Bill Bonner President, Portfolio Manager Evan Spiropoulos Managing Director, Portfolio Manager Martin Davies Managing Director, Portfolio Manager
FORWARD-LOOKING STATEMENT DISCLAIMER This presentation may contain forward-looking statements including Management's assessments of future plans and operations, intentions, expectations of returns, growth, business prospects, cash flow and earnings. No person should rely on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in many cases, beyond the control of Management and may cause the Fund’s actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Forward looking statements are based on certain assumptions, including, without limitation, the ability of the Fund to raise funds, locate and complete desirable investments, the amount and timing of such investments and the outcome of such investments. While the Fund considers the assumptions it has utilized to be based on available information, these assumptions may prove to be incorrect. Further, these forward- looking statements are made as of the date of this presentation, are not intended to give any assurance as to future results of the Fund and Management does not assume any obligation to update these statements. Prospective investors should carefully consider, among other things, the risk factors inherent in the business of the Fund (such as general and economic business conditions, volatility of markets, lack of a market for the Units, competition and other factors) before making an investment decision. Investors should review the funds prospectus and consult professional advise as it pertains to there own investment objectives and risk tolerances. Brickburn Investment Funds Brickburn Investment Funds
BRICKBURN INVESTMENT TEAM Willia liam D. Bonner er, , B.Comm omm, , Finance Presid siden ent and Portfoli olio o Manager ager • 31 years of capital markets experience, co-founder and President of Brickburn Asset Management Inc.. in 1997 • Chairman & Director WCSB OIL & Gas Royalty Interest LPs • Co-managed the Network Capital 1997 Limited Partnership - 30% IRR over 7 years • 14 years with Peters & Co. Limited as a Managing Director and Executive Committee Member Evan an Spiropou opoulos, los, B.A. Economic onomics, s, CFA Portf tfoli olio o Manager/Ma ager/Managin aging Direc ector or • Founder, Chief Investment Officer of Sophina Capital Management from 2004 – 2012 • 17 years of retail investment management and business management • Partner and Portfolio Manager with Hesperian Capital Management, and a manager of the Norrep Small Cap Fund 1999 – 2004 • Burns Fry/ Nesbitt Burns 7 years private client experience T. Marti tin Davies, ies, B.A. Economic onomics s Portf tfoli olio o Manager/ ager/ Manag aging ing Direc ector or • Managing Director, Portfolio Manager, Chief Compliance Officer of Brickburn Asset Management Inc. since 2004 • 33 years capital markets experience, including 22 years with Peters & Co. Limited as senior partner • Former chairman and member of the Alberta District Council of the IDA Brickburn Investment Funds Brickburn Investment Funds
INVESTMENT STYLE Since its formation in 1997, Brickburn Asset Management Inc . has been creating investor wealth through a unique and extensive blend of expertise in Canadian equities. Over the years, Brickburn has expanded its offerings to include a family of public mutual funds, private equity, and now Oil and Gas Royalty Income LPs. Fund Objectives • Focused fund with a maximum of 20 core investments • Predominately Canadian, but investors should expect some global securities • Invest in companies that have Growth At a Reasonable Price (GARP) • Bottom up “stock picking” style • Long-term investment style with low turnover (15%) • Small Cap is defined as Canadian companies with a market cap under $1.5 billion and $3 billion for global securities Brickburn Investment Funds Brickburn Investment Funds
BUY DISCIPLINE Understand global market currents Monitor Determine how management to those currents continue to will change execute corporate profit Identify the best Be patient, be of breed early and pay companies to low benefit Brickburn Investment Funds Brickburn Investment Funds
SELL DISCIPLINE What makes us sell? • The company fails to execute its business plan • A fundamental change in the global market • Position becomes greater than 10% of the portfolio • Valuation remains significantly over valued Brickburn Investment Funds Brickburn Investment Funds
HOW WE HAVE DONE Highlights: Outperformed benchmark for 1, 3, and 5 year time periods We are in the top quartile of funds in our category since inception We have 100% tax efficiency Nov 5th. 2014 chart provided by Globefund Brickburn Investment Funds Brickburn Investment Funds
Highlights: Evan Spiropoulos took over Spring of 2014 Outperformed the benchmark since taking over 5.6% dividend yield Lower than market volatility Highly tax efficient Nov 5th. 2014 chart provided by Globefund Brickburn Investment Funds Brickburn Investment Funds 8
HOW WE HAVE DONE – SMALL CAP TSX Added Value Fund Group Average NB WSC* Completion over TSX Return TR Comp Column1 1 Month -2.67% -4.68% -9.20% -5.30% 2.63% 3 Months -1.45% -3.17% -9.48% -3.40% 1.95% 6 Months -2.08% 0.72% -1.35% 3.04% -5.12% 1 Year 17.11% 15.27% 15.55% 17.67% -0.56% 2 Years 19.16% 15.62% 7.34% 11.54% 7.62% 3 Years 17.67% 15.61% 7.33% 11.30% 6.37% 4 Years 11.46% 10.01% 4.75% 7.96% 3.50% 5 years 12.36% 11.36% 9.24% 11.27% 1.09% Since Inception 8.34% n/a 1.85% 5.50% 2.84% (5/08) Annual -5.36% 2011 -13.21% -16.93% -11.02% -7.85% 5.75% 2012 10.50% 6.83% 2.46% 4.75% 2013 30.24% 22.82% 7.76% 12.22% 18.02% Sept. 30, 2014 Brickburn Investment Funds Brickburn Investment Funds
HOW WE HAVE DONE – LARGE CAP Fund Return Group Average TSX TR Value Added 1 Month -2.24% -2.83% -3.99% 1.75% 3 Months 2.95% 0.17% -0.59% 3.54% 6 Months 3.92% 4.86% 5.79% -1.87% 1 Year 18.17% 17.02% 20.38% -2.21% 2 Years 16.55% 14.18% 13.56% 2.99% 3 Years 10.13% 12.64% 12.07% -1.94% 4 Years 5.46% 9.22% 7.94% -2.48% 5 years 6.72% 9.42% 8.67% -1.95% -1.64% n/a n/a Since Inception (5/08) Annual -3.77% 2011 -12.48% -1.60% -8.71% -13.04% 2012 -5.85% 7.53% 7.19% 9.50% 2013 22.49% 16.60% 12.99% Sept. 30, 2014 Brickburn Investment Funds Brickburn Investment Funds
OUR TOP TEN – SMALL CAP Be Aerospa space ce Inc. Sector Weightings WestJe tJet t Airlin lines es Ltd. Transf ansfor orce Inc nc. ATS Automation mation Inc. Sierra erra Wireless less Absolut lute e Softwar tware WS WSP P Global l Inc. Descar artes es Systems ems AG Growth h Internation ernational al Inter ertap tape Polymer ymer Nov. 2014 Brickburn Investment Funds Brickburn Investment Funds
OUR TOP TEN – LARGE CAP Magna a Internation ernational al Sector Weightings Met etha hane nex Corp rp Sun unLif Life Fina nancial ncial CSX X Corp rp AltaGas aGas Inc Royal yal Bank George rge Weston on Raytheon theon Corp rp TransCan ansCanada ada Corp rp Spirit irit Aerosyst system ems Inc. Nov. 2014 Brickburn Investment Funds Brickburn Investment Funds
WHAT HAS HAPPENED The bear market started in S&P 500 2000 for non-commodity investors Bear Market Real bull markets go up 500-700% The rally between 2001 and 2007 was just a bear market rally, not a bull market Bull Market Bull markets last for multiple years and start out of investor apathy Brickburn Investment Funds Brickburn Investment Funds
WHAT WILL SHAPE 2015 1. Increasing interest rates 2. Reversion to the mean in valuations between Canada vs U.S. and Small vs Large Cap 3. The expansion of the Panama Canal 4. The Return of Europe Brickburn Investment Funds Brickburn Investment Funds
INCREASING INTEREST RATES Rising interest rates do not necessarily mean declining markets In the 50’s and 60’s we had great market moves Brickburn Investment Funds Brickburn Investment Funds
RETURN TO THE MEAN The Small vs the Large generally go in cycles, we are entering a positive Small Cap cycle For this current cycle to start the Russell 2000 had to hold 1080 (it did) Brickburn Investment Funds Brickburn Investment Funds
CANADA VS U.S. After 2-3 years of underperformance we are going to see certain Canadian markets come back Canadian Tech and Industrials are cheap compared to the U.S. and now have a lower dollar Brickburn Investment Funds Brickburn Investment Funds
EXPANSION OF THE PANAMA CANAL Ship size increases from 4,000 TEU to 16,000 TEU (average ship size is currently 14,000 TEU) The savings to ship to the U.S. Northeast is nearly 10% This will open up Gulf Coast liquids sales Brickburn Investment Funds Brickburn Investment Funds
THE RETURN OF EUROPE 35% of northern Europe’s GDP is based on Exports German Industrial Production looks to have bottomed EU is getting aggressive on monetary policy Brickburn Investment Funds Brickburn Investment Funds
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