On February 15, 2024, changes will be made to the Multi-Manager Tangible Asset Fund (the “Fund”). These changes are primarily intended to take advantage of the growth in Fund assets that occurred in recent years to improve the Fund’s diversification, both in terms of its target asset allocation and its underlying investments. They result from analytical and optimization work conducted with the aim of maximizing the portfolio’s return/risk ratio, based on current market assumptions.
This work is carried out on a periodic basis and can lead to adjustments to the Fund’s target asset allocation when results are sufficiently different from the current allocation to justify a change. Such changes fall within a strategic positioning framework of the Fund’s asset allocation and are not intended for tactical management purposes.
What are the details of these changes?
The Fund’s target asset allocation will be adjusted in order to reflect the current long-term risk and return perspectives of its different tangible asset components. The private real estate target will be reduced in favour of private infrastructure, and the Fund will now be able to invest in private natural resources strategies (farmland and timberland). The addition of natural resources seeks to reduce portfolio risk by integrating assets that show little correlation with real estate and infrastructure investments.
The natural resources target will initially be set at 0%, on a temporary basis, until the first strategy to be added to the composition has been formally identified. Adjustments to the target asset allocation will be done gradually using the Fund’s future cash flows.
The DGAM Global Private Infrastructure Fund will also be added to the Fund’s composition, with a target allocation representing 50% of the total private infrastructure exposure. This addition will complement the IFM Global Direct Infrastructure Fund, at the investment type or sector allocation level, while allowing for the Fund’s capital in this asset class to be more quickly deployed. The position in the DGAM Global Private Infrastructure Fund will gradually be built from the Fund’s future cash flows.
Changes will also be made to the composition of the Fund’s public assets, both in terms of the strategies employed and their target allocation. These changes aim to ensure that the Fund’s public component replicates as closely as possible the private assets’ risk and return profile.
The table below presents an overview of the expected changes to the Fund’s structure in comparison to its current composition:
|Asset class / Underlying fund
|Tangible private assets
|DFS Invesco Global Direct Real Estate
|DFS UBS Global Direct Real Estate
|DFS IFM Global Direct Infrastructure
|DGAM Global Private Infrastructure
|Equities and bond securities
|DFS BlackRock® Global Real Estate Index
|DFS BlackRock® Global Infrastructure Index
|DFS BlackRock® MSCI All Country World Index
|Cash and short-term securities
|DFS DGAM Money Market
|DFS PH&N Short Term Bond and Mortgage
These changes will not have any impact on the Fund’s investment fee.
About the DGAM Global Private Infrastructure Fund
This fund aims to provide favourable risk-adjusted returns over the long term by assembling a diversified portfolio of infrastructure assets through direct investments, co-investments and fund investments. It seeks global diversification with a focus on Canada and the United States while prioritizing jurisdictions that are politically stable, and have mature legal, regulatory, tax and accounting frameworks. The fund primarily targets mid-market investments and focuses on core and core plus infrastructure assets in order to ensure the stability and predictability of cash flows.
For more information about these changes, don’t hesitate to contact your client relationship manager.