Newport Invests $20 Million for 80% Interest in Armstrong Partnership

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Newport Partners Income Fund (TSX:NPF.UN) ("Newport") announced today that it has invested $20 million for an 80% interest in the business of Toronto-based Armstrong Partnership ("Armstrong"), a leading North American promotional marketing company with particular expertise in the financial services, credit card marketing and animal pharmaceutical segments. The remaining 20% interest is controlled by Armstrong's founder and President, John Armstrong, who along with his existing management team will continue to operate the company.

Under the terms of the transaction, Mr. Armstrong is receiving a combination of cash and units in Newport and has subordinated his 20% interest in Armstrong's cash flows to Newport's unitholders for a period of two years. Newport's priority annual income under the subordination agreement is $4 million.

Newport also announced that it has expanded its credit facilities to $170 million for working capital and investment purposes and has added the Bank of Nova Scotia and TD Bank to its banking syndicate. Newport will draw $16 million from this expanded facility to finance the cash portion of its investment in Armstrong.

For its fiscal year ended December 31, 2005, Armstrong had $24.3 million of revenues and $4.2 million of normalized EBITDA. Revenue and normalized EBITDA for the last twelve months to June 30, 2006 were $34.8 million and $6.1 million respectively. In addition to major credit card, financial services and pharmaceutical companies, Armstrong earned approximately 13 percent of its normalized EBITDA last year from services relating to the United States Internet gaming industry. In pricing its investment in Armstrong, Newport has appropriately discounted these cash flows to account for the uncertain impact of recent regulatory changes in this industry. Over the next twelve months, this investment is expected to add approximately $4 million of distributable cash flow to Newport.

Founded in 1994, Armstrong is a full-service promotional marketing agency. With 70 full-time employees, the company provides Fortune 100 clients in Canada and the United States with a complete range of specialized services including interactive, in-store and direct marketing promotions. In 2005, Armstrong won five PROMO! Awards out of the eight marketing categories it entered, including Best of Show. Armstrong has been profitable since inception and has enjoyed steady growth. Mr. Armstrong is known to Newport and to several CEOs of Newport's operating partnerships. In 2003, Mr. Armstrong was recognized as one of Canada's Top 40 under 40 award recipients.

"We are very excited about the opportunity to partner with John Armstrong and his management team," said Mr. Peter Wallace, President & CEO of Newport. "John is a first-rate entrepreneur who has built a fast growing company with an excellent market position and very high levels of customer satisfaction. Armstrong meets all of our investment criteria and will be a positive addition to the marketing segment of our portfolio."

"Our company has experienced steady and significant growth that has allowed us to reach a higher baseline level of business again this year. Our new relationship with Newport Partners will position Armstrong Partnership to maximize marketplace opportunities while providing us with greater financial stability from a committed, long-term financial partner," explained Mr. John Armstrong.

ABOUT NEWPORT

Newport is an unincorporated, open-ended trust created to hold through the Company's investment in Newport Partners Commercial Trust, interests in Newport Private Yield LP, ("NPY") a limited partnership established under the laws of the Province of Ontario. Newport began trading on the TSX on August 8, 2005 under the symbol NPF.UN.

Newport is a leading Canadian asset manager. Newport invests in the private business asset class -- a major growth engine of the Canadian economy. Our objective is to make long-term equity investments in leading private businesses that have a track record of strong earnings and potential for future growth. We minimize risk by investing at value prices, with capable operating management who are known to us, and by using debt conservatively. Newport's portfolio currently consists of 16 high-quality businesses representing a diverse cross-section of the Canadian economy. Newport unitholders participate in the cash flows, growth and diversification of the portfolio through monthly distributions. Newport's management has decades of investment experience and a significant ownership position.

The terms "EBITDA" and "distributable cash flow" are financial measures that are not standard measures under Canadian GAAP. Newport's method of calculating Non-GAAP Measures may differ from the methods used by other issuers. Therefore, Newport's Non-GAAP Measures may not be comparable to similar measures presented by other issuers. EBITDA refers to net earnings of Newport determined in accordance with generally accepted accounting principles, before depreciation and amortization, net of gain or loss on disposal of capital assets, interest expense and income tax expense. Newport's method of calculating distributable cash flow is disclosed in the Summary Financial Table of its 2005 Annual Report.

Investors are cautioned that the Non-GAAP Measures are not alternatives to measures under GAAP and should not, on their own, be construed as an indicator of Newport's performance or cash flows, a measure of liquidity or as a measure of actual return on the Units. Historical performance is not indicative of future returns.

Certain statements in this news release may include "forward-looking" statements that relate to future events or future performance and reflect management's expectations and assumptions regarding the growth, results of operations, performance and business prospects and opportunities of Newport and the operating partnerships in which it holds an ownership interest (the "Operating Partnerships"). Such forward-looking statements reflect management's current beliefs and are based on information currently available to management of Newport and the Operating Partnerships. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar expressions concerning matters that are not historical facts. In particular, statements regarding the future operating results and economic performance of Newport and the Operating Partnerships are forward-looking statements. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. In evaluating these statements, prospective purchasers should specifically consider various factors, including the risks outlined under "Risk Factors" in Management's Discussion and Analysis, which may cause actual events or results to differ materially from any forward-looking statement. Although the forward-looking statements are based on what management of Newport and the Operating Partnerships consider to be reasonable assumptions based on information currently available to it, there can be no assurance that actual events or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this news release, and Newport does not assume any obligation to update or revise them to reflect new events or circumstances.

Email: IRinfo@newportpartners.ca