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Kirsten Bischoff, Opalesque New York: Opalesque reports on a small selection of the 300 hedge funds located in Canada. The hedge fund industry in this northernmost part of the Americas is young and agile and looking to use these very advantages to become a force in global asset management (see part 6 here).

Ottowa-based Beechwood Asset Management launched its Canada long/short fund on April 1, 2008. Second generation hedge fund Portfolio Manager Thomas Schenkel, CFA spoke with Opalesque about how he and Co-Manager Michael Durose use a value investing approach to equities.

The catalyst factor Targeting a 10-15% annual return the strategy that Schenkel and Durose will follow is value investing with a catalyst requirement. “We look for value first,” Schenkel commented, and then invest based on expected catalysts (with a 12-18 month time target) such as misunderstood asset structure, management changes, etc.

Durose’s background as a geoscientist and a former senior mining analyst for investment firms Scotia Capital, Morgan Stanley, BMO and UBS Canada as well as the makeup of the Canadian economy will mean natural resources will be a well represented in the portfolio. However, Schenkel points out “we have a healthy representation of special situation......................

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