Investment Strategies

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35 years of thoughtful investment management

Investment Philosophy

 

We focus on generating strong, risk-adjusted returns for our clients guided by the following three principles:

  • Strategic asset allocation

    We leverage our wealth planning services to incorporate all aspects of our clients’ financial picture and define what success means to them. We construct customized portfolios for each client based on the most attractive investment opportunities suited for their goals and objectives. We believe in strategic asset allocation and the benefits of diversification by asset class, sector and geography and by investing in both public and private investment opportunities.

  • Research-driven security selection

    Our security selection process consists of finding undervalued, profitable and cash-flow generating companies with excellent management teams and a sustainable competitive advantage. We employ a collaborative approach to our research process, combining the disciplines of equity research, fixed income analysis and risk management. Our research-driven process gives us the confidence to manage portfolios of our best ideas.

  • Macroeconomic analysis

    We analyze global macroeconomic trends to guide investment decisions by identifying key opportunities and potential risks. Historical perspectives provide us with the insights required to make profitable long-term decisions on behalf of our clients.

Long-term track record

  • Equities

    GS+A PREMIUM INCOME PORTFOLIO

    Our flagship GS+A Premium Income Portfolio, which invests primarily in dividend-paying Canadian equities, has generated an annualized net return of 11.2% over its 18-year history with significantly less volatility than the Canadian equity market index.

    Growth of 1 Million Dollars

    $1 million invested in our GS+A Premium Income Portfolio on July 1, 2001 (its inception date) would have grown to $6.7 million on June 30, 2019, versus $3.4 million for the S&P/TSX Total Return Index over the same period.

    Equities

    Disclaimer

     

    Past returns are not necessarily indicative of future performance. Rates of return are those of the composite of segregated Premium Income portfolios and are presented net of fees and expenses and assume reinvestment of all income. Portfolios with significant client restrictions that would potentially achieve returns that are not reflective of the manager’s portfolio returns are excluded from the composite. Returns of the GS+A Premium Income Trust or Fund are not included in the composite. Pooled fund returns are available upon request.

    Inception: July 1, 2001.

     

    Investment amounts are presented only to illustrate the effect of past performance of the composite of segregated Premium Income portfolios on an investment of $1 million, and are presented net of fees and expenses. They are not intended to reflect future values of any portfolios or returns on investments in any portfolio.

  • Fixed Income

    BLAIR FRANKLIN GLOBAL CREDIT FUND

    Our track record and expertise spans different asset classes. The Blair Franklin Global Credit Fund has generated an annualized net return of 11.4% over its 13-year history with positive returns in 145 out of 160 months.

    Growth of 1 Million Dollars

    $1 million invested in our Blair Franklin Global Credit Portfolio on February 28, 2006 would have grown to $4.2 million on June 30, 2019.

    Fixed Income

    Disclaimer

     

    A. Returns are stated in Canadian dollars and are net of all expenses, management fees and accrued incentive fees. Fund returns have been audited with the exception of 2016 return data. The rate of return has been calculated in accordance with the Modified-Dietz Method, a time-weighted rate of return. LTM stands for last twelve months performance. Historical results are not necessarily indicative of future returns.

     

    B. The inception date for the Blair Franklin Global Credit Fund LP (“Global Credit Fund”, formerly the Blair Franklin Multi-Strategy Fund LP) was March 1, 2004. The Global Credit Fund’s return since inception is 377.62%. As of March 1, 2006 the Global Credit Fund’s focus moved to fixed income. The Global Credit Fund’s return since March 1, 2006 is 323.39%.

     

    C. Annualized return is net and shown for the period from March 31, 2006 to June 30, 2019, which represents the period in which the Blair Franklin Global Credit Fund’s focus has been on fixed income.

Long-term track record

  • Equities

    GS+A PREMIUM INCOME PORTFOLIO

    Our flagship GS+A Premium Income Portfolio, which invests primarily in dividend-paying Canadian equities, has generated an annualized net return of 12.1% over its 18-year history with significantly less volatility than the Canadian equity market index.

    Growth of 1 Million Dollars

    $1 million invested in our GS+A Premium Income Portfolio on July 1, 2001 (its inception date) would have grown to $7.8 million on June 30, 2019, versus $3.9 million for the S&P/TSX Total Return Index over the same period.

    Equities

    Disclaimer

     

    Past returns are not necessarily indicative of future performance. Rates of return are those of the composite of segregated Premium Income portfolios and are presented net of fees and expenses and assume reinvestment of all income. Portfolios with significant client restrictions that would potentially achieve returns that are not reflective of the manager’s portfolio returns are excluded from the composite. Returns of the GS+A Premium Income Trust or Fund are not included in the composite. Pooled fund returns are available upon request.
    Inception: July 1, 2001.

     

    Investment amounts are presented only to illustrate the effect of past performance of the composite of segregated Premium Income portfolios on an investment of $1 million, and are presented net of fees and expenses. They are not intended to reflect future values of any portfolios or returns on investments in any portfolio.

Supported by Onex’ investment expertise

Over its 35-year history, Onex has built a world-class team and successful approach to investing. Our investment team is able to leverage Onex’ knowledge and expertise as we look for the most optimal investment opportunities to meet our clients’ needs.

 

In addition, we’re able to provide eligible clients with access to Onex’ private equity and private debt strategies to help build more comprehensive and diversified portfolios.

  • Onex Credit

    Onex Credit invests primarily in non-investment grade debt through its collateralized loan obligations, private debt and other credit strategies. It practices value-oriented investing, employing a bottom-up, fundamental and structural analysis of the underlying borrowers. Onex Credit seeks to generate strong risk-adjusted and absolute returns across market cycles.

  • Onex Private Equity

    Onex’ private equity platform focuses on acquiring and building high-quality businesses in the United States, Canada and Europe across various market caps. With a focus on execution theses rather than macro-economic or industry trends, long-term value creation is our only goal. Onex’ private equity investing has generated a 27% gross IRR on realized, substantially realized and publicly traded investments since inception.

Equity Strategies

  • The GS+A Premium Income Portfolio seeks to provide steady income distributions together with an opportunity for capital appreciation by investing in a diversified portfolio of stable, primarily Canadian income-producing investments across a broad range of industries.

     

    We focus on mature companies that have a history of steady income distributions. We follow these companies closely, to satisfy ourselves that management remains focused and committed to business strategies which will maintain the stability of distributions. In diversifying our Premium Income Portfolio, we consider the following factors:

     

    • The experience of management
    • The nature of the underlying assets
    • A history of stable cash flows within the underlying business
  • The GS+A International Portfolio seeks to achieve capital appreciation by investing in a variety of growth and value securities listed on international exchanges outside of Canada and the United States.

     

    The investment process followed in selecting securities for the Portfolio includes both a “bottom-up” investment style focused on company fundamentals and a “top-down” macroeconomic investment style.

     

    Using a “bottom-up” approach, we seek to invest in a diversified selection of stocks – growth stocks and value stocks; large cap, mid cap and small cap; and special situation stocks. Individual stocks are selected according to a combination of their capital gain potential and their risk-reward profile.

     

    A “top-down” approach of analyzing the outlook for different geographic regions, economies and sectors is used to determine markets and sectors in which to invest. A top-down approach may also be used to ensure that the portfolio mix is prudent and provides adequate diversification.

  • The GS+A U.S. Equity Portfolio seeks to provide steady income and capital appreciation by investing primarily in a diversified portfolio of investments across a broad range of industries, with a predominant focus on publicly traded U.S. securities.

     

    The portfolio generally invests in U.S. companies that display the following characteristics:

     

    • A history of providing steady dividends, distributions or interest payments
    • Strong balance sheets and a history of stable cash flows within the underlying business
    • Sustainable competitive advantage
    • Proven management ability
    • The ability to generate high or improving returns on invested capital
  • The GS+A Global Special Situations Portfolio aims to identify investment opportunities that represent special situations. Special situation investments are those that we believe are undervalued relative to their long-term potential, and where such potential may not be realized by the broader market. Circumstances that may create special situations include, but are not limited to:

     

    • Spin-offs
    • Recapitalizations
    • Free cash flow inflections
    • Management changes

     

    The portfolio may be invested in small, medium and large capitalization companies, but tends to focus on small and medium capitalization companies, normally holding 25 or fewer companies. In addition to equity securities, we may also invest in fixed income securities.

Fixed Income & Credit Alternative Strategies

  • Winner of the 2014, 2015 and 2017 Canadian Hedge Fund Award for Overall Best Canadian Hedge Fund for the best combined 10-year return and Sharpe Ratio, the Blair Franklin Global Credit Fund seeks to provide consistent positive absolute returns by making investments in securities and financial instruments, including derivatives, in a variety of world markets. The Fund is managed with a primary focus on the debt obligations of Canadian, U.S. and foreign issuers. Returns are typically generated from long and short exposure to credit spreads globally, while seeking to minimize interest rate risk and foreign exchange risk. The Fund expresses its credit views through a variety of trades, including but not limited to:

     

    • Carry trades – long positions that provide return through net yield
    • Long or short credit – returns are generated through relative spread movements
    • Curve arbitrage – curve steepeners and flatteners take advantage of term structure relative value opportunities
    • Global relative value positioning – relative value disconnects between global bond markets
    • Credit Default Swap (CDS) / Cash bond arbitrage – relative value between cash bond and CDS markets

     

    In 2017, the Blair Franklin Global Credit Fund won its third Canadian Hedge Fund Award for the Overall Best Canadian Hedge Fund for the best combined 10-year return and Sharpe Ratio. It also received an award for the second best 5-year Sharpe Ratio in the Credit Focused category. 163 Canadian hedge funds were considered for these awards in 2015, 170 in 2014, and 47 in 2017.

    The inception date for the Blair Franklin Global Credit Fund was March 1, 2004. As of March 1, 2006, the Global Credit Fund’s focus moved to fixed income

    Winner of the 2011 Canadian HF Awards Winner of the 2015 Canadian HF Awards Winner of the 2016 Canadian HF Awards
  • The GS+A Tactical Fixed Income Portfolio seeks to generate positive absolute returns by investing primarily in a diversified portfolio of fixed income securities encompassing a broad universe of companies and credit ratings and employing numerous fixed income investment strategies.

     

    Such strategies may include, but are not limited to:

     

    • investing in investment grade and higher yielding fixed income securities that trade at prices or credit spreads that do not reflect their positive fundamentals, long-term outlook or ratings
    • simultaneously taking long positions in corporate bonds and short positions in government bonds, thereby aiming to produce a return that isolates the credit spreads in corporate bonds with minimal interest rate risk
    • simultaneously taking long and short positions in different corporate bonds to capture the relative value between different credits, sectors and/or maturities
    • overweighting our best ideas
    • using leverage to enhance the return of the portfolio
  • The GS+A Credit Arbitrage Portfolio seeks to achieve positive absolute returns by investing in a concentrated portfolio of primarily investment grade corporate bonds. The strategy is focused on a combination of credit selection, risk management and interest rate protection.

     

    Both long positions in corporate bonds and short positions in government bonds are used to protect against interest rate risk. The Portfolio is constructed and aggregated with a focus on credit spread and interest rate risk, enabling a more complete coverage of the opportunity set. We overweight our best ideas through the use of a modest amount of leverage.

  • The GS+A Enhanced Yield Portfolio seeks to gain economic exposure to a concentrated portfolio of higher yielding corporate bonds encompassing a broad universe of companies and credit ratings.

     

    Investments are made primarily in the debt of companies that trade at prices or credit spreads that we believe do not reflect their positive fundamentals, long-term outlook or ratings.

  • The GS+A Enhanced Bond Portfolio seeks to achieve capital appreciation and stable income by investing in a concentrated portfolio of stable, income-generating corporate bonds across a broad universe of companies and credit ratings.

     

    Investments are made primarily in the debt of companies that trade at prices or credit spreads that we believe do not reflect their positive fundamentals, long-term outlook or rating. This strategy aims to produce an attractive return from a highly concentrated portfolio of fixed income credit with some degree of interest rate protection.

     

    Portfolio returns are enhanced through the use of duration, credit mixture, security selection, leverage and interest rate convexity. We position the bonds in the portfolio with a bias toward either credit risk, interest rate risk or both, depending on the prevailing environment.

Onex' Private Strategies

  • The GS+A Global Special Situations Portfolio aims to identify investment opportunities that represent special situations. Special situation investments are those that we believe are undervalued relative to their long-term potential, and where such potential may not be realized by the broader market. Circumstances that may create special situations include, but are not limited to:

     

    • Spin-offs
    • Recapitalizations
    • Free cash flow inflections
    • Management changes

     

    The portfolio may be invested in small, medium and large capitalization companies, but tends to focus on small and medium capitalization companies, normally holding 25 or fewer companies. In addition to equity securities, we may also invest in fixed income securities.

  • The GS+A Enhanced Preferred Share Portfolio invests primarily in a portfolio of North American preferred securities and other investments that are expected to produce a high yield. We may invest in debt securities, convertible debt securities and publicly-traded equity securities in Canada and abroad.

     

    In order to generate stable income with the potential for capital appreciation we focus our investments primarily in preferred shares of companies that have:

     

    • Spin-offs
    • Recapitalizations
    • Free cash flow inflections
    • Management changes
  • Onex Credit invests primarily in non-investment grade debt through its collateralized loan obligations, private debt and other credit strategies. It practices value-oriented investing, employing a bottom-up, fundamental and structural analysis of the underlying borrowers. Onex Credit seeks to generate strong risk-adjusted and absolute returns across market cycles.

     

    For more information about Onex Credit please visit www.onex.com/credit

  • Onex’ private equity platform focuses on acquiring and building high-quality businesses in the United States, Canada and Europe across various market caps. With a focus on execution theses rather than macro-economic or industry trends, long-term value creation is our only goal. Onex’ private equity investing has generated a 27% gross IRR on realized, substantially realized and publicly traded investments since inception.

     

    For more information about Onex’ private equity please visit www.onex.com/private-equity

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