Q&A

Michael Prittie Portfolio manager/ senior financial advisor MANDEVILLE PRIVATE CLIENT

Fast fact Successful people manage their finances in a specific way. Prittie has analyzed and distilled this information over the last 28 years into “The Five Laws of Wealth Creation.”

Is private equity in for a growth spurt? What is the state of private equity investments in Canada today? Private-equity (PE) exposure has grown dramatically over the past 10 years and Canada is following the lead set in the US and globally. The future for private equity is bright – and further growth and democratization is supported by regulatory reform that is liberalizing access.

What sectors and industries are getting most of your attention and that of advisors? Personally I am utilizing several Private Equity products – some are short-/mid-term income oriented and some are long-term growth oriented. Portland Investment Counsel’s Private Income Fund has a steady annual yield of about 8% (paid monthly) yet similar volatility/ variability in price to that of iShares short-term bond ETF, which is very compelling. Timbercreek Investment Management has a fourquadrant product offering a mix of private/public real estate and Private/public debt....a yield of 5% with opportunity for capital growth. By combining private with public equity it offers quarterly liquidity and I have had great success with their previous US MultiResidential Opportunities Fund. For longer-term investors I’m very pleased with the unique aspects of Portland’s Global Energy Efficient Renewable Energy Fund (GEEREF), which offers the ability to co-invest with the European Investment Bank, Germany and Norway. This product offers excellent

Mackenzie gets into the alternatives game

Mackenzie Financial has launched its Mackenzie Diversified Alternatives Fund. The fund provides Canadian retail investors access to alternative asset classes typically available only to pension funds and institutional investors. Specifically, the fund invests in real estate, infrastructure, emerging market debt, micro-cap equities, foreign currencies, preferred shares and commodities. It also promises access to an absolute return strategy by investing in the Mackenzie Unconstrained Fixed Income Fund.

growth potential and first rights to capital protection, income stream and return of capital.

What are the biggest challenges in private equity today? Biggest challenges: access, quality and transparency. Regulatory environment remains protectionist (except for institutional and other accredited investors), but slowly regulatory reform is improving access and helping to promote greater transparency and quality. Finding an advisor who has access to highquality private equity through their dealer is at times a challenge. Another challenge an advisor qualified, experienced and knowledgeable with private equity who can act on a client’s behalf – especially if the client isn’t accredited. This means working predominately with a registered portfolio manager who can act as the accredited entity on behalf of clients where suitable.

Why do you believe in private-equity investments? High-quality PE investments have proven to be great creators of wealth. Most very wealthy people we know created wealth owning a private business which they understood intimately, was domiciled in a growth industry and held by them for a long time. The objective of the average Canadian investor is no different than that of the wealthy – they both desire to protect and grow their capital. Why then, should the methodology be different?

CIBC Mellon wins KKR’s trust

CIBC Mellon has won the right to provide asset servicing for Cygnus Investment Partners’ new set of alternative investment solutions. CIBC Mellon will provide Cygnus with custody and safekeeping of client assets; foreign exchange processing and settlement; and investment information delivery. In the last issue, we highlighted the move by Cygnus to offer Canadian institutional and qualified individual investors with access to a global and diversified suite of KKR products at unusually low minimums. KKR is a leader in alternative investments.

Timbereek’s newest fund does first big raise

Timbereek completed first close of its Canadian Multi-Residential Value Add Fund with aggregate commitments of approximately $100 million from Canadian and European institutional investors. This is Timbercreek’s fourth Canadian fund focusing on rehabilitating and repositioning well-located, multi-residential assets in key Canadian markets. It’ll acquire assets where value can be achieved through Timbercreek’s active management and value enhancement program. Timbercreek has deployed more than $3 billion in multi-residential real estate in North America. www.wealthprofessional.ca

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