December 11, 2025
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction)
AND
IN THE MATTER OF OBSIIDO ALTERNATIVE INVESTMENTS INC. (the Filer)
AND
IN THE MATTER OF OBSIIDO ALTERNATIVE INCOME PORTFOLIO (the Terminating Fund)
AND
IN THE MATTER OF ALTERNA PRIVATE INCOME PORTFOLIO (the Continuing Fund)
DECISION
Background
The principal regulator in the Jurisdiction has received a passport application from the Filer, who is the portfolio manager of the Terminating Fund and the Continuing Fund (collectively, the Funds) on the Effective Date (as defined below) for a decision under securities legislation of the Jurisdiction (the Legislation) for an exemption from the prohibition contained in subparagraph 13.5(2)(b)(iii) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) which prohibits a registered adviser from knowingly causing an investment portfolio managed by it, including an investment fund for which it acts as an adviser, to purchase or sell a security from or to the investment portfolio of an investment fund for which a responsible person acts as an adviser in order to effect the proposed merger (the Merger) of the Terminating Fund into the Continuing Fund (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
- the Ontario Securities Commission is the principal regulator for this application; and
- the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in the province of Alberta (together with Ontario, the Jurisdictions).
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer:
A. The Filer
1The Filer is a corporation formed under the laws of the Province of Ontario with its head office in Toronto, Ontario.
2The Filer is a registered investment fund manager in Ontario, and a portfolio manager and exempt market dealer in British Columbia, Ontario, and Alberta.
3The Filer is not in default of securities legislation in any jurisdiction of Canada.
B. The Funds
4The Filer acts as investment fund manager, portfolio manager and trustee for the Funds.
5Each Fund is an open-ended trust established under the laws of the Province of Ontario and governed by the third amended and restated master declaration of trust dated November 3, 2025 (the Trust Agreement).
6The Funds are not reporting issuers in any jurisdiction and are not subject to National Instrument 81-102 Investment Funds.
7Each Fund offers its units in the Jurisdictions pursuant to available prospectus exemptions in accordance with National Instrument 45-106 Prospectus Exemptions.
8The Funds are not in default of securities legislation in any jurisdiction of Canada.
9Each Fund is a "mutual fund trust" as defined in the Income Tax Act (Canada) (the Tax Act).
10The objective of the Terminating Fund is to seek to generate consistent income while preserving capital by investing substantially all of its assets in a diversified portfolio of income-generating alternative investments, including but not limited to real assets, private credit and hedge funds. The Terminating Fund will invest on a global basis.
11To achieve its objective, the Terminating Fund invests its assets primarily in underlying investment funds or other investment vehicles managed by third-party alternative investment managers.
12The objective of the Continuing Fund is to seek to generate attractive long-term risk-adjusted returns with consistent income generation by investing substantially all of its assets in a diversified portfolio of alternative investments, including but not limited to private credit, real assets, private equity and hedge funds. The Continuing Fund will invest on a global basis.
13To achieve its objective, the Continuing Fund invests its assets primarily in underlying investment funds or other investment vehicles managed by third-party alternative investment managers.
C. The Proposed Merger
14The Filer wishes to merge the Terminating Fund into the Continuing Fund effective as of March 31, 2026 (the Effective Date), subject to receipt of all regulatory approvals. The Filer has decided to effect the Merger because of the similarities in the Funds' investment portfolios.
15Pursuant to the Trust Agreement, no special meeting of unitholders is required to be called in order to approve the Merger.
16Unitholders of the Funds will be provided a written notice of the Merger at least 60 days prior to the Effective Date and once the Exemption Sought is granted.
17The Filer has determined that the Merger is not material to the Continuing Fund.
18There will be no increase in management fees paid by unitholders of the Terminating Fund and the Continuing Fund as a result of the Merger.
19No redemption fees, other fees or commissions will be payable by the Funds' unitholders in connection with the Merger. No sales charges will be payable in connection with the acquisition by the Continuing Fund of the Terminating Fund's investment portfolio.
20The costs of the Merger will be borne by the Filer.
21It is expected that the Merger will occur on a taxable basis. Unitholders in cash accounts may be subject to taxable gains or losses. The Merger will not give rise to material adverse tax consequences for the Terminating Fund and its unitholders.
22Unitholders of the Terminating Fund will be able to redeem their units at the Terminating Fund's net asset value at all redemption dates up to and on the Effective Date.
23The investment objectives and portfolios of the Continuing Fund and the Terminating Fund are similar and there is substantial overlap in the underlying portfolio securities. The portfolio of assets of the Terminating Fund to be acquired by the Continuing Fund arising from the Merger will be consistent with the investment objectives of the Continuing Fund and comply with the Continuing Fund's investment restrictions.
24The net asset value of each of the Funds is determined using the same valuation principles.
25The following steps will be carried out to effect the Merger:
i. the value of the Terminating Fund's investment portfolio and other assets will be determined as of the close of business on the Effective Date in accordance with the Trust Agreement;
ii. any securities in the investment portfolio of the Terminating Fund which do not conform to the investment objective, strategies and restrictions of the Continuing Fund will be sold for cash, if needed;
iii. the Continuing Fund will acquire the portfolio assets and other assets of the Terminating Fund in exchange for units of the Continuing Fund;
iv. the Continuing Fund will not assume the liabilities of the Terminating Fund and the Terminating Fund will retain sufficient assets to satisfy its estimated liabilities, if any, as of the date of the Merger;
v. the units of the Continuing Fund received by the Terminating Fund will have an aggregate net asset value equal to the value of the Terminating Fund's portfolio assets and other assets that the Continuing Fund is acquiring, which units will be issued at the applicable net asset value per unit as of the close of business on the Effective Date;
vi. if necessary, the Terminating Fund will distribute a sufficient amount of its income and capital gains, if any, to ensure that the Terminating Fund will not be liable for income tax under Part I of the Tax Act, other than alternative minimum tax, for its current taxation year;
vii. immediately thereafter, the units of the Continuing Fund received by the Terminating Fund will be distributed to unitholders of the Terminating Fund on a dollar-for-dollar basis in exchange for their respective equivalent series of units in the Terminating Fund; and
viii. as soon as reasonably possible following the Merger, the Terminating Fund will be wound up.
26The assets of the Funds will be valued in accordance with the valuation policies and procedures outlined in the Trust Agreement and, at this value, the assets of the Terminating Fund will subsequently be exchanged for units of the Continuing Fund as described above.
27The Filer has determined it is in the best interest of the Funds to proceed with the Merger.
28The transfer of the assets of the Terminating Fund to the Continuing Fund will not adversely impact the liquidity of the Continuing Fund.
29The board of directors of the Filer has determined that the Merger is in the best interests of the Funds and has approved the Merger, subject to obtaining the Exemption Sought.
30The Filer believes that the Merger is in the best interest of unitholders of the Funds for the following reasons:
i. the Filer believes it is suitable for unitholders of the Terminating Fund to hold units of the Continuing Fund and be exposed to the Continuing Fund's objective and strategy;
ii. the Merger will result in a more streamlined and simplified product line-up by eliminating similar fund offerings across product line ups, reducing duplication and redundancy;
iii. a greater pool of assets for the Continuing Fund will provide its unitholders with increased diversification; and
iv. the Continuing Fund will benefit from its larger profile in the marketplace.
31Though the desired end result of the Merger could be achieved by each unitholder redeeming his or her units of the Terminating Fund and using the proceeds to purchase units of the Continuing Fund, this could not be done in a timely manner and would not be beneficial to unitholders of the Terminating Fund. The Terminating Fund would be subject to (i) early redemption penalties associated with the sale of most of the portfolio securities to provide liquidity for the redemptions, and (ii) hard lock-ups associated with a portion of the portfolio securities, which would prohibit the Terminating Fund from liquidating those portfolio securities in a timely manner. Further, executing the trades in this manner would result in negative consequences to the Terminating Fund and the Continuing Fund through the incurrence of unnecessary brokerage charges relating to the sale and repurchase of portfolio securities.
32The portfolio securities and other assets of the Terminating Fund will be transferred from the Terminating Fund to the Continuing Fund in accordance with the steps described above. Because the transfer of portfolio securities and assets will take place at a value determined by common valuation procedures and the issue of units will be based upon the relative net asset value of the portfolio securities and other assets received by the Continuing Fund and notice and redemption rights will have been provided to unitholders, any potential conflict of interest will have been adequately addressed and as a result, there should be no conflict of interest for the Filer in effecting the Merger.
33The sale of the assets of the Terminating Fund to the Continuing Fund, and the corresponding purchase of such assets by the Continuing Fund, as a step in the Merger may be considered a purchase or sale of securities, knowingly caused by a registered adviser that manages the investment portfolios of both Funds, from the Terminating Fund to, or by the Continuing Fund from, an investment fund for which a "responsible person" acts as an adviser, contrary to subparagraph 13.5(2)(b)(iii) of NI 31-103.
34Unless the Exemption Sought is granted, the Filer would be prohibited from knowingly causing the units of the Terminating Fund to be issued to the Continuing Fund in connection with the Merger.
Decision
The principal regulator is satisfied that this decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted.
"Darren McKall"
___________________________
Darren McKall Associate Vice President, Investment Management Division Ontario Securities Commission
Application #2025/0675