PRODUCTIVITY POVERTY

PRODUCTIVITY POVERTY

We have been described as “rock stars” by HSBC, and told by our politicians the record high migration rates and house prices in New Zealand are just problems of success. This may be true but the table below highlights that we as a nation have been in denial about the most important factor that contributes toward long-term economic success - our productivity (or lack of it) - for most of the last two decades.

LESSONS FROM LONDON

LESSONS FROM LONDON

Brexit’ has been the topic “du jour” for several weeks now with a number of interesting points being raised both for and against Britain’s awaiting departure from the EU. A recent Reuters article by columnist Mr. Edward Chancellor challenges populist views on the economic turmoil Britain is currently facing suggesting ‘Brexit’ could instead provide a platform for long-term sustainable economic growth.

ELEVATION CAPITAL VALUE FUND COMMENTARY JULY 2016

ELEVATION CAPITAL VALUE FUND COMMENTARY JULY 2016

Dear Investors,

We have recently updated information reported in our monthly Value Fund factsheet – below we outline key additions you can now expect to see detailed in our monthly factsheet including a link to our latest release.

The additions to the factsheet are driven by our current transitioning of the Value Fund and the Manager to be licensed under the FMCA (Financial Markets Conduct Act - 2013) and our desire to continually improve transparency for investors in the Fund.

ECVF - QUARTERLY REPORT - Q4 2015

ECVF - QUARTERLY REPORT - Q4 2015

The fourth quarter (and now into early 2016) saw continued volatility in global markets as commodity prices further weakened and investors exhibited concern about China’s slowing growth rate and monetary interventions by the People’s Bank of China (PBOC). The Fund took advantage of this volatility on both the acquisition and divestment front – please refer page 56 of this report for further details on specific names.

ECVF - QUARTERLY REPORT - Q3 2015

ECVF - QUARTERLY REPORT - Q3 2015

The third quarter saw heightened volatility in global markets as investors became increasingly concerned by the prospect of a slowdown in China and the impact it would have on the rest of the world. This was further fueled by the Chinese Central Bank – People’s Bank of China (PBOC), devaluing the yuan which triggered further weakness in commodities and emerging markets more generally. More specifically, Chinese industrial companies reported an -8.8% year-on-year decline in profits in August. At a corporate level, Longmay Mining Holding Group, the largest coal miner in China’s northeast announced 100,000 layoffs. Global Bio-Chem Technology, the largest corn refiner in China and the third largest in the world suspended operations. Even beer production in China fell 4% year-on-year! One could be forgiven based on all the headlines that China was not only important to New Zealand, Australia, Brazil and Germany but also to the US. The facts are actually quite the contrary. Total US exports to China are US$ 165bln, less than 1% of US GDP according to James Surowiecki at The New Yorker. Goldman Sachs estimates that just 2% of the S&P 500’s revenues comes from China at present.

ECVF - QUARTERLY REPORT - Q2 2015

ECVF - QUARTERLY REPORT - Q2 2015

When asked what the stock market was going to do, JP Morgan once famously responded – “It will fluctuate”. It turns out Mr. Morgan was exactly right. What’s more, his response is just as applicable to the market today as it was then. Given the uncharted waters of rock bottom interest rates and associated high asset prices, any bold statements on the direction of equity markets must be taken with a grain of salt. The best one can do is to take a bottom-up approach, investing in quality assets with enduring moats. In the current market environment of buoyant optimism and elevated multiples (particularly in NZ), our focus has remained on capital preservation and we have accordingly been holding a significant cash balance (21% as at 30 June). With this continued cautious approach, the second quarter of 2015 yielded a return of 10.36%. This was helped by Kirkcaldie & Stains, Mondelez International, depreciation of the NZ Dollar (down 9.8% vs USD) and hindered by a decline in European Stocks which make up 33.71% of the portfolio.

ECVF - QUARTERLY REPORT - Q1 2015

ECVF - QUARTERLY REPORT - Q1 2015

Period Ending 31 March 2015

The first quarter of 2015 has seen equity indices march on, albeit more slowly in the US, and bond yields fall to previously unseen levels. Oil prices have seemingly found a floor (at least for the time being), and the effect of monetary easing by the European Central Bank (ECB) is being felt in equity and fixed income markets – particularly in Europe. A number of the best performing stocks in the Elevation Capital Value Fund portfolio have been European, including Tod’s SpA, Heineken Holdings, Remy Cointreau and adidas AG, all of which have delivered returns of above +15% (in local currency terms) for the quarter.

ROB CAMPBELL : SPEECH TO ELEVATION CAPITAL FUNCTION AT THE HOLY TRINITY CLOISTERS, PARNELL, AUCKLAND, NEW ZEALAND IS IT IMPORTANT TO INVESTORS?

ROB CAMPBELL : SPEECH TO ELEVATION CAPITAL FUNCTION AT THE HOLY TRINITY CLOISTERS, PARNELL, AUCKLAND, NEW ZEALAND IS IT IMPORTANT TO INVESTORS?

Thank you for the invitation to speak this evening. Chris Swasbrook and his colleagues at Elevation are an interesting option for investors, giving investors the benefits of efficient access to some of the best global value funds in the one instance and in the second to Chris’ unique view of local and global equities. 

HIGHLIGHTS FROM THE COLUMBIA BUSINESS SCHOOL DINNER AND BERKSHIRE HATHAWAY ANNUAL MEETING IN OMAHA, NEBRASKA ON 4 & 5 MAY 2012

HIGHLIGHTS FROM THE COLUMBIA BUSINESS SCHOOL DINNER AND BERKSHIRE HATHAWAY ANNUAL MEETING IN OMAHA, NEBRASKA ON 4 & 5 MAY 2012

Columbia Business School Dinner hosted by Bruce Greenwald with Thomas Russo, Mario Gabelli and David Winters talking. For background, Professor Bruce C. N. Greenwald holds the Robert Heilbrunn Professorship of Finance and Asset Management at Columbia Business School and is the academic Director of the Heilbrunn Center for Graham & Dodd Investing. Described by the New York Times as “a guru to Wall Street’s gurus,” Greenwald is an authority on value investing with additional expertise in productivity and the economics of information.

WHAT ARE “VALUE TRAPS”?

WHAT ARE “VALUE TRAPS”?

 “Is Microsoft stock a value trap?”

“PaperlinX is trading at 0.1x P/B. It must be cheap!”

“Value trap” is a term used in the investment management industry. It describes stocks that appear cheap, but the gap between price and potential value does not close, or, worse, widens. With this Elevation Capital Insights paper we have sought to explain the concept of value traps, and how Elevation Capital tries to avoid being “trapped”.

SEQUOIA FUND ANNUAL MEETING & SHORT BIOGRAPHY OF WILLIAM J. RUANE

 SEQUOIA FUND ANNUAL MEETING & SHORT BIOGRAPHY OF WILLIAM J. RUANE

 We recently attended the Sequoia Fund Annual Meeting in New York (the Elevation Capital Global Value Fund of Funds is an investor in Sequoia) and we thought it might be useful to share with our investors some insights from some of the best capital allocators in the world. The meeting was attended by a group of ~250 people where the portfolio managers and analysts proceeded to answer any / all questions that investors asked for a period of ~2.5 hours. The opening remarks by Bob Goldfarb are provided below:

“We are pleased with our results since we met here a year ago. As long-term investors, we’re particularly proud of our 41-year record. Over the past decade, our firm has undergone some significant changes. We own less Berkshire than we did for many years; we own more stocks than in the past; and the stocks we own represent a broader group of industries and geographies than in the past.