Objective: Usually a blended 7-8%, with improved characteristics to Global Equity on a stand-alone basis. 

Composition: Conviction portfolios consisting of a combination of our Global Equity and High Income products. The proportions are flexible with the use of margin, such as 100% Global Equity + 40% High Income.  

Suitability: For a blend of capital appreciation and income, with medium risk and longer time horizon. Investment accounts with margin. Min. account size 500k-1m.

Edge: This product offers a unique diversifying combination of active equity exposure and high income from corporate and macro event positioning. 

For the Global Equity portion, capital is allocated to the best global opportunities from both a top-down and bottom up perspective, based on our global views, investment themes, sector preferences, and company analysis. There is a rationale for each and every holding in the portfolio.

For the High Income portion, a proprietary approach to event-driven investing takes place to:

1. monetize the time value of the evolution of deals involving merger & acquisition arbitrage,
2. capitalize on the mispricing of securities in catalyst-driven situations, and
3. produce high convexity payouts during systemic events and turbulent environments  through idiosyncratic opportunities and special situations.   

Characteristics: For the Global Equity portion, stock selection tends to favour growth at a reasonable price, which may include both large and smaller capitalization companies. Sector weights usually differ substantially from benchmarks, tending to overweight technology, health care, and telecommunications, with varying exposures to consumer cyclicals, industrials, consumer non-cyclicals, and financials, and limited to no exposure to utilities, basic materials, and energy. Geographically, investments have tended to favour the United States and Europe, followed by Asia, with limited exposure to emerging markets.

The High Income portion is composed by a selection of discrete event-driven deals typically consisting of stocks and related options. At the portfolio level, positions in equity index, commodity and other derivatives may be in place to further reduce correlation to the stock market, mitigate downside risk, and improve the risk/reward of volatility changes. The geography, sector, and stock universe is not preset.

Dynamics: In the Global Equity portion, holdings are typically intended to be held for the longer term, so turnover can be quite low. Trades are predicated by a change in market conditions and/or a change in our investment thesis. Cash is a strategic asset, with active allocations when deemed appropriate to mitigate downside risks and await better future opportunities and pricing. 

In the High Income portion, each event-driven opportunity is evaluated on its own merits for consideration in the portfolio. The first focus for the sizing of each deal is the downside risk. Since each deal has a unique profile, they provide some diversification (orthogonality) to existing positions. Nevertheless, positions may be put on at the portfolio level to reduce risk and market exposure. The holding period of each deal is unique and dynamically managed as necessary, with an average of perhaps 6 months.

Investment examples: 1. An investment is made to gain sector exposure in anticipation of a shift in relative industry valuation, due to changes in economic perceptions and their anticipated impact on the specific company’s sales and margins. 2. The time value of a deal is monetized by positioning in a merger deal between two companies, upon completion of analysis evaluating the nature, likelihood, final price and timing of completion.