Bud Roberts has reached his supposed allotted three score and 10, but the investment industry veteran isn't planning to slow down any time soon.
Roberts, who has been in the investment business for almost 50 years -- he started in 1958 with Royal Securities, a firm later acquired by Merrill Lynch -- is the driving force behind Edenview Investment Partnership, a firm that deals with high-net-worth individuals. His official title is president and chief executive.
But to ease up some of the driving, Roberts added Patrick Brigham initially as a partner and later as executive chairman. Brigham, who founded Sunquest Vacations in 1972 before selling it to Airtours PLC in 1995, is also the chairman of publicly listed of Mad Catz Interactive Inc.
Roberts' firm, which has been managing money for just over three years, requires a minimum investment of $150,000 and has just begun an expansion into Alberta and British Columbia, is different:
- It is a limited partnership and not an investment counsellor. "The LP structure means that we are restricted in who we can deal with. Investors need at least $150,000, we are allowed to accept only non-registered investments and we only invest in equities, fixed-income and options."
- It deals largely with two investment firms, TD Waterhouse and RBC Dominion Securities, specifically the Harbour Group.
"We deal with just two firms because, apart from the excellent service they give us, it allows us more time to focus on the investments," Roberts said.
The firm, which has about $50-million under management, is not different in that it charges a performance fee: After the partners have received a 7% return, the general partner is entitled to a 20% stake of gains above that benchmark.
Over the past three years, the general partner has received a performance fee, given that annual returns have been 27.85% (2003-2004), 29.93% (2004-2005) and 23% (2005-2006.)
Like a number of other firms that cater to the rich, Edenview is a big user of covered call options. Under that strategy, the firm will sell some "at the money" calls on either stocks it owns or it buys at the same time as it implements the strategy. It collects the option premium -- and dividends, if any -- but runs the risk of losing the ownership of the stocks.
Roberts said a covered-call strategy "produces additional premium income and helps with the overall performance."
Roberts, who is an active participant in new equity issues, added that portfolio is turned over "at least twice a year. We believe that through active management we can take advantage of market developments and short-term trends."
The fund's four biggest holdings are Addax Petroleum Inc., Alcan Inc., Canadian Pacific Railway Co. and EnCana Corp., while Research In Motion Ltd. has generated the largest absolute gain. In the United States, Goldman Sachs is the largest holding.
Ruus's results Within a couple of weeks, Alex Ruus, a portfolio manager with Northern Rivers Funds, will know whether he has retained the title of the best performing manager over the past year.
Ruus held that title for the 12 months ended Oct. 31, 2006, with his Northern Rivers Conservative Growth Fund LP. That fund, which was formed in November, 2005, and which has about $10-million in assets, posted a gain of 42.68% for the one year ended Oct. 31, 2006.
That return -- the best of all the country's mutual funds over the past 12 months -- is after all fees have been deducted. The fund -- one of the two managed by Ruus, the other is the Northern Rivers Global Energy Fund LP -- does not have a performance fee.
Ruus, who worked in the petroleum industry with Chevron before getting a MBA and heading to the investment world, said the fund reflects his "personal approach to investing."
He said that approach can be summed up as being "a long-term value manager. Everybody needs to be a value manager. I am looking for the biggest discount to the company's net present value," said Ruus, who describes his strategy as "similar to the approach taken by a private-equity fund." And his personal style is reflected in the diversity of what the fund owns. Indeed, his fund is probably the only one of its kind with the following three largest positions:
- ZCL Composites Inc., a Canadian-based company that manufactures fiberglass underground storage tanks and distributes petroleum-handling equipment and which has a market cap of $200-million.
- WestJet Airlines Ltd., a low-fare Calgary-based airline that has a market cap of $1.8-billion.
- Bank of America Corp., a bank holding company that has a market cap of US$245.3-billion.
During the year, Ruus -- who worked at Perigee Inc. and Cumberland Asset Management prior to joining Northern Rivers last year -- made a couple of strategic moves: During the summer he reduced the fund's energy weighting (to 15% from 35%) and almost doubled the share of the financial sector to about 20%.
"Energy and financials are always a key holding," said Ruus, whose fund is sold to those who satisfy the so-called accredited investor rule. (That rules requires a certain annual income and financial assets.)
