New Government Rules Forcing Ontario Teachers to Review Hedge Funds

Summary

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TORONTO (HedgeWorld.com) - A Canadian government proposal to cap pension fund holdings in income trusts could force the Ontario Teachers' Pension Plan to scale back its roughly C$300 million (US$228 million) worth of investments in hedge funds.

The Canadian government is considering a proposal that would ban pension funds from investing more than 1% of total assets in income trusts and that also would ban them from holding more than 5% of any single income trust. Income trusts provide a return on capital and also distribute corporate cash flow to their investors. The trusts do not pay corporate tax, but investors are taxed on the payouts they receive from the trusts.

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New Government Rules Forcing Ontario Teachers to Review Hedge Funds

According to published reports, the government in Ottawa is concerned that growing holdings in income trusts by tax-exempt investor...

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