Securities Law & Instruments


Exemption from fees mandated under section 7.3of Rule 45-501 - Exempt Distributions for a distribution oflimited partnership units effected on an exempt basis in relianceon section 2.3 of Rule 45-501.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.,section 147.

Rules Cited

O.S.C. Rule 45-501 Exempt Distributions, sections2.3 and 7.3.







("RULE 45-501")







(Section 147 of the Act)

WHEREAS Kensington Co-Investment Fund-A,L.P. ("Fund A") and Kensington Co-Investment Fund-B,L.P. ("Fund B") have submitted an application to theOntario Securities Commission (the "Commission") requestingan order pursuant to Section 147 of the Act that Fund A andFund B (collectively, the "Funds") be exempt fromthe requirement to pay certain fees otherwise payable underSection 7.3 of Rule 45-501 Exempt Distributions in connectionwith the issue and sale of limited partnership units of theFunds;

AND UPON the Funds having representedto the Commission that:

1. Fund A and Fund B are limited partnershipsformed under the laws of Ontario for the purpose of investingin co-investment opportunities presented to such limited partnershipsby Kensington Fund of Funds, L.P. (the "FOF Fund").

2. The registered office of each of the Fundsis located in Ontario.

3. The general partners of each of Fund A(the "Fund A GP"), the FOF Fund (the "FOF GP")and Fund B (the "Fund B GP") are distinct Ontariocorporations and are wholly owned subsidiaries of KensingtonCapital Partners Limited an Ontario corporation ("GPHoldco").

4. On August 1, 2002, Canada Pension PlanInvestment Board (the "Purchaser") purchased fromeach of Fund A and Fund B, respectively, limited partnershipunits of each of Fund A and Fund B, respectively. These trades(the "Distributions") were effected on an exemptbasis in reliance on Section 2.3 of Rule 45-501.

5. The investment by the Purchaser in FundA and Fund B was structured as an investment in two limitedpartnerships with similar investment objectives, rather thanas an investment in a single limited partnership, in orderthat one of the partnerships, namely Fund A, could qualifyas a "qualified limited partnership" under the IncomeTax Act (Canada). The other partnership (Fund B) willmake investments that cannot be made by a "qualifiedlimited partnership". Investments in "foreign property"(as defined in the Income Tax Act (Canada) cannot bemade by Fund A, but may be made by Fund B.

6. The Purchaser was required to purchaselimited partnership units of both Fund A and Fund B, and holdsall of the limited partnership interests in both Fund A andFund B.

7. The total purchase price that the Purchaseragreed to pay for its investment in Fund A and Fund B, inthe aggregate, is Cdn $50,000,000. The Purchaser agreed topay up to Cdn $50,000,000 of this amount for its investmentin Fund A (less the amount invested by the Purchaser in FundB), and up to Cdn $15,000,000 for its investment in Fund B.Proceeds paid by the Purchaser will only be allocated to FundB if required by Fund B to pay for an investment that cannotbe made by Fund A. The Purchaser's obligation to provide fundsto Fund B is limited to the lesser of Cdn $15,000,000 andthe difference between Cdn $50,000,000 and the amount actuallyinvested by Fund A. As the allocation of proceeds paid bythe Purchaser between Fund A and Fund B depends on which ofFund A and Fund B requires the proceeds to make a particularinvestment, the actual amount of proceeds that will be receivedby each of Fund A and Fund B will not be known until the investmentperiods of both Funds expire (which could be as late as August,2007).

8. Each of Fund A and Fund B will be requiredto pay filing fees under Section 7.3 of Rule 45-501 F1 inconnection with the distribution by it to the Purchaser underSection 2.3 of Rule 45-501 at the time a Form 45-501F1 isrequired to be filed in respect of such distribution, basedon the maximum amount of proceeds that may be received bysuch Fund. In the case of Fund A, that maximum amount is Cdn$50,000,000, and in the case of Fund B, that maximum amountis Cdn $15,000,000. Consequently, both partnerships are requiredto pay fees at the time that Form 45-501F1's are requiredto be filed by them in respect of the Distributions, calculatedbased on an aggregate amount of proceeds of Cdn $65,000,000,even though the aggregate amount of proceeds that will beultimately received by both Funds will not exceed Cdn $50,000,000,in total.

AND UPON the Commission being of theopinion that to do so would not be prejudicial to the publicinterest,

IT IS ORDERED, pursuant to Section 147of the Act, that Fund B is exempt from the requirement to paythe fees applicable under Section 7.3 of Rule 45-501 to thefiling by Fund B of the Form 45-501F1 in respect of the Distributions,provided that Fund A pays the fees under Section 7.3 of Rule45-501 applicable to the filing by Fund A of a Form 45-501F1in respect of the Distributions, calculated on Cdn $50,000,000,the maximum amount of proceeds from the Distributions that maybe received by Fund A and Fund B.

August 23, 2002.

"Paul M. Moore"                    RobertL. Shirriff"