the Trust will
bear the risk of loss of any investment of cash collateral.
Foreign Currency Exposure
The investments in the Corporation are denominated in Canadian dollars and the investments in the Global
Macroeconomic Portfolio to which the Corporation is exposed by virtue of the Forward Agreement are expected to be
denominated primarily in U.S. dollars. Exchange rate fluctuations could cause the value of the investments in the
Corporation to diminish or increase. Transactions to hedge against changes to the exchange rates between Canadian and
foreign currencies may not be effective or profitable. The complex systems and programmes operated to mitigate such
risks may result in trades being executed which, with the benefit of hindsight, were not required and/or delayed execution
or non-execution of trades which, with the benefit of hindsight, would have been appropriate. Shareholders will receive
the benefit or bear the loss resulting in such circumstances.
The Investment Advisor currently intends to hedge at least 90% of the value of the Global Macroeconomic Portfolio
back to the Canadian dollar. There may be circumstances in which the Investment Advisor may not be able to meet or may
determine that it is not advisable to meet the target hedge ratio and in such circumstances, the Investment Advisor may
maintain a hedge ratio that the Investment Advisor deems appropriate.
Potential Conflicts of Interest
The services of the Manager and its officers and directors are not exclusive to the Corporation. The Manager or any of
its affiliates and associates may, at any time, engage in the promotion, management or investment management of any
other investment fund or account which invests primarily in securities in the Common Share Portfolio, and provide similar
services to other investment funds and other clients and engage in other activities.
Securities held by the Corporation may also be held by other investment funds or clients for which the Manager or its
affiliates provide investment advice. Because of different investment objectives or other factors, a particular security may
be bought for one or more investment funds or clients when one or more other investment funds or clients are selling the
same security. If opportunities for purchase or sale of securities by the Manager for the Corporation or for other
investment funds or clients for which the Manager renders investment advice arise for consideration at or about the same
time, transactions in such securities will be effected, insofar as feasible, for the respective investment funds or clients on
an equitable basis, in accordance with the Manager’s trade allocation policy in effect from time to time.
The Investment Advisor will engage in other business activities and manage the accounts of clients other than the
Trust including those of other investment funds. The investment strategy for such other clients may vary from that of the
Trust. The Investment Advisor is not required to refrain from any other activity or disgorge any profits from any such
activity, including acting as investment advisor or managing agent for investment funds with objectives similar to those of
the Trust. The Investment Advisor will devote such time and effort to the Trust and its affairs as the Investment Advisor
deems necessary and appropriate. If the Investment Advisor makes trading recommendations for other accounts and the
Trust’s account at or about the same time, the Trust may be competing with such other accounts for the same or similar
investment opportunities. The Investment Advisor expects to allocate opportunities on a fair and equitable basis subject to
the investment objectives of its clients, portfolio needs and available cash.
In addition to the risks described above, the Corporation and its Shareholders are, by virtue of the Forward
Agreement, exposed to the risks associated with an investment in the Trust, including the risks which are summarized
below.
Reliance on the Investment Advisor and Key Personnel
The Investment Advisor will, with respect to the Global Macroeconomic Portfolio, advise the Trust in a manner
consistent with the investment objective, strategy, criteria and restrictions of the Trust. The Investment Advisor will
provide investment management advice in respect of securities selection for the Global Macroeconomic Portfolio and will
determine the allocation of the assets within the Global Macroeconomic Portfolio. Although the employees of the
Investment Advisor who will be primarily responsible for providing investment management advice in respect of the
Global Macroeconomic Portfolio are experienced in managing investment portfolios, there is no certainty that such
individuals, including Mr. Krishnamurthy Narayanan, will continue to be employees of the Investment Advisor
throughout the life of the Corporation or that the Investment Advisor will continue to be engaged as an advisor to
the Trust.
49
Legal and Statutory Rights
Trident is located outside of Canada and all or a substantial portion of its assets are situated outside of Canada. It may
be more difficult to enforce legal rights against Trident than if it was resident in Canada. Although the custodian of the
Global Macroeconomic Portfolio is in Canada and some of the assets of the Global Macroeconomic Portfolio may be held
in Canada, the majority of the Global Macroeconomic Portfolio may be held in accounts with sub-custodians in other
jurisdictions. Accordingly, there may be additional defences available to any judgement obtained by the Trust in Canada
which may affect the enforcement in any such jurisdictions.
Performance of the Global Macroeconomic Investment Methodology
There can be no assurance that any trading strategies used by the Investment Advisor will produce profitable results.
The past performance of the global macroeconomic investment methodology used for Trident Global Opportunities Fund
is not necessarily indicative of the future profitability for the Trust (and, by virtue of the Forward Agreement, the
Corporation). Furthermore, trading methods used by the Investment Advisor are dynamic and may change over time, so
that the Investment Advisor’s current strategies may not be representative of the strategies used in the past or the strategies
to be used in the future. The Investment Advisor’s global macroeconomic investment approach may not be successful in
the future.
General Risks of Investments
The value of the securities and other investments in which the Trust may from time to time invest may fluctuate in
accordance with changes in the financial condition of the issuers of those securities or other investments, the condition of
markets generally and other factors. The Trust also will be subject to the risks inherent in direct or indirect investments in
equity securities, including the risk that the financial condition of the issuers in which the Trust invests may become
impaired or that the general condition of the stock markets may deteriorate. Equity securities are susceptible to general
stock market fluctuations and to volatile increases and decreases in value as market confidence in, and perceptions of, the
issuers change. These investor perceptions are based on various and unpredictable factors including: expectations
regarding government, economic, monetary and fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic and banking crises.
In many circumstances, the issuers in which the Trust may invest may have limited operating histories. The value of
the Global Macroeconomic Portfolio will be influenced by factors that are not within the control of the Trust, which may
include the financial performance of the respective issuers, interest rates, exchange rates and, in the case of resource-based
issuers, commodity prices (which may vary and are determined by supply and demand factors including weather and
general economic and political conditions) and the hedging policies employed by such issuers. The performance of issuers
in which the Trust may invest may also be affected by the performance of their competitors and demand for specific
products and services, and may be adversely affected by a change in any of such conditions.
Illiquid Securities
There is no assurance that an adequate market will exist for the securities held in the Global Macroeconomic
Portfolio. If the market for a specific security is particularly illiquid, the Trust may be unable to acquire or dispose of such
securities or may be unable to acquire or dispose of such securities at an acceptable price.
Commodity Trading
The prices of commodities contracts and all derivative instruments, including futures and options prices, are highly
volatile. Price movements of commodities, futures and option contracts are influenced by, among other things, changing
supply and demand relationships, domestic and foreign governmental programs and policies, national and international
political and economic events, interest rates, and monetary and exchange control programs and policies of governments.
Moreover, commodity exchanges limit fluctuations in commodity futures contract prices during a single day by
regulations referred to as “daily price fluctuation limits” or “daily limits.” During a single trading day no trades may be
executed at prices beyond the daily limit. Commodity futures prices have occasionally moved the daily limit for several
consecutive days with little or no trading. Similar occurrences could prevent the Global Macroeconomic Portfolio from
promptly liquidating unfavourable positions and subject the Global Macroeconomic Portfolio to substantial losses.
Foreign Market Exposure
The Global Macroeconomic Portfolio may, at any time, include securities of issuers established in jurisdictions
outside Canada and the United States. Although most such issuers will be subject to uniform accounting, auditing and
financial reporting standards comparable to those applicable to Canadian and U.S. companies, some issuers may not be
subject to such standards and, as a result, there may be less publicly available information about such issuers than there
50
would be with respect to a Canadian or U.S. company. Volume and liquidity in some foreign stock markets may be less
than in Canada and the U.S. and, at times, volatility of price may be greater than in Canada or the U.S. As a result, the price
of such securities may be affected by conditions in the market of the jurisdiction in which the issuer is located or its
securities are traded.
The Global Macroeconomic Portfolio may include securities of issuers in countries with emerging economies or
securities markets. Political and economic structures in many such countries may be undergoing significant evolution and
rapid development, and such countries may lack the social, political and economic stability characteristic of more
developed countries. Certain of such countries may have in the past failed to recognize private property rights and have at
times nationalized or expropriated the assets of private companies. As a result, the risks of investing in such countries,
including the risks of nationalization, expropriation of assets or restriction on currency convertibility, may increase. In
addition, unanticipated political or social developments may affect the value of the Global Macroeconomic Portfolio.
Interest Rate Sensitivity
Each investment strategy is assumed to have some interest rate sensitivity, which effectively means that the
Investment Advisor would expect the returns to be higher in higher interest rate environments, and lower in lower interest
rate environments. The net asset value of the Trust will fluctuate with interest rate changes and the corresponding changes
in the value of the securities and other investments in the Global Macroeconomic Portfolio.
Use of Derivatives
The Trust may use various hedging and interest rate transactions and may purchase and sell derivative instruments
including options, futures contracts and options on futures. The use of derivative instruments involves risks different from,
and possibly greater than, the risks associated with investing directly in securities and other traditional investments.
Derivatives are subject to a number of risks. They also involve the risk of mispricing or improper valuation and the risk
that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index. Hedging with
derivatives may not always be successful and could limit the Trust’s ability to have access to increases in the value of the
Global Macroeconomic Portfolio. The Trust may not be able to obtain or close out a derivative contract when the
Investment Advisor believes it is desirable to do so, which may prevent the Trust from making a profit or limiting a loss.
When the Trust invests in a derivative instrument, it could lose more than the principal amount invested. Amounts paid by
the Trust as premiums and cash or other assets held in margin accounts are not otherwise available to the Trust for
investment purposes. To the extent that the Trust enters into derivatives, the Trust will be exposed to the credit risk of the
counterparties in those derivatives.
Short Selling and Uncovered Call Options
The Trust may engage in short-selling of securities and write uncovered call options. A short sale will result in a gain
if the price of the securities sold short declines between the date of the short sale and the date on which securities are
purchased to replace those borrowed. An uncovered call option will earn premiums for the Trust. A short sale will result in
a loss if the price of the security sold short increases. Any gains are decreased by the amount of any payment and
compensation that the Trust may be required to pay with respect to the borrowed securities. Short sales may only be
maintained if the securities can be borrowed. It may not be possible at times for the Trust to borrow the securities it wished
to sell short or maintain the borrowing for a security sold short. The borrowed securities may need to be returned on short
notice. If the securities cannot remain borrowed, the Trust could be required to cover the short sale by borrowing the
security elsewhere or by purchasing securities at a higher price than the short sale transition thereby creating a loss.
Similarly, the Trust will incur a loss if value of the securities subject to an uncovered call option increase above the
exercise price of the option and the Trust is required to purchase the security at a price which exceeds the premium for
selling the option and the exercise price of the option. If the price of a security that has been sold short or that is the subject
of a call option increases, there is theoretically no limit to the loss that could be incurred in closing a short sale position or
upon the exercise of the call option, as there is no limit on how much the price of security may appreciate. In addition,
there is no assurance that the securities sold short or subject to an uncovered call option will be available in a marketplace
to be repurchased by the Trust when necessary.
Use of Leverage
In order to implement its investment strategies, the Trust may utilize the Loan Facility and various other
arrangements with financial institutions and invest through investment vehicles, such as swaps and other off balance
sheet derivative transactions. While leverage presents opportunities for increasing total return, it has the effect of
potentially increasing losses as well. If income and appreciation on investments made with borrowed funds are less than
the cost of the leverage, the value of the Trust’s net assets will decrease. Accordingly, any event which adversely affects
51
the value of an investment by the Trust would be magnified to the extent leverage is employed. The cumulative effect of
the use of leverage in a market that moves adversely to a leverage investment could result in a substantial loss that would
be greater than if leverage was not used. While the Investment Advisor has risk management and monitoring systems in
place to measure the level of leverage used by the Trust, there can be no certainty that such level will not be exceeded.
Generally, most leveraged transactions may involve the posting of collateral. Increases in the amount of margin or
similar payments could result in the need for trading activity at times and prices, which could be disadvantageous to the
Trust and could result in substantial losses for the Trust and, consequently, for the Corporation.
Transaction Costs
The performance of the Trust will be affected by brokerage and related transaction costs. Certain investment
strategies may engage in a high level of trading resulting in commensurately higher transactions. Typically, high portfolio
turnover will result in correspondingly high transaction costs.
Valuation of the Global Macroeconomic Portfolio
The net asset value of the Trust will be based on the valuation of the investments in the Global Macroeconomic
Portfolio. Valuation of some investments in the Global Macroeconomic Portfolio may be estimated values provided by
third parties and subject to error. Assessing the accuracy of the valuation of the Global Macroeconomic Portfolio may not
be possible where it is not possible to assess the accuracy of the valuations provided by third parties of specific
investments within the Global Macroeconomic Portfolio.
Taxation of the Trust
Certain trusts that hold one or more “non-portfolio properties” as defined in section 122.1 of the Tax Act are
effectively taxed on income and capital gains in respect of such non-portfolio properties at combined rates comparable to
the rates that apply to income earned and distributed by Canadian corporations. The investment restrictions of the Trust
and the restrictions on the ownership of Trust Units are intended to ensure that the Trust is not subject to such tax. If,
notwithstanding the foregoing, the Trust is found to be subject to the tax described above, the value of Trust Units would
be reduced, which would reduce the value of the Forward Agreement, and thereby reduce the NAV of the Corporation.
INTEREST OF MANAGER AND OTHERS IN MATERIAL TRANSACTIONS
The Manager will receive the fees described under “Fees and Expenses — Fees and Other Expenses” for its services
to the Corporation and the Trust and will be reimbursed by the Corporation and the Trust for all reasonable expenses and
liabilities incurred in connection with the operation and management of the Corporation and the Trust.
PRINCIPAL SHAREHOLDER
All of the issued and outstanding Class M Shares of the Corporation are owned by Trident Performance Corp.
Holding Trust (the “Holding Trust”), an Ontario trust. David C. Pauli and Stuart P. Hensman are the trustees of the
Holding Trust and the beneficiaries are the holders of the Shares outstanding from time to time.
MATERIAL CONTRACTS
Other than contracts entered into in the ordinary course of business, the following contracts can reasonably be
regarded as material to purchasers of Units:
(a)
the Management Agreement described under “Management of the Corporation — The Manager”;
(b)
the Forward Agreement described under “Investments of the Corporation — Forward Agreement”;
(c)
the Agency Agreement described under “Plan of Distribution”;
(d)
the Warrant Indentures described under “Description of Securities and Shareholder Matters — Warrants”; and
(e)
the Custodian Agreement described under “Custodian”.
Copies of the agreements referred to in (a) to (e) above, after the execution thereof, may be inspected during business
hours at the principal office of the Corporation during the course of distribution of the Units offered hereby.
LEGAL OPINIONS
The matters referred to under “Eligibility for Investment” and “Canadian Federal Income Tax Considerations” and
certain other legal matters relating to the securities offered hereby will be passed upon by Fasken Martineau DuMoulin
LLP on behalf of the Corporation and McMillan Binch Mendelsohn LLP on behalf of the Agents.
52
PROMOTER
The Manager has taken the initiative in organizing and incorporating the Corporation and accordingly is considered
to be a “promoter” of the Corporation within the meaning of the securities legislation of certain provinces of Canada. The
Manager will receive fees from the Corporation and will be entitled to reimbursement of all reasonable expenses and
liabilities incurred in connection with the operation and management of the Corporation as described under “Fees and
Expenses — Fees and Other Expenses”.
AUDITORS
The auditors of the Corporation are PricewaterhouseCoopers LLP, 77 King Street West, Toronto, Ontario M5K 1G8.
CUSTODIAN
Pursuant to an agreement (the “Custodian Agreement”) to be entered into on or before the closing of the Offering,
RBC Dexia Investor Services Trust (“RBC Dexia”) will be the custodian of the assets of the Corporation. The address of
RBC Dexia is 77 King Street West, 11th Floor, Royal Trust Tower, Toronto-Dominion Centre, Toronto, Ontario M5W 1P9
Attention: International Investment Products. RBC Dexia will not have any responsibility or liability for any assets of the
Corporation which it does not directly hold or have control over (including through its sub-custodians). RBC Dexia is
entitled to receive fees from the Corporation and to be reimbursed for all expenses and liabilities which are properly
incurred by RBC Dexia in connection with the activities of the Corporation.
REGISTRAR AND TRANSFER AGENT
Pursuant to a Transfer Agent, Registrar and Distribution Disbursing Agent Agreement to be entered into on or before
the closing of the Offering, Computershare Investor Services Inc., at its principal office in Toronto will be appointed the
registrar and transfer agent for the Class A Shares. Pursuant to the Class A Warrant Indenture, Computershare Trust
Company of Canada will be appointed the registrar and transfer agent for the Class A Warrants.
PURCHASER’S STATUTORY RIGHTS
Securities legislation in certain of the provinces of Canada provides a purchaser with the right to withdraw from an
agreement to purchase securities within two business days after receipt or deemed receipt of a prospectus and any
amendment. In several of the provinces, the securities legislation further provides a purchaser with remedies for rescission
or, in some jurisdictions, damages if the prospectus and any amendment contains a misrepresentation or is not delivered to
the purchaser, provided that such remedies for rescission or damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser’s province. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser’s province for the particulars of these rights or consult with
a legal advisor.
53
AUDITORS’ REPORT
To the Directors of
Trident Performance Corp.
We have audited the statement of financial position of Trident Performance Corp. (the “Corporation”) as at
January 31, 2008. This statement of financial position is the responsibility of management of the Corporation. Our
responsibility is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require
that we plan and perform an audit to obtain reasonable assurance whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statement. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
In our opinion, this statement of financial position presents fairly, in all material respects, the financial position of the
Corporation as at January 31, 2008 in accordance with Canadian generally accepted accounting principles.
Toronto, Ontario
January 31, 2008
(signed) PRICEWATERHOUSECOOPERS LLP
Chartered Accountants
Licensed Public Accountants
54
Trident Performance Corp.
STATEMENT OF FINANCIAL POSITION
As at January 31, 2008
ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$100
$100
SHAREHOLDER’S EQUITY
Class A Shares (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class F Shares (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class M Shares (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Approved by the Board of Directors
By: (signed)
Director
CHRIS
VON
BOETTICHER
By: (signed)
Director
55
STUART P. HENSMAN
—
—
$100
$100
Trident Performance Corp.
NOTES TO STATEMENT OF FINANCIAL POSITION
January 31, 2008
1.
FORMATION OF THE CORPORATION
Trident Performance Corp. (the “Corporation”) was incorporated under the laws of the Province of Ontario on
December 20, 2007. The manager of the Corporation is CI Investments Inc. (in such capacity, the “Manager”). The
Corporation is authorized to issue an unlimited number of Class A shares (the “Class A Shares”), an unlimited
number of Class F shares (“Class F Shares”) and 100 Class M shares (the “Class M Shares”), of which no Class A
Shares or Class F Shares and 100 Class M Shares are outstanding. A trust established for the benefit of the holders of
Class A Shares and Class F Shares owns all of the issued and outstanding Class M Shares. Each whole Class A share
purchase warrant (a “Class A Warrant”) of the Corporation entitles the holder to purchase one Class A Share of the
Corporation at a subscription price of $10.25 on or before 4:00 p.m. (Toronto time) on February 28, 2011. Each
whole Class F share purchase warrant (a “Class F Warrant”) of the Corporation entitles the holder to purchase one
Class F Share of the Corporation at a subscription price of $10.25 on or before 4:00 p.m. (Toronto time) on
February 28, 2011.
2.
AGENCY AND CUSTODIAN AGREEMENTS
The Corporation has engaged TD Securities Inc., Blackmont Capital Inc., CIBC World Markets Inc., BMO Nesbitt
Burns Inc., National Bank Financial Inc., Scotia Capital Inc., Canaccord Capital Corporation, Dundee Securities
Corporation, HSBC Securities (Canada) Inc., Raymond James Ltd., Desjardins Securities Inc., Richardson Partners
Financial Limited and Wellington West Capital Inc. to offer for sale to the public pursuant to a prospectus dated
January 31, 2008 the Class A Shares, Class F Shares, Class A Warrants and Class F Warrants referred to in Note 1.
The Corporation will retain RBC Dexia Investor Services Trust (the “Custodian”) under a custody agreement to act
as custodian of the assets of the Corporation and to be responsible for certain aspects of the Corporation’s day-to-day
operations. In consideration for the services provided by the Custodian, the Corporation will pay the Custodian a
monthly fee as set out in the custody agreement.
3.
MANAGEMENT FEES AND OTHER EXPENSES
The Corporation has retained CI Investments Inc. (the “Manager”) under a management agreement dated as of
January 31 2008 to act as the manager of the Corporation. Pursuant to such agreement, the Manager is entitled to a
management fee payable monthly in arrears at an annual rate of 0.25% of the net asset value of the Corporation
calculated as at the last valuation date in each month, plus applicable taxes, plus an amount equal to the service fee
(the “Service Fee”) payable to the Manager by the Corporation, as discussed below.
In addition to the management fee, the Corporation will pay to the Manager a Service Fee in an amount equal to
0.40% per annum of the Net Asset Value per Class A Share for all Class A Shares then outstanding, plus applicable
taxes. The Manager will pay a comparable service fee, plus applicable taxes to each dealer on a pro rata basis based
on the respective number of Class A Shares held by clients of the sales representatives of such dealers.
The Corporation will pay for all expenses incurred in connection with its operation and administration. The
Corporation also will be responsible for commissions and other costs of portfolio transactions, and all liabilities and
any extraordinary expenses which it may incur from time to time.
56
AUDITORS’ CONSENT
We have read the prospectus of Trident Performance Corp. (the “Corporation”) dated January 31, 2008 relating to the
issue and sale of Class A Units and Class F Units of the Corporation. We have complied with Canadian generally accepted
standards for an auditor’s involvement with offering documents.
We consent to the use in the above-mentioned prospectus of our report to the Directors of the Corporation on the
statement of financial position of the Corporation as at January 31, 2008. Our report is dated January 31, 2008.
Toronto, Ontario
January 31, 2008
(signed) PRICEWATERHOUSECOOPERS LLP
Chartered Accountants
Licensed Public Accountants
57
CERTIFICATE OF THE CORPORATION AND THE PROMOTER
Dated: January 31, 2008
The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities offered by this
prospectus as required by Part 9 of the Securities Act (British Columbia), by Part 9 of the Securities Act (Alberta), by
Part XI of The Securities Act, 1988 (Saskatchewan), by Part VII of The Securities Act (Manitoba), by Part XV of the
Securities Act (Ontario), by Part 6 of the Securities Act (New Brunswick), by Section 63 of the Securities Act (Nova
Scotia), by Part II of the Securities Act (Prince Edward Island) and by Part XIVof The Securities Act (Newfoundland and
Labrador) and the respective regulations thereunder. This prospectus does not contain any misrepresentation likely to
affect the value or the market price of the securities to be distributed, as required by the Securities Act (Québec) and the
regulations thereunder.
TRIDENT PERFORMANCE CORP.
By:
(signed) DAVID R. MCBAIN
Chief Executive Officer
By:
(signed) DOUGLAS J. JAMIESON
Chief Financial Officer
On behalf of the Board of Directors
By:
(signed) STUART P. HENSMAN
Director
By:
Promoter
CI INVESTMENTS INC.
By:
(signed) DAVID R. MCBAIN
Senior Vice-President
C-1
(signed) SHARON M. RANSON
Director
CERTIFICATE OF THE AGENTS
Dated: January 31, 2008
To the best of our knowledge, information and belief, the foregoing constitutes full, true and plain disclosure of all
material facts relating to the securities offered by this prospectus as required by Part 9 of the Securities Act (British
Columbia), by Part 9 of the Securities Act (Alberta), by Part XI of The Securities Act, 1988 (Saskatchewan), by Part VII of
The Securities Act (Manitoba), by Part XV of the Securities Act (Ontario), by Part 6 of the Securities Act (New
Brunswick), by Section 64 of the Securities Act (Nova Scotia), by Part II of the Securities Act (Prince Edward Island) and
by Part XIV of The Securities Act (Newfoundland and Labrador) and the respective regulations thereunder. This
prospectus does not contain any misrepresentation likely to affect the value or the market price of the securities to be
distributed, as required by the Securities Act (Québec) and the regulations thereunder.
TD SECURITIES INC.
BLACKMONT CAPITAL INC.
CIBC WORLD MARKETS INC.
(Signed) CAMERON GOODNOUGH
(Signed) CHARLES A.V. PENNOCK
(Signed) RONALD W.A. MITCHELL
BMO NESBITT BURNS INC.
NATIONAL BANK FINANCIAL INC.
SCOTIA CAPITAL INC.
(Signed) FAROOQ N.P. MOOSA
(Signed) MICHAEL D. SHUH
(Signed) BRIAN D. MCCHESNEY
CANACCORD CAPITAL
CORPORATION
DUNDEE SECURITIES
CORPORATION
HSBC SECURITIES
(CANADA) INC.
RAYMOND JAMES LTD.
(Signed) BINA N. PATEL
(Signed) MARTIN L. JURAVSKY
(Signed) BRENT LARKAN
(Signed) J. GRAHAM FELL
DESJARDINS SECURITIES INC.
RICHARDSON PARTNERS FINANCIAL LIMITED
WELLINGTON WEST CAPITAL INC.
(Signed) BETH SHAW
(Signed) DAVID FINNBOGASON
(Signed) KEVIN M. HOOKE
C-2