VANCOUVER, British Columbia, July 22, 2022 (GLOBE NEWSWIRE) — PenderFund Capital Management Ltd. (“hanging”), the Manager of Pender Value Fund II (“PVFII”) and the Pender Special Situations Fund (“PSSF” and with PVFII, the “Funds“and each one”Funds”) announces that, at the special meeting of unitholders of the Funds (the “Unitholders”) held on July 22, 2022, the following proposed amendments were approved by the unitholder of these Funds. Each Fund will convert from a conventional mutual fund to an alternative mutual fund as set out in NI 81-102 – Investment Funds of the Canadian Securities Administrators (“National Instrument 81-102”) and, in this regard, the fundamental investment objectives and fee structure of each Fund will be amended as follows:
PVFII
| Current Fundamental Investment Objectives | New Fundamental Investment Objectives |
| The Fund’s objective is to achieve long-term capital appreciation by investing primarily in Canadian and US equities with the option of also investing in debt and other securities. The Fund seeks to identify investment opportunities which are believed to represent particular situations. | The Fund’s objective is to preserve capital and generate returns through current income and capital appreciation, while being sufficiently diversified to mitigate volatility. The Fund will invest primarily in North American securities and may also invest in foreign securities.
The Fund meets the definition of an “alternative mutual fund” as set out in NI 81-102 because it is permitted, as modified by an exemption received by the Fund, to use generally prohibited strategies by other types of mutual funds, such as the ability to invest more than 10% of its net asset value in securities of a single issuer (up to 20%), either directly or through the use of specified derivative instruments, the ability to borrow cash, when aggregated to the value of all outstanding borrowings, up to 100% of its net asset value, to be used for investment purposes, the ability to sell short securities (provided that the aggregate market value of the securities of the issuer of the securities sold short, other than government securities, does not exceed 10% of its net asset value and the aggregate market value of the securities sold short overdraft does not exceed 100% of its net asset value), and the ability to use leverage through cash borrowing, short selling and specified derivative instruments. The maximum global exposure to these sources of leverage, calculated in accordance with section 2.9.1 of NI 81-102, must not exceed 300% of the NAV of the Fund. |
| New performance-based fees: Performance fees will apply to all unit classes. For Class O Units, such costs are or will be charged directly to Unitholders, as the case may be. Performance fees correspond to 15% of the amount by which the total return of the share class exceeds a minimum rate of 3%, for the period since the last payment of the performance fee, subject to accumulation in the years where no performance fee is paid, provided that the total return of the relevant unit class for that period is above the previous high-water mark. |
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PSSF
| Current Fundamental Investment Objectives | New Fundamental Investment Objectives |
| The Fund’s objective is to achieve long-term capital appreciation by investing primarily in Canadian and US equities with the option of also investing in debt and other securities. The Fund seeks to identify investment opportunities which are believed to represent particular situations. | The Fund’s objective is to achieve long-term capital appreciation by investing primarily in Canadian and US equities with the option of also investing in debt and other securities. The Fund seeks to identify investment opportunities which are believed to represent particular situations.
The Fund meets the definition of an “alternative mutual fund” as set out in NI 81-102 because it is permitted, as modified by an exemption received by the Fund, to use generally prohibited strategies by other types of mutual funds, such as the ability to invest more than 10% of its net asset value in securities of a single issuer (up to 20%), either directly or through the use of specified derivative instruments, the ability to borrow cash, when aggregated to the value of all outstanding borrowings, up to 100% of its net asset value, to be used for investment purposes, the ability to sell short securities (provided that the aggregate market value of the securities of the issuer of the securities sold short, other than government securities, does not exceed 10% of its net asset value and the aggregate market value of the securities sold short overdraft does not exceed 100% of its net asset value), and the ability to use leverage through cash borrowing, short selling and specified derivative instruments. The maximum global exposure to these sources of leverage, calculated in accordance with section 2.9.1 of NI 81-102, must not exceed 300% of the NAV of the Fund. |
| New performance-based fees: Performance fees will apply to all unit classes. For Class O Units, such costs are or will be charged directly to Unitholders, as the case may be. Performance fees will be equal to 15% of the amount by which the total return of the unit class exceeds a hurdle rate of 6%, for the period since the last payment of the performance fee, subject to accumulation on years in which no performance fee is paid, provided that the total return of the relevant class of units for that period exceeds the previous highest level. |
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The new investment objectives and performance-based fees for the Funds are expected to be implemented by Pender, as manager of the Funds, on or about September 1, 2022. Following such implementation, the following additional changes are expected to be made to the Funds:
- Name change: The name of “Pender Value Fund II” will be changed to “Pender Alternative Multi-Strategy Income Fund”. The name of “Pender Special Situations Fund” will be changed to “Pender Alternative Special Situations Fund”.
- Change in investment strategies: Certain related changes will be made to the investment strategies of each Fund in order to implement the new investment objectives of that Fund.
- Change in risk rating:
| Funds | New risk rating | Ranking of Prior Risks |
| PVFII | Down | High |
| PSSF | Medium | Medium |
Additional information regarding the changes described above for the Funds, including changes to investment objectives and performance-based fees, is provided in the applicable Fund’s management information circular dated June 23, 2022, which is available on that Fund’s SEDAR profile at www.sedar. com.
The risk rating of each Fund is reviewed at least once a year, and also when a Fund undergoes a material change. A summary of the methodology used by Pender to determine each Fund’s risk rating can be found in the Funds’ simplified prospectus available on SEDAR at www.sedar.com. This methodology is also available by calling toll free 1-866-377-4743 or emailing info@penderfund.com.
About PenderFund Capital Management Ltd.
Pender was founded in 2003 and is an independent, employee-owned investment firm located in Vancouver, British Columbia. Our goal is to protect and grow the wealth of our investors over time. We have a talented investment team of expert analysts, stock pickers and independent thinkers who actively manage a suite of differentiated investment funds, exploiting inefficient parts of the investment universe to achieve our goal.
For more information about Pender and for information on standard performance of our funds, please visit www.penderfund.com and www.fondspender.com.
Please read important information at www.penderfund.com/disclaimer.
For more information, please contact:
Melanie Moore
Vice President of Marketing, PenderFund Capital Management Ltd.
mmoore@penderfund.com
(604) 688-1511
Toll Free: (866) 377-4743
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