At Pender, we are often asked about our cash levels because it fluctuates over time depending on the individual Fund mandate and the opportunity set. One of the common misconceptions regarding some Pender mandates is that most outsiders think we have generated good risk-adjusted returns despite holding cash. However, we are of the view that good risk-adjusted returns have been achieved because of the opportunistic deployment of cash over the cycle. Without that cash, it would be impossible to deploy capital when individual stocks drop and “fat pitches” suddenly become available, or when the market enters one of its recurring corrections and great opportunities become more widespread.Continue Reading
There is no longer an “easy button” in fixed income whereby investors can earn relatively high real returns from invested instruments guaranteed by the government. While most investors still construct their portfolio with a mix of “ballast” and “earners” (fixed income and equities), many no longer expect to earn meaningful returns from their fixed income allocation. However, we believe that it can be done. Moreover, we believe that there should be a healthy part of investor portfolios assigned to credit instruments that can protect their principal well, while adding to the overall return of their portfolio. Investors no longer have to depend on equity markets to carry the full weight of their return expectations.Continue Reading
Stocks rarely perform in the time frames we predict, which is why the market works best for investors who have a long-term portfolio focus. Volatility in short-term returns, especially with the relatively concentrated strategies we deploy, comes with the territory and we don’t place too much emphasis on it in any given year. Nevertheless, despite a bumpy ride as various macro events shook the markets, 2016 was a great year for Pender.Continue Reading
At the time of writing, David Barr’s track record for picking small cap take-out1 targets stands at 40 portfolio holdings taken out since the Pender Small Cap Opportunities Fund was launched (June 2009). In just over seven years, that averages out to around one every two months.
We take a private equity approach to public markets
We research potential holdings as if we were buying an ownership stake in the business, not just the stock. We take a deep look at financials, risk factors, the industry, competition and the management team. We also determine how we can exit the position by estimating a present and projected range of intrinsic value.Continue Reading