A Birth and a Fifth Birthday for J.C. Clark

Date: Monday, May 17, 2004

J.C. Clark Ltd., one of Canada’s largest alternative investment managers, announced plans to open a new hedge fund this summer designed specifically for institutional investors.
The new fund will be called Loyalist Capital. It will be a long/short fund focused exclusively in Canadian equities.

“The number of U.S. long/short managers has grown dramatically over the past few years and the market is now becoming saturated,” J.C. Clark Chief Executive John Clark said in a statement May 12. “As a result, funds of funds and large institutional investors are now seeking a new source of alpha in the form of Canadian hedge funds.”

Mr. Clark is a former chairman of the Toronto Stock Exchange.

The new fund will be offered by Barbados-based Alexander Ernst Ltd. to U.S. and offshore institutions at a minimum investment of US$5 million, and its assets under management will be capped at US$150 million. It may be closed before it reaches that point if the managers decide that returns are being eroded by excess capital inflows, given the liquidity constraints of an all-Canada strategy.

Colin Stewart will serve as the new fund’s portfolio manager. He said in the statement that Canada is an excellent place for a hedge fund, because the relative paucity of funds operating there so far leads to pricing inefficiencies Loyalist Capital will be in a position to exploit.

J.C. Clark also announced a milestone for one of its older funds, The Preservation Trust, which reaches its fifth birthday in May. The statement said that The Preservation Trust and its managed accounts have approximately US$225 million in assets.