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| Closed-end Funds |
| Stars Income Fund |
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| The investment
objectives of STaRS Income Fund (the “Fund”) are: (i) to provide
unitholders with a stable stream of monthly distributions targeted to yield 9%
per annum on the original issue price of $10.00 per unit, and (ii) to return
the original issue price of the units to unitholders upon termination of the
Fund on December 31,2013, as well as to provide unitholders with capital
appreciation above the original issue price. To achieve the second objective,
the Fund entered into a forward purchase and sale agreement pursuant to which
the counterparty will pay to the Fund an aggregate amount equal to $5.00 (being
an amount equal to 50% of the original issue price) for each unit outstanding
on the termination date in exchange for the Fund delivering to the counterparty
certain equity securities which the Fund purchased with approximately 24% of
the gross proceeds from the initial offering of units. The balance of the net
proceeds of the initial offering together with draw-downs under the loan
facility have been invested in a diversified portfolio of income trusts
including oil and gas royalty trusts, real estate investment trusts, business
trusts and power and pipeline trusts.In addition, the Fund can also invest up
to 25% of the portfolio in common stocks to provide further
diversification. |
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