an investment partnership managed by ewing morris & co. investment partners … · - private...

- PRIVATE & CONFIDENTIAL -

BROADVIEW DARK HORSE LPAN INVESTMENT PARTNERSHIP MANAGED BY EWING MORRIS & CO. INVESTMENT PARTNERS LTD.

Investor Presentation | September 2019

- PRIVATE & CONFIDENTIAL - 1

► Established in 2011 with $3m;

currently manage ~$380m*

► Focused on small/mid

capitalization companies

primarily in North America

► More than 350 clients

across the country and

in the US

► 13 full-time teammates

VALUE-DRIVEN CANADIAN BOUTIQUE INVESTMENT FIRM

EWING MORRIS OVERVIEW

Serving clients across the country


*As of June 30, 2019.


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2011 2012 2013 2014 2015 2016 2017 2018

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EWING MORRIS TEAM

EXPERIENCED TEAM WITH STRONG ADVISORY BOARD

AND GOVERNANCE STRUCTURE

John Ewing, CFA

Co-President & Chief

Investment Officer

Darcy Morris

Co-President & Chief

Executive Officer

Jill Hamblin

Office Manager

Alex Ryzhikov, CFA

Portfolio Manager

Anthony Hammill, CFA

Co-Portfolio Manager

Lee Matheson, CFA

Co-Portfolio Manager

Randy Steuart, CFA

Portfolio Manager

Breann Kirincich, LLB

Chief Compliance &

Operating Officer

William Jones, JD

Relationships

Sharon Rodrigues

Reception

Oghale Omosa

Client Administration

Cynthia Chan, CA, CPA

Controller

As of June 30, 2019.


A STRONG ADVISORY BOARD

3

Martin Connell

Rosamond Ivey

Bill Stedman

Linda Haynes

Ira Gluskin

David Wilson

John MacIntyre

Hon. David

Peterson

Harry Rosen


STRATEGY OVERVIEW

Focus on small capitalization companies

North American long /short strategy

Capital structure agnostic seeking “equity like”

returns

Heavy due diligence and continued involvement in

companies



$1,000

$1,500

$2,000

$2,500

$3,000

Sam

ple

gro

wth

of

$1000

Broadview Dark Horse S&P/TSX Small Cap Index S&P/TSX Composite Index

BROADVIEW DARK HORSE LP

SAMPLE GROWTH OF $1000 INVESTED SINCE INCEPTION

*Year-to-date returns. Returns reflect the A Class – Master Series as of August 31, 2019. Broadview Dark Horse LP returns since inception are net of fees and expenses and are for the consolidated series. Past performance doesnot guarantee future results. This letter does not constitute an offer to sell or the solicitation of an offer to buy any interest in the Broadview Dark Horse LP. Such an offer may only be made by way of a definitive subscriptionagreement and are only available to investors who meet legal requirements for investor suitability and sophistication. The strategy’s composition is materially different from major indices. (1) We have listed the S&P/TSX Compositeand S&P/TSX Small Cap Indices because they are representative of widely known and followed investment alternatives of similar market capitalization. These benchmark indices are provided for information only and comparisonsto benchmarks and indices have limitations. Investing in Canadian equities is the primary strategy for the Dark Horse, however the Dark Horse does not invest in all, or necessarily any, of the securities that compose the referencedbenchmark indices, and the Dark Horse portfolio may contain, among other things, options, short positions and other securities, concentrated levels of securities and may employ leverage not found in this indices. As a result, nomarket indices are directly comparable to the results of the Dark Horse. Benchmark source: Capital IQ. While all information prepared in this report is believed to be accurate, Ewing Morris & Co. Investment Partners Ltd. makes noexpress warranty as to the completeness or accuracy nor can it accept responsibility for errors, appearing in the report. This report is not intended for public use or distribution.

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Cumulative Annualized

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*Since

Inception

Since

Inception

Broadview Dark

Horse LP15.8% 4.7% 13.4% 19.9% 6.9% 5.4% -2.2% 12.5% 1.9% 4.3% 186.7% 10.7%


SECURITY SELECTION

Competitive advantage:

• Small capital base

• Alignment - partners

invested alongside

clients

Exploit structural,

nuanced or temporal

inefficiencies. We are

value investors and

content to look very

different from peers

6

Heavy due diligence and

continued involvement in

virtually all files, with an

“Activist” involvement as

back-up plan

LONG/SHORT FUND, ALPHA LONGS, ALPHA SHORTS AND INDEX HEDGES


UNDERWRITING PROCESS

DARK HORSE FUND LP

Identify situations with mispricing likely associated with distress,

disinterest, complicationIdea Generation

Focus on businesses we understand well and can properly

handicap with a strong preference for recurring, contractual

cashflow streams Expertise

Determine value through the lens of Private Market Value with the

insight of a sophisticated, arm’s length buyer with full dataPrivate Value

Business operations, industry structure, creditors, credit

environment, shareholders, boards of directors and managementDeep Diligence

Determine fair value range using spectrum of scenarios, acquire at

meaningful discount to probability weighted fair value. Payoff

asymmetry & liquidity help determine position sizingScenario Analysis

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RISK MANAGEMENT

FRAMEWORK

Asset/Liability

matching

framework

Prevent against

over-investing in

illiquid securities

EXPOSURE LIMIT

Aim not to exceed

100% gross long

or 100% gross

short

SECTOR LIMIT *

Aim not to exceed

20% gross long

POSITION LIMIT

Aim not to exceed

8% long exposure

to any single

issuer

Aim not to exceed

4% short

exposure to any

single issuer

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*Sector classifications may differ from commonly used classifications such as GICS.


THE DARK HORSE VS. INDICES

Returns reflect the A Class – Master Series as of August 31, 2019. Broadview Dark Horse LP returns since inception are net of fees and expenses and are for the consolidated series. Past performance does not guarantee futureresults. This letter does not constitute an offer to sell or the solicitation of an offer to buy any interest in the Broadview Dark Horse LP. Such an offer may only be made by way of a definitive subscription agreement and are onlyavailable to investors who meet legal requirements for investor suitability and sophistication. The strategy’s composition is materially different from major indices. (1) We have listed the S&P/TSX Composite and S&P/TSX SmallCap Indices because they are representative of widely known and followed investment alternatives of similar market capitalization. These benchmark indices are provided for information only and comparisons to benchmarks andindices have limitations. Investing in Canadian equities is the primary strategy for the Dark Horse, however the Dark Horse does not invest in all, or necessarily any, of the securities that compose the referenced benchmark indices,and the Dark Horse portfolio may contain, among other things, options, short positions and other securities, concentrated levels of securities and may employ leverage not found in this indices. As a result, no market indices aredirectly comparable to the results of the Dark Horse. Benchmark source: Capital IQ. While all information prepared in this report is believed to be accurate, Ewing Morris & Co. Investment Partners Ltd. makes no express warrantyas to the completeness or accuracy nor can it accept responsibility for errors, appearing in the report. This report is not intended for public use or distribution.

Performance SummaryBroadview

Dark Horse

S&P/TSX

Composite Index

S&P/TSX

Small Cap Index

Return

1-Month -1.7% 0.4% -1.5%

MRQ -2.0% 0.8% 1.6%

1-Year 5.8% 4.3% -5.2%

3-Year 4.6% 7.2% 0.1%

5-Year 5.2% 4.1% -1.3%

ReturnCumulative Returns (SI) 181.0% 146.0% 114.6%

Annualized Returns (SI) 10.4% 9.0% 7.6%

RiskStandard Deviation 3-Year 6.0% 9.0% 10.8%

Standard Deviation (SI)** 6.9% 10.3% 15.5%

Sharpe Ratio Sharpe Ratio (SI)** 1.3 0.7 0.4

Correlation Correlation 3-Year 1 -0.2 0.1

Max Drawdown Max Drawdown (SI) 7.4% 16.5% 31.5%

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THE DARK HORSE

88 POSITIVE MONTHS VS. 37 NEGATIVE MONTHS

*Returns reflect Class A – Master Series. Inception date of the Fund is April 3, 2009

NET RETURNS SINCE INCEPTION (CAD)*

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YEAR

2019 0.33 0.03 0.84 0.08 3.60 1.39 -0.29 -1.69 --- --- --- --- 4.30

2018 1.22 -1.52 -1.48 -1.02 0.91 1.04 -1.18 2.53 -0.20 2.07 -1.13 0.70 1.85

2017 -1.42 4.75 0.66 2.93 -0.35 0.27 -1.00 1.30 1.45 2.58 -1.74 2.60 12.48

2016 -4.33 0.67 4.12 0.85 -0.22 1.03 0.55 -0.31 0.84 0.05 -3.31 -1.90 -2.21

2015 -1.44 2.46 1.50 -0.46 1.89 -0.41 -1.98 -0.49 2.79 -0.45 1.17 0.84 5.42

2014 0.03 3.23 2.07 -1.46 -0.82 -0.57 0.77 -0.94 0.60 0.95 1.36 1.53 6.85

2013 3.18 1.09 1.78 -1.52 2.23 0.42 3.80 1.60 2.06 2.20 0.81 0.70 19.85

2012 2.46 2.84 2.94 1.37 -2.16 0.85 0.05 2.11 1.18 -0.96 0.20 1.87 13.37

2011 2.45 1.93 1.03 -1.58 1.36 1.51 1.17 -7.13 -0.30 1.86 1.46 1.24 4.71

2010 1.07 0.62 0.50 6.23 -1.59 -3.90 3.44 -0.86 3.65 1.42 1.37 3.20 15.80

2009 --- --- --- 4.79 1.47 3.02 5.66 4.87 2.08 -0.87 2.83 2.61 29.6

TERMS AND INVESTOR SERVICES

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SUMMARY OF KEY TERMSAlignment of interests Over 25% insider assets are invested in the Fund

Fees

Class A: 1.65% annual fee + performance fee, 30-day

redemption notice period

Class B: Available to certain institutional investors at the

discretion of the Manager

Perpetual High Water MarkPerpetual; performance fee does not start accruing until after

the previous losses have been recouped + hurdle rate

Performance Fee20% of profits over a hurdle rate equal to the higher of 3% or

the 1-year Bank of Canada Treasury Rate

Lockup provision None

Liquidity Monthly (2% early redemption fee payable to LP)

Reporting

Monthly investment statements and pricing

Quarterly commentary

Annual Limited Partners Meeting

Custodian/Prime Broker TD Securities / Goldman Sachs / BMO Nesbitt Burns

Fund Administrator SS&C Commonwealth Fund Services



CONTACT US

WILL JONES

Partner, Relationships

[email protected]

416.317.0050

LEE MATHESON

Portfolio Manager

[email protected]

416.640.2791

1407 Yonge Street

Suite 500 Toronto, ON

Canada M4T 1Y7

telephone 416.640.2791

www.ewingmorris.com

mailto:[email protected]

mailto:[email protected]


DISCLAIMER

This document does not constitute an offer to sell units of the Broadview Dark Horse LP.

Past performance does not guarantee future results. The information contained herein

reflects the views of Ewing Morris as of the date of publication. These views are subject to

change without notice at any time subsequent to the date of issue. All information

provided is for informational purposes only and should not be construed as personal

investment advice. Users of these materials are advised to conduct their own analysis

prior to making any investment decision. While the information is believed to be reliable,

no representation or warranty is made concerning the accuracy of any data presented.

There can be no guarantee that any projection, forecast or opinion will be realized.

an investment partnership managed by ewing morris & co. investment partners … · - private...

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