Business of the Fund
The Fund is an open-ended investment trust formed under the laws of the Province of Ontario that has been created to invest, directly or indirectly, in music catalogues (international and domestic) which include high-quality music rights including copyrights, publishing rights, performance rights and recording rights that have the right to receive royalties (“Music Rights”) in accordance with the Fund’s investment objective described below. The Fund is not an “investment fund” under applicable securities laws.
Investment Objective
To achieve its investment objective, the Fund invests directly or indirectly in, and holds,
substantially all of its assets in long-term holdings of Music Rights. The Fund may, pending investment in Music Rights, invest the net proceeds of the Offering in high-quality short-term fixed income investments.
The Music Manager expects that the Fund’s portfolio will consist of approximately 5-30 Music Rights across a variety of genres, vintages, royalty types and price ranges primarily in the United States and to a lesser extent Canada and internationally. It is expected that the Fund will not hold more than 25% of its Net Asset Value in any one single artist/song and not more than 60% in a single genre. The Fund may hold Music Rights sourced outside of Canada indirectly through one or more non-Canadian investment vehicles.
The Fund may borrow money or employ other forms of leverage to acquire Music Rights and for general working capital purposes in an amount not exceeding 20% of the Fund’s Net Asset Value (excluding any indebtedness in connection with any promissory note issued by the Fund from time to time in connection with the redemption of Units) measured at the time of borrowing.
Investment Restrictions
The Fund shall not undertake any activity or derive income from any source other than the investing of its funds in accordance with the Fund’s investment objective and strategies.