A choice of objectives, from capital accumulation to income
Our goal is to excel at growing our clients’ capital while also providing them with income if required (in which case capital appreciation will take a more limited role). We are forthright in explaining our process, the possible behaviour of our portfolios and the documented potential for significant growth that Intrinsic Value investing brings. That we believe in this potential is attested to by the fact that our own assets are invested alongside those of our clients.
Capital accumulation: Classic and Premium Value portfolios
Within a flexible investment mandate we follow a disciplined process, both on the buy side and the sell side: we invest only in those securities whose intrinsic value we can determine with confidence and whose Margin of Safety is significant enough to justify leaving the safety of cash. We sell when market prices reach Intrinsic Value. Such rigorous discipline is required to invest wisely, and to achieve the returns we seek.
The nature of such opportunities is that they may take time to mature. We require from our investors a perspective long enough to give these investments time to mature.
Classic Value portfolio NOW REOPENED TO NEW CAPITAL
The Classic Value portfolio holds equity positions mainly in Canadian and sometimes in US companies and is suitable for registered accounts. It is offered as a Classic Value Account, which is a personal, managed segregated account.
This portfolio is suitable for all types of registered accounts (RRSP, RESP, LIRA, TFSA, etc.).
Premium Value portfolio NOW REOPENED TO NEW CAPITAL (EXCEPT FOR PARTNERSHIP VERSION)
The Premium Value portfolio contains the same long positions as those held in the Classic Value portfolio, subject to minor adjustments. In addition, the Premium Value portfolio has the freedom of taking advantage, when available, of other intrinsic value opportunities such as short selling overvalued securities or arbitraging between over- and under-valued securities. As part of its inherently more opportunistic mandate, the Premium Value portfolio may use any kind of security, including options, to fulfill its goal of extracting Intrinsic Value from mispriced financial market instruments.
The Premium Value portfolio is offered either through the Premium Value Partnership (available to Canadian residents who meet certain prospectus and registration exemptions under applicable legislation – please see disclaimer ) or as a Premium Value Account (managed segregated account available to all investors).
Income, with capital appreciation: Income Value portfolio
CURRENTLY OPEN TO NEW CAPITAL
The objective is to generate income without neglecting the potential for capital gains while keeping volatility moderate. The Income Value portfolio is a well diversified portfolio composed of dividend paying common shares, debt, convertible debt, fully hedged convertible arbitrage positions, and to a limited extent capital structure arbitrage positions and takeover arbitrage positions.
Short-term capital protection: Reserve Account
We advise our investors to keep their short-term cash requirements as well as their emergency funds in securities that will remain immune to market fluctuations. To hold such reserved capital, we construct portfolios of Treasury Bills and/or guaranteed short-term securities.