Purpose rebranding details

Over the next few months, Purpose Investments will be working to unite the best of both our quantitative and managed strategies under the core Purpose Investments brand and as a result, will be retiring the Redwood brand. Our goal in bringing all our products under a single banner is simple: to streamline and simplify our product mix for advisors and investors.

Below are some of the more granular details around this rebranding. Should you have any further questions or require additional support with this transition, please do not hesitate to reach out to your wholesaler or contact us directly at info@purposeinvest.com.

 

Overview

Purpose Investments is undertaking a rebrand that will see all funds, including those under the banner of Purpose’s wholly owned subsidiary, Redwood Asset Management, be united under the core Purpose brand. This rebrand will include:

 

Rationale

While we recognize that some of our clients have seen a lot of change over the past 18 months, we believe this rebranding is essential. In our view, a modern financial services firm should be focused on delivering the best strategies to investors. Everything else – trying to fit into a certain style box or articulate to you what makes each brand different – is just noise. Unifying our product lineup under the Purpose brand will simplify our message and help minimize confusion. It will also simplify our operations, allowing us to focus our efforts on what’s really important: helping clients meet their financial goals.

Throughout this process, we would like to reassure you that we are very mindful of our clients’ and partners’ time; and are working diligently to minimize the impact of these changes. To this end, while there will be changes to a number of CUSIPs, there will be no impact to FundServ codes of continuing funds. We are also here to provide support and any additional information you require, and encourage you to contact us any time.

 

Amalgamation of Purpose Investments and Redwood Asset Management

Why are we amalgamating?

Purpose Investments and Redwood Asset Management are both registered with the Ontario Securities Commission. In addition to operational inefficiencies, maintaining two separate investment management companies means double the regulatory and legal burden. For this reason, on March 30, 2018, we will be amalgamating the companies via a short-form vertical amalgamation. Purpose will continue as the registrant for all funds.

How does this benefit clients?

  • Regulatory fees will be reduced. By amalgamating Redwood into Purpose, we will substantially reduce our regulatory fees
  • Decreased filing and legal costs. As part of the amalgamation process, we will be consolidating a number of prospectuses. A reduction in the number of annual prospectus filings will result in significant savings in legal fees.
  • Operational efficiencies. The amalgamation will result in material operational efficiencies. One area of note: going forward, we will only need to maintain working capital for one company, rather than two.

 

The cost savings and operational efficiencies realized by Purpose will be reflected in lower management and administration fees for clients.

 

 

Fund mergers

Purpose recently announced proposed changes and enhancements to certain funds in the Redwood lineup. In addition to name changes to align funds under the Purpose brand and more accurately reflect the strategies, a number of fund mergers were proposed (listed in the table below). As securityholder approval is required for most of the proposed changes, a package containing a Notice of Meeting and a Management Information Circular was mailed out on March 27, 2018 to securityholders of record as of March 12.

 

How does this benefit clients?

These mergers will streamline the Purpose fund lineup, and consolidation should provide cost efficiencies in a number of areas:

  • With the merging of similar mandates, the continuing funds will benefit from reduced reporting and regulatory burdens and larger AUM bases, which should result in substantial cost savings.
  • In some instances, funds structured as trusts will be merging into funds in the corporate class structure. This will result in more tax-efficient distributions for investors.
  • Many of the terminating funds were subject to higher management fees than the continuing funds, and thus a number of securityholders will benefit immediately upon merger from lower overall MERs.
  • These mergers also include consolidation and simplification of fund series. Where applicable, series I, TA6, TF6, UA, X and Y of certain terminating funds will be merged into series A, B or F of certain continuing funds. In addition, in some cases, this will reduce the management fee considerably.


Total cost savings resulting from the proposed mergers are expected to be approximately 20% on average.

 

TERMINATING FUNDS CONTINUING FUNDS
Redwood Global Resource Fund [Trust]

Redwood Energy Income Fund [Trust]

Purpose Global Resource Fund [Class]

(formerly Redwood Resource Growth & Income Fund)

Redwood Tactical Equity Fund [Class]

Redwood Total Return Fund [Trust]

Purpose Global Innovators Fund [Class]

(formerly Redwood Global Opportunities Fund)

Redwood Growth Fund [Trust] Purpose Special Opportunities Fund [Class]

(formerly Redwood Special Opportunities Fund)

Redwood Global Balanced Income Fund [Class]

Redwood Balanced Income Fund [Class]

Redwood Monthly Income Fund [Closed end trust]

Redwood Advantage Monthly Income Fund [Closed end trust]

Purpose Multi-Asset Income Fund [Trust]

(formerly Redwood High Income Fund)

Redwood Global Financials Income Fund [Closed end trust] Purpose US Preferred Share Fund [Trust]

(formerly Redwood U.S. Preferred Share Fund)

Redwood Floating Rate Bond Fund [Closed end trust] Purpose Floating Rate Income Fund [Trust]

(formerly Redwood Floating Rate Income Fund)

Closed-end fund conversions

In addition to the mergers covered in the Fund mergers section above, Purpose is also converting certain strategies currently structured as closed-end funds to open-end mutual fund and ETF classes (list of impacted funds included in the table below).

Our target for these conversions is the end of April; as the exact timing of becomes available, we will provide additional details.

 

CURRENT NAME OF FUND NEW NAME OF FUND NEW ETF TICKER
Redwood Floating Rate Income Fund Purpose Floating Rate Income Fund RFT
Australian Banc Income Fund Purpose Global Financials Income Fund RFI

Name changes

Purpose will also be making changes to Redwood-branded funds not impacted by the above-detailed mergers. Details are provided in the table below. Note that the timing on the changes varies; some name changes will be introduced in conjunction with the launch of ETF classes of the funds in the first week of April, while others will change with the filing of prospectuses.

 

CURRENT NAME OF FUND NEW NAME OF FUND ETF TICKER EXPECTED TIMING
Redwood Strategic Yield Fund Purpose Strategic Yield Fund SYLD (new) Early April
Redwood High Income Fund Purpose Multi-Asset Income Fund PINC (new) Early April
Redwood Global Opportunities Fund Purpose Global Innovators Fund PINV (new) Early April
Redwood Tactical Credit Fund Purpose Strategic Investment Grade Bond Fund IGB (new) Early April
Redwood U.S. Preferred Share Fund Purpose U.S. Preferred Share Fund RPU Early April
Redwood Energy Credit Fund Purpose Energy Credit Fund REC Late April
Redwood Canadian Preferred Share Fund Purpose Canadian Preferred Share Fund RPS Late April
Redwood Emerging Markets Dividend Fund Purpose Emerging Markets Dividend Fund REM Late April
U.S. Banks Income & Growth Fund Purpose U.S. Financials Income Fund PUB Late April
Redwood Core Income Equity Fund Purpose Core Income Equity Fund RDE Late April
Redwood Income Growth Class Purpose Equity Income Fund n/a Late April
Redwood Pension Class Purpose Pension Portfolio Fund n/a Late April
Marijuana Opportunities Fund Purpose Marijuana Opportunities Fund MJJ Late April
Redwood Behavioural Opportunities Fund Purpose Behavioural Opportunities Fund BHAV Late April
Redwood Tactical Asset Allocation Fund Purpose Tactical Asset Allocation Fund RTA Late April
Redwood Equity Growth Class Purpose Equity Growth Fund n/a Late April
Redwood MLP & Infrastructure Income Fund Purpose MLP & Infrastructure Income Fund n/a Late April
Redwood Special Opportunities Fund Purpose Special Opportunities Fund n/a Late April
Silver Bullion Trust Purpose Silver Bullion Fund SBT Late April
Redwood Select Equity Fund Purpose Select Equity Fund n/a Late April
Redwood Credit Opportunities Fund Purpose Credit Opportunities Fund n/a Late April

 

 

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