Global Fund Objective
The fund, established in October 1998, invests in
the innovation economy. By utilizing long
and short strategies, the fund’s objective is to
capture the upside returns of the technology, clean energy, and the innovation
sectors while reducing volatility on the downside.
The funds’ investing guidelines are focused on
microcap (less than $500M market cap) companies,
with the opportunity to invest up to 15% of the
capital (at cost) in pre-IPO private companies.
Portfolio Strategy
The manager uses disciplined conservative
fundamental analysis to determine both asset
allocation and stock selection. Once a stock has
been selected, technical analysis is used to assist
in the timing of the purchase or sell. Asset
allocation weighting is determined by sectoral
growth rates, visibility and macro trend analysis.
Once asset allocation is determined, individual
stock selections are analyzed for their strength in
three components: management, science and value.
Firstly, the experience of management and their
track records are thoroughly reviewed prior to any
investment. Not as much an issue with large cap
companies, differences in management capabilities
are very apparent in small to mid cap opportunities.
Secondly, the portfolio focuses on companies with
scientific intellectual property that can be
leveraged in the marketplace. Semiconductors,
optical networking, switching equipment, amongst
others are investigated for strength in technology
and their patent portfolio. And finally, the stocks
must be attractively valued. Traditionally,
companies are purchased at a low valuation and held
until a target sell price is reached. Since
fundamental metrics are used, including earnings and
cash flow, many internet early stage companies do
not qualify for investment. They are considered
overvalued and speculative. The portfolio invests in
approximately 15 to 20 companies.
Subscriptions
Subscriptions and redemptions are
available monthly. Redemptions require a 30 day
written notice to the fund manager (Commencing June 2008, new subscribers require minimum 2 year term for no penalty - 7% penalty for first 12 months, 5% penalty for 12 to 24 months)
Management Fees
Fees include a 2.5% per annum management fee plus
a 20% profit participation. All fees are paid
quarterly.
Transfer Agent and Custodian
Equity Transfer Services
Auditors
Silver Gold Glatt Grosman
Legal Council
Blake Cassels (Toronto)
Back Office
BMO Nesbitt Burns