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Attractive Target Yield
8.25% base target yield for Preferred A and Preferred B Trust Units and 9.25% base target yield for Preferred F Trust Units (only sold to fee-based accounts), annually, paid quarterly.
Potential Yield Upside
In addition to the base target yield, Preferred Unit yields may grow over time as 80% of royalty growth on the Trust’s investments in Lynx are streamed to Preferred Units.
Long-term Investors Rewarded
The distribution of any royalty growth amount is weighted towards the Trust’s oldest investors, so annual yield increases, if any, reward long-term investors who earn a higher yield than new investors. For example, the Trust’s 2016 Preferred A investors currently earn 9.62% per year on their investment compared to new Preferred A investors who initially receive 8.25% per year.
16-Year Operating History
Since its inception in 2007, Lynx Equity Limited has never missed a distribution or redemption request. Since the Trust’s inception in 2016, it also has never failed to make a quarterly distribution or meet a redemption request.
Zero Volatility
The value of an investment in the Trust does not fluctuate based on Net Asset Value (NAV). Trust Units are not NAV units but are similar to a debt investment and are redeemed at their purchase price. Therefore, 100% of investor returns are via quarterly distributions and investors will not experience volatility in their principal investment.
Liquidity
Trust Units are redeemable monthly at the full purchase price, subject to early redemption fees (only on Preferred A and B Units) and redemption limits.
Experienced Management Team
Over the last 16 years, the Lynx management team has identified, negotiated, closed, and successfully integrated over 60 acquisitions in Canada, the U.S., Great Britain, and Denmark. Those acquisitions have built Lynx into one of Canada’s largest companies with corporate revenues of $591 million in 2022.
Diversified Portfolio
The Trust is backed by Lynx Equity's diversified portfolio of 16 U.S. businesses in flooring contracting, construction and industrial distribution, retail, and business services. Capital raised by the Trust is used to acquire additional U.S. businesses which increases the size and diversification of the portfolio.
Well-Established & Profitable Businesses Acquired
Lynx only acquires well-established companies with a long history of profitable operations. Lynx does not invest in start-ups or turnaround companies, and avoids companies associated with commodities or technology in order to avoid volatile profitability.
Strong Portfolio Revenue and Profitability Growth
Lynx’s focus on new acquisitions creates strong portfolio revenue and profitability growth. Since entering the U.S. in 2013 Lynx has grown U.S. revenue at a compound annual rate of 50% per year, from $7 million in 2013 to $288 million in 2022.
Investments are Always Under Lynx’s Control
Unlike traditional private debt and credit funds your investment never leaves Lynx’s control. The Trust does not lend your funds to a third party. Your funds stay within the Lynx family of companies and are used to help purchase additional U.S. companies that Lynx will own 100%. This ensures that the Trust can keep close control of all funds entrusted to it and prevent your investment from being subject to undue risk.
Protected by Lynx Owners’ Equity
Unlike traditional private debt and credit funds, whose net asset value can decline from an investment loss, an investment in the Trust ranks senior to Lynx owners’ equity. Therefore, any investment loss incurred by Lynx would first diminish Lynx owners’ equity before any impairment to Trust investors.
Protected by Risk Mitigation Strategies
The Trust requires that Lynx's portfolio of U.S. businesses adhere to certain overall Debt to EBITDA and EBITDA to Fixed Charge ratios to ensure that the portfolio is not unduly levered. In addition, the Trust protects investors’ capital with positive and negative covenants, equity step-in rights, as well as strategic security and subordination conditions.
Registered Plan Eligible
The Trust is a qualified investment for registered accounts (RRSP, TFSA, RRIF, etc.).
Reviewed by Independent Trustees
The Trust maintains two Independent Trustees who must review and unanimously approve any material changes to the Trust and its operations.
How to Invest in the Income Trust
Individual Investors
Please contact your registered Investment Advisor for guidance on how to add the Lynx Equity Income Trust to your portfolio.
Investment Advisors
If you're an Investment Advisor looking for information on how the Lynx Equity Income Trust can fit into your client portfolios, please email Lorne Bloomberg.