NOTICE OF MEETING AND INFORMATION CIRCULAR FOR SPECIAL MEETING OF SHAREHOLDERS OF NEXGEN GLOBAL VALUE TAX MANAGED FUND TO BE HELD ON JULY 30, 2013

Transcription

1 NOTICE OF MEETING AND INFORMATION CIRCULAR FOR SPECIAL MEETING OF SHAREHOLDERS OF NEXGEN GLOBAL VALUE TAX MANAGED FUND TO BE HELD ON JULY 30, 2013 These materials are important and require your immediate attention. They require shareholders of NexGen Global Value Tax Managed Fund to make important decisions. If a shareholder is in doubt as to how to make such decisions, please contact your financial, legal or other professional advisor.

2 NEXGEN GLOBAL VALUE TAX MANAGED FUND NOTICE OF SPECIAL MEETING OF SHAREHOLDERS NOTICE IS HEREBY GIVEN that a special meeting (the Meeting ) of the shareholders of NexGen Global Value Tax Managed Fund (the Fund ) will be held at 36 Toronto Street, Suite 1070, Toronto, Ontario M5C 2C5 on Tuesday, July 30, 2013 at 10:00 am (Toronto time) for the following purposes: 1. to consider, and if thought fit, approve a special resolution (the Merger Resolution ) substantially in the form set out in Schedule A of the accompanying management information circular (the Circular ) approving the merger of the Fund and NexGen Global Resource Tax Managed Fund (the Resource Fund ) into NexGen Canadian Balanced Growth Tax Managed Fund (the New Fund ), all as described in the Circular; and 2. to transact such other business as may properly come before the Meeting or any adjournment thereof. The specific details of the matters to be put before the Meeting are set forth in the Circular. Shareholders who are unable to attend the Meeting in person are requested to complete, sign, date and return the enclosed form of proxy to NexGen Financial Limited Partnership ( NexGen or the Partnership ), the manager of the Fund. To be effective, a proxy must be received for verification by 5:00 p.m. (Toronto time) on Thursday, July 25, 2013, or in the case of any adjournment of the Meeting, not less than 48 hours prior to the time of such Meeting. The Chairman of the Meeting may refuse to recognize any instrument of proxy received after such time. NexGen has fixed the close of business on Monday, June 20, 2013 as the record date for the determination of the shareholders of the Fund entitled to receive notice of the Meeting. Only shareholders of record on such record date are entitled to vote at the Meeting. Enclosed for the reference of shareholders of the Fund are the simplified prospectus and annual financial statements of the New Fund. Shareholders of the Fund may obtain other additional information relating to the New Fund by accessing the System for Electronic Disclosure and Retrieval (SEDAR) website at upon request without charge by calling NexGen s toll free number at or by writing to NexGen at 36 Toronto Street, Suite 1070, Toronto, Ontario M5C 2C5. DATED at Toronto, Ontario as of this 22 nd day of June, BY ORDER OF THE BOARD OF DIRECTORS OF NEXGEN LIMITED, THE GENERAL PARTNER OF NEXGEN FINANCIAL LIMITED PARTNERSHIP, THE MANAGER OF THE FUND Laurie Munro Chief Executive Officer

3 TABLE OF CONTENTS NOTICE OF SPECIAL MEETING OF SHAREHOLDERS... 2 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS... 2 INFORMATION CONTAINED IN THE CIRCULAR... 2 QUESTIONS AND ANSWERS ABOUT THE MEETING... 4 SOLICITATION OF PROXIES... 8 APPOINTMENT AND REVOCATION OF PROXIES... 9 OTHER MATTERS WHICH MAY COME BEFORE THE MEETING... 9 VOTING OF PROXIES... 9 EXERCISE OF DISCRETION BY PROXIES VOTING SHARES AND PRINCIPAL HOLDERS THEREOF MANAGEMENT CONTRACT THE MERGER COMPARISON OF THE FUND AND THE NEW FUND ADDITIONAL INFORMATION REGARDING THE NEW FUND INDIVIDUAL MERGER STEPS CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS NEXGEN INVESTMENT CORPORATION INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS AUDITORS APPROVAL BY THE DIRECTORS CERTIFICATE SCHEDULE A

4 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Certain statements included in the Circular constitute forward-looking statements. All statements, other than statements of historical fact, included in the Circular that address future activities, events, developments or financial performance, are forward-looking statements. These forward-looking statements can be identified by the use of forward-looking words such as may, should, will, could, expect, intend, plan, estimate, anticipate, believe, future or continue or similar variations. Shareholders are cautioned not to put undue reliance on such forwardlooking statements, which are not a guarantee of performance and are subject to a number of uncertainties, assumptions and other factors, many of which are outside the control of the Fund and NexGen. Such uncertainties, assumptions and other factors could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, among other things, general and local economic and business conditions, changes in government regulations or in tax laws and timing of the completion of the Merger. Although the forward-looking statements contained in this Circular are based upon what the Fund and NexGen believe are reasonable assumptions, there can be no assurance that actual forward-looking information and objectives include the assumptions that there will be no material changes in government regulations or in tax laws. Such forwardlooking statements should, therefore, be construed in light of such factors. All forwardlooking statements are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements contained in the Circular speak only as of June 22, 2013 and NexGen is under no obligation, and expressly disclaim any intention or obligation, to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. INFORMATION CONTAINED IN THE CIRCULAR Unless otherwise specified, all information contained in this Circular is current as of June 22, No person has been authorized to give information or to make any representations in connection with the matters to be considered at the Meeting other than those contained in the Circular and, if given or made, any such information or representations should not be relied upon in making a decision as to how to vote on any resolution, including the Merger Resolution, or be considered to have been authorized by the Fund or NexGen. The Circular does not constitute an offer to buy, or a solicitation of an offer to sell, any securities, or the solicitation of a proxy, by any person in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such an offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such an offer or solicitation. Shareholders should not construe the contents of this Circular as legal, tax or financial advice and should consult with their own professional advisors as to the 2

5 relevant legal, tax, financial and other matters in connection therewith as these apply to their particular circumstances. 3

6 QUESTIONS AND ANSWERS ABOUT THE MEETING The following questions and answers are to help shareholders understand the Merger to be considered and voted on at the Meeting. However, these questions and answers do not describe everything that a shareholder should consider before voting. Accordingly, shareholders are urged to read this Circular in its entirety. Q1 What are shareholders being asked to vote on at the Meeting? A1 The Meeting is a special meeting of shareholders of the Fund at which shareholders will be asked to consider and vote on a merger (the Merger ) of the Fund and NexGen Global Resource Tax Managed Fund (the Resource Fund ), each an open-end fund managed by NexGen into NexGen Canadian Balanced Growth Tax Managed Fund (the New Fund ), an open-end mutual fund managed by NexGen. Q2 What is the Merger? A2 The proposed Merger is a series of steps that would involve, among others: (i) on or before the effective date of the Merger, the Fund and the Resource Fund will liquidate all their respective securities which may not be suitable investments for the New Fund; (ii) each outstanding share of the Fund and the Resource Fund will be exchanged for shares of an equivalent class and series of the New Fund based on the respective net asset values; (iiii) the assets and liabilities of NexGen Investment Corporation (the Corporation ), (which houses the Fund, the Resource Fund and the New Fund), attributed to the Fund and the Resource Fund will be reallocated to the New Fund; and (iv) the Fund and the Resource Fund will each be wound up. Upon completion of the Merger, the shareholders of the Fund and the Resource Fund will own shares of the New Fund, which will hold in its portfolio, among other assets, the portfolio assets of the Fund and the Resource Fund. The complete series of steps to effect the Merger are outlined in detail in the Circular. Q3 Why is the Merger being proposed? A3 The Fund currently has approximately $2 million in assets under management and its investment performance has not been competitive. At such asset levels, the Manager believes that the AUM may not grow sufficiently quickly to achieve meaningful economies of scale, thereby ensuring that per share costs are competitive. Accordingly, the Manager believes that the proposed Merger, by providing access to a combined larger fund (approximately $110 million in assets), has an increased possibility of achieving economies of scale. The Manager also believes that the proposed change in the portfolio management for shareholders of the Fund will assist in improving the investment performance and increasing the assets and the competitiveness of the New Fund. J. Zechner Associates Inc. ( Zechner ) acts as the sub-adviser to the New Fund. Accordingly, if the Merger is approved, the Merger will result in a change in the effective portfolio management of the Fund from NexGen to Zechner. See Portfolio Management and Performance for details respecting the performance of Zechner. 4

7 Q4 Who is Zechner? A4 Zechner is a well known and successful investment counselor serving high net worth and institutional investors. Established in 1993, the firm has built an entrepreneurial organization dedicated to excellence in stock selection driven by macro economic strategy. John Zechner is the Chairman and Chief Investment Officer of Zechner. Mr. Zechner entered the business in 1983 as a portfolio manager. In 1993, he formed his own firm to manage investments for institutions and individuals. The company has continued to grow and today has 12 employees and manages over $1.6 billion in assets, primarily in fixed income and Canadian equity. Zechner currently acts as sub-adviser to NexGen in respect of the Canadian Cash Funds, Canadian Bond Funds, Canadian Diversified Income Funds (fixed income only), North American Growth Funds and Turtle Canadian Balanced Funds (fixed income only). Q5 How will the Merger affect a shareholder s investment? A5 If the Merger is approved, a shareholder will hold shares of the New Fund. Accordingly, although the performance of each investment entity is dependent on the performance of the underlying portfolio assets, there are certain material differences between the Fund and the New Fund, including the following: Investment Objective (i) The Fund The Fund s investment objective is to provide long-term capital growth primarily through investment in a diversified portfolio of equity and equity-like securities. The Fund may invest all or any portion of its assets in any country or industry depending on prevailing market conditions. (ii) The New Fund The New Fund s investment objective is to provide a combination of capital preservation, income generation and long-term capital growth primarily through investment in a diversified portfolio of Canadian securities. As a result, the investment objective will change significantly. Specifically, the investment objective of the New Fund will: (i) be restricted primarily to Canadian securities; (ii) emphasize capital preservation, income generation and long-term capital growth through investment in a combination of equity and income securities rather than long term capital growth through investment primarily in equity securities; and (iii) have no specific industry focus. Portfolio Management and Performance (i) The Fund Jonathan Baird of NexGen currently manages the investment portfolio of the Fund. The performance of the Fund (regular front end and deferred load series of the capital gains class) for the period ended May 31, 2013 is as follows: 1 Year 2 Years 3 Years 5 Years Since Inception (April 2, 2007) -18.2% -21.8% -9.1% -9.6% -10.2% 5

8 (ii) The New Fund Zechner currently manages the investment portfolio of the New Fund through a sub-advisory relationship with NexGen. The performance of the shares (regular front end and deferred load series) of the New Fund for the period ended May 31, 2013 is as follows: 1 Year 2 Years 3 Years 5 Years Since Inception (September 5, 2006) 10.5% -4.7% 0.2% 1.2% 2.7% Distribution Policy Currently, investors in the Fund s Return of Capital and Dividend Tax Credit Classes receive an annual distribution at a rate of $0.30 ($0.025 per security monthly), which is an effective actual distribution rate, based upon the net asset value of the Fund as at May 31, 2013 of approximately 10.9% and 9.7%, respectively, depending upon the particular series. If the Merger is approved, the annual distribution rate for the Return of Capital and Dividend Tax Credit Classes will be increased to $0.75 ($ per security monthly) and $0.60 ($0.050 per security monthly), respectively, which will be an effective actual distribution rate, based upon the New Fund s net asset value as at May 31, 2013 of 11.4% and 7.9%, depending upon the particular series. Accordingly, as indicated in the table below, (i) in respect of the Return of Capital Class, this Merger will result in a higher annual and actual distribution rate; and (ii) in respect of the Dividend Tax Credit Class, although the monthly distribution rate of the New Fund will be higher than the Fund, the actual distribution rate of the New Fund, based upon the net asset value as at May 31, 2013, will be lower than the Fund. Return of Capital Class Dividend Tax Credit Class Price/Share as Distribution Rate Price/Share as DTC Distribution Rate of May 31, 2013 $ % of May 31, 2013 $ % Global Value $ $ % $ $ % Pre-Merger Canadian Balanced Growth $ $ % $ $ % Post-Merger Q6 When will the Merger be completed? A6 If approved, the Merger is expected to be implemented on or about August 9, Completion of the Merger is dependent upon a number of conditions, including the approval of the Merger Resolution by shareholders of the Fund and the Resource Fund, the approval of a similar merger resolution by shareholders of the NexGen Global Value Registered Fund and the receipt of all necessary regulatory approvals. There is no assurance that all conditions will be satisfied and that the Merger will be completed. The Manager reserves the right to effect the Merger in respect of the Fund if approved by its shareholders, notwithstanding non-approval of the Merger by shareholders of the Resource Fund. 6

9 Q7 What happens if the Merger is not completed? A7 If the Merger is not completed, shareholders will continue to hold shares in the Fund on the same terms and conditions as on the date of this Circular. Q8 What are the principal income tax consequences to a shareholder of the Merger? A8 The shares of the Fund will be exchanged for shares of the New Fund in a manner that is similar, for tax purposes, to switching between mutual funds within the Corporation. When the assets and liabilities of the Fund are reallocated to the New Fund, those assets and liabilities will remain within the Corporation and therefore not involve a disposition of assets for tax purposes. See Certain Canadian Federal Income Tax Considerations in the circular for additional information. Q9 How can a shareholder vote? A9 If a shareholder is a registered holder of shares of the Fund, whether or not the shareholder plans to attend the Meeting in person, the shareholder is requested to complete, sign, date and return to NexGen Financial Limited Partnership, the manager of the Fund, the enclosed form of proxy. All instruments appointing proxies to be used at the Meeting must be deposited with NexGen Financial Limited Partnership not later than 5:00 p.m. (Toronto time) on Thursday, July 25, 2013, and any instruments appointing proxies to be used at any adjournment or postponement of the Meeting must be so deposited at least 48 hours (excluding Saturdays and holidays) prior to the time set for such adjournment or postponement of the Meeting. If a shareholder is a non-registered holder of shares of the Fund (for example, if the shareholder holds their shares in an account with a broker, dealer or other intermediary), whether or not the shareholder plans to attend the Meeting, the shareholder should follow the voting procedures described in the voting instruction form or other document accompanying the Circular or call his or her broker, dealer or other intermediary for information on how the Shareholder can vote his or her shares. Q10 Who bears the costs of the Merger? A10 NexGen will pay the costs relating to the Merger, including the solicitation of proxies and the holding of the Meeting. Q11 Who should a shareholder call with questions regarding NexGen, the Meeting or the Merger? A11 For more information, a shareholder should call his or her advisor or NexGen. Alternatively, a shareholder may NexGen at info@nexgenfinancial.ca. 7

10 NEXGEN GLOBAL VALUE TAX MANAGED FUND 36 Toronto Street, Suite 1070, Toronto, Ontario M5C 2C5 MANAGEMENT INFORMATION CIRCULAR SOLICITATION OF PROXIES THIS MANAGEMENT INFORMATION CIRCULAR (the Circular ) IS FURNISHED IN CONNECTION WITH THE SOLICITATION BY THE MANAGEMENT OF NEXGEN GLOBAL VALUE TAX MANAGED FUND (the Fund ) of proxies to be used at the special meeting of shareholders (the Shareholders ) of the Fund to be held at 36 Toronto Street, Suite 1070, Toronto, Ontario M5C 2C5 on Tuesday, July 30, 2013 at 10:00 am (Toronto time) for the purposes set forth in the enclosed notice of meeting. Proxies will be solicited primarily by mail and may also be solicited personally or by telephone by the directors or officers of NexGen Financial Limited Partnership (the Partnership or the Manager ), the manager of the Fund, at nominal cost. The solicitation of proxies by this Circular is being made by management of the Partnership. The cost of solicitation by management together with all costs relating to the proposed Merger will be borne by the Manager. The Partnership may pay the reasonable costs incurred by persons who are the registered but not beneficial owners of shares of the Fund (such as brokers, dealers, other registrants under applicable securities laws, nominees and/or custodians) in sending or delivering copies of this Circular, the notice of meeting and form of proxy to the beneficial owners of such shares. The Partnership will provide, without cost to such persons, upon request, additional copies of the foregoing documents required for this purpose. INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON The Partnership, the manager of the Fund, is also the manager of the NexGen Global Resource Tax Managed Fund (the Resource Fund ) and the NexGen Canadian Balanced Growth Tax Managed Fund ( New Fund ). As manager of the Fund and the Resource Fund, the Partnership receives an annual ongoing management fee for the services it provides to each of such entities. For the financial year ended December 31, 2012, the Partnership received an aggregate management fee of $79,000 and $154,800 respectively from the Fund and the Resource Fund. If such Funds assets had been transferred to the New Fund at the beginning of such financial year and held for the entire year, the Partnership, in its capacity as manager of the New Fund, would have received an additional management fee of $233,800, being the amount received collectively from the Fund and the Resource Fund during such year. No person who has been a director or officer of the general partner of the Partnership or the Fund at any time since the beginning of its last completed financial year or any associate of any such director or officer has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting, except as disclosed in this Circular. 8

11 APPOINTMENT AND REVOCATION OF PROXIES The persons named in the enclosed form of proxy represent officers and directors of the Manager. A SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON, WHO NEED NOT BE A SHAREHOLDER OF THE FUND, TO REPRESENT HIM AT A MEETING MAY DO SO by filling in the name of such person in the blank space provided in the proxy or by completing another proper form of proxy. A Shareholder wishing to be represented by proxy at the Meeting or any adjournment thereof must, in all cases, deposit the completed proxy with the Manager not later than 5:00 p.m. (Toronto time) on Thursday, July 25, 2013 or, if the Meeting is adjourned, not later than 48 hours, excluding Saturdays and holidays, preceding the time of such adjourned Meeting, at which the proxy is to be used. A proxy should be executed by the Shareholder or his or her attorney duly authorized in writing or, if the Shareholder is a corporation, by an officer or attorney thereof duly authorized. In addition to any other manner permitted by law, a proxy may be revoked before it is exercised by an instrument in writing executed in the same manner as a proxy and deposited at the registered office of the Fund at any time up to and including the last business day preceding the day of the Meeting, or any adjournment thereof, at which the proxy is to be used or with the Chairman of the Meeting on the day of such Meeting or any adjournment thereof and thereupon the proxy is revoked. A registered Shareholder attending the Meeting has the right to vote in person and, if he does so, his or her proxy is nullified with respect to the matters such person votes upon and any subsequent matters thereafter to be voted upon at the Meeting or any adjournment thereof. OTHER MATTERS WHICH MAY COME BEFORE THE MEETING The Manager knows of no matters to come before the Meeting of Shareholders other than as set forth in the notice of Meeting. However, if other matters, which are not known to the management, should properly come before the Meeting, the accompanying proxy will be voted on such matters in accordance with the best judgment of the persons voting the proxy. VOTING OF PROXIES The persons named in the enclosed form of proxy are each a Shareholder and/or officer of the Manager, and have indicated their willingness to represent as proxy the Shareholder who appoints them. Each Shareholder may instruct his proxy how to vote his shares by marking the appropriate box(es) on the proxy form. The persons named in the accompanying proxy will vote or withhold from voting the shares in respect of which they are appointed in accordance with the direction of the Shareholder appointing them. 9

12 EXERCISE OF DISCRETION BY PROXIES The shares represented by proxies in favour of management nominees will be voted or withheld from voting in accordance with the instructions of the Shareholder on any ballot that may be called for and, if a Shareholder specifies a choice with respect to any matter to be acted upon at the Meeting, the shares represented by proxy shall be voted accordingly. WHERE NO CHOICE IS SPECIFIED, THE PROXY WILL CONFER DISCRETIONARY AUTHORITY AND WILL BE VOTED IN FAVOUR OF EACH ITEM. THE ENCLOSED FORM OF PROXY ALSO CONFERS DISCRETIONARY AUTHORITY UPON THE PERSONS NAMED THEREIN TO VOTE WITH RESPECT TO ANY AMENDMENTS OR VARIATIONS TO THE MATTERS IDENTIFIED IN THE NOTICE OF MEETING AND WITH RESPECT TO OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING IN SUCH MANNER AS SUCH NOMINEE IN HIS OR HER JUDGMENT MAY DETERMINE. At the time of printing this circular, the Manager knows of no such amendments, variations or other matters to come before the Meeting. VOTING SHARES AND PRINCIPAL HOLDERS THEREOF The Manager has fixed the close of business on Monday, June 20, 2013 (the Record Date ) as the record date for the purposes of determining the Shareholders entitled to receive the Notice and vote at the Meeting. The Fund is authorized to issue an unlimited number of shares, of which 563,809,09 shares of the Fund were issued and outstanding as at May 31, Each share of the Fund entitles the holder thereof to one vote for each matter voted at the Meeting of the Fund. Each Shareholder named in the list will be entitled to vote the shares shown opposite his or her name on the list at the Meeting except to the extent that: (a) the Shareholder has transferred any of his or her shares after the date on which the list was prepared; and (b) the transferee of those shares produces properly endorsed share certificates or otherwise establishes that he or she owns such shares and demands not later than ten days before the Meeting that his or her name be included on the list before the Meeting, in which case the transferee is entitled to vote his or her shares at the Meeting. To the knowledge of the directors and senior officers of the Manager, as at May 31, 2013, no person beneficially owns, directly or indirectly, or exercises control or direction over voting securities of the Fund carrying more than 10% of the voting rights of any series of securities of the Fund, other than the following. Series No. of Shares % of Series Shareholder* Capital Gains Front End Regular ( A ) INVESTOR 1 A INVESTOR 2 A INVESTOR 3 DSC ( B ) INVESTOR 4 10

13 B INVESTOR 5 B INVESTOR 6 F High Net Worth ( FH ) MANAGER F Regular ( FR ) MANAGER FR INVESTOR 7 High Net Worth ( H ) MANAGER Institutional ( I ) MANAGER Ultra High Net Worth ( U ) MANAGER Dividend Tax Credit A INVESTOR 8 A INVESTOR 9 A INVESTOR 10 B MANAGER B INVESTOR 11 B INVESTOR 12 B INVESTOR 13 FH MANAGER FH INVESTOR 14 FR INVESTOR 15 H INVESTOR 16 H INVESTOR 17 I MANAGER U MANAGER Inter Fund NG GLOBAL VALUE REG Compound Growth A INVESTOR 18 A INVESTOR 19 A INVESTOR 20 B INVESTOR 21 C INVESTOR 22 C INVESTOR 23 FH MANAGER FR MANAGER FR INVESTOR 24 H INVESTOR 25 H INVESTOR 26 H INVESTOR 27 I MANAGER U INVESTOR 28 U INVESTOR 29 Return of Capital A MANAGER 11

14 A INVESTOR 30 A INVESTOR 31 B MANAGER B INVESTOR 31 B INVESTOR 32 FH MANAGER FR INVESTOR 33 H MANAGER I MANAGER U MANAGER Inter Fund NG GLOBAL VALUE REG * to protect the privacy of individual holders, we have omitted the name of the individual holder. This information is available on request by contacting us. MANAGEMENT CONTRACT The Partnership acts as the manager of the Fund and the Resource Fund and the New Fund pursuant to a management agreement dated May 5, 2006, as amended. As manager, the Partnership is responsible for directing the affairs and managing the business of the Fund, the Resource Fund and the New Fund and for administering or arranging for the administration of the day to day operations of the Fund, the Resource Fund and the New Fund, including providing or arranging for the provision of investment advice, establishment of brokerage arrangements and book keeping and other administrative services. The management agreement continues for an indefinite term in respect of the Fund, the Resource Fund and the New Fund, unless terminated by the Manager or the applicable fund upon 60 days prior written notice. In addition, the management agreement may be terminated immediately by any party on written notice in the event that the other party ceases to carry on business, becomes bankrupt or insolvent, resolves to wind up or liquidate or commits a material breach of the management agreement and such breach is not remedied within 30 days written notice. THE MERGER Shareholders of the Fund are being asked to consider the Merger as described in this Circular and to vote on the Merger Resolution attached as Schedule A to this Circular authorizing and approving the Merger in respect of the Fund. The Merger Resolution must be approved by a majority of the votes cast by the Shareholders of the Fund represented at the Meeting, present in person or by proxy. Purpose of the Merger The Fund currently has approximately $2 million in assets under management. At such asset levels, the Manager believes that the assets under management may not grow sufficiently quickly to achieve meaningful economies of scale, thereby ensuring that per share costs are competitive. Accordingly, the Manager believes that the proposed 12

15 Merger, by providing access to a combined larger fund (approximately $110 million in assets), has an increased possibility of achieving potential economies of scale. The Manager also believes that the proposed change in portfolio management will improve the investment performance for shareholders of the Fund. J. Zechner Associates Inc. ( Zechner ) acts as the sub-adviser to the New Fund. Accordingly, if the Merger is approved, the Merger will result in a change in the effective portfolio management of the Fund from NexGen to Zechner. Steps to Complete the Merger The steps required to complete the Merger, together with the tax consequences to the Shareholders, are set out below. Effects of the Merger If approved, the Merger is expected to be implemented on or about August 9, Completion of the Merger is dependent upon a number of conditions, including the approval of the Merger Resolution by Shareholders and shareholders of the Resource Fund, the approval of a similar merger resolution by shareholders of the NexGen Global Value Registered Fund and the receipt of all necessary regulatory approvals. There is no assurance that all conditions will be satisfied and that the Merger will be completed. If the Merger is not Completed If the Merger is not completed, Shareholders will continue to hold shares in the Fund on the same terms and conditions as on the date of this Circular. COMPARISON OF THE FUND AND THE NEW FUND If the Merger is approved, a Shareholder will hold shares of the New Fund. Accordingly, although the performance of each investment entity is dependent on the performance of the underlying portfolio assets, the nature of the investments differ in a few material respects, including the following: Investment Objective (i) The Fund The Fund s investment objective is to provide long-term capital growth primarily through investment in a diversified portfolio of equity and equity-like securities. The Fund may invest all or any portion of its assets in any country or industry depending on prevailing market conditions. (ii) The New Fund The New Fund s investment objective is to provide a combination of capital preservation, income generation and long-term capital growth primarily through investment in a diversified portfolio of Canadian securities. As a result, the investment objective will change significantly. Specifically, the investment objective of the New Fund will: (i) be restricted primarily to Canadian securities; (ii) emphasize capital preservation, income generation and long-term capital 13

16 growth through investment in a combination of equity and income securities rather than long term capital growth through investment primarily in equity securities; and (iii) have no specific industry focus. Portfolio Management and Performance (i) The Fund Jonathan Baird of NexGen currently manages the investment portfolio of the Fund. The performance of the shares (regular front end and deferred load series) of the Fund for the period ended May 31, 2013 is as follows: 1 Year 2 Years 3 Years 5 Years Since Inception (April 2, 2007) -18.2% -21.8% -9.1% -9.6% -10.2% (ii) The New Fund Zechner currently manages the investment portfolio of the New Fund through a sub-advisory relationship with NexGen. The performance of the shares (regular front end and deferred load series) of the New Fund for the period ended May 31, 2013 is as follows: 1 Year 2 Years 3 Years 5 Years Since Inception (September 5, 2006) 10.5% -4.7% 0.2% 1.2% 2.7% As indicated above, the relative performance of the New Fund has been superior to the Fund for all applicable periods. Cost Structure (i) The Fund The Fund currently has approximately $2 million in net assets. All expenses relating to the operation of the Fund, including the management fees, are paid by the Fund. Due to the small size of the Fund, the management expense ratio before absorption of the Fund was 3.81% (for the regular front end, deferred and low load series of the Capital Gains Class) at December 31, 2012 and the Manager has capped such expense ratio at 2.82%. The annual management fee payable by the Fund with respect to the regular front end, deferred and low load series is 2% of the net asset value of the Fund. (ii) The New Fund The New Fund currently has approximately $110 million in net assets. All expenses relating to the operation of the New Fund, including the management fees, are paid by the New Fund. Given the New Fund is larger, the management expense ratio of the New Fund was 2.64% (for the regular front end, deferred and low load series of the Capital Gains Class) at December 31, The annual management fee payable by the New Fund with respect to the regular front end, deferred and low load series is 2% of the net asset value of the New Fund. As noted above, the management expense ratio of the New Fund (at 2.64%) is less than the management expense ratio after absorption of the Fund. 14

17 As disclosed in the prospectus of the New Fund and the Fund, the cost structure of the Fund and the New Fund are substantially identical. Distribution Policy Currently, investors in the Fund s Return of Capital and Dividend Tax Credit Classes receive an annual distribution at a rate of $0.30 ($0.025 per security monthly), which is an effective actual distribution rate, based upon the net asset value of the Fund as at May 31, 2013 of approximately 10.9% and 9.7%, respectively, depending upon the particular series. If the Merger is approved, the annual distribution rate for the Return of Capital and Dividend Tax Credit Classes will be increased to $0.75 ($ per security monthly) and $0.60 ($0.050 per security monthly), respectively, which will be an effective actual distribution rate, based upon the New Fund s net asset value as at May 31, 2013 of 11.4% and 7.9%, depending upon the particular series. Accordingly, as indicated in the table below, (i) in respect of the Return of Capital Class, this Merger will result in a higher annual and actual distribution rate; and (ii) in respect of the Dividend Tax Credit Class, although the monthly distribution rate of the New Fund will be higher than the Fund, the actual distribution rate of the New Fund, based upon the net asset value as at May 31, 2013, will be lower than the Fund. Return of Capital Class Dividend Tax Credit Class Price/Share as Distribution Rate Price/Share as DTC Distribution Rate of May 31, 2013 $ % of May 31, 2013 $ % Global Value $ $ % $ $ % Pre-Merger Canadian Balanced Growth $ $ % $ $ % Post-Merger ADDITIONAL INFORMATION REGARDING THE NEW FUND Enclosed for the reference of shareholders of the Fund are the simplified prospectus and annual financial statements of the New Fund. Additional information about the New Fund is included in documents filed by the Partnership with the securities commissions or similar authorities in Canada. Copies of these documents are available on SEDAR at and may be obtained upon request without charge by calling the Partnership s toll free number at or writing NexGen Financial Limited Partnership, Suite 1070, 36 Toronto Street, Toronto, ON M5C 2C5. The following documents relating to the New Fund filed with the securities commissions or similar authorities in Canada are specifically incorporated by reference into and form an integral part of this Information Circular: The audited annual financial statements for the year ended December 31, 2012; The 2012 annual management report of fund performance for the year ended December 31, 2012; The portion of the simplified prospectus of the NexGen Funds dated May 31, 2013 relating to the New Fund; 15

18 The portion of the annual information form for the NexGen Funds dated May 31, 2013 relating to the New Fund; The semi-annual management report of fund performance for the six-month period ended June 30, 2012; The unaudited semi-annual financial statements for the six-month period ended June 30, INDIVIDUAL MERGER STEPS The Merger is proposed to be implemented in a series of steps, which will be substantially as set out below. In approving the Merger Resolution, Shareholders of the Fund will be implicitly approving and consenting to each of the following individual transactions which collectively comprise the Merger. Each of these steps will be subject to the closing of the Merger. 1. Liquidate Certain Investments Portfolio securities held by the Fund and the Resource Fund which may not be suitable investments for the New Fund will be liquidated on or before the effective date of the Merger. 2. Exchange of Fund Shares for New Fund Shares Each outstanding share of the Fund will be exchanged for shares(s) of an equivalent class and series of the New Fund. The share exchange will be effected on the basis of the relative net asset values of the applicable shares at the close of business on the closing of the Merger (the Valuation Time ) in accordance with the formula set out below. Fund Shares No. of New Fund shares to be received = Net Asset Value of Fund Shares at the Valuation Time Net Asset Value of New Fund Shares at the Valuation Time 3. Transfer of Assets and Liabilities The assets and liabilities of the Corporation attributable to the Fund and the Resource Fund will be transferred to the New Fund. 4. Wind-up of Fund and Resource Fund The Fund and the Resource Fund will be wound up. 16

19 Board RECOMMENDATION OF THE MANAGER AND THE INDEPENDENT REVIEW COMMITTEE TO SHAREHOLDERS The Board of the Partnership, in its capacity as manager of the Fund, recommends that all Shareholders vote FOR the Merger Resolution. Independent Review Committee In accordance with National Instrument Independent Review Committee for Investment Funds ( NI ), an independent review committee (the IRC ) was appointed for the Fund, the Resource Fund and the New Fund. The members of the IRC are Alan Hutton (Chair), Graham Turner and Ed Zinger. As required by NI , the Partnership, as manager of the Fund, the Resource Fund and the New Fund, presented the terms of the Merger and the IRC provided a positive recommendation to the Partnership on the basis that the Merger would achieve a fair and reasonable result for the Fund, the Resource Fund and the New Fund. CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS The following is a summary prepared by the Partnership of the principal income tax considerations associated with the Merger. This summary applies to Shareholders who, at all relevant times and for purposes of the Income Tax Act (Canada) ( the Tax Act ), are residents of Canada, hold their shares as capital property and who deal at arm s length, and are not affiliated, with the Fund. Shares of the Fund should be considered to be capital property to a Shareholder provided that the Shareholder does not hold the shares in the course of carrying on a business and has not acquired them in one or more transactions considered to be an adventure in the nature of trade. Shareholders who do not hold their shares as capital property should consult their own tax advisors regarding their particular circumstances. This summary is based upon the provisions of the Tax Act and the Regulations thereunder, and all specific proposals to amend the Tax Act and the regulations that have been publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date of this Circular, and the current published administrative and assessing policies of the Canada Revenue Agency ( CRA ). It is assumed that all amendments to the Tax Act will be enacted substantially, as currently proposed. This summary is not exhaustive of all possible Canadian federal income tax considerations and does not take into account or anticipate any changes in the law, whether by legislative, governmental or judicial action, or changes in CRA s administrative and assessing policies, nor does it take into account provincial or territorial tax considerations, which may differ significantly from those discussed herein. 17

20 This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Shareholder, and no representation with respect to the Canadian federal income tax consequences to any particular Shareholder is made. Consequently, Shareholders are advised to consult their own tax advisors to determine the tax consequences to them of the Merger having regard to their particular circumstances, including the application and effect of the income and other tax laws of any country, province, territory or local tax authority. Tax Considerations Applicable to the Merger The reallocation by the Corporation of assets of the Fund to the New Fund will not be a taxable transaction to the Fund or the Corporation. A Shareholder of the Fund will not realize a capital gain or a capital loss on the exchange of his or her shares of the Fund into shares of the New Fund. The Shareholder s aggregate adjusted cost base of the shares of the New Fund so acquired will be equal to the aggregate adjusted cost base of his or her shares of the Fund, subject to adjusted cost base averaging rules that will apply if the Shareholder holds identical shares of the New Fund as capital property. Tax Considerations Following the Merger In respect of the income tax considerations applicable to Shareholders of the New Fund, please see Income Tax Considerations for Investors in the simplified prospectus of the NexGen Funds. NEXGEN INVESTMENT CORPORATION The Corporation is a mutual fund corporation formed by articles of amalgamation under the laws of the Province of Ontario on August 17, The Corporation has an unlimited number of common shares and 1,000 separate classes of shares, each issuable in series consisting of an unlimited number of shares. As at May 31, 2013, 440 separate series of mutual fund shares of the Corporation were issued and outstanding. NexGen owns 50% of the common shares of the Corporation and Graham Turner, an independent director of the Corporation, owns the remaining 50% of the common shares. NexGen and Graham Turner have entered into a put agreement dated February 15, 2011 relating to such shares. Compensation of Directors and Officers No remuneration is paid by the Corporation to any director or officer of the Corporation. For the 2012 fiscal year, the two independent directors of the Corporation were paid an aggregate of $9,000, comprised of a $5,000 retainer and a $4,000 meeting fee. All remuneration paid to the independent directors is paid directly by NexGen and allocated to the NexGen Funds. No remuneration is paid to the officers or remaining 18

21 directors of the Corporation by NexGen or the NexGen Funds for acting in such capacity. Directors and Officers Liability Insurance NexGen maintains directors and officers liability insurance for the officers and directors of the NexGen entities, including the Corporation, which provides coverage in the amount of $5 million in each policy year, with a total annual premium of approximately $23,500. No portion of that premium was paid by, or allocated to, the Corporation. INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS See Interest of Certain Persons in Matters to be Acted Upon above. 19

22 AUDITORS The auditors of the Corporation are Deloitte LLP, who were appointed on February 26, The address of the auditors is Suite 1400, Brookfield Place, 181 Bay Street, Toronto, Ontario. APPROVAL BY THE DIRECTORS The Board of Directors of the General Partner of the Partnership has approved the content of this Circular and the sending of this Circular to Shareholders having the right to receive the Notice of Meeting. 20

23 CERTIFICATE The foregoing contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made. Given at Toronto, Ontario, on the 22nd day of June, BY ORDER OF THE BOARD OF DIRECTORS of NEXGEN LIMITED, the General Partner of NEXGEN FINANCIAL LIMITED PARTNERSHIP Laurie Munro Chief Executive Officer 21

24 SCHEDULE A NEXGEN GLOBAL VALUE TAX MANAGED FUND (the Fund ) SPECIAL RESOLUTION OF SHAREHOLDERS OF THE FUND RECITAL Capitalized terms used and not defined in this Special Resolution have the respective meanings given to them in the management information circular of the Fund dated June 22, 2013 (the Circular ) with respect to the Special Meeting of Shareholders of the Fund to be held on or about July 30, RESOLVED AS A SPECIAL RESOLUTION THAT: 1. the merger of the Fund and NexGen Global Resource Tax Managed Fund into NexGen Canadian Balanced Growth Tax Managed Fund (the New Fund ) as described in the management information circular dated June 22, 2013 be and the same is hereby authorized and approved; 2. NexGen Financial Limited Partnership, as the manager (the Manager ) of the Fund, be and is hereby authorized to: (a) liquidate any portfolio securities of the Fund which may not be suitable investments for the New Fund; (b) exchange shares of the Fund for share(s) of an equivalent class and series of the New Fund based upon the respective net asset values of the applicable Funds; (c) transfer the assets and liabilities of NexGen Investment Corporation attributable to the Fund to the New Fund; (d) wind up the Fund as soon as reasonably possible following the merger; and (e) amend the articles of NexGen Investment Corporation to the extent necessary to give effect to the foregoing; (f) do any other matter required to effect or in respect of the merger as described in the information circular; 3. all amendments to any agreement to which the Fund is a party that are required to give effect to the matters approved in this resolution be and are hereby authorized and approved; 4. any officer or director of NexGen Limited, as the general partner of the Manager, be and is hereby authorized and directed, on behalf of the Manager and the Fund, to execute and deliver all such documents and do all such other acts and things as may be necessary or desirable for the implementation of this resolution; and 5. the Manager be and is hereby authorized to revoke this resolution for any reason whatsoever in its sole and absolute discretion, without further approval of the investors of the Fund, at any time prior to the implementation of the changes described above if it is considered to be in the best interests of the Fund and its Shareholders not to proceed. 22

25 NEXGEN GLOBAL VALUE TAX MANAGED FUND c/o NexGen Financial Limited Partnership (the Manager ) 36 Toronto Street, Suite 1070 Toronto, Ontario M5C 2C5 SPECIAL MEETING OF SHAREHOLDERS JULY 30, 2013 FORM OF PROXY The undersigned shareholder of NexGen Global Value Tax Managed Fund (the Fund ) hereby appoints Laurie Munro, President and Chief Executive Officer of NexGen Limited, the general partner of the Manager, or failing him, Patrick Lincoln, the Secretary of the Manager, or instead of either of them (see Note 1) as proxyholder of the undersigned to attend, vote and act for and on behalf of the undersigned at the Special Meeting of Shareholders of the Fund (the Meeting ) to be held at 10:00 a.m. (Eastern time) on Tuesday, July 30, 2013 and at any adjournment thereof and, without limiting the general authorization and power hereby given, specifies that the shares registered in the name of the undersigned be voted in the following manner: 1. the special resolution approving the merger of the Fund and NexGen Global Resource Tax Managed Fund into NexGen Canadian Balanced Growth Tax Managed Fund on the basis described in the Management Information Circular dated June 22, 2013 (the Circular ). FOR AGAINST If any amendments or variations to the matter referred to above or to any other matters identified in the notice of meeting are proposed at the Meeting or any adjournment or adjournments thereof, or if any other matters which are not now known to management should properly come before the Meeting or any adjournment or adjournments thereof, this proxy confers discretionary authority on the person voting the proxy to vote on such amendments or variations or such other matters in accordance with the best judgment of such person. The shares represented by this instrument of proxy, if in favour of a person designated in this form, will be voted for or against the resolution in accordance with the instructions of the shareholder on any ballot that may be called for and if the shareholder specifies a choice with respect to any matter to be acted upon, the shares will be voted accordingly. Where no choice is specified, the shares will be voted FOR the resolution. The undersigned hereby revokes any proxy previously given for the purposes of the Meeting in respect of shares held by the undersigned. DATED this day of, Shareholder s signature (see Notes 2 and 3) 23