Post on 20-Aug-2020
transcript
World Alternative Investment Summit Canada Niagara 2015
“We will never forget your money is an expression of your trust,
and we promise to always uphold that trust”
September 15, 2015
www.forgefirst.com
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Andrew McCreath, CFA, President and CEO
Andrew is Co-Founder of Forge First Asset Management Inc. His 25 years of investment industry experience includes more than 15 years of managing money during which time he was a founding shareholder of two successful money management organizations that were sold to larger organizations. After being a top-ranked sell-side securities analyst at leading investment banks for 7 years, Andrew moved to the money management side of the business. He was a founding shareholder of Synergy Mutual Funds which was sold to CI Financial in October 2003. Andrew started his first hedge fund business, Waterfall Investments Inc., in April 2004 which was sold to Sentry Investments in August 2008 at which time Andrew joined the Sentry team. During his three years at Sentry, Andrew managed the Sentry Diversified Total Return Fund, winner of 2010 Lipper Award, and the Sentry Market Neutral LP, winner of 2010 Morningstar Best Relative Value Hedge Fund (Gold in 2010). Once an entrepreneur and always an entrepreneur, Andrew left Sentry at the end of August 2011 to launch Forge First Asset Management. He is also a Market Commentator on BNN-TV, Canada’s only all-business television station (www.bnn.ca), and host of “Weekly with Andrew McCreath”.
1. PHILOSOPHY
2. PEOPLE
3. PROCESS
4. PERFORMANCE
Forge First Guiding Principles
Manage long/short equity funds with a focus on preserving capital via portfolio construction and
generating performance through security selection.
Experienced and award-winning portfolio management team with a history of collaboration, has
decades of experience, and significant capital in the funds.
Typically invest in small- and mid-cap North American securities, in businesses we know and
understand. To preserve capital, we build portfolios with specific characteristics in mind:
No big percentage
weights in single stocks Take no large
sector bets
Hold no private
companies
Hold a large short
book
Broadly diversified
portfolios
*Downside capture measures the manager’s performance in a down market. A negative number means the manager has made money when the market has gone down.
August net return -3.06%Net Return - YTD 13.22%Net Return - Since Inception 118.20%Annualized Return (since inception) 28.79%Correlation (since inception) 41%Sharpe Ratio (since inception) 3.26Annualized Standard Deviation 8.52%Alpha 15%Beta Relative to Index 0.44Gross Exposure 130%Net Exposure 41%Upside Capture 128%Downside Capture* -56%
Inception date is Aug 2012
Data as at August 31, 2015
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Since inception, the
Forge First Long
Short LP has
generated positive
net returns in 69% of
the months in which
the TSX was down.
In these same
months, the fund
has outperformed
the TSX 85% of the
time!
Forge First Long Short LP (Class F Lead Series)
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Investment Process
Macro Investment Process
Assess global economic environment and identify themes
Inflation
Interest rates
Currencies
GDP
Commodities
Political issues
Country analysis
Monetary Policies
Demographics
Sector Investment Process
Analyse sector themes and identify opportunities based on the macro
investment process Examples: Long Non-residential construction, Short Agriculture
Equipment and Fertilizers, Long REITS, Short Banks
Stock Selection Process (Within a Given Theme)
Identify securities within sector and macro themes
US and Canada Universe of stocks
Screen for potential candidates poised to benefit from themes
Qualified Investments
Identify eligible investments for thematic trade
Fundamental Analysis
Identify stocks that can be included in the portfolios
LONG SHORT
Financial strength
Reasonable valuation
Strong growth prospects
Financial weakness
Poor valuation
Weak growth prospects
Trade a basket of 10-30 names/theme
with small weights in each name
Risk Assessment and
Portfolio Construction:
Beta target, Net Exposure levels, Correlation,
Standard deviation
Specific Characteristics in Mind:
Broad diversification, No private companies, Large
short book, No big position weights, No large sector
weights
Special Situations
Investments
Take Long/Short positions in
individual names – not part
of a thematic trade
Continuous Monitoring
Continuous
Monitoring
Continuous
Monitoring
Note: Returns for the Long Short LP are based on the Aug 2012 CL F Lead Series and are net of all fees. In a year, up to 12 series can be created within a class of
units. Accordingly, no two series will have the same net return. Unitholders are advised to refer to their monthly statement for the net return of their respective series.
Summary of Net Returns – Forge First Long Short LP
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All returns are in local currencies
Gross Profit Attribution (basis points) by Sector Since Inception
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Have made money in BOTH long books and short books on a since inception basis!
Gross profit attribution (basis points) by sector since inception
Upside Capture Ratio = [Sum of Portfolio Returns during
up months / Sum of Benchmark return during up months]
Downside Capture Ratio = [Sum of Portfolio Returns
during down months / Sum of Benchmark returns during
down months]
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Generated positive net returns in 69% of negative months for the TSX
LSLP Upside Capture 128%
LSLP Downside Capture -56%
Forge First
Long Short
LP
Long book: % positive performance 78%
Short book: % positive performance 51%
% of winning months 81%
↓
DATETSX Total
Return
Long Short LP
Class F (net return)
Long book
(gross return)
Short book
(gross return)
Multi Strategy LP
Class F (net return)
Long book
(gross return)
Short book
(gross return)
Aug-15 -4.04% -3.06% -6.25% 3.00% -2.66% -5.90% 3.11%
Sep-14 -3.99% -1.44% -5.33% 3.95% -0.73% -4.87% 4.28%
Jun-13 -3.76% 2.30% -0.06% 3.17% 3.02% 0.01% 3.84%
Jun-15 -2.78% 2.74% 1.73% 1.48% 2.02% 1.01% 1.38%
Apr-13 -2.07% 2.21% 0.11% 2.76% 2.49% 0.13% 2.76%
Oct-14 -2.07% -3.96% -4.97% 0.81% -2.87% -4.31% 1.34%
Mar-15 -1.88% 2.75% 0.48% 2.79% 2.26% 0.00% 2.72%
Nov-12 -1.28% 4.66% 2.30% 2.78% 5.19% 2.45% 3.13%
May-15 -1.22% 2.69% 2.21% 0.93% 2.35% 2.00% 0.76%
Dec-14 -0.44% 1.96% -0.20% 2.58% 1.58% -1.00% 2.92%
Jul-15 -0.31% -0.84% -1.54% 0.85% -0.60% -1.27% 0.82%
Mar-13 -0.20% 1.75% 2.53% -0.26% 1.67% 2.55% -0.44%
May-14 -0.16% 1.92% 1.91% 0.32% 1.08% 0.96% 0.32%
Nov-13 0.45% 2.53% 3.63% -0.63% 1.60% 2.33% -0.34%
Jan-15 0.55% 4.04% 4.27% 0.39% 3.18% 3.24% 0.46%
Jan-14 0.82% 1.43% 1.37% 0.39% 0.89% 0.84% 0.33%
Nov-14 1.06% 5.57% 4.71% 1.61% 4.18% 3.32% 1.45%
Oct-12 1.07% -0.24% 0.08% -0.55% -0.82% 1.05% -2.09%
Mar-14 1.23% 0.65% 1.16% -0.18% 0.17% 0.64% -0.25%
Feb-13 1.25% 2.49% 1.94% 1.31% 1.96% 1.44% 1.19%
Sep-13 1.40% 2.25% 4.25% -1.14% 1.87% 3.91% -1.28%
Jul-14 1.42% -0.67% -2.16% 1.63% -0.20% -1.82% 1.82%
Aug-13 1.55% 5.88% 5.46% 0.89% 4.82% 4.44% 1.02%
May-13 1.77% 2.69% 4.28% -1.49% 1.82% 3.22% -1.36%
Dec-12 1.95% 4.31% 5.84% -1.23% 4.13% 5.59% -1.19%
Dec-13 1.99% 3.11% 4.46% -1.05% 2.01% 3.25% -0.99%
Aug-14 2.09% 1.71% 3.86% -1.66% 0.94% 3.00% -1.71%
Jan-13 2.25% 5.08% 8.23% -2.73% 4.79% 8.01% -2.94%
Apr-14 2.42% 1.93% 2.71% -0.34% 1.40% 2.15% -0.48%
Apr-15 2.43% 1.01% 2.70% -1.40% 0.47% 1.91% -1.21%
Aug-12 2.65% -0.60% -1.08% 0.38% -0.16% -0.50% 0.27%
Jul-13 3.19% 8.38% 12.59% -3.51% 5.86% 10.37% -4.02%
Sep-12 3.43% 0.61% 3.07% -2.37% -0.66% 1.77% -2.38%
Feb-14 3.93% 3.51% 6.14% -2.04% 1.95% 4.47% -2.13%
Feb-15 3.98% 3.39% 6.41% -2.49% 2.41% 5.42% -2.59%
Jun-14 4.07% 1.88% 3.83% -1.58% 0.98% 3.24% -1.97%
Oct-13 4.72% 5.29% 7.68% -1.81% 2.93% 5.08% -1.86%
Forge First Long Short LP - Class F Forge First Multi Strategy LP - Class FSince inception (August 2012), Forge First Long
Short LP has generated positive net returns in
69% of the months in which the TSX was
down, and outperformed the TSX in 11 of
these 13 months. During this time, Forge First
Long Short LP made money in its short book
92% of the time!
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Why Forge First?
Always runs with a big short book and has a proven track record of
generating positive alpha.
Commitment to transparency as to how we make money in a business
that’s over three years old and has ~$96 million in AUM.
Do not take a “big bet” approach to investing - broadly diversified
portfolios, no private companies, and no big portfolio weights in any
single sector or stock.
History of positive net returns in down markets (negative downside
capture ratio).
Solid track record of generating strong, risk-adjusted net returns.
Sharpe ratio 3.26, Negative downside capture -56%, net CAGR 28%.
For more information, please contact Andrew McCreath
Office: (416) 687-6771
Mobile: (647) 546 6771
amccreath@forgefirst.com
www.forgefirst.com
TWITTER@forgefirst
• This communication is for information purposes only and is not, and under no circumstances to be
construed as an invitation to make an investment in the Funds.
• Application for the Funds will be considered on the terms of the Confidential Offering Memorandum
for investors in jurisdictions of Canada that meet certain eligibility or minimum purchase requirements.
• There is no guarantee of performance, and past or projected performance is not indicative of future
results. Only investors who do no require immediate liquidity of their investment should consider a
potential investment in the Funds. The risks involved in this type of investment may be greater than
those normally associated with the other types of investments. Please refer to the Confidential
Offering Memorandum for a further discussion of the risks of investing in the Funds.
Contact Information
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