A tale of two fund managers Page 1 of 2
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National Post Article On Bsp (Oct 10 09)

Published on: Mar 3, 2016
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Transcripts - National Post Article On Bsp (Oct 10 09)

  • 1. A tale of two fund managers Page 1 of 2 Saturday, October 10, 2009 Presented by A tale of two fund managers Barry Critchley, Financial Post This is a tale of two money managers, one that's brand new to Canada and the other who has been part of the scenery for four decades. The connection between the two -- B.S.P. Funds Canada Inc., a limited market dealer whose parent is based in Israel and Focus Asset Management -- is that both are largely interested in the same clients: high-net-worth individuals. But there are some differences in how they plan to get there: In the case of B.S.P. Funds, formed four years back and believed to be the first Israeli-based money manager operating in Canada, it is seeking clients who satisfy the accredited investor rule and who want to invest at least $150,000 in a hedge fund, specifically a fund of funds whereby allocations can be made to global hedge fund managers. Currently there are 16 investment managers based in London and the United States. "The focus in Canada for now is fund of funds," said Meir Cohen, chief executive of B.S.P. Funds Canada, which was launched on Oct. 1. However, for investments of more than $10-million, the firm can create a managed account, said Cohen, who worked for Bull Capital Management for many years prior to joining B.S.P. this month. "Our goal is to generate a 10%-12% return a year with a 6% standard deviation [volatility]. We are trying to find managers that provide alpha, and a low correlation to the equity markets," added Cohen, noting the fund, launched in 2008, was down about 14% last year but is almost back to its high-water mark after a strong performance in 2009. Furthermore, B.S. P clients who have been invested in the managed accounts since 2005 have generated a return of about 7% a year, which compares favourably with equity markets, which have been negative over the same period. B.S. P has about US$250-million in assets under management, 90% of which is in managed accounts. It charges an annual 1.5% fee for retail clients and a 1% fee for institutional clients, plus a performance fee whereby the manager receives a 10% cut on returns above 5%. As for the market, Cohen said the firm is "not very bullish on the equities, so our long/short mandates tend to have a low exposure to the markets." The largest allocation in the fund is currently to event-driven/distressed assets strategies. Focus Asset Management was formed by Bob Armstrong -- a veteran who spent a decade in institutional equities and retail brokerage before forming Harbour Capital, which he ran for a decade before selling to TD Bank 10 years back -- and Ted Conrod, a former portfolio manager with Jones Heward, who also happens to be his son-in-law. "This time maybe I can get to 20 years," said Armstrong, a strict proponent of value investing. "There's something about value investing [where those practising it] live a long time. "You aren't so worried about the ups and downs, " he added, noting http://www.nationalpost.com/story-printer.html?id=2088566 11/10/2009
  • 2. A tale of two fund managers Page 2 of 2 he still has a stake in Warren Buffett's Berkshire Hathaway, which he first bought almost 30 years ago for about US$300 a share. "It has had a pretty good run, That's the joy of investing," he said. But Armstrong won't be accepting institutional money, in large part because they have different investment horizons and shorter time frames than individuals. "It's rewarding to have real clients. You are a bit like a country doctor. They are appreciative of protecting and growing their capital." bcritchley@nationalpost.com © 2009 The National Post Company. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited. http://www.nationalpost.com/story-printer.html?id=2088566 11/10/2009

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