Company’s co-CEO explains strategy behind new product
Ninepoint Partners has launched its new Ninepoint Concentrated Canadian Equity Fund, which aims to bring in an annual return 4% above the TSX benchmark.
It will be run by Scheer Rowlett & Associates, a team responsible for managing $2.8 billion in assets for pension plans, corporations and high-net-worth investors to name just a few.
James Fox, co-CEO and managing partner at Ninepoint Partners, said they will bring an institutional-quality process to managing the fund.
He said: “One thing that we like, taking their top names, is that they are effectively going to be running with 20 positions, so a little more focused on alpha.”
He added: “They are a firm that is a specialist in this space; they have a strong institutional following and why not have a firm that is just dedicated to Canadian equities?”
Fox said the fact Canadian equities are engrained in the team’s DNA appealed to Ninepoint. The fund, which charges a management fee of 2.25% (Series A) and 1.25% (Series F), will seek companies whose intrinsic value has not been accurately reflected in its stock price.
He said: “It’s more of a value long-term fundamental approach; they lean towards companies that are just more value-oriented. You won’t get many high-multiple companies.
“They look for companies at discounted valuations and they think that good value never goes out of style. They use a quantitative screening process to look for their names and they determine the sustainability of their profitability, which leads them to their security selection.”
He added: “This is more appealing, for our firm at least, in trying to offer a more alpha-orientated Canadian equity allocation for advisors. It’s not [a case of] buy a Canadian equity fund and it’s going to be very close to the index, this is really the best ideas, using the value, long-term fundamental approach of a team that all they do is focus on Canadian equities.”
Fox refused to be drawn on whether he thought Canadian equities as a whole were undervalued, insisting that he would leave that to the advisors.
He said: “They are the asset-allocators. We’re here to provide funds or products that help them with their asset allocation – that will be their view. This team runs $2.8 billion, it’s all institutions and they go through rigorous due diligence to allocate capital.”