The Canadian National Stock Exchange has a big new listing thanks to Brookfield Asset Management, which chose to list a new income fund it created on the smaller competitor to the TSX.
Brookfield New Horizons Income Fund set a record for a CNSX initial public offering, raising $130-million, and is now up and trading on CNSX. Why is it on CNSX and not on TSX Venture or TSX, where Brookfield has listed other funds? Fees.
Brookfield isn't saying how much cheaper it is to be on CNSX, but it's certainly less. According to William Woods, managing director, listed market at CNSX, the exchange has "product specific listing policies designed to attract funds like this Brookfield fund, and the lowest listing fees in Canada."
In the closed-end fund business, less paid in listing fees means more for investors. With the ratification of a big customer like Brookfield, CNSX's strategy to try to draw more listings from the closed-end fund business looks to have a brighter future.
The fund's goal is to invest in high-yield corporate debt and publicly listed securities of infrastructure and real estate companies. The idea is to produce an 8 per cent yield for investors who buy in at the $10 per unit issue price.