Profile of Fairlane Asset Management
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Manages traditional & non-traditional bond mandates
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Experienced investment professionals
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Services high net worth and institutional investors, including foundations & trusts
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80% of our investors have been with us for more than fifteen years
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Fairlane’s History
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Fairlane Asset Management was founded in 2003
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Merged with Strathy Investments Ltd. in 2005 creating over 33 years of experience
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Registration with the Ontario Securities Commission:
Portfolio Manager (PM)
Investment Fund Manager (IFM)
Commodity Trading Manager (CTM)
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Fairlane A Plus Bond Hedged Fund
Fairlane Asset Management Service Providers:
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Caledon Trust - Trustee
Commonwealth - Fund Administration
Gowlings - Legal
National Bank Prime Brokerage
SB Partners - Accountants
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Fairlane’s Business
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Our focus is providing superior absolute returns
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We concentrate in “Special Situation Investing” using the following investment strategies:
Fixed Income Long / Short Investing (Fairlane Credit
Arbitrage) with leverage
Fixed Income Long Investing (Fairlane A Plus Bond) traditional
Fixed Income Long Investing with Hedge (Fairlane A Plus
Bond Hedged) non-traditional
Equity and Fixed Income Investing (Fairlane Balanced)
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Fairlane’s Product Profile
Fairlane Balanced Strategy
Mid Cap Equity with Fixed Income
Fairlane Credit Arbitrage
Strategy
Canadian Fixed Income Strategies
Fairlane A Plus Bond Hedged Fund
Canadian Short Credit Bonds and Gov’t Bonds
Fairlane A Plus Bond Strategy
Canadian Fixed Income Strategies
Risk
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Fairlane A Plus Bond Hedged Fund
Philosophy and Objective:
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The Fund actively invests in undervalued investment grade corporate bonds with an average credit rating of “A” (as per S&P, Moody’s)
The bonds in the Fund will have an average duration of less than 5 years
The Fund can use Government bonds as a hedge to mitigate interest rate risk and also can be used opportunistically when market conditions warrant
The Fund invests in securities that are highly liquid
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Suitability :
The Fund is suitable for fixed income investors seeking a lower risk strategy to invest in an actively managed portfolio of bonds
This Fund should be a part of your overall asset mix.
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Fairlane A Plus Bond Hedged Fund
Investment Style:
Long Credit – what we do or look for
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Rich/Cheap
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Top Down
Liquidity
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• Credit Rating
Underlying stock performance
Government of Canada’s
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Match duration
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Add alpha value
Trade around edges when opportunity exists
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Fairlane A Plus Bond Hedged Fund
Fund Facts : GlobeFund Five Star Rating
Inception: July 1, 2011
Management Fee: 100 basis points
Performance Fee is 15% of our return over a
High Water Mark
Expenses: 30 basis points (capped)
Category:
Risk Profile:
Min Investment:
Fixed Income
Low….X……………………High
$100,000 for Pooled Funds
Distribution Frequency:
Asset Mix/Credit Mix:
Liquidity:
Tax Efficiency:
Systematically re-invested, T5 at end of year
“A” credit on average
Monthly redemptions & purchases
Fund is very tax efficient as approx 70% of fund return is Capital gain
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Fairlane A Plus Bond Hedged Fund
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Fairlane Asset Management Current Investment Strategy :
Fund is positioned to take advantage of current spreads between attractive Corporate Bonds and Government Bonds
Fund is also positioned well to take advantage of expensive
Government Bonds
Active Management provides increased returns by trading hedge
Manager believes that current economic conditions forecast higher bond yields
Hedge will protect capital in a “bear” bond environment
Fund will invest in a portfolio of Corporate securities and High
Yield producing a high internal positive cash flow which will add to net return
Fund would suit investors that seek above average fixed income return
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Fairlane A Plus Bond Hedged Fund
Compounded Rate of Return Chart
Fund
1
Month
3 Month 6 Month 1 Year
0.60% -0.24% 5.40% 8.51%
5 Year 10 Year
Since
Inception
8.51%
Benchmark* 0.12% 0.60% 0.69% 2.52% 2.52%
*Globe Canadian Short Term Fixed Income Peer Index
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Fairlane A Plus Bond Hedged Fund
3,00%
2,50%
2,00%
1,50%
1,00%
0,50%
0,00%
-0,50%
-1,00%
-1,50%
-2,00%
1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun
2011 2012
July 2011 to June 2012
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Fairlane A Plus Bond Hedged Fund
5 Yr. RBC Corp Bond ETF vs. 5 Yr. Gov’t of Can Benchmark

Fairlane A Plus Bond Hedged Fund
• Canadian 10-year bond yield too low
• Probability rates going higher at some point
• Fund is protected against higher rates
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Fairlane A Plus Bond Hedged Fund
Current Economic Scenarios and Outcomes
Economic Expansion
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EPS growing , stocks higher, credit tightens
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Canada’s decrease in price , down in price as BOC tightens eventually
Economic Contraction
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Flock to Canada’s for safety
Credit trades flat or down
Manager would reduce shorts outright or partially
Economic Lull
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Pick up positive spread between Corps and Canadas
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Pick up trading gains
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Robert Bradeen
30 St. Clair Ave West, Suite 1105
Toronto, Ontario M4V 3A1 t (416) 975-1900 f (416) 975-1933 www.fairlane-am.com | rbradeen@strathy.com