Frequently Asked Questions

The Algonquin Debt Strategies Fund (the “Limited Partnership” or the “Fund”) is a limited partnership. The Algonquin Trust (the “Trust”) is a Mutual Fund Trust that invests solely and directly in the Limited Partnership. Each structure contains special terms that are outlined within their respective Offering Memoranda. Investors should be aware; the Trust has expenses that are separate to those of the Limited Partnership. As such, the Trust’s performance will be slightly below that of the Limited Partnership.

Commonly, we recommend individuals, estates, and trusts to invest via the Trust and corporations to invest directly in the Limited Partnership. Because each investor’s situation is different and the two Fund structures have certain unique features, we recommend seeking the advice of your advisor to determine the structure that best suits you.

The Ontario Securities Commission is our principal regulator. Algonquin Capital is registered as an Investment Fund Manager, Exempt Market Dealer and Portfolio Manager in Ontario. The following table shows Algonquin Capital’s registrations in other provinces:

Access to the Limited Partnership is available for registered and tax-free savings accounts through the Trust. Investors must subscribe to units of the Trust, which invests solely and directly in the Limited Partnership.

The Fund is currently open to new investors. Investors purchase units of the Limited Partnership or the Trust on the first business day of each month based upon their respective Net Asset Values (“NAVs”) as calculated by the independent Fund administrator.

The ongoing operations of the Limited Partnership and the Trust are supported by the following reputable service providers:

The following limitations apply to the Fund:

• A minimum of 70% of total exposure is held in investment grade securities, where investment grade is defined as securities that have at least a BBB rating (or equivalent) by at least one recognized rating agency;
• A minimum of 60% of total exposure will be invested in “North American” securities. The Investment Manager defines “North America” to include the jurisdictions of Canada and the US;
• A maximum of 10% of the total exposure will be invested in a single corporate issuer;
• The maximum amount of leverage that the Partnership can employ is 6:1;
• The maximum market value of “Alternative Debt Instruments” will not exceed 10% of the total exposure. Alternative Debt Instruments include bank loans, private placements, unrated debt and structured credit instruments.

The Fund can and does intend to use interest rate futures, interest rate swaps and options, and credit derivatives as well as equity index futures and options. Derivative instruments can be used to achieve investment returns or to mitigate risk.

The core of our strategy is to separate a corporate bond into its two risk components: credit risk and interest rate risk. We do this by buying a corporate bond, while simultaneously selling a government bond. This bond package is now largely insulated from changes in interest rates.

The Fund targets an absolute return of 6% to 9% after fees with little sensitivity to changes in interest rates as well as equities.

The Fund offers investors portfolio diversification from both interest rates and equities. With correlation in the public equity markets at sustained highs and yields on fixed income at record lows, the inclusion of alternative investment classes is a necessary element in constructing portfolios designed to increase total returns to investors without exposing them to increased risk and volatility.

The appropriate amount of investment varies for each investor based upon their unique financial circumstances and investment objectives. We believe it is prudent to construct diversified portfolios. As such, we caution against allocations to the Limited Partnership and/or the Trust that may represent more than 10% of your portfolio.

You must be an ‘accredited investor’. Click Here to see the list of criteria that are used to qualify as an accredited investor. You must meet one of the criteria on the list.

To discuss whether this investment is suitable for you, please contact your advisor or you may reach us directly by contacting Mr. Raj Tandon by email at [email protected] or by phone on 416-214-3493. Raj is a registered Dealing Representative and one of the Founding Partners of Algonquin Capital. He will be happy to answer any questions you may have and should you wish to invest; Raj can guide you through the subscription process, including completing the subscription agreement.

Please be advised, investments made from registered plans or tax free savings accounts typically need to be made via a full-service investment advisor.

You will need to invest a minimum of $250k if you invest directly with Algonquin Capital. Investors seeking to invest less than $250k should do so through their full-service investment advisor, subject to a minimum investment of $25k.

Investors may subscribe to units of the Limited Partnership and/or the Trust through BMO, Scotiabank, CIBC, RBC, TD, Richardson GMP, Raymond James and Canaccord Genuity. Furthermore, we work with several family offices. Please contact Raj Tandon by email at [email protected] or by phone on 416-214-3493 for more information.

The W-8BEN and W-8BEN-E are US tax forms. The Limited Partnership is a flow-through entity, therefore we are required to provide the prime broker with a W-8BEN or W-8BEN-E for each investor to avoid the application of US withholding tax. These forms must be updated every three years. Algonquin Capital, in its sole discretion, may reject an order or even redeem an investor’s units in the event we don’t receive the required documentation.

The Fund has no lock up period.

An investor should send a written request (email is acceptable) to [email protected], giving at least 25 days notice. Redemptions are then processed once the month end NAV has been finalized.

No certificates are issued when you make an investment. SGGG will send a confirmation to show that an investment has been made. We recommend keeping this confirmation and a copy of the subscription agreement for your records.

The NAV is calculated monthly by SGGG Fund Services (“SGGG”) and is published a few business days after month-end. SGGG calculates the NAV using information, including valuation of the investment portfolio, obtained from independent sources. The NAV is reported by SGGG to individual unitholders each quarter. Algonquin Capital maintains its own daily NAV and reviews the monthly NAV calculation prepared by SGGG.

SGGG provides a T5013 – Statement of Partnership Income to each Limited Partner and a T3 – Statement of Trust Income Allocations and Designations to each investor in the Trust.

Investors subscribing directly through Algonquin Capital receive access to our investor portal. The investor portal provides investors with their transaction history and important investment reporting documents (e.g. financial statements, offering memorandum etc.).

An investor can elect to receive the semi-annual unaudited financial statements prepared by SGGG Fund Services as well as the annual audited financial statements prepared by KPMG.

Please see the below example.

* charged on period ending value

In the example below, profit distribution is paid in Year 1 and Year 3. The performance fee in Year 3, only applies to the gain in NAV from the end of Year 1.