ACC support OSC initiative to expand retail investor access to long-term assets

The Alternative Credit Council (ACC), the private credit affiliate of the Alternative Investment Management Association (AIMA), commend the Ontario Securities Commission (OSC) for its initiative to create the Ontario Long-Term Fund (OLTF)

The ACC strongly support initiatives that provide retail investors with access to long-term assets and has led efforts to promote these globally. If successfully implemented, the OLTF will benefit retail investors and provide a vital new source of capital for businesses and infrastructure projects in Ontario.

In response to the OSC’s consultation paper, the ACC underscored the success of similar frameworks globally such as Business Development Companies (US), Long-Term Asset Funds (UK), and European Long-Term Investment Funds (EU) and their usefulness as a base model for the OLTF.

To ensure the OLTF is effective and attractive to both investors and asset managers, the ACC have outlined three key priorities in their response:

• Recognise that an alignment of interest between investors and OLTF managers can be achieved in multiple ways and not just through the requirement to have a cornerstone investor
• Adopt a principles-based approach to any product level rules to ensure that OLTFs are suitable for investment into the full range of long-term assets and investment strategies
• Ensure that any disclosure and distribution rules are proportionate and only introduce any additional requirements for OLTFs where there is a strong justification for doing so

Commenting on the response, Nicholas Smith, Managing Director, Private Credit, AIMA: “The Ontario Long-Term Fund (OLTF) has the potential to be a significant boon for Ontario retail investors and businesses alike.  A well designed OLTF will have the flexibility to invest in different types of long-term assets in a way that meets the needs of retail investors.  We welcome the OSC’s decision to consult with industry on its proposals and contribute towards making the OLTF a success."

Claire Van Wyk-Allan, Managing Director, Head of Canada and Investor Engagement, Americas, AIMA added: "AIMA is pleased to have the opportunity to consult with the OSC on the OLTF proposal. We support the OSC’s goal of further democratizing alternative investments to investors and further align structures available in Ontario with other similar fund regimes in leading jurisdictions globally. Especially as firms continue to stay private longer, increasing opportunities for investors to access private markets is important for long-term, diversified portfolio success.”