what can we expect?, page-15

Background on a new substantial CPL shareholder:

Founded in 1992 by Wayne Deans and Doug Knight, Vancouver based Deans Knight Capital Management focuses on two strategies, growth and high income return. The firm describes its philosophy as being opportunistic with a long-term focus, buying undervalued businesses when they are out-of-favour. While the majority of investments are domiciled in Canada, many of these Canadian investments have global operations. The companys capital growth strategy involves looking for businesses with assets that provide a sustainable competitive advantage, reliable cash flows, hard book values, strong balance sheets, sum of parts worth more than the whole and hidden values. The firm makes no use of leverage or short selling and the portfolios are concentrated with 15-20 investments. The portfolio is also characterized by a low 20% turnover on average. Deans Knight has certainly found its stride in the Canadian marketplace as $1 million invested with Deans Knight in 1993 in their equity growth fund, is now worth nearly $19 million (as of March 31, 2010). To put things in perspective, the Deans Knight Equity Growth fund has averaged annualized returns of 18.9% since inception in March 1993 compared to the S&P/TSX Composite that has averaged 9.6% during the same period. Furthermore, returns from Deans Knight‟s income strategy have also exceeded those of the major North American Equity and High Yield Bond indices over the past 5, 10 & 15 year periods. The Deans Knight Income Fund has averaged annualized returns of 12.1% since inception in March 1993 compared to the S&P/TSX Composite that has averaged 9.6% and the Scotia Capital Markets(SCM) Universe bond index that has averaged 7.3%during the same period.
Deans Knight Capital Management is definitely doing something right and as such we want to learn as much about them and read everything written by the firms portfolio managers with the hope that a teeny weensy bit of their expertise rubs off on us. The Deans Knight Capital Management does have an archive of the quarterly commentaries for the Deans Knight Equity Fund and Deans Knight Income Fund that is great reading for top down macro insights on the Canadian equity and income markets. Weve also discovered that Deans Knight is the fund manager of the TDK Resource Fund, which is under the umbrella of First Asset Management. Twice a year, at the end of March and August, the fund files a Management report of fund performance on SEDAR, that not only talks about the performance of the fund and the markets over the preceding period but also highlights a few of the funds holdings. The same applies for the Deans Knight Income Corporation, a publicly traded company focused on investing in corporate bonds. If not for anything else, we would dig up the management reports of fund performance simply for the equity and fixed income picks.