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Invico Diversified Income Fund

Compliance : 20230817IC
Investor Eligibility : RRSP, TFSA, LIRA, RRIF, RESP, RDSP, LIF
Minimum Investment : $6,000
Total Target Return : Redemption Schedule
December 2023 : Active Online

Invico Diversified Income Fund : Key Investment Highlights

Over 10 Years of Positive Performance with the Top Alternative Investment Solutions Provider of the Year.

Invico Capital Corporation is an award-winning Canadian investment fund management firm providing alternative investing and financing solutions in Canada and the U.S.

$2.6B+

Assets under management (1)

18+

Year track record

100+

Years of underwriting experience

8

Industry team awards

6

Funds serving as IFM

(1) As at September 30, 2023.

Invico Diversified Income Fund (“IDIF”) is an award-winning open-ended mutual fund trust that invests in a diversified portfolio of high-yield private lending and energy working interests across North America.

Invico Diversified Income Fund (IDIF)

$485MM+

Assets under management (1)

10+

Year track record

6

Additional distributions since Q1 2022

9,000+

Investors (1)

10x

Hedge fund awards recipient

(1) As at June 30, 2023.

IDIF seeks to generate monthly income through a diversified portfolio with asset collateralization or direct ownership in real assets with an approximate 8% per annum target distribution rate for Class B.

Portfolio Allocation (1)

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Lending Strategies (50-60%)

  • Corporate bridge lending

  • Mortgages

  • Receivables factoring

  1. Energy Working Interests (30-50%)

  • Working interest ownership

  • Net revenue and royalty income

  1. Equity Yield (0-25%)

  • Equity position derived from loan investments

  • Controlling equity stakes in subsidiaries

(1) Based on total Partnership portfolio assets of $492.1 million as at September 30, 2023. The Net Asset Value of the Partnership as at September 30, 2023, is $485.2 million.

Lending Strategies

Typical Lending Terms


Amount: $3M – $30M

Term: 60 days – 3 years
Interest Rate: 12%+

Corporate Bridge Lending

Short-term loans to assist companies with short-term capital needs.

Mortgages

Real estate secured loans, which may include multi- family residential and commercial properties.

Loan Attributes

Focus on 100%, cash paid, first security position and asset- backed opportunities.

Q3 2023 Overview

19

Lending arrangements (3 majority/wholly owned subsidiaries)

~$7.3MM

Average loan size

1.6 years

Average term to maturity

~13.8%

Average interest rate of direct loans

17

First charge security positions
(3 subordinated positions)

Invico Diversified Income Fund : ESG Stewardship

Invico is a steward of environmental, social, and governance (ESG) principles and practices. We focus on all components of ESG as an organization and integrate stringent ESG criteria across our investment processes to help identify, address, and mitigate risks across our portfolio and ensure partnership with similarly adherent businesses and teams.

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Invico Diversified Income Fund : Class B Historical Performance

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* Past performance is not indicative of future results.

(1) Class B inception date: May 26, 2021; Class C inception date: November 8, 2013. All outstanding Class C units were converted to Class B effective December 1, 2021. Class C annual compound total returns are shown until September 30, 2021, which is the last official quarterly NAV date prior to the conversion.

(2) Class B returns assume all distributions were reinvested based on a NAV/ unit issuance price and are net of fees (without applicable rebates that may be available),but before any early redemption fees.

(3) Class C returns are net of fees (excluding early redemption fees) and assume all distributions were reinvested based on an issuance price of $10/unit until April 1, 2020, and NAV/unit thereafter, are shown for an investment of less than $500,000, and attribute special distributions to the year of declaration. Class C had different unit terms; if the current Class B terms had been applied to Class C units, the returns would have been different.

(4) Class B returns from May 26 to December 31, 2021, have been annualized to provide a more relevant comparison to other years.

Invico Diversified Income Fund : Offering

(1) See eligibility section of Offering Memorandum dated April 3, 2023, for details.
(2) Per annum percentage target distribution rates shown above are based on the annual Distribution Policy. The target distribution policy is set at least annually at the discretion of the Portfolio Manager.
(3) Rate set annually. See Offering Memorandum dated April 3, 2023, for details.

(4) See Offering Memorandum dated April 3, 2023, for details.

Invico Diversified Income Fund : Disclaimers and Appendix

RISK FACTORS

Investment in securities of the Fund involves a degree of risk and is suitable only for investors who can withstand the loss of their investment. No assurance, representation, or warranty can be given that the Fund’s investment objectives will be achieved or that investors will receive a return of their invested capital.

Legal Notice An offering memorandum dated April 3, 2023, (the “Offering Memorandum”) containing important information relating to the secu rities described in this document (the “Securities”) has or will be filed with the securities regulatory authorities in each of the jurisdictions where a distribution has occurred or will occur pursuant to the Offering Memorandum. Acopy of the Offering Memorandum is required to be delivered to you at the same time or before you sign the agreement to purchase the Securities described in this document pursuant to the Offering Memorandum. This document does not provide disclosure of all information required for an investor to make an informed investment decision. Investors should read the Offering Memorandum of Invico Diversified Income Fund (the “Trust”) especially the risk factors relating to the Trust and the Securities offered, before making an investment decision. An investment in the Trust is highly speculative and involves a number of risks, including the nature of the business to be conducted by the Trust and Invico Diversified Limited Partnership (the “Partnership”) and the risks inherent in the Trust and the Partnership’s investment strategies. Only investors who are willing to rely solely upon the ability, expertise, judgment, discretion, integrity and good faith of Invico Diversified Income Administration Ltd. (the “Administrator”) and Invico Capital Corporation (the “Portfolio Manager”), who do not require immediate liquidity of their investment and who can afford a total loss of their investment should consider an investment in the Trust. Prospective investors should read the entire Offering Memorandum and consult with their own professional advisors to ascertain and assess the income tax, legal, risks and other aspects of their investment in the Trust before making an investment. There is no guarantee of performance, and past or projected performance is not indicative of future results. No person has been authorized to give any information or to make any representation not contained in this document or the Offering Memorandum. No securities regulatory authority has assessed the merits of, or expressed an opinion about the Securities, the information contained in this document or the Offering Memorandum. The Securities will only be offered and sold in such jurisdictions where they may be lawfully offered for sale and, in such jurisdictions, only by persons permitted to sell such Securities. The Securities may only be sold to prospective investors who reside in certain provinces of Canada and who meet certain eligibility criteria on a basis which is exempt from the prospectus requirements of applicable Canadian securities laws. The Securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or the securities laws of any state of the United States and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act). This document contains statistical data, market research and industry forecasts that were obtained from government or other industry publications and reports or are based on estimates derived from such publications and reports. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. While the Trust believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. The Trust has not independently verified any of the data from independent third-party sources referred to in this document or ascertained the underlying assumptions relied upon by such sources. This document may provide addresses of, or contain hyperlinks to, third party websites. The Trust has not reviewed and takes no responsibility whatsoever for the contents thereof. Each such address or hyperlink is provided solely for the reader’s convenience and the information, and the contents thereof are in no way incorporated into this document. Readers who choose to access such third -party websites or follow such hyperlinks do so entirely at their own risk. Information and statements in this document relating to reserves and future net revenues are deemed to be forward-looking statements which are subject to certain risks and uncertainties. Certain information in this document may constitute “anticipated results”as defined in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators, including, but not limited to, information relating to the fair market value of certain assets held by the Trust or the Partnership. The reader is cautioned that the data relied upon by the Trust or the Partnership may be in error and/or may not be analogous to the Trust’s or the Partnership’s reserves. D i s c l o s u r e p r o v i d e d i n t h i s d o c u m e n t f o r b a r r e l s o f o i l e q u i v a l e n t ( “b o e ”) m a y b e m i s l e a d i n g , p a r t i c u l a r l y i f u s e d i n i s o l a t i o n . A b o e c o n v e r s i o n r a t i o o f s i x M c f t o o n e b b l i s b a s e d o n a n e n e r g y e q u i v a l e n c y conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of six to one, utilizing a boe conversion ratio of six Mcf to one bbl would be misleading as an indication of value.
Forward-Looking Statements Certain statements or information contained in this document constitute “forward -looking statements”within the meaning of that phrase under applicable Canadian securities laws. Any statements that express, or involve discussions as to, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, through the words or phrases such as “will likely result”, “are e x p e c t e d t o ”, “e x p e c t s ”, “d o e s n o t e x p e c t ”, “a n t i c i p a t e s ”, “d o e s n o t a n t i c i p a t e ”, “b e l i e v e ”, “c o n t i n u e ”, “e s t i m a t e ”, “i n t e n d ”, “p l a n ”, “p o t e n t i a l ”, “p r e d i c t ”, “p r o j e c t ”, “s e e k ” o r o t h e r s i m i l a r w o r d s ) a r e n o t s t a t e m e n t s o f historical fact and may be forward-looking statements. Forward-looking statements involve the Administrator and the Portfolio Manager’s internal projections, estimates or beliefs concerning, among other things, future growth, results of operations, investment opportunities, future expenditures, plans for and results of investments, portfolio results, business prospects and opportunities. Although the Administrator and the Portfolio Manager believe that the expectations, estimates and projections reflected in the forward-looking statements and FOFI (as defined below) are reasonable, they cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies which could cause the Trust’s actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Trust. Because of the risks, uncertainties and assumptions contained herein and in the Offering Memorandum, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Trust will derive therefrom. Prospective investors should not place undue reliance on forward-looking statements. Forward-looking statements contained in this document include, but are not limited to, statements with respect to: the use of proceeds of the offering; the business to be conducted by the Trust and the Partnership; timing and payment of distributions; the expected impact of COVID-19; payment of fees and expenses; the Trust’s investment objectives and investment strategies; the Partnership’s active investment approach; the degree of control exerted over management of investee companies by the Partnership; anticipated investments and investment pipeline; the assets to be held by the Partnership; the process by which the Partnership determines whether or not to make an investment; the composition and responsibilities of the Independent Review Committee; the Partnership’s expected capital investments and objectives with respect to Shoreline, Invico Energy Ltd., and Gator; treatment under governmental regulatory regimes and tax laws; financial and business prospects and financial outlook; the ability of the Trust and the Partnership to redeem units; types of portfolio securities and results of investments, the timing thereof and the methods of funding; anticipated terms of the Partnership’s lending arrangements; the Partnership’s strategies to manage defaults; objectives with respect to “equity yield investments”; and prospects and targets with respect to the offering. Forward-looking statements are based on a number of assumptions which have been used to develop such statements, but which may prove to be incorrect. Assumptions have been made by the Administrator and Portfolio Manager as set forth in the Offering Memorandum, including those factors and assumptions set out under the heading “Cautionary Statements– Forward Looking Information” in the Offering Memorandum. Forward-looking statements are subject to numerous risks and uncertainties, including but not limited to those risks described under “Item 10 - Risk Factors”in the Offering Memorandum, many of which are beyond the control of the Trust. Readers are cautioned that “Item 9 - Risk Factors”in the Offering Memorandum is not exhaustive. This document contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about the Trust’s prospective results of operations and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs and in the Offering Memorandum. The FOFI contained herein is made as of November 2023 and is provided for the purpose of providing further information about the Trust’s anticipated future business operations. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein and reliance on such information may not be appropriate for other purposes. The Trust has included the above summary related to forward-looking statements and FOFI in order to provide readers with a more complete perspective on the Trust’s current and future operations and such information may not be appropriate for other purposes. The forward-looking statements and FOFI in this document are given as at November 2023, and the Trust and the Administrator disclaim any intent or obligation to update publicly any forward-looking statements or FOFI, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. The forward-looking statements and FOFI contained in this document are expressly qualified by the foregoing cautionary statements.
Investor Rights Securities legislation in certain of the provinces and territories of Canada provides purchasers with a statutory right of ac tion for damages or rescission in cases where an offering memorandum or any amendment thereto contains an untrue statement of a material fact or omits to state a material fact that is required to be stated or is necessary to make any statement contained therein not misleading in light of the circumstances in which it was made (a “misrepresentation”). These rights, or notice with respect thereto, must be exercised or delivered, as the case may be, by purchasers within the time limits prescribed and are subject to the defenses and limitations contained under the applicable securities legislation. The following summary is subject to the express provisions of applicable securities legislation and the regulations, rules and policy statements thereunder. Purchasers should refer to the securities legislation applicable in their province or territory along with the regulations, rules and policy statements thereunder for the complete text of these provisions or should consult with their legal advisor. The statutory rights of action described below are in addition to and without derogation from any other right or remedy that purchasers may have at law. If you are subject to the laws of Ontario, Saskatchewan, Nova Scotia or New Brunswick, those laws provide, in part, that if there is a misrepresentation in an offering memorandum, which was a misrepresentation at the time that you subscribed for the securities, then you will be deemed to have relied upon the misrepresentation and will, as provided below, have a right of action against the issuer of the securities (and, in certain instances, other persons) in respect of the securities purchased by you for damages, or alternatively, while still the owner of any of the securities purchased, for rescission, in which case, if you elect to exercise the right of rescission, you will have no right of action for damages against the issuer of the securities provided that: (1) no person or company will be liable if it proves that you purchased the securities with knowledge of the misrepresentation; (2) in the case of an action for damages, the defendant will not be liable for all or any portion of the damages that it proves do not represent the depreciation in value of the securities as a result of the misrepresentation; and (3) in no case will the amount recoverable in any action exceed the price at which the securities were purchased by you. In Ontario, Saskatchewan or New Brunswick, in the case of an action for rescission, no action may be commenced more than 180 days after the date of the transaction that gave rise to the cause of action. In the case of any action other than an action for rescission, (A) in Ontario, no action may be commenced later than the earlier of (i) 180 days after you first had knowledge of the facts giving rise to the cause of action, or (ii) three years after the date of the transaction that gave rise to the cause of action, and (B) in Saskatchewan or New Brunswick, no action may be commenced later than the earlier of (i) one year after you first had knowledge of the facts giving rise to the cause of action or (ii) six years after the date of the transaction that gave rise to the cause of action. In Nova Scotia, no action (for rescission or otherwise) may be commenced later than 120 days after the date on which payment was made for the securities. If you are subject to the laws of any other province or territory, reference should be made to the full text of the applicable provisions of the securities legislation in such provinces or territories or consultation should be undertaken with professional advisors.
Risks Statements in this document are made as of the date hereof unless stated otherwise and are subject to change without notice. The delivery of this document shall not under any circumstances create an implication that the information contained herein is correct as of any time subsequent to its date. An investment in the Trust is speculative and contains certain risks. Prospective investors should carefully consider, among other factors, the matters described in the Offering Memorandum under the heading “Risk Factors”, each of which could have an adverse effect on the value of the Trust Units. As a result of these factors, as well as other risks inherent in any investment, there can be no assurance that the Trust will meet its investment objectives or otherwise be able to successfully carry out its investment program. The Trust's returns may be unpredictable and, accordingly, the Trust's investment program is not suitable as the sole investment vehicle for an investor or for an investor that is looking for a predictable source of cash flow. An investor should only invest in the Trust as part of an overall investment strategy. Based on, among others, the factors described in the Offering Memorandum under the heading “Risk Factors”, the possibility of partial or total loss of capital will exist and investors should not subscribe unless they can readily bear the consequences of such loss. There is no assurance that investors will receive any return or repayment of their capital contributions to the Trust. An investment in Trust Units is appropriate only for subscribers who have the capacity to absorb a total loss of their investment. Subscribers who are not willing to rely on the sole and exclusive discretion and judgment of the Administrator and the Portfolio Manager should not subscribe for Trust Units. No person has been authorized to give any information or to make any representation not contained in this document or the Offering Memorandum. It is important for an investor to consider the particular risk factors that may affect the industry in which it is investing and therefore the stability of the distributions that it receives. The risks involved in this type of investment may be greater than those associated with other types of investments. Please refer to the Offering Memorandum for a further discussion of the risks of purchasing Trust Units and more specifically to the “Risk Factors”section, which section also describes the Trust’s assessment of those risk factors, as well as the potential consequences to a Unitholder if the events contemplated by a particular risk factor should occur.

Pinnacle Wealth Brokers Inc.

Internal Compliance Audit : Invico Diversified Income Fund 20230817IC : 2,3,4,5,8,10,12,14,19,20,22

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