The investment philosophy behind the BT Global Growth Fund is to provide investors with a global investment approach via the Canadian equity markets and hedge their portfolios against the negative effects of the unprecedented growth in money supply and subsequent devaluation of paper currencies globally. The Fund is a value-oriented, long/short equity and commodity specialized investment fund, created to provide an investment vehicle for high-net-worth investors to augment their portfolio returns, through long-term capital appreciation.
Our Idea Generation Process
Some of our favorite themes include disruptive industrial and resource utilization patterns, identification of over-hyped stories as well as global trends in demographics, economic growth and resource consumption.
Industry Specialists Validation
We seek inputs from experts in specific industries such as the oil and gas, uranium, banking and finance, goals and precious metals, agriculture, telecommunications, water and various other sectors. This allows us to confirm or challenge our hypotheses, therefore making our conclusions more robust.
BT Global Growth’s management team perform in-house analysis of trends in the market. In addition, BTGG Management performs interviews with company executives, industry consultants, opinion leaders and research analysts
Fund Investors’ Input
Fund investors are all High Net Worth individuals, many of whom are experts in their industries. This includes over 17 senior executives of private and public companies with a solid expertise in a broad range of Canadian industries. Our investors have a strong commitment to share ideas and insights.
Our Investment Selection Process
- Identify growth global investment themes
- Analyze for cash flow value (low P/CF multiple)
- Assess company’s the competitiveness on a global scale
- Verify the oligopolistic nature of the industry
- Make sure the balance sheet risks are minimal
- Perform scenario analysis given changes in inflation and competition level
- The Resource Sector will benefit Canada as much as any global economy and have a negative impact on certain economic sectors.
- The growth of 300-400 million people to “middle class” status in emerging markets will be the greatest single investment opportunity of our generation.
- The best investment opportunities will be as a result of activities in the “BRIC” countries and not necessarily the West: Our Management team has extensive business experience in each of Brazil, Russia, India, China, Eastern Europe and Mexico.
- For the next 5-10 years you want to own hard assets in your investment portfolio:
- Anything you can touch, feel and eat will not only retain its value, but will increase in value relative to cash, bonds, debt credit derivatives, financials, etc.
- In our opinion, the 33 year bull market in bonds is over, 1982 – 2015.
- Financial assets, including Bank stocks, have been so good for so long, investors have forgotten or underestimated the risks. Technology risk is significant for Canadian Banks. Non-bank financials plays offer much more interesting opportunities.
- Inflation and very possibly stagflation is coming:
- We do not believe government supplied CPI statistics, as there is plenty of evidence these numbers are understated;
- As inflation creeps into our economy, bonds and financial companies are not what investors want to own;
- Higher inflation will provide excellent short opportunities.
- Leverage is to be avoided:
- Short overly levered companies, they will face massive dilution;
- Stay long cash-rich, debt-free equivalents;
- No use of Long leverage. No borrowed money!
- Single sector exposure in any one sector should be maximum 20%.
- As a rule, we will not average down, often investor’s biggest mistake.
- Ideally the Fund has a minimun 15 long positions, 2-5% initial positions per name.
- Ideally the Fund has a minimum 5-10 short positions, repesenting at least 15%-20% of the Fund.
- Once a short position is established, we do not intend to add to it if we lose money; and review within 3 months to either close it or double it.
- Losses on a short position are reviewed at 5% increments and closed out in the event of a 20% loss.
- We plan to be active in pair trading, with monthly review and rebalancing.
- We will focus on “averaging up” successful positions.
- In general, we endeavor to have many core positions may be held for several years.
- Will trade around core positions and earn interest income which will offset management fees and other operating costs.
- With specific brokers we plan to manage currency risk at very low cost.
- We plan to make judicious use of “stop losses”.
For more information about our organization and to learn more about our investment fund and our investment philosophy, we invite you to contact our Montreal based Hedge Fund today. It will be our pleasure to answer your questions.
I have been involved with BT GLobal Growth Fund as a customer for about 7 or 8 year now and the guys have done a terrific job throughout the global financial crisis of 2008 as well as the various crisis we saw in the last few years. They have always managed to protect the capital in the downside and find interesting investment opportunities on the up side!
– Jim Shannon, Windemere Capital