Ninepoint Canadian Senior Debt Fund
Fund Highlights
- Senior Secured & Collateralized Asset-Based Loans – Traditional asset-based loans that have security interests which are primarily 1st lien, sit at the top of the capital structure, and are secured by assets such as accounts receivable, inventory, machinery & equipment and real estate.
- Experienced Lending Team – Senior management team collectively has over 150 years of experience in Canadian mid-market lending.
- Lending Void in Canadian Mid-Market – Absence of financing for Canadian SMEs allow for strong pricing, robust loan structures and covenants.
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6 Reasons to Consider Canadian Senior Debt Fund
1. Private Debt Middle Market Opportunity
There are 1 million small and medium-sized enterprises (SMEs) in Canada, contributing over 50% of Canada’s GDP.
Due to post-2008 capital requirements and regulatory changes, SMEs are under-served by the banks.
In particular, there are 800 companies in Canada engaged in Security and Defence manufacturing that have limited access to financing, yet Canada is committed to spend in excess of $40B over the next 15 years to its military.
Sources: HSBC Commercial Banking Report, Statistics Canada, Industry Canada
2. Portfolio Diversification
- Private Debt is uncorrelated to public market debt securities
- Access to the Security and Defence sector
3. Experienced Private Debt Manager
- Fund Advisor, Waygar Capital, has over 60 years of collective experience in Canadian
middle market lending - Disciplined underwriting process with extensive workout, turnaround and restructuring
experience - Waygar is the preferred lender for the members of the Conference of Defense
Associations (CDA) Institute
4. Loan Security
- All loans in the Fund are first lien, senior secured loans and fully collateralized
- Loans typically at 60% loan-to-value ratio
- Average loan size: $5-30MM per issuer with an average term-to-maturity of 18 months
5. Added Oversight
Private debt is a loan-by-loan business. Ninepoint supplements fund-level oversight with an in-house Due Diligence & Oversight Team that has over 15 years of experience in corporate lending and loan origination.
Supporting our Oversight Team is BlackRock’s Aladdin platform, which provides additional risk management tools for the Oversight Team.
6. Tax Efficient Structure
Cayman structure provides tax-efficient vehicle to potentially improve after tax returns for Canadian and non-Canadian investors
Investment Team
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Regulatory Documents
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Fund Codes
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Fund Details
Fund Type Open-ended unincorporated
investment trustInception Date Series A: May 2018
Series F: May 2018
Series S: October 2017
Distributions Annual Registered Tax Plan Status Not Eligible Management Fee Series A*: 1.45%
Series F*: 1.45%
Series S: 0.85%
*(Class A and Class F will benefit from a time-limited management fee reduction of 10basis points for one year beginning on July 1, 2022 and ending on June 30, 2023.)Performance Fee See Offering Memorandum Minimum Initial Investment $5,000 accredited
$150,000 non-accredited**Minimum Subsequent Investment $5,000 Minimum Investment Term Early redemption fee of 2%, if redeemed within the first 12 months Redemptions Quarterly, with 180 days notice, changing to 120 days notice effective December 31, 2022.
Where redemption requests for any quarter exceed 5% of NAV of the Master Fund^ as at the prior quarter end, the redemption cap^ will apply pro rata across all investors in the Master Fund.
Valuations Monthly **non-individual only
^as defined in the offering memorandum
All returns and fund details are a) based on Class F units; b) net of fees; c) annualized if period is greater than one year. The index proxies for each category are: Bloomberg Barclays Canada Aggregate TR Index; ICE BofAML US High Yield TR Index; S&P/LSTA Leveraged Loan TR Index; S&P/TSX Composite TR; S&P 500 TR USD; HFRX Global Hedge Fund Index. Indexes are computed by Ninepoint Partners LP based on available index information.
For accredited investor requirements please consult a financial advisor or the Fund’s offering documents.
The Ninepoint Canadian Senior Debt Fund (the “Fund”) is generally exposed to the following risks. See the offering memorandum of the Fund for a description of these risks: Overall Risk; Not a Complete Investment Program; General Investment Risk; Limited Operating History; Class Risk; Changes in Investment Strategy; Limited Ability to Liquidate Investment; Capital Depletion Risk; Redemptions; Fluctuations in Net Asset Value and Valuation of the Master Fund’s Investments; Unitholders not Entitled to Participate in Management; Reliance on the Manager; Dependence of the Manager on Key Personnel; Reliance on the Loan Consultant; Dependence of Loan Consultant on Key Personnel; Taxation of the Fund; No Ownership Interest in the Portfolio; Distributions; Potential Indemnification Obligations; Liability of Unitholders; Lack of Independent Experts Representing Unitholders; No Involvement of Unaffiliated Selling Agent; Not a Public Mutual Fund; Charges to the Fund; Risks Associated with the Master Fund and Investments by the Master Fund; Overall Investment Risk; Changes in Investment Strategy; General Economic and Market Conditions; Risks of Executing Investment Strategies; Foreign Currency Risk; Market Liquidity; Discretion of the Manager; Concentration of Investments; Charges to the Master Fund; Risk of Taxation; Availability of Investment Strategies; Credit Risk and Default in Repayment Obligations by Borrowers; Liquidity of Underlying Investments; Impaired Loans; Inability to Realize on or Dispose of Security Granted by Borrowers on a Defaulted Loan.
Ninepoint Partners LP is the investment manager to the Ninepoint Funds (collectively, the “Funds”). The Ninepoint Canadian Senior Debt Fund is offered on a private placement basis pursuant to an offering memorandum and is only available to investors who meet certain eligibility or minimum purchase amount requirements under applicable securities legislation. The offering memorandum contains important information about the Fund including its investment objective and strategies, purchase options, applicable management fees, performance fees, other charges and expenses, and should be read carefully before investing. Performance data represents past performance of the Fund and is not indicative of future performance. Data based on performance history of less than five years may not give prospective investors enough information to base investment decisions on. Please contact your own personal advisor on your particular circumstance. This communication does not constitute an offer to sell or solicitation to purchase securities of the Fund. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.
After a successful unitholder vote to restructure several key features that provide investors with more predictable liquidity and better visibility into redemption requests, we are pleased to announce that Ninepoint Canadian Senior Debt Fund has re-opened for purchases as of June 30, 2022. Please refer to the Offering Memorandum for complete details. For further information or to subscribe, please contact your Ninepoint Product Specialist.
Are You An Accredited Investor?
An investment in this Fund requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in this type of an investment. Investors in the Fund must be prepared to bear such risks for an extended period of time and should review suitability with their Investment Advisor.
The minimum subscription amount is $150,000.00 in all jurisdictions, unless you meet the definition of "accredited investor" under National Instrument 45-106 Prospectus and Registration Exemptions.
If you meet the definition "accredited investor" (see below), you may invest a minimum of $25,000. Please consult the Offering Memorandum to determine your qualification status. Investment Advisors should consult their company's internal policies.
The Subscriber, or one or more beneficial purchasers for whom the Subscriber is acting, is (i) a resident of, or the purchase and sale of securities to the Subscriber is otherwise subject to the securities legislation of one of the following: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, North West Territories, or Nunavut, and the Subscriber is (and will at the time of acceptance of the Subscription be) an accredited investor within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions ("NI 45-106") because the Subscriber is one of the following:
| (a) | a Canadian financial institution, or a Schedule III bank; |
| (b) | the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); |
| (c) | a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; |
| (d) | a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); |
| (e) | an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d); |
| (f) | the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada; |
| (g) | a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l'île de Montréal or an intermunicipal management board in Québec; |
| (h) | any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government; |
| (i) | a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada; |
| (j) | an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000; |
| (k) | an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; (Note: If individual accredited investors wish to purchase through wholly-owned holding companies or similar entities, such purchasing entities must qualify under section (t) below, which must be initialled.) |
| (l) | an individual who, either alone or with a spouse, has net assets of at least $5,000,000; |
| (m) | a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements; |
| (n) | an investment fund that distributes or has distributed its securities only to:
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| (o) | an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt; |
| (p) | a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; |
| (q) | a person acting on behalf of a fully managed account managed by that person, if that person:
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| (r) | a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; |
| (s) | an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function; |
| (t) | a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors; |
| (u) | an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser, or; |
| (v) | a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor. |
Toronto, Ontario M5J 2J1 Canada
Advisor Use Only
This commentary is for Advisor use only. If you are an Advisor, please contact your Ninepoint Product Specialist for access.