Presentation for
Queen’s University Pension Plan
David Vanderwood, Senior Vice President & Portfolio Manager
December 4, 20151
Quality, Value & Time
Queen’s Pension Plan:
Burgundy Canadian Equity
+ 335%
+ 151%
TSX Composite Index
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Performance: (Inception) June 1, 2001 - October 31, 2015
2
Investment Philosophy
Quality, Value & Time
Protect and Grow Capital
1. Avoid Incurring Permanent Loss of Capital
2. Own a Portfolio of High-Quality Businesses for the Long-term
3. Be Contrarian and Opportunistic: “Be fearful when others are greedy and
greedy when others are fearful” - Warren Buffett
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What We Do
Guiding Principles:
 Relentless Focus on Quality Businesses: Invest in businesses, not stocks
 Buy and Hold: Buy quality companies and hold to compound capital long-term
 Benchmark Agnostic: Building portfolios company by company – not by sectors
 Risk = Permanent Loss of Capital: Not volatility to an index
 Circle of Competence: Concentrated portfolios increases our chances of getting it
right, or of not getting it wrong
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What We Look For
High Quality Businesses Available at a Discount
Quality
Valuation
Business
Characteristics
Managerial
Characteristics
Financial
Characteristics
• Barriers to entry
• Limited competition
• Economic resilience
• Industry leadership
• Capable, honest management
• Excellent capital allocation record
• Equity ownership
• Good corporate governance
• Growth in free cash flow
• Low capital requirements
• High return on invested capital
• Strong balance sheet
Estimate intrinsic value using discounted cash flow (DCF) analysis
Buy Decision
Dream Team
Margin of Safety
< 30 %
≥ 30 %
Burgundy Investment
5
Time
There Is No Free Lunch
 We try to avoid:
• Earnings Risk
• Business Model Risk
• Balance Sheet Risk
• Valuation Risk
 But even a Quality Value approach can’t avoid paying in Time
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Disciplined Process
Case Study: Loblaw
$70
SELL
$60
Trim
Trim
$50
Intrinsic Value
Trim
Margin of
Safety
$40
$30
Add
Add
Loblaw Share Price
$20
2007
2008
Add
Add
2009
2010
2011
2012
2013
2014
2015
Performance: March 2007 – July 31, 2015
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Quality, Value & Time
Queen’s Pension Plan:
Burgundy Canadian Equity
+ 335%
+ 151%
TSX Composite Index
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Performance: (Inception) June 1, 2001 - October 31, 2015
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