Funds to become qualified investments for registered plans
Not for Release, Publication or Distribution in Whole or in Part Into the United States, to U.S. Newswire Services, or Otherwise for Dissemination to the United States of America
CI Global Asset Management(“CI GAM”) today announced a series of significant enhancements to its private markets funds, including eligibility for registered plans and the removal of the lock-up period.
CI Private Markets Growth Fund and CI Private Markets Income Fund (the “Funds”) use a fund-of-funds structure to provide accredited investors with access to investment opportunities in global private markets.
Following changes approved by the Funds’ unitholders at special meetings held on September 5, 2024, CI GAM expects that units of the Funds will become qualified investments for registered plans starting in October 2024. Additionally, the lock-up period for investments in the Funds has been eliminated. The lock-up period had been one year, having been reduced from three years in June 2024.
Other recent developments for the Funds include:
- A cap on the maximum all-in management fee for Series F units.
- The payment of quarterly distributions.
- Expanded access to leading alternative investment managers.
“We firmly believe that an allocation to private markets can benefit individual investors and we developed our Funds to provide Canadians with convenient, one-ticket access to these asset classes,” said Marc-André Lewis, President and Chief Investment Officer of CI GAM and Co-Lead Portfolio Manager of the Funds. “With these latest changes, we are enhancing the benefits and flexibility of our solutions and making them accessible to an even broader group of investors.
“We are able to make these advantageous changes because of the structure and scale of our Funds, which have reached combined assets under management of approximately $1.8 billion (as at July 31, 2024).”
Mr. Lewis also noted that, “Sophisticated institutional investors will allocate significant portions of their portfolios to private markets while individual Canadian investors typically allocate zero. This is due primarily to barriers such as high investment minimums and the difficulty in identifying appropriate funds and managers. Our solutions overcome these barriers by providing access to a diversified private markets portfolio where CI GAM is responsible for investment manager selection, asset allocation and portfolio construction.”
Removal of the lock-up period
The elimination of the lock-up period has been made possible by the liquidity afforded by the increased scale of the Funds, along with the adoption of additional redemption options as approved by unitholders. These changes apply to the Funds’ current and future unitholders. While lock-up periods are common in private markets investing, CI GAM is now able to provide investors in the Funds with greater flexibility, should their objectives or circumstances change.
Eligibility for registered plans
With the changes, units of the Funds are expected to be considered qualified investments for registered plans, including registered retirement savings plans, registered retirement income funds, deferred profit-sharing plans, registered education savings plans, registered disability savings plans, tax-free savings accounts and first home savings accounts.
Capping the maximum all-in management fee on Series F
To provide investors with increased certainty and transparency on fees charged by the Funds, CI GAM is capping the all-in maximum management fees of the Series F units. The capped fee applies to the management fee of the Funds and the management fees of the underlying funds, which are paid by the Funds. If the total of a Fund’s management fee and the weighted average management fee of the underlying funds is greater than the capped all-in management fee, CI GAM will absorb the excess.
The Series F management fee is 0.65% for CI Private Markets Income Fund and 0.80% for CI Private Markets Growth Fund. The Series F capped all-in maximum management fee is 1.53% and 1.63%, respectively.1
Quarterly distributions
The Funds have begun paying quarterly distributions of net income starting with the first quarter of 2024, with unitholders of record as of December 31, 2023 receiving the payments in July 2024. CI GAM expects the Funds to pay distributions of net income, if any, for the first three quarters of each year. The distribution for the fourth quarter of each year will be composed of income and capital gains, if any, and will be a notional distribution.
Expanded roster of investment managers
The Funds are distinguished by their open architecture, under which CI GAM actively manages the allocation to alternative asset classes and investment managers through a diversified selection of underlying funds. Investment managers represented in the Funds are among the world’s leaders in alternative investing.
Since the Funds’ launch last year, CI GAM has expanded the number of underlying strategies, and managers represented in the Funds now include Adams Street Partners, American Industrial Partners, Apollo Global Management, Ardian, Avenue Capital Group, Canal Road Group, Dawson Partners, Demopolis Equity Partners, HarbourVest Partners, Monarch Alternative Capital, Radical Ventures, T.Rx Capital, and 26North Partners.
The CI GAM team is supported by specialized teams at its U.S. affiliate, which have extensive experience in due diligence and selection of alternative investments managers.
Private markets investments are those made in entities that are not publicly listed or traded. CI Private Markets Growth Fund invests primarily in private equity, venture capital, private real estate and private infrastructure. CI Private Markets Income Fund invests primarily in private credit, private real estate and private infrastructure, as well as private equity with the characteristics of preferred shares.
About CI Global Asset Management
CI Global Asset Management (“CI GAM”) is one of Canada’s largest investment management companies. It offers a wide range of investment products and services and is on the Web at www.ci.com. CI GAM is a subsidiary of CI Financial Corp. (TSX: CIX), an integrated global asset and wealth management company with approximately $511.3 billion in assets as at July 31, 2024.
1The Series F capped all-in management fee applies solely to management fees and does not cover operating expenses, performance fees, carried interest payments or taxes. No performance or incentives fees are payable directly to CI GAM by the Funds. The capped all-in management fee is for Series F only and does not apply to Series I or Series W units.
This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.
The Funds are not subject to rules and regulations that apply to publicly offered mutual funds, including restrictions intended to create diversification and liquidity in the Funds’ portfolio and certain ongoing public reporting requirements. Potential purchasers should carefully review the section entitled “Risk Factors” in each Fund’s Offering Memorandum before making any decision to subscribe for units.
The Funds are only being made available to “accredited investors” or pursuant to such other exemptions from the prospectus requirements under applicable securities legislation.
This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase funds managed by CI Global Asset Management and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Every effort has been made to ensure that the material contained in this document is accurate at the time of publication. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. These investments may not be suitable to the circumstances of an investor.
Adams Street Partners, LLC, and HarbourVest Partners L.P. are portfolio sub-advisors to certain funds offered and managed by CI Global Asset Management. The foregoing named sub-advisors, as well as other investment managers represented in the private markets solutions, including AIP, LLC, ARDIAN France, ARIS Management, LLC, Avenue Capital Management II, L.P., Avenue Europe International Management, L.P., Canal Road Capital, LLC, Dawson Partners Inc., Demopolis Equity Management, LLC, Monarch Alternative Capital LP, Radical Ventures Investments Inc. and T.Rx Cap, LLC, and 26North Private Equity LP, have not (i) explicitly or implicitly endorsed or approved nor (ii) been involved in the preparation of the information contained herein.
Certain names, words, titles, phrases, logos, icons, graphics, or designs in this document may constitute trade names, registered or unregistered trademarks or service marks of CI Investments Inc., its subsidiaries, or affiliates, used with permission. All other marks are the property of their respective owners and are used with permission.
CI Global Asset Management is a registered business name of CI Investments Inc., a wholly owned subsidiary of CI Financial Corp. (TSX: CIX).
©CI Investments Inc. 2024. All rights reserved.
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