Hello Tony.

I differ from you. I have no newfound concerns. My concerns are the same old concerns I’ve always had.

As follows is an updated edit of my August 2014 post, concerning Marquest. Even though we ended our funding through Marquest, there is still one old fund out there, possibly unwinding itself. Whether this is the case, presently, is anyone’s guess. If it is, in all likelihood, that will soon, at long last, be finally coming to an end.

The most hurtful feature of the Marquest funds is the fact that their self-destruction is a built-in feature. Each one of these funds—contained within its very definition—has “its scheduled dissolution date” prearranged. That is to say, there is a specific deadline date for all the shares to be sold off.

http://marquest.ca/products/offeringMemorandum/flowThroughLPs/?f=1566821.pdf

The applicable tax year is so essential to the logic of the investment that it is even part of the title of this fund as well as the titles of the earlier funds. In other words, their time-defined demise is one of the most important integral features. Earlier funds as well as this one use identical “dissolution” language. You only need to turn to page two, paragraph five (as follows, in its entirety), to get to the “dissolution” particulars.

“Mutual Fund Rollover Transaction and Termination of the Partnership:

The General Partner intends to cause the Partnership, prior to its scheduled dissolution date of November 30, 2015, to transfer its assets to the Mutual Fund (as hereinafter defined) on a tax-deferred basis in exchange for redeemable shares of the Mutual Fund, to be distributed to the Limited Partners. The Limited Partners shall be free to redeem some or all of their Mutual Fund Shares (as hereinafter defined) on or after the tax-deferred exchange. The General Partner has been granted all necessary power and authority, on behalf of the Partnership and each Limited Partner, to enter into the Mutual Fund Rollover Transaction (as hereinafter defined) and to implement the dissolution of the Partnership, and after that, to file all elections deemed necessary or desirable by the General Partner to be filed under applicable tax legislation, without any further authorization by the Limited Partners.”

This is not a rational question of a holding period, after which it possibly might be advantageous to sell all or part of this or that equity, at some point. Rather, it is specifically spelled out, in advance, that “The General Partner” has the legal obligation to comply with the “scheduled dissolution date.” The fact that the equities in the fund have “short hold periods,” is not only disclosed; it is trumpeted as one of the main advantages. The unstated implication is that long-term commitments are riskier and more onerous than short-term holdings.

It’s plain how this will play out, so far as the trading activity. First comes Part One, when Fancamp offers new shares, invariably the share price drops (primarily, because Shareholders generally disapprove of dilution). Worse is Part Two, which is defined by the strictly-limited number of days on the calendar that “The General Partner” has to set the detonation charge for the demolition (aka “the dissolution”) of the fund. When all the shares hit the market, all at the same time (or nearly at the same time), the result is what we’ve experienced over the years, in stages, the obliteration of a rational market price for Fancamp shares.

On the other hand, so far as the present moment, it’s possible that these particular blows are coming to an end (or have already ended or have been mitigated to some unknown degree or entirely). Unless you’re a Marquest insider, there’s no way of knowing because, for one thing, Marquest does not publicly post prospectuses of all its funds. For another thing, it’s possible for Marquest to transfer shares from one fund to another (without the permission of anybody here).

So far as the investors in the Partnership—all they know or care about is—their “Unit” has been “rolled over.” As soon as the tax advantage has been nailed down and used up (by the specified date), the General Partner has the authority (without further permission) to roll the money over into the second tax-advantaged fund (described on the Marquest website as a “RRSP-eligible corporate class mutual fund”).

So far as the original Partnership, there wasn’t even any notice ever given of what stocks were in the fund, in the first place. Bold, all caps, the first sentence of page three reads, “THIS IS A BLIND POOL OFFERING.” So far as the Participants, it is immaterial whether or not Fancamp (or any other named company) was in the offering, or even whether or not there ever existed, on the face of the Earth, such a company as Fancamp.