Middlefield Canadian Income PCC: A Pioneering Move in Investment
Middlefield Canadian Income PCC (the “Company”), which includes Middlefield Canadian Income – GBP PC (the “Fund”), is embarking on an exciting new chapter in its journey by planning a strategic rollover into a UCITS ETF (Exchange Traded Fund). This initiative is set to offer existing shareholders enhanced investment opportunities while modernizing the Company’s structure.
Overview of the Transition
In an announcement made earlier this month, Middlefield Canadian Income PCC, along with its Fund, expressed intentions for a voluntary winding up. This will provide an option for shareholders to exchange their holdings for shares in a newly established, actively managed fund that will be traded on the London Stock Exchange. By implementing this transition, the Company aims to align itself with current market practices while offering its investors a seamless ongoing exposure to its existing investment strategy.
The Role of Middlefield Limited
The ETF will be managed by Middlefield Limited, which has a proven track record in fund management and investment. This decision reflects Middlefield's commitment to delivering continued value to its shareholders. With an ongoing focus on investment objectives and policies, Middlefield will ensure that this transition maintains the integrity of the Fund’s existing strategies. Shareholders can choose to receive a cash exit close to the net asset value per share or opt for a combination of both cash and ETF shares.
Partnership with HANetf
To facilitate this transition, Middlefield has enlisted the expertise of HANetf, a renowned provider of exchange-traded products. HANetf's role will encompass advising on the structuring and establishment of the ETF, as well as providing support in operational, administrative, and marketing functions. The ETF will be domiciled in Ireland, allowing for a robust regulatory environment that is essential for investor confidence.
Regulatory Milestones Achieved
Significantly, the Central Bank of Ireland has granted approval for the establishment of the ETF after a thorough ten-week application process. Additionally, HANetf has submitted an application to the Financial Conduct Authority (FCA) to receive formal recognition under the Overseas Fund Regime. The anticipated admission for trading on Euronext Dublin and the London Stock Exchange is set for the latter part of the upcoming year, indicating a swift progression toward operational readiness.
Communication with Shareholders
Upon receiving Listing Approval from the FCA, the Company plans to communicate essential details regarding the transaction to shareholders. This will involve circulating a comprehensive circular that outlines the transaction process and convenes meetings for resolutions. Expect this circular to be published shortly thereafter, keeping shareholders well-informed of their options moving forward.
Financial Considerations
To ensure a streamlined transition and minimize operational costs, the Fund has wisely refrained from taking on additional borrowings. The existing loans, which were due under a credit facility with Royal Bank of Canada, have been fully repaid, positioning the Fund as ungeared. As Middlefield seeks to maintain its investment trajectory, it plans to ensure continued engagement in the market without compromising on strategic goals.
Tax Implications for Shareholders
In a noteworthy development, clearance has been obtained from HM Revenue & Customs, affirming that the exchange of shares in the Fund for those in the ETF will be regarded as a reconstruction scheme for tax purposes. As a result, UK-based shareholders should generally be able to transfer their investments without incurring immediate tax liabilities. This aspect of the transition represents a significant benefit for shareholders looking to align with the ETF’s objectives.
Contact Information
For any inquiries, shareholders can reach out to:
Middlefield Canadian Income – GBP PC via Investec Bank plc
Michael Phair (Chairman)
Investec Bank plc
Corporate Broker
Helen Goldsmith/Denis Flanagan
Tel: 020 7597 4000
JTC Fund Solutions (Jersey) Limited
Secretary
Matt Tostevin/Hilary Jones/Jade Livesey
Tel: 01534 700 000
Burson Buchanan
PR Advisers
Charles Ryland/Henry Wilson
Tel: 020 7466 5000
Frequently Asked Questions
What is the purpose of the proposed rollover into a UCITS ETF?
The rollover aims to provide shareholders continued exposure to the Company’s investment strategies while transitioning to a more modern investment structure.
Who will manage the ETF?
Middlefield Limited will manage the ETF, leveraging its expertise in fund management to uphold the Company’s investment objectives.
What happens to shareholders who do not participate in the ETF?
Shareholders can choose a cash exit close to the net asset value per share or a combination of cash and ETF shares.
What regulatory approvals have been secured for the ETF?
The Central Bank of Ireland has approved the establishment of the ETF, and an application for FCA recognition is pending.
How will tax implications affect shareholders during the rollover?
UK shareholders should generally be able to roll over their investments into the ETF without triggering immediate capital gains tax liabilities.
