Stewards of your wealth, from one generation to the next

We have a team of experienced portfolio managers, one of whom will discuss your objectives and circumstances with you to assess the appropriate asset allocation and investment mandate(s) for your account(s), and will maintain a direct relationship with you. In most cases, the investment and trading decisions for our managed accounts are made centrally by Generation PMCA’s investment team, with the support of our other portfolio managers and research analysts.

Assets are held in client name at major financial institutions. All cash and securities of our Canadian and U.S. clients (except IRA accounts) are custodied by Fidelity Clearing Canada ULC (“Fidelity”), Generation IACP’s “carrying” broker. Fidelity is an indirect, wholly-owned subsidiary of FMR LLC. FMR LLC and its subsidiaries, including Fidelity, conduct business under the “Fidelity Investments” name throughout the United States and Canada and collectively comprise one of the world’s largest providers of financial services.

All cash and securities of IRA accounts are custodied by Interactive Brokers LLC.

Generation PMCA and Generation IACP are affiliated companies. Generation IACP is a Canadian investment dealer, founded in 1998. Generation PMCA and Generation IACP share senior management and other personnel, and occupy the same office premises. Both Generation PMCA and Generation IACP offer portfolio management services for high net worth individuals and the two organizations exchange research ideas and strategies. Pursuant to your investment counsel agreement with Generation PMCA, we receive authority to open an account in your name at Generation IACP, as dealer. Generation PMCA uses Generation IACP exclusively for trade execution and other brokerage services.

Although we generally manage each client’s account separately (i.e., direct holdings of individual securities), from time to time that may not be ideal for a particular account. For example, for a client with a small registered plan account, in order to receive the same asset diversification benefits and to achieve cost benefits, we may invest all or a portion of the client’s account in one or more pooled funds managed by us, provided the account is eligible for investment in such funds and each fund’s mandate matches the client’s objectives.

A short sale is a sale of a security not owned but borrowed from a holder and subsequently returned to that holder when it is repurchased in the market. The short seller profits if the repurchase price of the security is below the initial sale price. For long/short accounts we can short sell stocks which are overvalued relative to their fair market value and/or have poor or deteriorating fundamentals, such as an overleveraged balance sheet, diminished growth expectations and/or a low return on capital. Short selling potentially enables us to realize a return, but also to potentially hedge or insulate our long positions in down or volatile markets where our outlook for the market or a particular sector is negative.

We may use options strategies for hedging or investment purposes to the extent such strategies are appropriate and permitted for a client’s account. We can use options to invest indirectly in securities or financial markets, and provide downside protection to the portfolio where we anticipate a bear market or changes to exchange rates. For example, we can sell put options to earn premiums to lower effective purchase prices (at a strike price where we would want to purchase a security in any event) or sell call options on securities we already hold to earn premiums to increase effective selling prices (at a strike price where we would want to sell or short sell a security in any event). We may also use options to initiate synthetic long or short positions with a view to maximizing risk-adjusted portfolio returns. We may apply our proprietary methodologies to these strategies by using put or call options with strike prices that are at or near floors or ceilings in our work.

Our managed accounts may use margin judiciously from time to time for clients who agree, where we are fully invested but wish to invest in additional attractive opportunities and/or further diversify. Margin involves borrowing funds against the assets of the account, a strategy which is often compelling from a tax point of view, since margin interest is tax deductible against earned or ordinary income and the potential capital gains are taxed at more favourable rates than dividend and interest income. Leverage increases both the possibilities for profit and the risk of loss for the account.