A New Competitor: Canadian Preferred Share Trust

On May 28, Fierra Capital announced:

that Canadian Preferred Share Trust (the “Fund”) has filed a preliminary prospectus dated May 27, 2015with the securities regulatory authorities of all of the Canadian provinces and territories for an initial public offering (the “Offering”) of Class A Units and Class F Units (collectively, the “Units”) of the Fund at a price of $10.00 per Unit. The Class F Units are designated for fee based and/or institutional accounts and will not be listed on a stock exchange but will be convertible into Class A Units on a weekly basis.

The Fund’s investment objectives are to provide holders of Units with monthly cash distributions, preserve capital and provide the opportunity for capital appreciation and reduce the risk of rising interest rates by managing portfolio duration. The Fund has been created to invest in an actively managed portfolio comprised primarily of Canadian preferred shares. The Fund’s distributions are initially targeted to be $0.0333 per Unit per month ($0.40 per annum) to yield 4.0% on the subscription price per Unit.

Fiera Capital is the manager, portfolio manager and promoter of the Fund. Fiera Capital is responsible for creating, structuring, managing and promoting the Fund and will also implement the Fund’s investment strategies.

The final prospectus was announced on June 23.

Exchange Ratios (when offering extant preferred shares in exchange for units of the fund; many, many different issues will be accepted) were announced June 24.

And on July 2 the issue closed:

Canadian Preferred Share Trust (the “Trust”) announces the closing of its initial public offering (the “Offering”) for aggregate gross proceeds of approximately $90 million. Pursuant to the Offering, the Trust issued Class A Units and Class F Units (together, the “Units”) at a price of $10.00per Unit. The Trust has granted the Agents an over-allotment option, exercisable for a period of 30 days from today’s date, to purchase up to an additional 1 million Class A Units.

The Class A Units are listed on the Toronto Stock Exchange under the symbol PFT.UN. The Class F Units are designated for fee based and/or institutional accounts and will not be listed on a stock exchange but will be convertible into Class A Units on a weekly basis.

The Trust’s investment objectives are to:

(i) provide holders of Units with monthly cash distributions;
(ii) preserve capital and provide the opportunity for capital appreciation; and
(iii) reduce the risk of rising interest rates by managing portfolio duration.

The Trust has been created to invest in an actively managed portfolio comprised primarily of Canadian preferred shares. The Trust’s distributions are initially targeted to be $0.0333 per Unit per month ($0.40 per annum) to yield 4.0% per annum on the subscription price per Unit.

Fiera Capital is the manager, portfolio manager and promoter of the Trust. Fiera Capital is responsible for creating, structuring, managing and promoting the Trust and will also implement the Trust’s investment strategies.

Fiera Capital is also the manager of National Bank Preferred Equity Fund, which used to be Altamira Preferred Equity Fund, which launched quietly in 2012.

Good luck!

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