OSC proposal to create a new investment fund category—the Ontario Long-Term Fund (OLTF)
The OSC’s proposal could expand retail investors’ access to long term illiquid assets while ensuring that new fund structures are viable and efficient and protect investors.
Submission – OSC consultation 81-737- Improve retail investor access to LTA through investment fund product structures
Recipients
- Ontario Securities Commission (OSC)
Industry segments this resource supports
- Assets management
- Wealth management
Summary
We submitted feedback to the OSC about its proposal to create a new investment fund category—the Ontario Long-Term Fund (OLTF)—designed to give retail investors access to long term illiquid assets such as private equity, private debt, real estate, infrastructure, and venture capital. We support the OSC’s objectives but recommends several changes to ensure the OLTF structure is practical, cost effective, and capable of functioning successfully in the market.
Why this matters: The OSC’s proposal could expand retail investors’ access to long term illiquid assets while ensuring that new fund structures are viable and efficient and protect investors.
Key takeaways
- We support the OSC’s goal of improving retail investor access to long term assets through an investment fund structure.
- The proposed OLTF framework is viewed as overly prescriptive, complex, and costly; We recommend greater flexibility in how OLTFs can be structured and operated.
- We recommends removing the mandatory Cornerstone Investor requirement, while allowing managers to use one if beneficial.
- Several issues could affect OLTF viability, including Ontario only market limitations, fund of fund eligibility, registered plan eligibility, retail distribution considerations, and financial reporting deadlines.
- We ask the OSC to clarify what alternative approaches were considered to address structural challenges in the proposal.
- Long term assets are defined by the OSC as illiquid, difficult to value investments with long time horizons, including private equity, private debt, mortgages, real estate, infrastructure, and natural resource projects.
