Managed by Patient Capital Management Inc. & Canso Investment Counsel Ltd.
At VPI, we believe the best way to preserve capital is by purchasing quality assets at attractive prices. Temporary losses of asset values are anticipated and are an unavoidable consequence of fluctuating equity and bond markets. We strive instead to avoid permanent losses of capital, which are largely the result of buying inferior assets and/or paying too high a price for assets.
We define sustainable income as a return on your capital and not a return of your capital. In other words, the income stream of the VPI Income Pool will be a function of the true yield of the portfolio less applicable expenses, and not a return that erodes your invested capital to meet a predetermined payout. Essentially, the Pool will only pay out what it has truly earned.
Long-term growth of capital is achieved by purchasing quality assets at a discount and by employing a disciplined and repeatable investment process that supports this type of purchasing behaviour.
The purchase decision is key. It is easy to buy a popular investment at a steep price or a poor investment cheaply. It is central to our investing success to buy securities when they are out of favour and priced cheaply compared to their ongoing cash flows.
- Canso Investment Counsel Ltd.
At all times, the VPI Income Pool (the pool) requires an asset allocation with a minimum of 25% Fixed Income and a minimum of 25% Equities.
As the principal portfolio manager, if Patient Capital identifies high quality businesses at attractive prices, the asset weighting of the Pool will shift towards the ownership of more equities, to a maximum of 75%.
On the other hand, if Patient Capital cannot identify investments that meet its rigorous standards for value and quality, greater responsibility transfers to Canso and the asset weighting of the Pool will shift towards more fixed income, to a maximum of 75%.
Total S.A. is a global energy producer and provider with operations in more than 130 countries and employing almost 100,000 people worldwide. Though Total S.A. is the fifth-largest global oil and gas company, they have also begun looking to solar and biomass to prepare for future energy requirements.
Through its predecessors, PanCanadian Energy Corporation and Alberta Energy Company Ltd., Cenovus' roots trace back to Canada's oldest oil and gas companies. Cenovus' operations include oil sands mining and processing in Northern Alberta as well as natural gas and conventional oil production across Alberta and Southern Saskatchewan. In 2014, Cenovus grew average oil sands production to 128,000 barrels of oil per day, up 25% over 2013.
Established in 1948 in Japan, Honda is a global manufacturer of automobiles, motorcycles, and power equipment. The starting point for Honda was a shift in demand after World War II for bicycles mounted with auxiliary engines that would make it easier for people to move around and transport goods. This shift was the catalyst for Honda and it has continued manufacturing motorcycles ever since. Honda entered the automobile market in 1963 with a release of its first sports car and light truck and today sells multiple vehicles under both the Honda and Acura brands.
Founded in 1971, Bed Bath and Beyond and its subsidiaries operate retail stores in the United States, Canada, and Mexico. Its brands include Bed Bath & Beyond, Christmas Tree Shops, buybuy BABY, and Cost Plus. Through nearly 1,500 retail stores, the Company sells a wide variety of goods and furnishings primarily for the bedroom, bathroom, kitchen, and dining room. In addition, the Company, through its subsidiary, Linen Holdings, is a distributor of a range of textile products, amenities, and other goods to customers in the hospitality, cruise line, and healthcare industries.
Firm Capital Property Trust is a publicly listed Real Estate Investment Trust (REIT) that is focused on creating long-term value for unitholders through capital preservation and disciplined investing. The Trust's focus is on co-owning a diversified property portfolio of real estate asset types, including multi-residential, industrial, net lease convenience retail and core service provider professional space.
Ensign Energy Services Inc, based out of Calgary, Alberta, is among the world's strongest, fastest-growing energy services companies. The Company provides oilfield services including drilling, well servicing, well testing and pressure drilling for the North American and International markets.
Macy's, Inc. is a premier omnichannel retailer operating over 900 stores all over the United States of America under the Macy's, Bloomingdale's, Bloomingdale's Outlet, and Bluemercury brands. The Macy's chain of stores has been around since 1858 but also lends their name to annual traditions such as the Macy's Thanksgiving Day Parade in New York City.
With offices strategically located across Canada and over 3,000 employees, Clearstream Energy Services constructs, transports and provides maintenance services that keep clients moving forward. The company's ability to offer both open-shop and union workforce options, as well as embedded or non-embedded workforce operating models, uniquely differentiates them from competitors.
Clearstream Energy Services' people and processes are the pillars of the company. Safety is intertwined into the culture where everyone strives to achieve a zero-injury workforce and flawless execution on schedule and within budget. Clear Stream is the clear choice.
Verizon Communications helps people, businesses and things communicate better.
The digital world promises consumers a better, more connected life, and Verizon Communications are the ones delivering it. The company makes it possible for people to stay in touch and businesses to connect with their customers. Verizon Communications also brings technology and hands-on learning opportunities directly to kids who need it most. The company's goal is to inspire tomorrow's creators to use technology to build brighter futures for themselves, their families and the world.
WPP is the world's largest communications services group, employing 200,000 people working in 3,000 offices in 113 countries. Within WPP, our clients have access to companies with all the necessary marketing and communications skills.
Kimco Realty Corp. is a real estate investment trust (REIT) headquartered in New Hyde Park, N.Y., that is one of North America's largest publicly traded owners and operators of open-air shopping centers. As of December 31, 2017, the company owned interests in 492 U.S. shopping centers comprising 83 million square feet of leasable space primarily concentrated in the top major metropolitan markets.
Linamar operates 58 manufacturing facilities around the world. The company's precision products provide the light vehicle, commercial truck, off-highway, energy and industrial OEM markets with powertrain system solutions. The Skyjack brand is a global leader of aerial work platforms to the construction and access markets. Linamar is a diversified manufacturing company powering motion, powering work, powering lives.
Information about specific issuers of securities has been made available by Value Partners Investments Inc. (Value Partners) for the sole purpose of providing additional background information on the holdings in the VPI Income Pool (the Pool) as of December 31, 2017, and is not intended to be investment advice about the merits of investing directly in these issuers. This brochure has been prepared based on information that is publicly available or that has been provided to Value Partners by the portfolio managers of the Pool.
The complete holdings of the Pool are disclosed in its Statement of Investment Portfolio semi-annually. On a quarterly basis, the Pool discloses its top 25 holdings in its Summary of Investment Portfolio. Both these documents are available on our website at www.valuepartnersinvestments.ca. Value Partners is a registered investment fund manager and has engaged Patient Capital Management Inc. and Canso Investment Counsel Ltd., registered portfolio managers, to make decisions about the investments made by the Pool–these investment decisions are not made by Value Partners.