Our FUndThe DKAM Capital ideas fund
The performance of the DKAM Capital Ideas Fund is our top priority. Many members of our team are significantly invested in the fund – alongside our clients – resulting in the highest possible alignment of interests. We believe this is one of the keys to our success.
How We Consistenly Outperform the Market
We invest in a group of high conviction companies, of which the top 10 names generally make up 75% of the overall portfolio. These companies will typically be run by a strong management team that have a significant ownership stake, and are characterized by having a track record of earning high returns on shareholders’ equity. The companies will also be capable of generating high returns on equity for many years to come without the addition of significant amounts of equity capital other than that which is being generated internally.
*Year to date (YTD) returns are Time Weighted Rates of Return as of December 31, 2019, net of fees and expenses.
DKAM Capital ideas fund LP vs the S&P
Since Inception – Oct 1st, 2008
|Total Return||Annualized Return|
|S&P 500 Total Return Index2||252%||11.8%|
|S&P/TSX Total Return Index3||103%||6.5%|
1 Time weighted rates of return for Class A Series 1, net of all fees and expenses as of December 31st, 2019.
2 S&P 500 Total Return Index is the Net Total Return version of the S&P 500 Index.
3 S&P TSX Composite Total Return Index is the Net Total Return version of the S&P/TSX Composite Index.
How we do it
Learn more about the relationship between our Portfolio Managers.
Our first step is to screen Canadian and American public markets for stocks that are currently earning high returns on common equity, typically in excess of 15% at a minimum. Basic screens, on-going communication with our global network of industry contacts, industry publications and financial media are all potential sources of new ideas.
Proprietary database ranking
Once we have identified a company that meets our initial criteria, we make several adjustments to company/analyst earnings forecasts in order to take into account non-cash items. Subsequent to the adjustments being made, we enter the relevant data into our proprietary database where each company’s ROE, valuation and share price momentum are scored in relation to all other stocks in our universe.
Those stocks that achieve the highest aggregate scores in our database are then subject to comprehensive quantitative analysis, which includes extensive earnings modeling as well as scenario analysis.
Our final step involves face to face meetings with company management, channel checks and discussions with industry analysts. If this process is successful, the position is added to the portfolio, constantly monitored and actively traded.
The Power of Compounders
Fundamentally, we believe in holding compounders for the long term and thus we won’t trade in and out of names. We believe that great management teams think much like portfolio managers– they carefully consider capital allocation and they make a point of knowing the intricacies of their businesses and industries. We expect the management teams of our companies to be able to put capital to work to further increase their profitability as opportunity arises. These opportunities may be based on the uniqueness of their businesses, the dynamics of the industries in which they operate, or the overall condition of the financial markets or economies.
Put another way, we are always on the lookout for management teams that can compound their growth to deliver outstanding returns.
UNIQUE AND DIFFERENTIATED
As of December 31, 2019.
In our portfolio we own:
0 of 30 companies in the Dow Jones Industrial Average ETF
2 of 61 companies in the S&P/TSX Composite ETF
1 of 1986 companies in the Russell 2000 ETF
3 of 506 companies in the S&P 500 ETF
2 of 103 companies in the Nasdaq Composite ETF
25 stocks that are not part of any of these major indices†
*Per DKAM estimates as of December 31st, 2019.
Geographic Concentration refers to percentage of DKAM Capital Ideas Fund allocated to assets listed in Canada or the USA.
† iShares Russell 2000, SPDR Dow Jones Industrial Average ETF, iShares S&P/TSX 60 Index ETF, Invesco QQQ Trust, SPDR S&P 500 ETF.
1 YEAR RETURN
5 YEAR RETURN
RETURN SINCE INCEPTION
*Year to date (YTD) returns are Time Weighted Rates of Return as of December 31st, 2019, net of fees and expenses.
**Return Since Inception is the Time Weighted Rate of Return since October 1, 2008, net of fees and expenses.
DKAM Capital Ideas Fund LP
|Management Fee: Class A 2.0%, Class F 1.0%||Currency: Canadian dollars ($CAD)|
|Performance Fee: 20%||Lock-Up Period: 3 months|
|High-Water Mark: Perpetual||Prime Broker: BMO Capital Markets|
|FundSERV Don200: Class A||Auditor: Deloitte|
|FundSERV Don250: Class F||Legal Counsel: AUM Law Professional Corporation|
|Administrator: SGGG Fund Services Inc|