Monthly Updates
The year closed out in dramatic fashion with broad based rallies in markets around the world. It was a sensational and unexpected year for markets. However, we must question the cause, nature of, and sustainability of these rallies. On one hand we see true domestic growth continuing in several key emerging markets such as Brazil, India, and Indonesia and an apparent bottoming in key indicators in western markets, particularly the US. Conversely, figures from the all important China are hard to interpret given the sheer magnitude of the government stimulus behind the return to rapid growth in the market and unlike other recessions in the US, the path back to growth with this one is not nearly so clear.
We therefore look at 2010 as a year to moderate expectations and be mindful of fundamentals. Markets have moved into momentum mode and we must be careful not to be left standing when the music stops. Similarly, there are opportunities to participate and to paraphrase a Japanese proverb, only fools are dancing but the biggest fools are those watching. That is to say, it would be imprudent to not capitalize on the increased liquidity in today’s market – there are opportunities for profit.
The Initial Portfolio of the Lawrence Partners Fund enters the year with two remaining holdings – Athabasca Oil Sands and the Irkutsk Oil debenture.
Investment Canada approved PetroChina’s investment in Athabasca Oil Sands and the company is now on a path to an initial public offering which we expect to be announced shortly. We believe this will be a value creating development for the Fund and are waiting until the company lists its shares to sell our position.
Discussions continue with various parties to sell the Irkustsk company and/or refinance it in a manner that will repay the Lawrence Partners Fund its principal and accrued interest. Based on oil prices, currently indicated levels of interest, and dramatically increased prices in comparable transactions, we remain optimistic that we will achieve a deal that is beneficial for the Fund.
In December the Fund elected to write-off its investment in Canadian Bioenergy. This resulted in a significant hit to the Fund. Although we believe there is significant potential future value, it is unlikely that the Fund will be able to realize anything for several years for this investment and on a liquidation basis, the value of our securities would be negligible. Therefore we believe this was a prudent move to more accurately reflect the current value of the portfolio.
The Re-Invest Fund has started to slightly increase its net exposure to the market. We are continuing to focus on commodity-related equities and high-yielding equities (trusts and former trusts) as our key long positions. It is our view that the bias is towards the upside for the market but that upside is limited based on moves observed in the past 9 months. We are optimistic that this approach will yield positive returns in 2010 and allow us to capitalize on any significant volatility in markets.
Click here for the Q1 2009 Update
Click here for the March 2009 Restructuring Update
Click here for the December 2008 Year End Update
Click here for the October 2008 Update
Click here for the September 2008 Update
Click here for the June 2008 Quarterly newsletter.
Click here for the March 2008 Quarterly newsletter.
Click here for the December 2007 Quarterly newsletter.
September 2007 - A credit crunch rocks global markets, but Lawrence Partners Fund continues to make gains. Click here for September's Quarterly newsletter.
June 2007 - Lawrence Partners Fund gains 16.8% in the second quarter and the fund maintains a long bias going into the second half of the year. Click here for June's Quarterly newsletter.
March 2007 - Lawrence Partners Fund participates in a dissident action to prevent True Energy Trust from converting back to corporation, but ends slightly down for the quarter. Click here for March's newsletter.
December 2006 - Despite of the challenge presented by the markets subsequent to the Federal Government's announcement on income trusts, Lawrence Partners Fund had a strong quarter and finished the year with a 74.7% total return net of fees. Click here for December's newsletter.
September 2006 - With markets in turmoil Lawrence Partners Fund posted modest growth in the third quarter and is well-positioned to capitalize on market opportunities as the year draws to an end. Click here for September's newsletter.
June 2006 - Trizec and Pengrowth positions caused the Lawrence Partners Fund to surge ahead while markets were down in June. Click here for our June newsletter.
March 2006 - Lawrence Partners Fund trailed the index in the first quarter and surged ahead in April. Featured position: Pengrowth Energy Trust. Click here for March's newsletter.
December 2005 - Lawrence Partners Fund ends 2005 with a return of 20%. Click here for December's newsletter.
November 2005 - Markets rebound sharply with good news for income trusts plus this month's featured position: Regalito Copper. Click here for November's newsletter.
October 2005 - Markets moved downwards during October, but the Lawrence Partners Fund did the opposite....plus this month's featured position, Cineplex Galaxy Income Trust. Click here for October's newsletter.
September 2005 - In this month's newsletter.... turmoil in the income trust market, a feature on XS Cargo Income Fund and investment strategies in the coming months. Click here for this month's newsletter.