Investment Strategy

 

The King & Victoria Fund L.P. is a limited partnership formed under the laws of the Province of Ontario. The primary investment objective of the Partnership is to provide consistent positive absolute returns. This will be achieved through a combination of both long and short positions of publicly traded securities designed to generate superior investment returns through capital gains, interest, dividends and income. The security selection process will adhere to a rigorous fundamental research approach with a strong emphasis on those securities that reflect extreme valuation relative to intrinsic value. Research will be conducted proactively with an emphasis on gathering and assessing information. Positions in the Partnership’s portfolio will be closed once the Manager deems them to be fairly valued and in equilibrium. The Partnership will be invested according to the following guidelines:

  1. Focus primarily on securities traded on the North American markets.
  2. The Partnership will invest in a cross section of securities including common shares, preferred stock, corporate debt instruments (including bank debt) and convertibles. Options and other derivative instruments may be utilized with an aim to either enhance returns and/or reduce risk.
  3. Long positions will include issuers that are out of favour, deep value situations where an appropriate catalyst exists for value enhancement, and voluntary or involuntary restructurings of corporate securities. Issuers will be expected to show improving fundamentals and/or be in an industry that has positive dynamics.
  4. Short positions will reflect deteriorating company and/or industry fundamentals, weakening market conditions, and other factors which merit a determination of overvaluation by the Manager. Where appropriate, shorting will also be utilized as a hedging strategy for long positions.
  5. No controlling interest will be taken in any issuer.
  6. Net position size in any one issuer will be limited to a maximum of 20% of the Partnership’s equity. “Net position size” means long positions less short positions in the same issuer.
  7. Aggregate net position size will be limited to no more than 200% of the Partnership’s equity.

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