Market Neutral Equity Fund Class A

P I C T O N MAH O N E Y AS S E T MANAG E M E N T
PICTON MAH O NEY
M ARKET NEU T R AL EQU I T Y FUND
December 31, 2014
Highlight
F UN D OUTLOOK & REV I EW
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December marked the most recent and most brutal chapter in the crude oil sell-off. Oil has now
declined for six consecutive months and the losses have only been accelerating. While lower crude
prices are generally a net beneﬁt to developed economies, a sell-off of this magnitude brings into question whether or not there is something more pronounced occurring in regards to global growth.
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The US economy continues to make cycle highs across a myriad of data points, a trend we expect to see
continue into early 2015. US equity markets have been resilient and we expect them to maintain their
relative outperformance until further notice.
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In this environment, we continue to prefer adding exposure to US domestic equities and US-levered
companies within Canada. We are adding this exposure at the expense of companies that are tied to
commodity prices and global growth.
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The TSX has not been as fortunate, as correlation to commodity prices has risen in recent months. We
maintain a negative view on the energy space which largely translates into a negative view on the TSX;
however, there should be opportunities in non-resource cyclicals with US exposure.
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The market is eagerly anticipating a launch of full quantitative easing (QE) from the European Central
Bank as the next catalyst to propel risk assets. While we are conﬁdent that Draghi will ultimately
deliver, uncertainty remains regarding what form it will take and just how effective it will be.
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In our portfolio, we’ve maintained a bias towards non-resource cyclicality with overweights in
technology, consumer discretionary and non-resource industrials and materials. Our single largest
underweight is in the energy sector, along with our long-standing underweight position in interest
rate-sensitive groups.
P ERF OR M A NCE
Value of $100,000 invested in Class A on Dec 31, 2005
PMAM Market Neutral Equity Fund
S&P/TSX Total Composite Return Index
$210,000
To provide consistent long-term
capital appreciation at an attractive
risk-adjusted rate of return with less
volatility than traditional equity
indices and low correlation to the
overall equity market. Based on
current market conditions, our target
return for this fund is approximately
6-8% per annum with half the volatility of the S&P/TSX Index and with
no correlation to the overall equity
market.
Strategy
Build a portfolio that is long the most
attractive stocks and short the most
unattractive stocks based on our
multi-factor ranking system. We will
buy quality companies in the midst
of fundamental positive change with
reasonable valuations and sell short
lower quality companies in the midst
of negative fundamental change that
have high valuations.
$190,000
$170,000
$150,000
$130,000
Fund Information
$110,000
Fund Codes:
Fund Assets:
Firm Assets:
Fund Details:
$90,000
PMAM Market Neutral Equity Fund
S&P/TSX Total Composite Return Index
1 Mon
0.65
-0.44
3 Mon
1.11
-1.47
6 Mon
0.01
-2.05
1 Yr
1.49
10.55
2 Yrs*
3.45
11.77
4
D
ec
-1
3
D
ec
-1
2
D
ec
-1
1
D
ec
-1
0
D
ec
-1
9
D
ec
-0
8
D
ec
-0
7
D
ec
-0
6
-0
ec
D
D
ec
-0
5
$70,000
3 Yrs*
3.01
10.20
5 Yrs*
2.98
7.52
Since Inc.*
7.72
5.89
Note: (*) refers to average annualized performance.
The inception date of the Class A Units of the fund is December 31, 2005. Performance and Performance Analysis data is presented since inception
for Class A Units of the Fund. Net Assets are reported for Class A, Class F and Class I combined. Maximum Drawdown, Period of Drawdown and
Time Under Water are calculated using monthly data. Beta, standard deviation and Sharpe Ratio are calculated using data from each weekly
valuation date. Top 5 holdings are reported in alphabetical order. Performance data is compared to the S&P/TSX Composite Total Return Index,
the standard benchmark for equity strategies in Canada. The composition of the Fund’s portfolio will significantly differ from the Index due to the
investment strategy employed by the Fund. Please see “Investment Strategies” in the Confidential Offering Memorandum for more details.
Commissions, trailing commissions, management fees and expenses all may be associated with fund investments. This is for information only
and is not an offer or solicitation to sell units of these funds. Complete information relating to the funds, including risk factors, is contained in the
Confidential Offering Memorandum. These funds are not guaranteed, their values change frequently and past performance may not be repeated.
Please see “Risk Factors” in the Confidential Offering Memorandum for more details.
Prime Broker:
Administrator:
Auditor:
Lawyer:
PIC100(A); PIC101(F)
$583.6 million
$9.2 billion
2% Management Fee - Cl A
20% Performance Fee
High Water Mark
Weekly Liquidity
RSP Eligible
Scotia Capital Inc.
Citigroup Fund Services
PricewaterhouseCoopers
McMillan LLP
P I C T O N MA H O N E Y A S S E T MA NAG E M E N T
PICTON MAHONEY
2
MARKET NEUTR AL EQUIT Y FUND
RET UR N & R IS K ANAL YSI S
INVESTOR ELIGIBILITY
PICTON MAHONEY
MARKET NEUTRAL EQUITY FUND
CLASS A (PIC100)
S&P/TSX COMPOSITE
TOTAL RETURN
INDEX
$19.5264
$583.6m
0.65%
1.49%
34.41%
14.10%
1.31%
8.60%
6.81%
-0.80%
2.16%
5.45%
1.49%
-0.44%
10.55%
17.26%
9.83%
-33.00%
35.05%
17.61%
-8.71%
7.19%
12.99%
10.55%
-4.63%
Jul - Sep 2008
5 months
66.67%
0.12
5.44%
1.03
-2.95%
-43.35%
Jun 2008 - Feb 2009
32 months
62.04%
1.00
18.58%
0.30
-16.67%
FUND HIGHLIGHTS
NAV per Unit
Net Assets
MTD Return
YTD Return
2006 Annual Return (Calendar Year)
2007 Annual Return (Calendar Year)
2008 Annual Return (Calendar Year)
2009 Annual Return (Calendar Year)
2010 Annual Return (Calendar Year)
2011 Annual Return (Calendar Year)
2012 Annual Return (Calendar Year)
2013 Annual Return (Calendar Year)
2014 Annual Return (Calendar Year)
PERFORMANCE ANALYSIS
Maximum Drawdown
Period of Drawdown
Time Under Water
Percentage of Positive Months
Beta
Standard Deviation (%)
Sharpe Ratio
Worst Month
TOP 5 LONG POSITIONS
Bank of Montreal
Canadian National Railway Company
Canadian Tire Corporation
Royal Bank of Canada
Veresen Inc.
Exposures
Gross
Long
Short
Net
Units of the Funds are offered to
investors resident in the provinces
and territories of Canada, (the
“Offering Jurisdictions”) pursuant to
applicable exemptions from the
prospectus requirements of the
securities laws in the Offering
Jurisdictions. Subscriptions will be
accepted from an investor who is
purchasing Units with a minimum
investment of $150,000, or an
investor who is an “accredited
investor” as described in applicable
securities legislation, or an investor
who is a resident of British Columbia,
New Brunswick, Nova Scotia,
Newfoundland and Labrador, who is
purchasing Units pursuant to the
“offering memorandum exemption”
as described in applicable securities
legislation. The minimum initial
investment for “accredited investors”
and investors purchasing Units
pursuant to the “offering memorandum
exemption” is $25,000.
200.00%
103.10%
-96.91%
6.19%
S ECTOR E X P OS U R E (NET )
Long
Short
Net
Industrials
Consumer Discretionary
Utilities
Information Technology
Materials
Health Care
Consumer Staples
Telecommunication Services
33 Yonge Street, Suite 830
Toronto, ON M5E 1G4
Financials
Other
Energy
-25%
-20%
-15%
-10%
-5%
0%
Percentage %
5%
10%
15%
20%
666 Burrard Street, Suite 500
Vancouver, BC V6C 2X8
www.pictonmahoney.com
service @ pictonmahoney.com
416.955.4108 1.866.369.4108

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