Tremont Capital Management, Corp., the manager and trustee of Tremont Capital Opportunity Trust (TSX: TT.UN), announced yesterday that it will hold a special meeting of the unitholders of the trust to consider the early termination of the trust.

The trust’s investment objectives are to achieve long-term capital appreciation and provide unitholders with exposure to an attractive risk-adjusted rate of return with low correlation to major equity and fixed income markets and less volatility than traditional equity markets. It is currently scheduled to terminate on or about March 29, 2013.

The manager, in consultation with Tremont Partners, Inc., has determined that it is in the best interests of the unitholders that the trust be wound up and its net assets distributed to unitholders prior to its scheduled termination date, subject to unitholder and regulatory approvals. The manager says this determination based on a number of factors, including the fund’s inability to preserve assets and increasing regulatory and operational costs. The resulting smaller net asset value has made it increasingly difficult to achieve the trust’s investment objectives.

The trust holds a portfolio of common shares of Canadian public companies, and has entered into a forward agreement with TD Global Finance, pursuant to which the trust receives exposure to the returns of a diversified hedge fund portfolio held by Tremont Hedge Fund Limited, a Cayman Islands company, which is managed by Tremont Partners, Inc. Pursuant to the forward agreement, TD Global Finance had agreed to pay to the trust, on or about March 29, 2013, as the purchase price for the common share portfolio, an amount equal to 100% of the redemption proceeds of a corresponding number of notes of Tremont Hedge Fund Limited.

As part of the early termination of the trust, the Trust will be required to pay a fee to TD Global Finance on the early termination of the forward agreement. The early termination of the forward agreement in connection with the early termination of the trust is also subject to unitholder approval.

Redemptions from the trust can only be made on an annual basis, if duly completed requests for redemption are received in the manner and within the time frames specified by the trust’s constating documents. The next annual redemption date is June 29, 2007.

If necessary based on the proposed dissolution date of the trust, the manager will also ask unitholders, conditional on the approval of the early termination of the trust, to approve amendments to the trust declaration to terminate the annual redemption right. The manager believes that if the early termination of the trust is approved, it would be in the best interests of all unitholders not to permit redemptions while the trust is preparing for liquidation. The manager believes this will permit the necessary liquidity to be generated in a prudent fashion.

The meeting is expected to be held on or about March 19, 2007, with an adjourned meeting (if required) to be held on or about March 29, 2007.

Details of the proposals will be outlined in a management information circular to be prepared and delivered to unitholders in connection with the meeting.