SOLUTIONS > GROWTH STRATEGIES

 

Generation Global Value
Private Trust

Invests primarily in securities of large capitalization companies, typically with market caps over $5 billion at the time of purchase, but may invest in those with $2 to $5 billion market caps.


Key Features

GLOBAL

Our “go anywhere” approach provides more opportunities.

VALUE APPROACH

Our most important pillar is our value investment philosophy.

RISK MANAGEMENT

We utilize a parallel process to monitor economic and market risk.

MULTI-ASSET/OPPORTUNISTIC

We may consider employing short positions, option positions or other strategies, either opportunistically or for risk management, to reduce volatility, mitigate drawdowns and lower correlations to the overall market.

Strategy Overview

The Generation Global Value Private Trust invests primarily in securities of large capitalization companies, typically with market caps over $5 billion at the time of purchase, but may invest in those with $2 to $5 billion market caps. Generation PMCA employs a proprietary and systematic process to uncover large cap global equities which our analysis indicates are undervalued. We prefer companies with strong competitive advantages led by management teams incentivized to maximize return on capital. Our fundamental analysis provides conviction to hold 30-40 holdings that meet our criteria. Innovative trading models are used in an attempt to optimize the timing of our purchases and sales.

In addition to rigorous stock screening and research, we utilize a parallel process to monitor economic and market risk.

Our Commitment to Sustainable Investing

Key Details

InceptionJuly 1, 2017
Fund Codes
   Series AGNR100
   Series FGNR200
Management Fee
   Series A2.25%
   Series F1.25%
Performance Fee20% of appreciation over 6% hurdle rate
High Water MarkYes
Fund ManagerGeneration PMCA Corp.
SubscriptionMonthly
RedemptionsWeekly
AdministratorDataCore Fund Services Inc.
CustodianFidelity Clearing Canada ULC
Fund AuditorShimmerman Penn LLP, Chartered Accountants, Toronto, Ontario
LegalBorden Ladner Gervais LLP, Toronto, Ontario

Top 10 Holdings

AS OF JUN 30, 2021

PROSHARES SHORT QQQ
CORECIVIC INC
LIBERTY MEDIA CORP SR C
AMAZON.COM INC
JUMIA TECH AG ADS
BRISTOL MYERS SQUIBB COMPANY
TAL EDUCATION GROUP ADR
SUN ART RETAIL GROUP LIMITED
ELECTRONIC ARTS
CVS HEALTH CORPORATION
Generation Global Value Private Trust

“Our four pillars are quantitative tools that we have developed to aid and complement the analysis, selection and trading of our investments. These proprietary tools are used in conjunction with our bottom-up fundamental research and overall macro outlook.”

Randall Abramson, CFA
CEO, Portfolio Manager

Generation Global Value Private Trust

Four Pillars

1 Value Philosophy

Our most important pillar is our fundamental research and value investment philosophy. We analyze a company’s operations, finances and valuation to assess its risk and reward potential. A value strategy offers two advantages. First, a stock purchased below our estimate of intrinsic or fair market value offers the potential for outperformance as the stock ascends to fair value. Second, we believe that stocks trading below their fair value offer a “margin of safety”; that is, downside risk is mitigated because these stocks are detached from their fair value.

2 Trade Optimization

Our proprietary security trading model, TRACTM, is used to gauge changing sentiment for individual stocks, sectors or overall markets. TRACTM helps to optimize the timing of our stock purchases and sales. We aim to buy stocks when they fall to TRACTM floors and to sell them when they hit ceilings or fall through floors.

3 Market Risk &
4 Economic Risk Management

Our two macro pillars are designed to manage risk. We monitor global economies and markets to alert us to potential economic downturns or severe market declines. Our Economic Composite evaluates economic activity by combining various economic variables into one composite to capture business cycle peaks. The Relative Indicator of Momentum model (TRIMTM) is an algorithm that combines momentum and volatility to determine the primary trend of the market. When the economy hits a business cycle peak according to our Economic Composite or stock markets fall below their TRIMTM line, we may raise cash, alter portfolio holdings, and hedge our portfolios by short selling markets/sectors.

Stock selection process

Process Overview

1 PROPRIETARY SCREENING

The Global Global Value Private Trust employs a proprietary and systematic process to uncover large cap global equities which our analysis indicates are undervalued.

2 DUE DILIGENCE

The most undervalued securities in our global large cap universe form the focus group for our analytical team to concentrate its research efforts for investment targets.

3 TRADE OPTIMIZATION

Our proprietary TRAC™ system is used in an effort to optimize buy and sell decisions for targets and portfolio holdings.

Screening Ingredients

To find ideas we utilize our proprietary ranking methodology that ranks companies on combined valuation, business quality, financial strength, and momentum metrics.

VALUATION

Stocks are ranked on valuation ratios such as P/E, EV/EBITDA, P/CF, and our own proprietary valuation ratios.

QUALITY

Stocks ranked on performance metrics such as return on equity, return on invested capital, etc.

FINANCIAL STRENGTH

Stocks ranked on debt-to-equity, interest coverage, Piotroski F Score, etc.

MOMENTUM

Stocks ranked on relative performance over the last 12 months.

How We Evaluate a Business

Competitive Advantages

Competitive advantages are critical weapons that keep a company ahead of the competition. Examples of competitive advantages are cost leadership (more for less), differentiation (more for more), scale, network effects, ownership of brands or intellectual property, favorable regulation that creates toll-booth dynamics, operational effectiveness, technological expertise, and financial flexibility. Without these competitive advantages, achieving a high and sustainable return on invested capital is nearly impossible.

Management

We look for strong leadership teams that are aligned with the interests of long-term shareholders. Priorities should be extending competitive advantages, achieving best-in-class operational excellence, and establishing strong capital allocation policies.

We prefer companies run by owner-operators that have cultivated an entrepreneurial mindset across all levels of the organizational structure. Lean and flat structures enable companies to evolve with the operating environment and capture emerging sources of value with new products and services.

Valuation

We value businesses in consideration of their macro environment, leadership, competitive advantages, and risk factors. The future is hard to predict; we strive for conservativism in our assumptions.

Purchasing companies below our estimate of intrinsic or fair market value offers the potential for outperformance as the stock ascends to fair value. We believe stocks trading below their fair value offer a “margin of safety”; that is, downside risk is mitigated because these stocks are detached from their fair value.

Business Model Evolution

History is replete with examples of companies that stood still as the world changed around them. Competitive advantages that serve a company well today will erode over time if management fails to recognize changing consumer preferences or disruptive new technology that could upend the economics of their industry.

We look for management teams that look to the future. Such companies are not afraid to jettison business lines or make large investments to capitalize on opportunities—even at the expense of short term earnings.

Macro Evaluation

We evaluate headwinds and tailwinds to identify threats or opportunities that may impede or accelerate growth over the short and long-run. Transitory headwinds such as input costs, irrational competition, wage pressures, etc., may create an opportunity should investors be overly pessimistic about their duration or intensity.

We prefer companies poised to benefit from secular growth drivers such as demographics, technological trends, or geopolitical forces rather than companies in cyclical sectors.

Mispricing and Catalysts

We unravel the prevailing narrative surrounding the company to understand the reasons why the investment opportunity exists. What information or understanding do we have that gives us an edge?

We prefer businesses with clear catalysts that will close the gap between price and our fair value estimate.

Risk Management

Economic Modelling

We developed an Economic Composite to monitor the business cycle. Monitoring the business cycle is of paramount importance. Since 1965, two-year rolling losses of 20% or more have always been preceded by a business cycle peak. Equity markets tend to be more volatile following business cycle peaks than during periods of economic expansion.

Market Risk Analysis

Market drawdowns can occur outside the natural ebb and flow of the business cycle. The Relative Indicator of Momentum (TRIMTM) is an algorithm we have developed that combines market volatility and momentum to model transition points that forewarn of a potential shift from a bull market to a bear market (a market decline greater than 20%). We use TRIMTM to monitor numerous global markets and commodities.

Portfolio Construction

We may employ short positions, option positions, or other strategies, for risk management, in an effort to reduce volatility, lower drawdowns, moderate correlation to the overall market, or opportunistically to increase returns.

Generation Global Value Private Trust

Invests primarily in securities of large capitalization companies, typically with market caps over $5 billion at the time of purchase, but may invest in those with $2 to $5 billion market caps

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Overview

Generation Global Value Private Trust Four Pillars

Randall_Team_M

“Our four pillars are quantitative tools that we have developed to aid and complement the analysis, selection and trading of our investments. These proprietary tools are used in conjunction with our bottom-up fundamental research and overall macro outlook.”

Randall Abramson, CFA
CEO, Portfolio Manager

Stock Selection Process

Risk Management

Our Commitment to Sustainable Investing

Contact Us

Contact our team of portfolio managers and capital advisors.


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