November 8, 2022

Dear Fellow Investors:

Over the past few months, we have kept you informed of how the current volatile economic conditions have created dislocations in North American real estate markets, and how those dislocations have impacted the Fund’s operations.   We have also noted how the unusually elevated investor demands for liquidity have created additional pressures, requiring the trustees to calibrate redemption activity with their obligation to allocate sufficient resources to execute the Fund’s long-term strategy for the benefit of all unitholders.   In fact, the life cycles of the Fund’s underlying assets and the capacity to generate strong returns for investors has always necessitated a trade-off with the ability to demand immediate liquidity.  The institution of the Run-Off Pool redemption mechanism in October 2022 is one example of the trustees’ attempt to implement a strategy designed to strike an appropriate balance between returning cash to withdrawing investors and honouring the Fund’s ongoing loan commitments and meeting operational requirements.

It was anticipated that a reduction in redemption demand to manageable levels would provide some leeway to allow Romspen to navigate through these transient market disruptions.  However, the institution of the Run-Off Pool did not dampen redemption activity, and loan payoff activity remains suppressed. In light of these circumstances, the Trustees have determined that the prudent and responsible course of action is to temporarily defer payment of unit redemptions requests until there is more clarity with respect to the Fund’s timetable for borrower loan repayments and the receipt of proceeds of collateral and asset monetization’s.   

Please be assured that we are working diligently to expedite a number of these portfolio transactions and remain confident in the underlying value of the Fund’s assets.  In many cases, however, such transactions involve coordinating the interests of a number of independent third parties, who are also affected by the present market uncertainties.  We are confident that, given some time, these transactions will be completed.  However, if redemption demands continue at high levels, the Trustees may be compelled to institute other temporary liquidity management measures.

Collectively, Romspen’s principals and employees have over $100 million invested in the Fund, so our interests continue to be fully aligned with those of long-term unitholders.  The Fund’s returns this year have outperformed other major asset classes.  We are confident that we will manage through this challenging phase and achieve reasonable long-term results for investors, much as we have in past periods of adversity over Romspen’s 50-plus year history.

Respectfully yours,

Sheldon      Mark        Arthur        Wesley

Esbin          Hilson      Resnick      Roitman

Trustees of the Fund