Compelling opportunities for the contrarian
Transcription
Compelling opportunities for the contrarian
Investment Companies UK Investment Companies Research 27 August 2015 Alan Brierley | Canaccord Genuity Limited (UK) | [email protected] | 44.20.7523 8091 Ben Newell | Canaccord Genuity Limited (UK) | [email protected] | 44.20.7523 8084 FTSE Investment Companies index since 2009 nadir (total return, base = 100) Compelling opportunities for the contrarian 275 250 225 200 175 150 125 100 Source:Morningstar Weighted average Investment Companies ex alternative investments sector discount (%) -3 -4 -5 -6 -7 -8 -9 -10 -11 -12 Source:Morningstar Contrarian value BlackRock World Mining (HOLD) British Empire (BUY) Murray International (BUY) Templeton Emerging (BUY) Defensive/portfolio diversifiers BH Global (BUY)/BH Macro (BUY) Ruffer Investment Company (BUY) Sub-sector quality on a discount Listed Private Equity (OVERWEIGHT) Notwithstanding recent weakness, global financial markets have made meaningful progress since 2009. Generally speaking, investors who have adopted a buy-the-dip, growth-orientated momentum-based strategy have been rewarded with strong gains. However, the headline performance numbers mask a massive polarisation in returns, at the style, geographic and sector level. Growth continues to lead value with the MSCI AC World Growth index having outperformed its value counterpart by 3% p.a. since the start of 2007 (and 9% in the past year). US equity returns have been particularly noteworthy with the S&P Composite beating the MSCI World ex US by 55% since October 2009. Emerging markets have struggled with the latest sell-off taking the index back to summer 2009 levels. At the sector level, the fortunes of the NASDAQ Biotech index (+469%) contrast starkly with that of the Euromoney Global Mining index, which has lost 72% of its value since April 2011. While many investment companies have fully participated in the recovery, some have had a shocking time and so have now become contrarian calls. This report includes BlackRock World Mining, British Empire, Murray International and Templeton Emerging. While the principle of contrarian investing is simple and potential gains substantial, the execution is much more difficult. Do these stocks offer once-in-a-generation opportunities or are they value traps, and what are the possible catalysts for change? Having become increasingly dependent on a narrow range of stocks, markets have lost momentum since the end of QE3 last October. In recent weeks, concerns over a hard landing for the Chinese economy and stockmarket, fears of a currency war and the prospect of an end of the zero interest rate policy in the US have ignited a sell-off and brought back painful memories. Only time will tell whether this is the beginning of something more sinister or another buy-the-dip opportunity, but we do fear that the ongoing commodities rout, with the Bloomberg Commodity Index now back at 1999 levels, may be the canary in the coalmine. We also feature BH Global/BH Macro, Ruffer and Listed Private Equity; we believe they have strategic value as portfolio diversifiers and would expect them to perform well in these more challenging conditions. Where do we go from here? The key theme of our 2015 handbook was Now the hard work begins. We expressed concerns about the gap between valuations and fundamentals, increasing signs of fatigue from many markets/sectors, the increasing dependence on US equities (which have been propelled by a re-rating of rather anaemic earnings growth which themselves have been boosted by significant levels of buybacks) and historically narrow discount levels in the closed-end sector. Little seems to have changed and we continue to favour a defensive stance with a focus on capital preservation; our model portfolio is on page 19. We would take advantage of elevated ratings of some distinctly average investment companies and reduce exposure to higher beta more illiquid assets. While the ongoing sell-off may represent another buythe-dip opportunity, and we note that even US equities are now well into correction territory, we do wonder what happens when (not if) we next have a crisis - with interest rates so low and debt levels so high, just what tools will the authorities be able to deploy? This research note is produced by Canaccord Genuity Limited which is authorized and regulated by the Financial Conduct Authority (FCA). This is non-independent research and a marketing communication under the FCA Conduct of Business rules. Please see the Important Disclosures section in the appendix of this note which are an integral part of it or visit Canaccord Genuity’s Online Disclosure Database http://www.canaccordgenuity.com/ecmpgn/disclosures.pdf for more information. Investment Companies Compelling opportunities for the contrarian Compelling opportunities for the contrarian To buy when others are despondently selling and to sell when others are euphorically buying takes the greatest courage, but provides the greatest profit – Sir John Templeton Value vs. Growth MSCI AC World Value vs. MSCI AC World Growth (relative total returns, base = 100) 100 MSCI AC World Value & MSCI AC World Growth (absolute total returns, base = 100) Source: Thomson Financial DataStream MSCI World Value Jun-15 Dec-14 Jun-14 Jun-13 Dec-13 Jun-12 Dec-12 Dec-11 Jun-11 Jun-10 Dec-10 Dec-09 Jun-09 Jun-15 Dec-14 Jun-14 Jun-13 Dec-13 Jun-12 Dec-12 Jun-11 Dec-11 Jun-10 Dec-10 Dec-09 Jun-09 Jun-08 Dec-08 Dec-07 Jun-07 Dec-06 75 Jun-08 80 Dec-08 85 Jun-07 90 Dec-07 95 Dec-06 180 160 140 120 100 80 60 40 MSCI World Growth Source: Thomson Financial DataStream Rest of World vs. US MSCI World ex US vs. S&P Composite (relative total returns, base = 100) 100 95 90 85 80 75 70 65 60 55 MSCI World ex US & S&P Composite (absolute total returns, base = 100) 250 225 200 175 150 125 100 75 MSCI World ex US Source: Thomson Financial DataStream 27 August 2015 | www.canaccordgenuity.com S&P Composite Source: Thomson Financial DataStream 2 Investment Companies Compelling opportunities for the contrarian Emerging Markets vs. Developed Markets MSCI Emerging Markets vs. MSCI World (relative total returns, base = 100) MSCI Emerging Markets & MSCI World (absolute total returns, base = 100) 100 180 90 160 80 140 120 70 100 60 80 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 50 Source: Thomson Financial DataStream MSCI Emerging Markets MSCI World Source: Thomson Financial DataStream Global Mining vs MSCI AC World Euromoney Global Mining vs. MSCI AC World (relative total returns, base = 100) Euromoney Global Mining & MSCI AC World (absolute total returns, base = 100) 160 100 90 80 70 60 50 40 30 20 140 120 100 80 60 40 Source: Thomson Financial DataStream 27 August 2015 | www.canaccordgenuity.com Jun-15 Dec-14 Mar-15 Jun-14 Sep-14 Dec-13 Mar-14 Jun-13 Sep-13 Dec-12 Mar-13 Jun-12 Sep-12 Dec-11 Mar-12 Jun-11 Sep-11 Dec-10 Mar-11 20 Euromoney Global Mining MSCI AC World Source: Thomson Financial DataStream 3 Investment Companies Compelling opportunities for the contrarian BH Global – BUY / BH Macro – BUY BH Global Company statistics Price Discount Dividend yield Market capitalisation Ongoing charge (£ class, excluding performance fee) 1300p/US$12.85 4.7%/4.7% 0%/0% £349m/eq£40m 2% Source: Morningstar Board Director (appointed to Board) Sir Michael Bunbury, Chairman (2013) John Hallam (2008) Graham Harrison (2010) Talmai Morgan (2008) Nicholas Moss (2008) Fee (£,000) Investment (£,000) 150 52 36 31 31 36 41 20 41 11 Source: Morningstar Company statistics Price 2065¼p/US$19.56/€19.90 Discount 5.3%/6.2%/5.4% Dividend yield 0%/0%/0% £745m/eq£233m/ Market capitalisation eq£69m Ongoing charge (£ class, excluding 2.55% performance fee) Source: Morningstar Board Ian Plenderleith, Chairman (2007) David Barton (2015) Huw Evans (2010) Christopher Legge (2007) Colin Maltby (2015) Claire Whittet (2014) BH Macro has been a long-term constituent of our model portfolio and historically we have had a marginal preference for this fund. However, we are impressed by recent changes at BH Global and the strong re-rating would suggest this enthusiasm is shared by the market. Undoubtedly the relatively subdued returns from both companies in recent years have focused investor’s minds on the fee arrangements and we welcomed the removal of BH Global’s 50 bps over-riding fee. Since the changes, the NAV and shareholder total returns are 2.9% and 8.9% respectively, comparing favourably against a FTSE All Share total return of -5%. Both companies offer strategic and tactical value and these qualities are compounded by attractive discounts. We believe these ratings are a function of the subdued returns during the liquidity driven markets of recent years rather than prospective returns. The Boards have demonstrated they will take decisive action to address supply/demand imbalances and prevent discounts widening and control discount volatility, through regular buybacks, capital returns and even class closures. Brevan Howard seeks to generate consistent long-term appreciation, employing a combination of global macro and relative value trading strategies in the fixed income and FX markets. The traders will look to construct positively skewed, limited downside return profiles under different event scenarios. The managers believe that extracting economic value is fundamentally a function of effective risk management; the risk management team consists of 29 investment professionals. There is a focus on capital preservation with risk defined as the loss of capital not just volatility of returns. BH Macro Director (appointed to Board) Key role in improving portfolio diversification A fundamental question now is whether and for how long the authorities can continue to create an environment that favours risk assets and keep volatility at artificially low levels. Although we have no idea how long this phase may last, when it ends, it is unlikely to end well. This will be a fertile environment for Brevan Howard and very challenging for risk assets that have performed so well in recent years. Looking forward, we expect Brevan Howard to deliver superior long-term risk-adjusted returns and so believe that both companies have a key role in improving portfolio diversification. Fee (£,000) Investment (£,000) 167 0 0 37.5 37.5 34 34 0 15 0 25 0 Source: Morningstar 27 August 2015 | www.canaccordgenuity.com BH Macro was launched in March 2007 and is a direct feeder into the flagship Brevan Howard Master Fund. BH Global launched in May 2008 and following a policy change in September 2014, now invests all of its assets in the Brevan Howard Multi-Strategy Master Fund. This currently allocates to four underlying funds and a Direct Investment Portfolio (an opportunistic allocation to individual senior traders). The current split is BH Master (43%), Direct Investment Portfolio (30%), BH Asia Master (12%), DW Catalyst (11%) and BH Systematic Trading (9%). The manager expects to allocate a material portion of assets to the Direct Investment Portfolio and this is a key differentiator relative to BH Macro. In addition, the fee structure of BH Global has been simplified. A management fee of 2% is charged at the company level along with a 20% performance fee on the net NAV performance above a high water mark. A 50 bps over-riding fee that had previously been charged has been discontinued. For BH Macro, the management and performance fees are 2% and 20% respectively but there is also an operational services fee of 50 bps. Since inception, the Master Fund has delivered an annualised return of 9.78%, volatility of 5.3%, with Sharpe and Information ratios of 1.52 and 1.8 respectively. In addition, correlation with equity markets has been very low and actually negative during market dislocations. However, QE has proved to be a strong headwind. Returns have been somewhat anaemic since the authorities moved to “do-whatever-it-takes mode” back in 2011 and have been materially impacted by a challenging period between June 2013 and May 2014, when the NAV fell by 8.5%. 4 Investment Companies Compelling opportunities for the contrarian BH Macro NAV vs. FTSE All Share (absolute and relative total returns, base = 100) 240 Premium/Discount (cum-fair NAV, %) 6 280 255 210 3 230 180 205 150 0 180 155 120 130 90 105 60 Mar-07 -3 -6 80 Mar-09 Mar-11 NAV (LH scale) Mar-13 Mar-15 FTSE All Share (LH scale) -9 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 NAV vs FTSE All Share (RH scale) Source: Morningstar Source: Morningstar BH Global NAV, price & FTSE All Share (absolute total returns, base = 100) 115 Premium/Discount (cum-fair NAV, %) 0 110 -3 105 -6 100 -9 95 -12 90 -15 Aug-10 BHGG - NAV BHGG - Price Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 FTSE All Share Source: Morningstar Source: Morningstar BH Macro vs. BH Global – NAV & shareholder total return (base = 100) 124 145 140 120 135 116 130 112 120 125 115 108 110 104 105 100 95 100 NAV total return (LH scale) Shareholder total return (RH scale) Source: Morningstar 27 August 2015 | www.canaccordgenuity.com 5 Investment Companies Compelling opportunities for the contrarian BlackRock World Mining Company statistics Price Discount Equity portfolio (as % of NAV) Dividend yield Market capitalisation Ongoing charge 206p 12.4% 116% 10.1% £369m 1.4% Source: Morningstar Board Director (appointed to Board) Fee (£,000) Investment (£,000) Anthony Lea (Chairman, 2005) Ian Barby (2003) Colin Buchan (2001) David Cheyne (2012) Ian Cockerill (2013) Russell Edey (2014) Judith Mosely (2014) 45 25 30 37.5 30 30 30 30 52 60 49 58 14 15 Source: Morningstar HOLD The canary in the coal mine? When Ben Bernanke gave notice of his intention to launch QE2 in August 2010, risk assets appeared to be the prime beneficiaries. We expected BlackRock World Mining to perform well in this environment and indeed for the rest of that year, the price jumped 52%. Sadly, it has all been downhill since then. Since its peak in December 2010, the Euromoney Global Mining £ total return is -68% while the BlackRock World Mining NAV total return has lagged this benchmark by 23% since April 2012. These are indeed challenging times for BlackRock World Mining while sentiment towards the asset class is so poor, and it is difficult to identify a catalyst for any turnaround in the short-term. However, maybe these are the classic BUY signals for the contrarian investor. Subdued global growth and the slowdown of the Chinese economy represent obvious headwinds, but, with the share price now back to 2005 levels and 75% off its April 2011 highs, we wonder to what extent are these already discounted? The current yield, based on the total dividend paid last year of 21p is now 10.1%. The Board recently advised that based on current estimates proving correct, it is prepared to use revenue reserves to maintain the current dividend level in 2015. Future use of reserves will depend on its confidence in returning to a fully covered position in the near term. The 2014 dividend was covered and although H1 2015 EPS fell 6.1%, the interim dividend was also covered; income from investments was 16% below H1 2014 but this was partially offset by a 57% rise in option premiums, begging questions about sustainability. We draw investors’ attention to these issues when looking at the apparent attractiveness of the headline yield. While commodity prices remain at these depressed levels we are likely to see a greater focus on underlying income streams and an increased scrutiny of the progressive dividend policies of some of the key holdings. The Bloomberg Commodity index is now back at 1999 levels. To be candid, we struggle to reconcile the collapse in the commodity sector with a global economy that is supposed to be recovering. This remains an undoubted concern. We added BRWM to our model portfolio in March 2009, but downgraded from a long-standing Buy recommendation to HOLD last October. For the investor who is prepared to take a long-term view, then the shares have their attractions. The higher beta characteristics bode well when we arrive at the other side of the valley, while BRWM remains the only commodity-focused closed-end fund with good marketability. 27 August 2015 | www.canaccordgenuity.com 6 Investment Companies Compelling opportunities for the contrarian Premium/Discount (cum-fair NAV) NAV vs. Euromoney Global Mining/FTSE All Share (total returns, base = 100) 110 250 100 200 2 -2 -6 90 150 80 100 -10 -14 -18 70 Aug-05 50 Aug-07 Aug-09 Aug-11 vs. Euromoney Global Mining (LH scale) Aug-13 -22 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 vs. FTSE All Share (RH scale) Source: Morningstar Source: Morningstar Top 10 investments @ 31 July 2015 Geographic exposure - Sector % of NAV BHP Billiton Global - Diversified 16.7 Rio Tinto Global - Diversified 12.9 Global - Copper 8.9 Glencore Global - Diversified 6.5 Lundin Mining Global - Diversified 5.7 Norilsk Nickel Russia – Diversified 5.1 Peru - Copper 4.4 Mexico – Silver & Diamonds 3.4 Australia – Industrial Minerals 3.4 First Quantum Minerals Cerro Verde Fresnillo Iluka Resources Hudbay Minerals Canada – Diversified 3.3 70.3 Source: Company Reports Sector breakdown (% of total assets) Base Metals 22.1% Geographic breakdown (% of total assets) Gold 12.5% LatAm 15.4% Silver & Diamonds 10.4% Diversified 43.6% Source: Morningstar 27 August 2015 | www.canaccordgenuity.com Net current liabilities -0.8% Other Africa 7.4% Canada 6.7% Industrial Minerals 4.8% Other 5.2% Australasia 8.5% Emerging Europe 4.8% Global 52.6% South Africa 2.6% Net current China liabilities Indonesia 2.2% -0.8% 0.6% Energy Minerals 2.2% Source: Morningstar 7 Investment Companies Compelling opportunities for the contrarian British Empire Company statistics Price Discount Equity portfolio (as % of NAV) Dividend yield Market capitalisation Ongoing charge 456.2p 13.1% 101% 2.3% £625m 0.9% Source: Morningstar Board Director (appointed to Board) Strone Macpherson (Chairman, 2002) Steven Bates (2006) Susan Noble (2012) Nigel Rich (2012) Andrew Robson (2008) Fee (£,000) Investment (£,000) 35 182 25.3 23 23 27 91 41 68 20 Source: Morningstar BUY Patience beginning to wear thin The manager looks to identify valuation anomalies where the price does not reflect intrinsic value. Stock selection seeks to identify high quality global holding companies, asset backed companies and funds where there are a number of potential catalysts for the discount to narrow. Strong balance sheets and cash-flows are an important part of the investment selection process. The manager will actively engage with holdings to improve corporate governance and unlock shareholder value, although the track record of realising value in recent years has not matched the experience with investment trust holdings at the end of the 1990’s/early 2000’s. In recent years, value investors have faced material headwinds as central bankers in the developed world have successfully engineered a powerful rally in risk assets and kept interest rates and asset volatility at exceptionally low levels. Since the end of 2006, the MSCI World Value index has lagged the MSCI World Growth index by an annualised 3%. Not surprisingly, British Empire has struggled against this backdrop and matters have been compounded by material underweight US (where the manager has struggled to find value), overweight Europe, relatively high levels of liquidity and some poor individual stock selections (in gold miners and energy). For investors, poor NAV total returns have been accompanied by a de-rating which now sees the shares trade on one of the widest discounts in the global sector. Since June 2012, the company has bought 25m shares (or 16% of shares in issue) to address a supply/demand imbalance; these shares are currently held in treasury. In the absence of a turnaround in sentiment, we would expect the company to continue to employ an active buyback programme. We note that these are anxious times for British Empire; since the beginning of 2013, the shareholder total return has lagged the peer group by a sobering 25% and this has materially impacted sentiment towards the company. Back in April 2012, we said that patience was the hardest part of value investing and three years later, little seems to have changed. The portfolio remains relatively cheap (currently trading at a 25% discount) while the look-through discount represents a significant margin of safety. Meanwhile the focus on quality businesses with strong balance sheets and cash-flows should underpin defensive characteristics. Identifying a catalyst for a change in fortunes is challenging but we wonder whether a move to higher interest rates will lead to a more supportive environment. NAV/Shareholder total returns vs. AIC Global peer group (base = 100) Discount vs. peer group (cum-fair NAV) 110 0 105 -2 100 -4 95 -6 90 -8 85 -10 80 -12 75 -14 70 65 Aug-05 -16 Aug-10 Aug-07 Aug-09 NAV total returns Aug-11 Aug-13 Aug-15 27 August 2015 | www.canaccordgenuity.com Aug-12 British Empire Shareholder total returns Source: Morningstar Aug-11 Aug-13 Aug-14 Aug-15 Morningstar Global Growth Source: Morningstar 8 Investment Companies Compelling opportunities for the contrarian Top 10 investments @ 31 July 2015 Sector % Investor AB Investment Holding Company 6.5 Sofina Investment Holding Company 4.5 NB Private Equity Investment Company 4.3 HarbourVest Global Private Equity Investment Company 4.1 Jardine Matheson Investment Holding Company 4.0 Investment AB Kinnevik-B SHS Investment Holding Company 3.5 Aker ASA Investment Holding Company 3.3 Symphony International Investment Company 3.2 Wendel Investment Company 3.2 Mitsui Fudosan Co Real Estate Company 3.1 Sub-total 39.7 Source: Company Reports Sector breakdown (% of invested assets) Risk region breakdown (% of net assets) European Holding Companies 31.5% North American Holding Companies 3.8% Asian Holding Companies 9.0% Closed-End Funds 37.5% Resources & Mining 1.5% Conglomerate 3.9% Source: Morningstar 27 August 2015 | www.canaccordgenuity.com Property 12.8% Americas 24% Pacific ex Japan 9.7% UK 13.3% Japan 8.8% Liquidity -0.8% Continental Europe 39.2% Emerging Markets 5.8% Source: Morningstar 9 Investment Companies Compelling opportunities for the contrarian Listed Private Equity Overweight Something’s missing… In our Listed Private Equity sector review of April 2009, we highlighted the potential for some exceptional returns and what we regarded as “a classic opportunity for the contrarian investor”. In that time the weighted average shareholder total return of 229% compares to a FTSE All Share total return of 106%, translating into 8.5% annualised outperformance. The key driver of these superior returns has been a rerating from extremely distressed discount levels. Somewhat counter-intuitively, for an industry that looks to generate 3 to 5% excess returns over quoted equities, NAV progression has been relatively subdued. Since the start of 2010, the weighted average annualised NAV total return is 9.3%, ahead of the FTSE All Share total return CAGR of 8% but behind the MSCI World CAGR of 10.3%. We are intrigued but not unduly concerned by this solid but dull relative performance. We believe it is due to a number of factors. Firstly, since the authorities began flooding markets until last summer, quoted equities have been led higher by a number of higher beta, “lower quality” stocks. Between November 2011 and July 2014, a basket of 50 S&P 500 companies with weak balance sheets (measured by Altman Z-scores) put together by Goldman Sachs outperformed a basket of companies with stronger balance sheets by 42%. We would expect the LPE sector to struggle in this type of environment, although notably there are signs that this is now beginning to reverse. In addition, NAV’s have historically tended to lag in buoyant quoted markets. For several years, the managers have been focused on building value in the underlying portfolios and we believe there is now considerable latent value here in an environment where valuations are high and M&A activity at record levels. As the portfolios continue to mature we would expect to see further healthy realisations. Meanwhile conservative valuations will likely see further meaningful uplifts on carrying value while also representing important defensive characteristics. The traditional equity long-only investment companies now trade on historically narrow discounts, with the weighted average discount now 4.6%. Meanwhile, the re-rating of the listed private equity sector has lost momentum in the past couple of years with the weighted average discount of 18.5%, a long way below the average 10% premium it reached prior to the financial crisis. We like this margin of safety, while recent developments at Electra highlight the risks of a relaxed approach to addressing discounts; there is certainly no room for complacency. Given the experiences during the last crisis, it is only natural to question the defensive qualities of the Listed Private Equity sector, particularly if we have now entered a period of choppier waters. However, we do believe there are a number of material differences between 2008 and now. Much work has been done on strengthening balance sheets at the investment company level, with many companies having net cash and medium-term debt facilities in place in case of need, while the maturity profile of the underlying portfolios is increasingly attractive. Critically, the Boards now have firepower to provide some liquidity and prevent relatively modest selling pressure causing so much damage, as was the case during the crisis. We take comfort from the margin of safety represented by the current discounts and conservative valuations of the portfolios. As demonstrated by the performance table below, given the divergence between the best and worst performers, stock selection is critical. Our current preferred plays are F&C Private Equity, Graphite Enterprise, HarbourVest Global Private Equity, NB Private Equity, Pantheon, Standard Life European Private Equity and SVG Capital. 27 August 2015 | www.canaccordgenuity.com 10 Investment Companies Compelling opportunities for the contrarian Morningstar Listed Private Equity ex 3i sector - NAV/TSR vs. FTSE All Share/MSCI World (base = 100) Premium/Discount (%) 20 130 10 120 0 -10 110 -20 -30 100 -40 -50 90 -60 80 Aug-10 Aug-11 Aug-12 NAV vs FTSE All Share Aug-13 NAV vs MSCI World Aug-14 Aug-15 -70 TSR vs FTSE All Share Source: Morningstar Source: Morningstar NAV total returns to 21 August 2015 (sterling adjusted, base = 100) 1 year Rank 3 years Rank 5 years Rank 10 years Rank 3i 113.2 6 162.4 1 145.6 12 165.1 8 Aberdeen Private Equity 110.3 11 123.2 10 149.1 11 Better Capital PCC 2009 112.3 9 112.8 15 141.8 14 Better Capital PCC 2012 92.0 20 102.0 19 Candover Investments 71.4 21 80.4 21 57.1 20 47.8 12 Electra 124.4 1 152.0 3 193.3 2 356.9 1 F&C Private Equity 109.2 12 122.4 11 152.1 10 244.4 3 Graphite Enterprise 102.0 15 124.1 9 154.5 8 216.3 5 HarbourVest Global Priv Equity 112.9 7 144.4 4 179.2 3 HgCapital Trust 112.4 8 125.2 7 157.1 7 284.4 2 JPMorgan Private Equity 119.5 3 114.7 14 98.6 18 142.9 9 JZ Capital Partners 120.5 2 124.3 8 166.6 5 131.6 10 234.2 4 LMS Capital NB Private Equity Oakley Capital Investments 96.4 18 103.0 18 109.2 17 118.9 4 144.2 5 167.7 4 99.0 17 108.7 16 129.5 15 Pantheon International 112.2 10 130.0 6 160.7 6 Princess Private Equity 105.0 14 107.9 17 124.4 16 Private Equity Investor 95.2 19 88.9 20 97.6 19 176.3 7 Standard Life Euro Private Eq 105.1 13 120.8 13 153.2 9 213.5 6 SVG Capital 117.6 5 154.4 2 260.0 1 101.9 11 99.6 16 122.2 12 145.0 13 Symphony International Morningstar Listed Private Equity ex 3i 110.9 126.8 158.1 194.9 MSCI World 102.9 138.8 170.5 205.8 FTSE All-Share Index 97.2 123.9 150.7 181.2 MSCI Europe 98.6 135.4 140.3 167.3 Source: Morningstar 27 August 2015 | www.canaccordgenuity.com 11 Investment Companies Compelling opportunities for the contrarian Shareholder total returns to 21 August 2015 (sterling adjusted, base = 100) 1 year Rank 3 years Rank 5 years Rank 10 years Rank 3i 130.9 2 254.5 1 219.5 7 140.9 8 Aberdeen Private Equity 111.5 8 141.6 12 149.9 14 Better Capital PCC 2009 105.0 13 77.7 19 104.0 18 Better Capital PCC 2012 77.4 20 61.5 21 Candover Investments 45.5 21 66.9 20 43.0 20 18.8 12 Electra 123.3 3 190.9 3 254.8 2 332.6 1 F&C Private Equity 108.7 10 161.8 7 213.2 8 249.6 3 Graphite Enterprise 100.1 14 159.6 8 227.4 5 219.0 4 HarbourVest Global Priv Equity 121.0 4 191.0 2 253.0 3 HgCapital Trust 110.7 9 127.7 15 159.6 13 254.7 2 JPMorgan Private Equity 138.1 1 149.5 9 88.1 19 108.5 10 JZ Capital Partners 106.7 12 143.6 11 186.9 10 100.8 11 83.3 19 110.9 17 168.2 12 118.1 5 182.7 4 224.1 6 94.7 18 121.5 16 136.9 16 Pantheon International 111.8 7 174.0 5 240.6 4 192.7 5 Princess Private Equity 115.1 6 139.6 13 196.0 9 Private Equity Investor 98.7 16 102.5 18 148.3 15 145.6 7 LMS Capital NB Private Equity Oakley Capital Investments Standard Life Euro Private Equity SVG Capital Symphony International 99.4 15 147.7 10 185.8 11 176.4 6 108.6 11 164.9 6 298.9 1 130.6 9 97.7 17 131.6 14 127.2 17 Morningstar Listed Private Equity ex 3i 107.0 142.9 191.9 133.4 MSCI World 102.9 138.8 170.5 205.8 FTSE All-Share Index 97.2 123.9 150.7 181.2 MSCI Europe 98.6 135.4 140.3 167.3 Source: Morningstar 27 August 2015 | www.canaccordgenuity.com 12 Investment Companies Compelling opportunities for the contrarian Murray International Company statistics Price Premium Equity/Fixed income portfolio (as % of NAV) Dividend yield Market capitalisation Ongoing charge (excl performance fee) 812.5p 1.2% 101%/15% 5.7% £1,042m 0.73% Source: Morningstar Board Director (appointed to Board) Fee (£,000) Dr Kevin Carter (Chairman, 2009) Lady Balfour of Burleigh CBE (2003) James Best (2005) Marcia Campbell (2012) Peter Dunscombe (2011) David Hardie (2014) Investment (£,000) 42 203 23 11 23 28 23 23 427 47 31 34 Source: Morningstar BUY “Don’t get emotional about stock, it clouds your judgement” For many years after assuming managerial responsibility in 2004, Bruce Stout put together an exceptional performance record that transformed the fortunes of Murray International. Strong NAV gains were accompanied by a healthy re-rating and the Board addressed a material supply/demand imbalance by issuing new shares and in the process raised over £360m. Strong stock selection combined with a prophetic reading of the macro-economic environment were key drivers. However, the recent history has been sobering. Since April 2013 the NAV total return has lagged the benchmark by 26% and a painful de-rating has compounded matters. A disciplined value conscious process continues to emphasise solid growth businesses with strong balance sheets and proven management teams focused on shareholder interests, but with hindsight, this has proved too defensive in recent times. The portfolio has been significantly underweight US/overweight Emerging Markets, while the strength of sterling has been a further drag (90% of the portfolio is invested internationally). The manager continues to be troubled by the macro backdrop, particularly debt levels, while noting that “stretched and illogical valuations usually always lead to capital destruction regardless of prevailing short-term justifications”. Meanwhile, with regard to sterling he believes that given economic and political fundamentals, such strength is unlikely to last. Given current sentiment and supply/demand dynamics, we see further downward pressure on the discount in the short-term. After trading on a material premium for many years, recent weeks have seen selling pressure intensify. Accordingly, while it may have seemed inconceivable a short time ago, the Board may soon have to take action to prevent this de-rating gaining momentum. We look for Boards to take tangible action to protect investors from excessive premium/discounts and also rating volatility. Back in 2013 we warned over the sustainability of the premium and moved from a BUY to Tactical SELL recommendation. However, we then blotted our copy book by returning to a BUY in 2014. Although this has proved premature we retain our confidence in the manager and have a great deal of sympathy with his views. We like the focus on capital preservation, and would highlight that the dividend yield is now 5.7% while the revenue account and reserves are strong. We strongly believe that at some point the market will once again come to value these characteristics. NAV/Shareholder total returns vs. Composite index: 40% FTSE World UK/60% FTSE World ex UK (base = 100) Premium/Discount (cum-fair NAV) 190 13 180 11 170 9 160 7 150 5 140 3 130 1 120 110 -1 100 -3 90 Aug-05 Aug-07 Aug-09 NAV total return Aug-11 Aug-13 Aug-15 -5 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Shareholder total return Source: Morningstar 27 August 2015 | www.canaccordgenuity.com Source: Morningstar 13 Investment Companies Compelling opportunities for the contrarian Top 10 investments @ 31 July 2015 Sector % British American Tobacco 4.9 ASUR 4.9 Taiwan Semiconductor 3.6 Unilever Indonesia 3.6 Taiwan Mobile 3.2 Philip Morris 3.1 Nordea 2.9 Roche 2.7 SingTel 2.6 Zurich Insurance 2.6 Sub-total 34.1 Source: Company Reports Geographic breakdown (% of portfolio) UK 13.8% North America 15.4% LatAm & Emerging Markets 27.4% Japan 2.1% Cash 0.9% Europe ex UK 18.5% Asia Pacific ex Japan 21.9% Source: Company data 27 August 2015 | www.canaccordgenuity.com 14 Investment Companies Compelling opportunities for the contrarian Ruffer Investment Company Company statistics Price Premium Equity portfolio (as % of NAV) Dividend yield Market capitalisation Ongoing charge 218.6p 4.6% 44% 1.6% £338m 1.18% Source: Morningstar Board Director (appointed to Board) Fee (£,000) Ashe Windham, Chairman (2009) John Baldwin (2011) Wayne Bulpitt (2004) Jeanette Etherden (2004) Peter Luthy (2004) Christopher Spencer (2004) Investment (£,000) 35 175 25 25 25 25 25 0 44 80 262 31 Source: Morningstar BUY The powers of compounding absolute returns Ruffer focuses on the preservation of capital and seeks to generate consistent, sustainable and absolute returns; the principle objective of the company is to achieve a positive total annual return, after all expenses, of at least twice the Bank of England base rate. Since launch in July 2004, the annualised NAV total return is 8.8%, around 100 basis points ahead of the FTSE All Share CAGR of 7.8% and notably this has been achieved with 40% lower volatility. Historically, fortunes have been inversely correlated with equity markets and as the chart below demonstrates, the company is likely to struggle during liquidity fuelled equity rallies. Since last summer, there has been a stealth-like recovery in the relative NAV performance, and a re-rating has compounded these superior returns; the shareholder total return is now 16% ahead of the FTSE All Share since last September. Although the NAV has lagged equity markets in recent years, the shares have traded on a premium and the company has increased shares in issue by 73%. The closedend structure and size give the manager greater flexibility than its £3bn open-ended fund, and so we have a natural preference, but we would be mindful of acquiring shares on overly excessive premium ratings. The company has an annual redemption facility, for up to 25% of its shares, although this has only been used once in 2007. For some time the managers have expressed concern about the rising tide of “easy” money and the increasingly correlated nature of markets; the portfolio is defensively positioned but the key focus is ensuring these defences are in the right place – “it is in the reaction to the next crisis where the true risk lies”. With global debt, both on an absolute level and also as a percentage of GDP now higher than 2007, reducing the debt burden will be a significant challenge. The portfolio is currently positioned to protect against both inflation and financial repression through index-linked bonds, while the equity investments (with a material tilt towards Japan) will give exposure to the possibility that we may be able to grow out of these debt problems. In addition, the sterling exposure is now 79%, its highest level in several years. In order to reduce the equity risk profile and improve diversification, we added Ruffer to our model portfolio at the beginning of last year. Given the inverse correlation characteristics, we believe it has an important role to play in improving portfolio diversification while its defensive attributes leave it well placed if we have now entered a more challenging phase. 27 August 2015 | www.canaccordgenuity.com 15 Investment Companies Compelling opportunities for the contrarian NAV & FTSE All Share, Shareholder total return vs. FTSE All Share (total return, base = 100) 240 180 220 160 200 180 140 10 8 6 4 160 120 140 120 100 80 60 Aug-05 Premium/Discount (cum-fair NAV) 0 80 -2 60 Aug-07 Aug-09 Aug-11 2 100 Aug-13 -4 -6 Jun-08 Ruffer Inv Co - NAV (LH scale) FTSE All Share (LH scale) Price total return vs. FTSE All Share (RH scale) Source: Morningstar Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Source: Morningstar Top 5 bond/equity investments @ 31 July 2015 % 1.875% Treasury index-linked 2022 6.2 1.25% Treasury index-linked 2055 5.9 0.375% Treasury index-linked 2062 4.6 US Treasury 0.625% TIPS 2043 4.0 US Treasury 1.125% TIPS 2021 3.9 T&D Holdings 2.5 Mizuho Financial 2.4 Mitsubishi UFJ Finance 2.3 Sumitomo Mitsui Financial Group 2.0 The Boeing Company 1.5 Source: Company Reports Asset allocation (% of NAV) Gold and gold equities 3% Options 1% Japan equities 19% Currency allocation (% of NAV) UK equities 8% Cash 6% North American equities 8% Index-linked gilts 9% Asia ex Japan 4% Long-dated index-linked 10% Non-UK indexlinked 19% Source: Company Reports 27 August 2015 | www.canaccordgenuity.com Illiquid strategies 9% Sterling 79% US dollar 8% Yen 8% Europe equities 4% Gold 3% Other 2% Source: Company Reports 16 Investment Companies Compelling opportunities for the contrarian Templeton Emerging Company statistics Price Discount Equity portfolio (as % of NAV) Dividend yield Market capitalisation Ongoing charge 387.7p 13.3% 94% 2.1% £1,207m 1.2% Source: Morningstar Board Director (appointed to Board) Fee (£,000) Peter Smith (Chairman, 2004) Christopher Brady (2007) Hamish Buchan (2008) Neil Collins (2006) Peter Harrison (2007) Beatrice Hollond (2014) Gregory Johnson (2007) Paul Manduca (2015) Investment (£,000) 60 39 35 35 35 47 35 0 35 0 58 27 17 0 0 0 Source: Morningstar BUY Desperately seeking value For many years, TEMIT has been a core holding for investors looking for global emerging markets exposure. However, the recent experience has been sobering. While emerging markets have materially lagged developed markets (by 46%), TEMIT’s value-orientation has been a drag on the relative performance (20% behind), and as the chart below highlights, the discount has come under increasing pressure (widening from 3% to 13%). The shareholder total return is now 53% behind the FTSE All Share since the end of 2010. Ominously, matters have begun to accelerate to the downside in recent months. Last month, TEMIT announced that Carlos Hardenberg would replace Mark Mobius as lead portfolio manager. Moving forward, Mark Mobius will remain Executive Chairman of the Templeton Emerging Markets Group and a portfolio manager of TEMIT, while critically a team of 53 portfolio managers represents a significant depth of resource. While the recent history has been poor, we feel it pertinent to note that since TEMIT was launched back in 1989 it has outperformed the MSCI Emerging Markets and FTSE ALL Share indices by an annualised 3.6% and 3.7% respectively. Since the beginning of the year, selling pressure has gathered momentum and the Board has addressed this by purchasing 10.6m shares for cancellation. We would look for the Board to continue to address this imbalance and expect buybacks to remain a feature until we see a sustainable recovery in performance. In a recent note we highlighted the management fee, which is 1.1% of shareholders’ funds, and argued that there was scope for a reduction in charges. We believe that this fee remains generous and that it is a legacy of the superior longer-term record. In what is an increasingly competitive environment we note that the ongoing charge is more than four times the £4bn Vanguard Emerging Markets Fund. We added TEMIT to our model portfolio back in March 2009 and although the shareholder total return in the first 20 months was nearly 198%, the company has since endured a perfect storm. Undoubtedly these are dark days and current sentiment is reminiscent of that towards the end of the TMT bubble. However, it is worth noting that between April 2000 and May 2003, the company outperformed the MSCI Emerging Markets index by 45%. Only time will tell whether we have reached a point where investors are despondently selling, but we believe there are dangers in throwing the towel in now - we retain our BUY recommendation. NAV vs. MSCI Emerging Markets (LH scale) & on an absolute basis (RH scale) (total returns, base = 100) 135 325 130 275 125 120 225 115 Discount (cum-fair NAV) -3 -5 -7 -9 175 110 -11 105 125 100 95 Aug-05 Aug-07 Aug-09 Aug-11 vs MSCI Emerging Markets (LH scale) Source: Morningstar 27 August 2015 | www.canaccordgenuity.com Aug-13 75 Aug-15 -13 -15 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 NAV total return (RH scale) Source: Morningstar 17 Investment Companies Compelling opportunities for the contrarian Top 10 investments @ 31 July 2015 Brilliance China Automotive Country - Sector % Hong Kong/China – Consumer Discretionary 8.2 Unilever UK – Consumer Staples 4.4 Siam Commercial Bank Thailand – Financials 4.3 MCB Bank Pakistan – Financials 4.2 Dairy Farm Hong Kong/China - Consumer Staples 4.1 Itau Unibanco ADR Brazil - Financials 3.9 Astra International Indonesia – Consumer Discretionary 3.8 Brazil – Financials 3.6 Kasikornbank Thailand - Financials 3.3 PetroChina, H Hong Kong/China – Energy 3.3 Banco Bradesco, ADR Sub-total 43.1 Source: Company data Geographic breakdown (% of net assets) South Africa 4.4% Sector breakdown (% of net assets) Cash 5.9% Other 12.2% Hong Kong/China 26.3% Pakistan 5.4% India 5.8% Indonesia 6.9% Thailand 13.2% South Korea 8.5% Materials 6.7% 27 August 2015 | www.canaccordgenuity.com Cash 5.9% Financials 27.3% Consumer staples 9.6% Information technology 10.9% Energy 18.4% Consumer discretionary 16.7% Brazil 11.4% Source: Company data Industrials, 4.5% Source: Company data 18 Investment Companies Compelling opportunities for the contrarian Canaccord Genuity Investment Company model portfolio Current constituents BH Macro Monks BlueCrest All Blue Pantheon International British Empire Perpetual Income & Growth Edinburgh Dragon Polar Capital Technology Edinburgh Investment Trust RIT Capital HICL Infrastructure Ruffer Investment Company HarbourVest Global Private Equity Standard Life European Private Equity Impax Environmental Templeton Emerging The MedicX Fund Worldwide Healthcare Model portfolio (NAV and price), FTSE All Share and FTSE Investment Companies (total returns, base = 100) 250 225 200 175 150 125 100 75 50 Jun-15 Mar-15 Dec-14 Sep-14 Jun-14 Mar-14 Dec-13 Sep-13 Jun-13 FTSE ALL SHARE Mar-13 Dec-12 Sep-12 Jun-12 Mar-12 Dec-11 Model Portfolio - NAV Sep-11 Jun-11 Mar-11 Dec-10 Sep-10 Jun-10 Mar-10 Dec-09 Sep-09 Jun-09 Mar-09 Dec-08 Sep-08 Jun-08 Mar-08 Dec-07 Model Portfolio - Price FTSE Investment Companies Source: Thomson Financial DataStream, Morningstar 27 August 2015 | www.canaccordgenuity.com 19 Investment Companies Compelling opportunities for the contrarian Appendix: Important Disclosures The research provided in this report is based on our investment company analysis. Investment companies mentioned in our reports are not formally "covered" or "rated" by Canaccord Genuity, and as such there is no assurance that additional research will follow previously issued reports. The analysis contained in this research report is based on assumptions and predictions regarding future price movements and overall market trends. There can be no assurance that such assumptions and predictions will ultimately prove accurate or correct. Please note that the disclosures below relating to the distribution of stock ratings are relevant for Canaccord Genuity's fundamental research only. Analyst Certification: The authoring analyst of Canaccord Genuity Limited whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research. Distribution of Ratings: Global Stock Ratings (as of 27 August 2015) *Total includes stocks that are Under Review Canaccord Investment Companies Ratings System BUY: Over the next twelve months we expect the company to outperform its peer group and/or benchmark, in terms of shareholder total return HOLD: Over the next twelve months we expect the company to perform in line with its peer group and/or benchmark, in terms of shareholder total return SELL: Over the next twelve months we expect the company to underperform its peer group and/or benchmark, in terms of shareholder total return OVERWEIGHT: Over the next twelve months we expect the sector to outperform the peer group and/or benchmark UNDERWEIGHT: Over the next twelve months we expect the sector to underperform the peer group and/or benchmark None of the stocks covered in this research are under formal and regular coverage by the analyst nor are they formally rated in accordance with the Canaccord Genuity Ratings System. Ratings track BH Global BUY (26/03/2012)1 BH Macro BUY (26/03/2012)1 BlackRock World Mining BUY (31/01/2013); BUY (29/01/2014); HOLD (16/10/2014) British Empire BUY (26/03/2012)1 Murray International BUY (26/03/2012)1 ; SELL (15/07/2013)1 ; BUY (29/01/2014)1 Ruffer Investment Company SELL (26/03/2012)1 ; BUY (31/01/2013)1 Templeton Emerging BUY (26/03/2012)1 1. Date Canaccord Genuity Limited integrated with Stewart. 27 August 2015 | www.canaccordgenuity.com 20 Investment Companies Compelling opportunities for the contrarian Canaccord Genuity Company –Specific Disclosures as of 27 August 2015 Canaccord Genuity or one or more of its affiliated companies is a market maker or liquidity provider in the securities of BH Global, BH Macro, BlackRock World Mining, British Empire, Murray International, Ruffer Investment Company and Templeton Emerging or in any related derivatives. General Disclosures “Canaccord Genuity” is the business name used by certain wholly owned subsidiaries of Canaccord Genuity Group Inc., including Canaccord Genuity Inc., Canaccord Genuity Limited, Canaccord Genuity Corp., and Canaccord Genuity (Australia) Limited, an affiliated company that is 50% owned by Canaccord Genuity Group Inc. The authoring analysts who are responsible for the preparation of this research are employed by Canaccord Genuity Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). In the event that this is compendium research (covering six or more subject companies), Canaccord Genuity and its affiliated companies may choose to provide by reference specific disclosures of the subject companies or its policies and procedures regarding the dissemination of research. To access this material or for more information, please refer to http://www.canaccordgenuity.com/ecmpgn/disclosures.pdf The authoring analysts who are responsible for the preparation of this research have received (or will receive) compensation based upon (among other factors) the Corporate Finance/Investment Banking revenues and general profits of Canaccord Genuity. However, such authoring analysts have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Corporate Finance/Investment Banking activities, or to recommendations contained in the research. Canaccord Genuity Limited and its affiliated companies may have a Corporate Finance/Investment Banking or other relationship with the issuer that is the subject of this research and may trade in any of the designated investments mentioned herein either for their own account or the accounts of their customers, in good faith or in the normal course of market making. Accordingly, Canaccord Genuity Limited or their affiliated companies, principals or employees (other than the authoring analyst(s) who prepared this research) may at any time have a long or short position in any such designated investments, Related designated investments or in options, futures or other derivative instruments based thereon. For the purpose of UK regulation Canaccord Genuity Limited produces non-independent research which is a marketing communication under the FCA Conduct of Business Rules and has not been prepared in accordance with the FCA requirements to promote independence of research nor is it subject to the prohibition on dealing ahead of the dissemination of research. However, Canaccord Genuity Limited does have procedures in place to manage conflicts which may arise in the production of research, which includes preventing dealing ahead and Chinese Wall procedures. 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This research is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. This material is prepared for general circulation to clients and does not have regard to the investment objectives, financial situation or particular needs of any particular person. Investors should obtain advice based on their own individual circumstances before making an investment decision. To the fullest extent permitted by law, none of Canaccord Genuity Limited, its affiliated companies or any other person accepts any liability whatsoever for any direct or consequential loss arising from or relating to any use of the 27 August 2015 | www.canaccordgenuity.com 21 Investment Companies Compelling opportunities for the contrarian information contained in this research. 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This research is only intended for persons who fall within the definition of accredited 27 August 2015 | www.canaccordgenuity.com 22 Investment Companies Compelling opportunities for the contrarian investor, expert investor or institutional investor as defined under section 4A of the Securities and Futures Act. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. Recipients of this report can contact Canaccord Genuity Singapore Pte. Ltd. (Contact Tel: +65 6854 6150) in respect of any matters arising from, or in connection with, the research. For Hong Kong Residents: This research is distributed in Hong Kong by Canaccord Genuity (Hong Kong) Limited which is licensed by the Securities and Futures Commission. This research is only intended for persons who fall within the definition of professional investor as defined in the Securities and Futures Ordinance. 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None of the material, nor its content, nor any copy of it, may be altered in any way, or transmitted to or distributed to any other party, without the prior express written permission of the entities listed above. 27 August 2015 | www.canaccordgenuity.com 23 Investment Companies Team Head of Team Robbie Robertson +44 20 7523 8474 [email protected] Specialist Sales – STX - 69124 Dominic Waters +44 20 7523 8473 [email protected] Sales Trading – STX - 69124 Gavin Tooke +44 20 7523 8470 [email protected] Will Barnett +44 20 7523 8094 [email protected] Neil Brierley +44 20 7523 8478 [email protected] Research Alan Brierley +44 20 7523 8091 [email protected] Market Making – STX - 69123 Amar Bhachoo +44 20 7523 8476 [email protected] Corporate Finance Andrew Zychowski +44 20 7523 8363 [email protected] Ben Newell +44 20 7523 8084 [email protected] Wayne Friary +44 20 7523 8092 [email protected] David Yovichic +44 20 7523 8361 [email protected] Richard Mirams +44 20 7523 8093 [email protected] Lucy Lewis +44 20 7523 8360 [email protected] David Wharton +44 20 7523 8475 [email protected] Helen Goldsmith +44 20 7523 8340 [email protected] Denis Flanagan +44 20 7523 8356 [email protected] Vancouver Head Office(C) P.O. Box 10337 Pacific Centre 2200 . 609 Granville Street. Vancouver, BC, V7Y 1H2 1.604.643.7000 Toronto(C) Brookfield Place, 161 Bay Street Suite 3000, P.O. Box 516 Toronto, Ontario M5J 2S1 1.416.869.7368 Calgary(C) TransCanada Tower 450 1st Street SW Suite 2200 Calgary, Alberta T2P 5P8 1.403.508.3800 Montréal(C) 1250, René-Lévesque Bureau 2930 Montréal, Québec H3B 4W8 1.514.844.5443 Melbourne(AUS) 60 Collins Street, Level 4 Melbourne, VIC 3000 61.3.8688.9100 London(UK) 8th Floor, 88 Wood Street, London, EC2V 7QR 44.20.7523.8000 Boston(US) 99 High Street. Suite 1200 Boston, MA 02110 1.617.371.3900 New York(US) 350 Madison Avenue. 10th Floor New York, NY 10017 1.212.849.3900 San Francisco(US) 101 Montgomery Street, Suite 2000 San Francisco, CA 94104 1.415.229.7171 Sydney (AUS) 9 Castlereagh Street, Level 26 Sydney 61.2.9263.2700 Hong Kong 8 Queen’s Road Central, 5th Floor Hong Kong 852.3919.2500
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