PORTLAND ADVANTAGE FUND

Transcription

1 PORTLAND ADVANTAGE FUND wealth creation at the core OWNERS. OPERATORS. AND INVESTORS.

2 Why Portland Investment Counsel we are owners, operators and investors I am a better investor because I am a businessman and a better businessman because I am an investor. Warren Buffett The difference between speculating and investing can be distilled down to one word, Understand. At Portland Investment Counsel we have a unique history dating back to 1986 of being Owners, Operators and Investors in excellent businesses globally. Our unique hands on operational experience in businesses across Portland Investment Counsel Inc. and its predecessor AIC Limited has, for nearly three decades, invested in publicly traded equities and fixed income securities globally on behalf of retail and institutional clients. AIC Limited was acquired by Portland Holdings founder Michael Lee- Chin in At that time AIC had Portland Private Equity L.P. serves as the General Partner and Investment Advisor for the AIC Caribbean Fund, a private equity fund whose investors include European Investment Bank, Export Development Canada, OPIC (an agency of the US Treasury), a Fortune 100 corporate pension fund and a prominent US Fund of Funds. various sectors, allows us thoroughly less than $1 million in assets under Portland Holdings Inc. s group of to understand the businesses in which management. AIC then grew to become companies investments include we invest. We know what makes a one of Canada s largest privately held Portland Investment Counsel, successful business and, as importantly, mutual fund companies. This business Wallenford Coffee Company, Portland the underlying risks. Therefore, was sold to Manulife in Today Private Equity, National Commercial we measure and assess potential Portland Investment Counsel Inc. Bank Jamaica Limited, Mandeville investments with incisive judgment. remains firmly committed to creating Private Client Inc., resort development With Michael Lee-Chin s advisor roots wealth for investors as an investment and other real estate properties. going back to 1977, Portland Investment fund manager and exempt market Counsel is committed to the principles of dealer. disciplined long term investing. WE ARE WE ARE OWNERS AND OPERATORS THUS WE ARE INSIGHTFUL INVESTORS owners... We are Owners therefore we think like owners and have lived the associated responsibilities. We have garnered a reputation for being a long-term shareholder and for taking significant positions in investee companies. Currently or in the past, Portland Holdings Limited group of companies has direct and/or controlling ownership of: Wealth Management - AIC Limited/Portland Investment Counsel Inc. - Berkshire TWC Financial Group - Portland Private Equity L.P. - Mandeville Private Client Inc. - Mandeville Wealth Services Inc. Banking - National Commercial Bank Jamaica Insurance - NCB Insurance Company Ports - Kingston Wharves Media - CVM Real Estate Hospitality/Tourism Waste Management Consumer Goods - Wallenford Coffee Company operators... As operators we have experience and understanding of the day-to-day challenges and opportunities facing industries/businesses. Our Portfolio Managers have operational experiences in many sectors including: Wealth Management Banking Insurance Ports Telecommunications Private Equity Infrastructure Consumer Goods Real Estate Waste Management Hospitality/Tourism Agriculture 2 insightful investors... We draw on our understanding and real world experience as owners and operators when making investments. Globally Across multiple sectors Public equities Fixed income Private equity

3 the portland investment counsel difference we have garnered a reputation for being a long-term shareholder and for taking significant positions in investee companies. We believe that wealth should be invested in a manner that is more aligned with the principles followed by a successful Mr. Business that there is an alternative to becoming Mr. Market. Consistent with this belief, we work with our clients to build portfolios that we believe will: Preserve capital Earn attractive returns Provide desired income Minimize taxes portland investment counsel s approach Public Equity Public Fixed Income Cash Private Equity Direct Venture Capital Real Estate Infrastructure Resources CLIENT NEEDS Preserve Capital Liquidity Income Growth Tax Minimization Public Fixed Income Public Equity Cash the standard approach we have garnered a reputation for being a long-term investors and for taking significant positions in investee companies. Portland Investment Counsel s goal is the creation, preservation and distribution of wealth for its clients. In order to achieve this objective, Portland may create portfolios which have alternative, private investment and public securities. The most successful institutional & high net worth investors incorporate alternative and private investments into their investment portfolios. Portland s purpose is the democratization of such investments. Our clients will have unique access to alternative and private investment opportunities. This represents a significant departure from the investment industry at large which focuses predominantly on the public markets. At Portland Investment Counsel, our investment approach is based on the concept that since the needs of the high net worth and institutional investor are the same as the average investor, the portfolio profiles should be similar. We therefore offer private and alternative investments as well as traditional public equity and fixed income. 3 The Power Of Private Alternative Investing Wealth is created not only in the public markets, but also by private businesses. The Canadian Exempt Market raised $149 billion 1 in capital in 2011 alone. The world s most successful institutions and high net worth investors have been investing in this space for generations and have achieved above average rates of return utilizing an asset mix combining traditional and private and alternative investments. The investment objectives of these successful institutions and high net worth investors are the same as those of the average investor: Preserve Capital Liquidity Income Growth Tax Minimization

4 Portland Investment Counsel Portland Advantage Fund Focus on wealth management businesses with inherent low business risks for long-term growth; Enhance diversification with holdings of: -- cash, to dampen volatility and enable value buying during market declines; -- real and infrastructure assets to dampen volatility and increase inflation protection; and -- unique growth opportunities to add volatility dampening diversification and potential for growth. Portfolio Construction Wealth Management at the Core (30-60%) (Driver of wealth creation) Canada IGM Financial Inc., CI Financial Corporation, Brookfield Asset Management Inc. US Invesco Limited, Franklin Resources Inc. Canadian Banks The Toronto-Dominion Bank, Bank of Nova Scotia Banking Wealth Management Insurance Countercyclical Sectors Intelligent Diversification (40-70%) (Reduce portfolio volatility, enhance inflation protection, seize opportunities) Cash Infrastructure, real estate and resources Unique growth opportunities and Emerging markets 4

5 Wealth Management - the Ultimate Business Model 4 Strong long-term growth industry Insatiable customer demand Favourable demographics (population growth and aging) Under-funded public and private savings Embedded growth from market appreciation No inventory to lose or go obsolete No loans or receivables to turn into losses No physical plant and equipment to get damaged or go obsolete 4 Highly scalable 4 Low business risk Strong recurring cash flow model Products diversified across asset classes, geography and structures Customers and sales channels diversified Assets are off balance sheet 4 Operating leverage Costs grow slower than revenues 4 Financial leverage Use other people s money Low capital expenditure requirements Wealth Managers Regardless of how someone wants to invest or which industry sector an investor believes will out perform they have to go through one of the wealth management gatekeepers to invest. Therefore the gatekeepers always win. You have to pay the Gatekeeper to play. Income Allocated for Savings and Retirement Asset Management Company Life Insurance Company Banks Wealth Management Gatekeepers The larger the pillar the higher the % of income that is generated from Wealth Management Wealth Management Products Mutual Funds Funds of Funds Variable Annuities Fixed Annuities Segregated Funds GIC Structured Products Industry Sectors 5

6 PORTLAND ADVANTAGE FUND Holding fund company shares proves more profitable than holding units in some leading funds Value of $10,000 investment in fund company stock and units of applicable fund from Dec. 31, 1994 September 30, 2015.* CI Funds $500,000 $450,000 $400,000 $424,141 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 $61,046 $24,604 Dec. 31, 94 Dec. 31, 95 Dec. 31, 96 Dec. 31, 97 Dec. 31, 98 Dec. 31, 99 Dec. 31, 00 Dec. 31, 01 Dec. 31, 02 Dec. 31, 03 Dec. 31, 04 Dec. 31, 05 Dec. 31, 06 Dec. 31, 07 Dec. 31, 08 Dec. 31, 09 Dec. 31, 10 CI Fund Management Inc. ($424,141) CI Canadian Investment ($61,046) CI Global ($24,604) Investors Group $80,227 $40,609 $29,476 Dec. 31, 94 Dec. 31, 95 Dec. 31, 96 Dec. 31, 97 Dec. 31, 98 Dec. 31, 99 Dec. 31, 00 Dec. 31, 01 Dec. 31, 02 Dec. 31, 03 Dec. 31, 04 Dec. 31, 05 Dec. 31, 06 Dec. 31, 07 Dec. 31, 08 Dec. 31, 09 Dec. 31, 10 Dec. 31, 11 Dec. 31, 12 Dec. 31, 14 Dec. 31, 11 Dec. 31, 12 Dec. 31, 14 $130,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Dec. 31, 13 Sept. 30, 15 Dec. 31, 12 Sept. 30, 15 IGM Financial ($80,227) Investors Income Plus Portfolio C ($29,476) Investors Dividend C ($40,609) *Source: Bloomberg, PALTrak, Morningstar, Company Website, Lipper. The mutual funds of the three fund companies (CI and IGM) were selected from those companies funds in existence longer than ten years and having at least $50 million in assets. The best performing fund (10 yrs.) and the largest fund from those fund companies were selected. The data is presented for the sole purpose of comparing the returns of each fund company against the returns of its biggest and best fund over the past 14 years and not for the purpose of comparing the funds to one another or to Portland Advantage Fund. These mutual funds are not comparable as they have different fundamental investment objectives, asset size and management strategies. The 14-year comparison period was chosen to coincide with the date of CI Canadian Investment Fund & CI Global Fund s initial public share offering which occurred on June 30, Fourteen years back is the first timeframe period that data is available to permit comparision of both companies and their respective mutual funds. 6

7 Portfolio Managers Michael Lee-Chin, B.Eng., LLD (Honorary) Executive Chairman Michael Lee-Chin purchased AIC Limited (AIC) in 1986 for $200,000; by the mid nineties and under Michael s stewardship, AIC became Canada s largest privately held mutual fund company grew from less than $1 million and at its business peak held more than $15 billion in assets under management. In September 2009, AIC s retail investment fund business was sold to Manulife Asset Management Limited. Today, Michael remains firmly committed to creating wealth for investors as Executive Chairman, Chief Executive Officer and Chief Investment Officer of Portland Investment Counsel, an investment fund manager, portfolio manager, mutual fund dealer and exempt market dealer. AIC was the second business which Michael built from the ground up and sold to Manulife; in 2007 Manulife Financial purchased the Berkshire-TWC Financial Group Inc., an investment dealer with approximately 1,000 financial advisors and $12.5 billion in assets under administration. He is also currently the Executive Chairman of Portland Holdings Limited, Chairman of NCB, Mandeville Holdings Inc, Mandeville Private Client Inc., Mandeville Wealth Services Inc., and Mandeville Insurance Services Inc., and Founding Partner of Portland Private Equity L.P.. In addition to financial services, Michael s holding company, Portland Holdings has direct investments in many different sectors globally including banking, insurance, consumer goods, hospitality/tourism, media waste management, telecommunications and agriculture. In 2002, Michael returned to his homeland of Jamaica and purchased a 75% stake in the National Commercial Bank Jamaica Limited (NCB). At the time of purchase, he immediately deployed a transformation team with a mandate to improve employee morale, increase customer confidence and modernize the bank s IT infrastructure. Today, NCB is the largest bank in the country and has a reputation for being a leader in corporate citizenship and for its mantra Building a Better Jamaica. In 2006, Michael co-founded Columbus International Inc., a diversified telecommunications company which provides services to over 21 countries across the Caribbean and Latin America. Among his many personal accomplishments, Michael has received the doctor of laws degree from a number of distinguished universities including, McMaster University, University of Toronto, Northern Caribbean University, Wilfrid Laurier University, The University of West Indies and York University. In 2008, Michael received the Order of Jamaica, one of the country s highest national honours for outstanding service in business and philanthropy. In 2010, Michael joined the Board of the Trust for the Americas (a dynamic development institution affiliated with the Organization of American States (OAS)) recognizing his leadership in the area of corporate social responsibility. The OAS is an organization that, with 35 member countries, facilitates development, security, human rights, democracy and prosperity throughout the Western Hemisphere. In 2011, Mr. Lee-Chin was appointed the Chancellor of Wilfrid Laurier University in Waterloo, Ontario, Canada. Robert Almeida, B.Comm., CA Senior Vice President and Portfolio Manager Robert Almeida brings a strong business management perspective to the Portfolio Investment Management Team. Portland Investment Counsel believes strongly that Understanding is the key to successful investing and that, as Mr. Buffett states, I am a better Investor because I m a Business Person and a better Business Person because I m an Investor. Robert has over 25 years experience, both as an Investor and as a Business Executive. Some specific business experiences that he brings to his role as a portfolio manager are: Chartered Accountant with Ernst & Young Strategic Development Executive at Loblaw in the 1990 s Founding President of President s Choice Financial Executive on CIBC s US retail expansion team Founding Chairman of Amicus Bank of Canada Lead founding investment in Columbus International Inc., which has become the leading cable/telecom provider in the Caribbean and serves 21 countries Director of National Commercial Bank Jamaica Limited, the largest bank in Jamaica Experience as a Director of Kingston Wharves Limited, one of two operators at the busy port of Kingston Jamaica. This port has more volume than any port on the eastern sea-board of the United States, with volumes comparable to Panama. Robert is also a founding Partner of Portland Private Equity and a Managing Partner of the AIC Caribbean Fund, a private equity fund with capital commitments from institutional investors in Europe, United States, Canada and the Caribbean. He joined Portland Investment Counsel and AIC Limited in July 2002 and was a co-manager of the Manulife Advantage Funds until June As a manager of public and private equity portfolio investments, Robert continues to practice as both, an Investor and a Business Person. In addition to his CA designation, he also earned a Bachelor of Commerce degree with High Distinction from the University of Toronto. 7

8 1. EMDA, March 2013 Risks that may impact the Fund s performance include concentration risk, foreign exchange risk and equity risk. See Risks Factors section of the Simplified Prospectus. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. The indicated rates of return are the historical annual compounded total returns including changes in units [share] value and reinvestment of all distributions [dividends] and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. The rates of return are used only to illustrate the effects of the compound growth rate and are not intended to reflect future values of the mutual fund or returns on investment in the mutual fund. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Information presented in this material should be considered for background information only and should not be construed as investment or financial advice. Please consult a Financial Advisor. Every effort has been made to ensure the utmost accuracy of the information provided. Information provided is believed to be reliable when posted. All information is subject to modification from time to time without notice. Consent is required for any reproduction, in whole or in part, of this piece and/or of its images and concepts. Please read the Prospectus before investing. PORTLAND, PORTLAND INVESTMENT COUNSEL and the Clock Tower Design are registered trademarks of Portland Holdings Inc. Used under licence by Portland Investment Counsel Inc. Portland Investment Counsel Inc., 1375 Kerns Road, Suite 100, Burlington, Ontario L7P 4V7 Tel: Fax: PIC5102-E(10/15) 8 info@portlandic.com