Securities Law & Instruments


National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Approval granted for change of manager of labour sponsored investment fund for the purpose of 5.5(1)(a) -- change of manager is not detrimental to investors or the public interest -- investors have received adequate disclosure regarding the change of manager.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.5(1)(a), 5.7, 19.1.

December 14, 2012




(the Jurisdiction)








(Aston Hill) AND


(the Fund) AND


(Cambridge, together with Aston Hill, the Filers)



The principal regulator in Ontario (the Principal Jurisdiction) has received an application (the Application) from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) approving, pursuant to section 5.5(1)(a) of National Instrument 81-102 -- Mutual Funds (NI 81-102), the change in the manager of the Fund from Aston Hill to Cambridge (the Approval Sought).

Under the process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator (the Principal Regulator) for this application, and

(b) the Filer has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 -- Passport System (MI 11-102) is intended to be relied upon in the province of Nova Scotia.


Defined terms contained in National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning in this decision, unless otherwise defined.


This decision is based on the following facts represented by the Filers:

Aston Hill and the Fund

1. Aston Hill is:

(a) a corporation amalgamated under the laws of Ontario with its head office located at Suite 2110, 77 King Street West, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8;

(b) registered as a dealer in the category of exempt market dealer, as an adviser in the category of portfolio manager and as an investment fund manager with the Principal Regulator (among others); and

(c) the manager of the Fund.

2. The Fund is a corporation formed under the Canadian Business Corporations Act by articles of incorporation dated October 31, 2001, registered as a labour sponsored investment fund corporation under Part III of the Community Small Business Investment Funds Act (Ontario) (the Ontario Act) and as a prescribed labour sponsored venture capital corporation under the Income Tax Act (Canada) and the Equity Tax Credit Act (Nova Scotia).

3. The share capital of the Fund consists of Class A shares (the Class A Shares), owned by the public (the Shareholders), and Class B shares (the Class B Shares), which are owned by the Canadian Air Traffic Control Association, CAW Local 5454 (the Sponsor). The Shareholders and the Sponsor are referred to collectively in this decision as the Securityholders. The Class A Shares were offered for sale in Ontario and Nova Scotia pursuant to prospectuses dated January 8, 2007, December 29, 2005, December 20, 2004, December 15, 2003, December 5, 2002 and December 14, 2001. Accordingly, the Fund is a reporting issuer in the Principal Jurisdiction and in Nova Scotia. The Fund is not currently offering securities to the public.

4. Neither Aston Hill nor the Fund is in default of securities legislation in any of the jurisdictions of Canada.


5. Cambridge is:

(a) a Canadian investment management firm incorporated in 2011 under the laws of Ontario with its head office located at Suite 1202, 70 York Street, Toronto, Ontario, M5J 1S9;

(b) registered as a dealer in the category of exempt market dealer, as an adviser in the category of portfolio manager and as an investment fund manager with the Principal Regulator; and

(c) not in default of securities legislation in any of the jurisdictions of Canada.

6. Cambridge was founded as a closed-end fund manager. Its current business is to invest and manage its current assets as well as to review and pursue other investment funds that might propose strategic opportunities. Cambridge currently has no assets under management as it is a newly registered portfolio manager.

7. The management team at Cambridge, comprised of principals Larry Guy, Chief Executive Officer (CEO) and Director, Andrew Bentley, President and Director, and Hugh John MacLean, Chief Compliance Officer (CCO), is highly experienced, with over 40 years of combined investment management and financial services expertise, as well as experience in founding, building and managing asset management firms.

8. The management team at Cambridge has previous experience in managing the Fund. While at Navina Asset Management Inc. (Navina), the principals of Cambridge were directly responsible for portfolio management, administration and accounting functions related to the Fund. Larry Guy, previously Chief Financial Officer (CFO) and a portfolio manager with Aston Hill, was CFO, a Director and co-founder of Navina, which was acquired in 2010 by Aston Hill Financial Inc., Aston Hill's parent company. Andrew Bentley was President, a Director and co-founder of Navina. Hugh John MacLean was CCO and Vice President of Operations and Trading at Navina.

9. The management team at Cambridge, through their experience at Navina and previous employment, have organized, distributed and managed numerous investment fund offerings to investors across Canada raising in excess of $1 billion.

10. Cambridge has a qualified portfolio manager, Larry Guy, who has considerable experience in managing investment portfolios, including experience in managing the Fund in the past.

The Proposed Change of Manager of the Fund

11. Cambridge wishes to acquire and manage the Fund because the Fund represents a strategic opportunity that the principals of Cambridge believe fits with their areas of expertise and experience.

12. On November 5, 2012, Cambridge signed a purchase agreement with Aston Hill with respect to the purchase (the Proposed Transaction) of the right to manage the Fund (the Acquired Assets). The Acquired Assets include all of the rights, title and interest in and to the management contract dated December 14, 2001, as amended and restated as of December 15, 2003, pursuant to which Aston Hill acts as the manager (within the meaning of such term in NI 81-102) of the Fund; thus closing the Proposed Transaction would result in a change of the manager of the Fund from Aston Hill to Cambridge.

13. A press release and material change report were filed on November 5, 2012 and November 6, 2012, respectively, announcing the Proposed Transaction. A press release and material change report for the Fund will be filed immediately following closing of the Proposed Transaction.

14. Pursuant to section 5.1(b) of NI 81-102, the approval of the Securityholders of the Fund is required to change the manager of the Fund. The Securityholders approved the Proposed Transaction at an annual and special meeting of the Securityholders that was held on December 13, 2012 (the Meeting). Securityholders of record as at November 20, 2012 were entitled to attend and vote at the Meeting.

15. Cambridge possesses all registrations under the OSA and National Instrument 31-103 -- Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) to allow it to manage the Fund after the closing of the Proposed Transaction.

16. Cambridge has the appropriate personnel, policies and procedures and systems in place to assume the management of the Fund on closing of the Proposed Transaction.

17. Larry Guy and Andrew Bentley will be appointed CEO, and President and Treasurer, of the Fund, respectively, should the Proposed Transaction receive all necessary approvals. In addition, Greg Myles, Robert Turner, Michael J. Killeen, Larry Guy, John Crow and Aris Kaplanis, the previous directors of the Fund, will continue on as directors of the Fund as a result of having been re-elected by Securityholders at the Meeting. The current directors and officers of Cambridge, and the directors and current officers of the Fund have the integrity and experience to manage the Fund contemplated by sub-paragraph 5.7(1)(a)(v) of NI 81-102.

18. Cambridge has hired a CCO, Hugh John MacLean, who will assist in properly integrating and supervising the personnel involved in managing the Acquired Assets. In addition, Cambridge may engage experienced regulatory consultants if it determines this would assist it in assessing and enhancing its compliance systems to address any additional business risks associated with the Proposed Transaction. Accordingly, Cambridge has not identified, and does not believe that there will be, any aspects of the Proposed Transaction or the subsequent management of the Acquired Assets that would hinder its compliance with securities regulation in any way.

19. The Filers believe that the Proposed Transaction will be beneficial to the Securityholders of the Fund for the following reasons:

(a) The principals of Cambridge have prior experience providing management and investment management services to the Fund and have been officers and/or directors of the Fund both currently and in the past. Many of the remaining private investments of the Fund were entered into during their prior period of managing the Fund and the principals of Cambridge have remained active at a board capacity with companies still held as investments by the Fund. This additional familiarity with the Fund's private investments should be beneficial to the future performance of the Fund.

(b) Larry Guy has previous experience in managing the portfolio of the Fund. Accordingly, Cambridge has not identified any investor protection concerns that would arise from the change of manager as it relates to the portfolio management of the Fund. Mr. Guy has had a continuing involvement with the Fund since 2010 as portfolio manager and/or as a director and he has intimate knowledge of each of the portfolio investments of the Fund. It is expected that these private investments will require the preponderance of the work over the coming few years to maximize returns to Securityholders. The Filers believe that Mr. Guy's unique role with the Fund will permit him to best position the Fund for success in the future. The Fund's net asset value as at November 19, 2012 was $7,507,350 (versus $23,130,536 as at August 31, 2009). In light of the decreasing size of the Fund, there are not expected to be any investments in private companies in the future. Cambridge does not intend for the Fund to recommence offering its securities to the public in the future and intends to manage the Fund with a view to responsibly winding up the Fund's operations.

(c) The Proposed Transaction will not result in a change to the fundamental investment objectives or strategies of the Fund. Operational changes are expected to be modest as the proposed officers have all had extensive involvement with the Fund during their tenure as officers and directors of the Fund. No fees or expenses will be incurred by the Securityholders as a result of the Proposed Transaction.

20. Aston Hill, as current manager of the Fund, has determined that the Proposed Transaction is not a conflict of interest matter pursuant to section 5.1 of National Instrument 81-107 -- Independent Review Committee for Investment Funds (NI 81-107) and that, as a result, the Proposed Transaction will not require the approval or the recommendation of the Fund's independent review committee (IRC) pursuant to sections 5.2 and 5.3 of NI 81-107. The Fund itself has its own board of directors, a majority of whom are independent of the manager, and as such an independent board has approved the Proposed Transaction.

21. On November 8, 2012, the Fund announced the calling of the Meeting. On November 22, 2012, the Fund filed the notice of the Meeting, the annual report for the year ended August 31, 2012, the management information circular and the forms of proxy relating to the Meeting on SEDAR (collectively, the Meeting Materials). The Meeting Materials were mailed to Securityholders on November 22, 2012.

22. Cambridge intends to reconstitute the IRC for the Fund as required, in accordance with the provisions of Part 3 of NI 81-107. The members of the IRC constituted by Cambridge for the Fund are expected to be the same members that compose the Fund's current IRC. Each member has been requested and has agreed to serve as a member of the IRC for the Fund following the Proposed Transaction.

23. The Filers have determined that the Proposed Transaction does not trigger the need to give notice under section 11.9 of NI 31-103 because Cambridge is not proposing to acquire securities of Aston Hill or Aston Hill Financial Inc. and the Acquired Assets do not constitute all or a substantial part of Aston Hill's assets.

24. There is no current intention to change the operations of the Fund, including, in particular, no current intention to change investment objectives or strategies of the Fund, directors, fee structure or auditor of the Fund.


The Principal Regulator is satisfied that the decision meets the test set out in the Legislation.

The decision of the Principal Regulator under the Legislation is that the Approval Sought is granted.

"Vera Nunes"
Manager, Investment Funds Branch
Ontario Securities Commission