PORTLAND ADVANTAGE PLUS FUNDS

Transcription

1 PORTLAND ADVANTAGE PLUS FUNDS Portland Advantage Plus - Everest Fund Portland Advantage Plus - McKinley Fund An alternative strategy with potential for high yield and enhanced returns

2 WHY PORTLAND we have built a reputation for being a long-term shareholder and for taking significant positions in investee companies. Wealth is created not only in the public markets, but also by private businesses. The world s most successful institutions and ultra wealthy investors have been investing in both spaces for generations and have achieved above average rates of return, utilizing an asset mix combining traditional and private and alternative investments. Our philosophy revolves around the concept that if the needs of the general population of investors are the same as the institutional and ultra wealthy investor (preserve capital, earn attractive returns, income and tax minimization), the investment profiles should be similar. Unfortunately, the general population of investors invariably end up with a portfolio of 100% public securities. We therefore offer access to a range of traditional asset classes as well as access to private and alternative offerings, allowing the portfolio profile of the general population of investors to be similar to that of the institutional and ultra wealthy investor. Therefore we offer a broad range of investment options including: TRADITIONAL PUBLIC EQUITY + PUBLIC FIXED INCOME AND PRIVATE EQUITY AND ALTERNATIVE OFFERINGS ACCESS to PORTLAND HOLDINGS FAMILY OFFICE RESOURCES As an investor in Portland Investment Counsel Inc. s products, you will have access to the benefits of our family office resources, which means you will have the unique opportunity to invest in quality offerings, alongside some of the world s most successful institutions and affluent investors. FINANCIAL STRENGTH Portland Holdings financial strength and reputation allows it to provide unique offerings with access to low cost borrowing HUMAN RESOURCES Our team has global business and investment experience across many sectors REPUTATION Portland Holdings has built with integrity, a reputation for being owners, operators and investors in excellent businessess globally NETWORK Portland Holdings extensive global holdings, reputation and experience provides a widespread global network that gives access to expertise DOMAIN EXPERIENCE CLIENTELE Global network of affluent clientele: business owners, institutions, pensions and supranationals 2 Wealth Management Banking Insurance Consumer Goods Hospitality/Tourism Media Waste Management Telecommunications Agriculture

3 The portland advantage Plus Funds are positioned for enhanced wealth creation Wealth is created by adhering to the 5 Principles of Wealth Creation 1. Owning a few high quality businesses 4 2. Thoroughly understand these businesses 4 3. Ensure these businesses are domiciled in strong long-term growth industries 4 4. Use other people s money 4 5. Hold these businesses for the long-run 4 FV=PV(1+r) n The Future Value Formula is central to investing Most people recognize the formula E=mc 2. It is a compelling formula, regarded as an indisputable truth in the world of science. At Portland, we are guided by the Future Value Formula FV=PV(1+r) n which defines compounding and hence wealth creation. As an investor, your goal is to maximize the future value of your current investments (PV). To do this, you need to ensure that each component in the formula is optimized. Successful investing is the ability to apply the Future Value Formula and to recognize the power that lies within it - the power of compounding. Understanding FV= PV (1+r) n FV is the future value of your nest egg or your investments. PV is the amount you choose to invest today and over time. r is the after-tax rate of return. n represents time or the total number of years that you allow your money to grow and to compound. The Portland Advantage Plus Funds are designed to be in alignment with the Principles of Wealth Creation and the Future Value Formula. The Funds have the potential to enhance the creation of wealth and the generation of income by applying a sound investment strategy that: Makes use of Portland s access to low-cost of borrowing Invests in a limited number of high quality securities with an emphasis towards: Large capitalization High liquidity Sector diversification Businesses domiciled in strong long-term growth industries 3

4 PORTLAND ADVANTAGE PLUS FUNDS Access to low cost borrowing Benefiting from the Portland family office s financial strength and reputation, the Portland Advantage Plus Funds have access to attractive low cost of borrowing. The Portland Advantage Plus Funds will utilize this low cost of borrowing to potentially enhance capital gains and income. The Portland Advantage Plus Funds have different levels of leverage customized for risk appetite and tolerance. PORTLAND ADVANTAGE PLUS - EVEREST FUND The leverage within the Everest Fund will initially be lower than and ordinarily is not expected to exceed 60% of the Portfolio but is currently higher due to market conditions. EVEREST FUND LEVERAGE 60% INCREASE PRESENT VALUE BY 2.5X Increase money working for you PRESENT VALUE OF INVESTMENT $250,000 $200,000 $150,000 $100,000 $50,000 The Portland Advantage Plus Funds aims to increase the investment dollars you have working for you (Present Value) 1 Leverage Initial Investment 2.5X 2X PORTLAND ADVANTAGE PLUS - MCKINLEY FUND The leverage within the McKinley Fund will initially be lower than and ordinarily is not expected to exceed 50% of the Portfolio but is currently higher due to market conditions. INCREASE PRESENT MCKINLEY FUND LEVERAGE 50% VALUE BY 2X $0 UNLEVERED INVESTMENT MCKINLEY EVEREST 4

5 Access to an Enhanced Level of Income Generation The Portland Advantage Plus Funds use low cost leverage to enhance the power of dividends. The Portland Advantage Plus Funds focus on relatively higher yielding quality equity securities with a history of progressive dividend policies. Distributions* Everest Fund McKinley Fund Current Annual Distribution Rate (as at September, 2016) $0.50 $0.95 * Distributions reported for series F units. The Manager reserves the right to change the targeted annual distributions at its discretion. Access to enhanced wealth creation Backtested performance (Value of $100) 10 Year Scenario Below shows the outcome (ending equity value and ending per annum indicative dividend) of a backtested calculation, based on the Illustrative Portfolio, applied to a 10 year scenario, from February 27, 2004 to February 28, 2014, which includes the financial crisis. 2 $1,000 $800 Ending Equity Ending Dividends $600 $400 $200 An initial investment of $100 leveraged by 60% debt, with reinvested income, would have grown to a value of $804 and currently be generating $43 of dividends p.a. (43% of initial investment) 0 S&P/TSX Portfolio 50% 60% Leverage Leverage Backtested total return performance is gross of fees, assumes re-investment of dividends and is net of the borrowing costs; re-balancing to target minimum and/or maximum leverage levels was assumed to be done on a weekly basis; data analyzed includes the period from February 27, 2004 to February 28, Brookfield Property Partners LP, which was listed on March 22, 2013, total return performance for the period was approximated by the total return performance of Brookfield Office Properties. 5

6 PORTLAND ADVANTAGE PLUS FUNDS Access to Experience - Michael Lee-Chin has over 30 years investment and business experience Michael Lee-Chin, B.Eng., LLD (Honorary) Executive Chairman, Chief Executive Officer and Portfolio Manager In 1983, at the age of 32, Michael borrowed money to purchase $500,000 of Mackenzie Financial stock. After four years the stock appreciated seven-fold. Michael used the profits to make his first acquisition, a small Ontario-based investment firm called AIC Limited (AIC). At that time, Advantage Investment Counsel (a division of AIC) had assets under management of just $800,000. Within 20 years, AIC 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. Following the acquisition of AIC, Michael set about developing the Berkshire Group of Companies comprising an investment planning arm, a securities dealership and an insurance services operation. Under his stewardship, Berkshire was able to amass more than $12 billion in assets under administration by At that time Berkshire had grown to form a network of 750 financial advisors operating in 250 offices across Canada. In 2007, Manulife acquired the Berkshire Group of Companies. In 2012 through Mandeville Holdings Inc., Michael started assembling a diversified group of wealth management companies that includes: Portland Investment Counsel Inc. (an investment fund manager, portfolio manager, mutual fund dealer and exempt market dealer), Mandeville Private Client Inc. (an investment dealer) and Mandeville Insurance Services Inc. (life insurance). Today, Michael remains firmly committed to creating wealth for investors. In addition to his duties at Portland Investment Counsel Inc., Michael sits on various boards in Canada and throughout the Caribbean. Banking and Insurance In 2002, Michael returned to his homeland of Jamaica and purchased a 75% stake in 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 traded on the Jamaica Stock Exchange and the Trinidad & Tobago Stock Exchange and is the largest bank in the country with a reputation for being a leader in corporate citizenship and for its mantra Building a Better Jamaica. In 2015, NCB was awarded the following from Global Banking and Finance Review: Best SME Bank Jamaica; Best CSR Bank Jamaica; Best Corporate Governance Bank Jamaica and Best Banking Group Jamaica. In May 2016, NCB announced the acquisition of 29.99% shareholding in Guardian Holdings Limited (GHL), the leading insurer in the Caribbean region. This transaction is considered a significant event in the financial services sector in the Caribbean. Michael sits on the Board of Directors of GHL. Telecommunications In 2005, Michael co-founded Columbus International Inc. (Columbus), a diversified telecommunications company which provides services to 22 countries across the Caribbean and Latin America. In 2015, Columbus was acquired by Cable & Wireless Communications, Plc which in turn was acquired by Liberty Global in Michael s companies hold investments in Liberty Global and its subsidiaries. Private Equity Michael along with the Portland Private Equity team currently manages the Caribbean Basin s largest private equity vehicle, AIC Caribbean Fund (ACF). ACF is a USD225 million, 2007 vintage growth equity fund. Portland Private Equity also manages the Portland Caribbean Fund II (PCF II) which had a first closing of USD100 million of capital commitments in July 2014 and has a target size of USD200 million. ACF and PCF II invest in key sectors such as telecommunications, financial services and energy generation. In July 2016, Portland JSX Limited (PJX) had the largest initial public offering (IPO) of ordinary shares ever on the Jamaica Stock Exchange. The IPO provided an exposure that is new to the Jamaican market place, as investors were able to diversify their investment portfolio across country, sector and currently. PJX is managed by the Portland Private Equity Team and is a limited partner in PCF II. Special Achievements 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. From , Michael held the position of Chancellor of Wilfrid Laurier University in Waterloo, Ontario, Canada. In 2008, Michael received the Order of Jamaica, one of the country s highest national honours for outstanding service in business and philanthropy. In 2013, Michael received the Queen Elizabeth II Diamond Jubilee Medal. 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. On April 27, 2016, Michael was appointed Chair of the Government of Jamaica s newly established Economic Growth Council (EGC), in an effort to bolster economic development. Michael is tasked with leading a team from the private and public sectors, to advise the Government of Jamaica on the adoption of a framework of growth initiatives. Dragos Berbecel, CFA, BComm, MSc, MA, MBA Portfolio Manager Dragos Berbecel has 18 years of experience, both as an investment professional and a business executive. He has devoted the last 10 years to being a student and practitioner of focused value investing. Dragos leverages more than a decade of experience as a marketing and sales executive working in diverse industries in Europe and North America. He played a leading role in starting up a new subsidiary for 6

7 Syngenta, the largest global agribusiness, in a key European market. He was also instrumental in improving the performance metrics for KBC Tools and Machinery, a top North American industrial distribution company. Having worked with thousands of clients from individual farmers to distributors and large industrial corporations, his ground level understanding of what it takes for a company to be successful in the marketplace has been greatly enhanced. Dragos joined Portland Investment Counsel in 2008 when he conducted research in the field of investment alternatives with a socially responsible investing mandate and amassed a body of knowledge necessary to introduce the environmental, social and governance performance and risk factors analysis in the firm s investment process. Since then, Dragos has been involved in developing and managing a number of public equity, balanced and alternative assets investment strategies. Dragos holds an MBA degree from the University of Toronto, with a major in Finance. He earned a BComm and an MSc in Marketing Management from the Academy of Economic Studies in Bucharest, as well as an MA from the National School of Political Studies and Public Administration in Bucharest. He passed the professional accreditation exams to be licensed as a broker/trader on the BSE (Bucharest Stock Exchange) by the Brokers Association and the Romanian Financial Institute. Dragos is a CFA charterholder and has been a member of CFA Society Toronto since fund facts Offering Units: Minimum Investment: Investment Objective: Investment Strategy of the Portland Advantage Plus Funds Initial Sales Commission Trailing Commission Management Fee Organizational Expenses and Operational Expenses Portland Advantage Plus Everest Fund and Portland Advantage Plus McKinley Fund (the Funds ) are each offering units of Series A, Series F, Series N and Series O on a private placement basis in all jurisdictions across Canada under prospectus exemptions which currently include the accredited investor exemption, the offering memorandum exemption and the $150,000 minimum purchase exemption for non-individuals. Registered plan eligible Open-ended with monthly purchases and redemptions and valued in CA$ Available for purchase in CA$ and USD$ Generally CA$2,500 for Series A Units, Series N Units and Series F Units, and $500,000 for Series O Units; otherwise CA$150,000 for non-individuals for Series A Units, Series N Units and Series F Units Investment objective of each Fund is to: Provide income Achieve over the long term an above average rate of return The investment strategy of the Funds: Focused investing in a limited number of long securities positions Leverage by purchasing securities on margin For Series A Units and Series N Units of each Fund, the registered dealer which distributes such Units may charge investors an initial sales commission of up to 6% (up to $60 for each $1,000 investment) of the value of the Units purchased. No initial sales commission is paid in respect of Series F or Series O Units of each Fund. The Manager will pay to registered dealers a Trailing Commission equal to 1.00% per annum of the NAV of the Series A Units and the NAV of Series N Units of each Fund held in each registered dealer s client accounts. No Trailing Commission is paid in respect of Series F or Series O Units of each Fund. Management fees are calculated daily and paid monthly. The management fee for each of these Series of Units is as follows: Series A 0.75% per annum, calculated daily as a percentage of the total market asset value, as defined in the offering memorandum, of Series A, plus 1.0% per annum, calculated daily as a percentage of the NAV of Series A, plus applicable taxes including HST. Series N 0.75% per annum, calculated daily as a percentage of the total market asset value, as defined in the offering memorandum, of Series N, plus 1.0% per annum, calculated daily as a percentage of the NAV of Series N, plus applicable taxes. Series F 0.75% per annum, calculated daily as a percentage of the total market asset value, as defined in the offering memorandum, of Series F, plus applicable taxes including HST. Management fees on Series O Units are negotiated with each investor and paid directly by the investor and are not recorded as an expense of the Series in the determination of the NAV of Series O Units. The expenses incurred in respect of the organization of the Funds and the offering of the Units will initially be paid by the Manager. The Manager is entitled to reimbursement for the Organizational Expenses incurred with respect to the Funds. All of the ongoing expenses related to the administration and operation of each Fund are paid by that Fund. 7

8 Potential Risks While the Manager exercises prudence and due diligence throughout the investment process, no guarantees can be given to offset a risk of loss and investors should consult with their financial advisor prior to investing in the Portland Advantage Plus Funds. The Manager believes the following risks are key to the Portland Advantage Plus Funds performance: leverage, interest rate changes, dividend yields, highly volatile markets and equity risk. Please read the Risk Factors section in the Offering Memorandum for a more detailed description of all the relevant risks. FUNDSERV CODES Fund Name Series A Series F* Series N Series O** Portland Advantage Plus - Everest Fund PTL960 PTL955 PTL950 PTL945 Portland Advantage Plus - Everest Fund USD PTL860 PTL855 PTL850 - Portland Advantage Plus - McKinley Fund PTL940 PTL935 PTL930 PTL925 Portland Advantage Plus - McKinley Fund USD PTL840 PTL835 PTL830 - *Generally only available through dealers who have entered into a Portland Series F Dealer Agreement ** Generally only available to certain institutional and other investors 1. Assuming an investment of $100,000 and leverage is at the expected level for the applicable fund. The investment does not include fees, expenses, dividend or borrowing costs. 2. The Illustrative Portfolio as of March 3, 2014 includes BCE Inc., Brookfield Property Partners LP, Northland Power Inc., Johnson & Johnson, The Procter & Gamble Company, Baytex Energy Corporation, Crescent Point Energy Corp, Canadian Oil Sands Ltd, Bank of Nova Scotia and IGM Financial, Inc. This is for illustration purposes only, the actual portfolio will be the result of active portfolio management, weighed by risk and return considerations, including valuation levels, company and industry fundamentals, currency and borrowing impact. Each fund is expected to have similar holdings and weights. The Portland Advantage Plus Everest Fund and Portland Advantage Plus McKinley Fund (collectively the Funds ) are not publicly offered. They are only available under prospectus exemptions and other exemptions available to investors who meet certain eligibility or minimum or maximum purchase requirements. Currently these exemptions include the accredited investor exemption, and the $150,000 minimum purchase exemption for non-individuals. Information herein pertaining to the Funds is solely for the purpose of providing information and is not to be construed as a public offering in any jurisdiction of Canada. The offering of Units of the Funds is made pursuant to an Offering Memorandum and the information contained herein is a summary only and is qualified by the more detailed information in the Offering Memorandum. If there are any discrepancies between this document and the Offering Memorandum, the Offering Memorandum is deemed correct. Portland Investment Counsel Inc. has not independently verified all the information and opinions given in this material. Accordingly, no representative or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this material. 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 published. 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. 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: info@portlandic.com PIC5139-E(09/16) 8