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Waratah Capital Advisors’ Return, AUM, and Holdings

Jelena Martinovic

Waratah Capital Advisors Ltd. is an investment management firm founded by Bradley Dunkley and Blair Levinsky in February 2010. Besides launching and managing equity mutual funds, this Toronto, Canada based firm is also known for producing extremely good risk-adjusted returns. Its Portfolio Manager and Co-Chief Executive Officer Bradley Dunkley gained his experience while working for Gluskin Sheff + Associates Inc. for more than a decade, after joining in 1998. Until January 2010, he served as a Senior Portfolio Manager, Portfolio Manager of Canadian Equities & Income Trusts and Portfolio Manager of Proprietary Hedge Funds and a Vice President. For a year and a half now, he has been an Independent Director of Parkit Enterprise, Inc., being  its Chairman for two months starting from June 2018. Also, he’s a Board Member of Beautiful World Canada and a Trustee of the Dunkley Charitable Foundation. He graduated with a Bachelor's degree in Business Administration from Wilfrid Laurier University, and shortly after, in 2001, achieved the CFA® designation.

As for Blair Levinsky, his co-founder and co-CEO -- besides holding a Bachelor of Laws, L.L.B. degree and a Masters in Business Administration from Dalhousie University he also holds a Bachelor of Arts from the University of Western Ontario. Prior to launching Waratah Capital Advisors, Ltd., he was a Managing Director of Institutional Equities at TD Newcrest at TD Bank Financial Group where he spent over ten years dealing with mergers and acquisitions on both global and domestic level as well as structuring and pricing equity securities.

Blair Levinsky of Waratah Capital Advisors

Waratah Capital Advisors, Ltd. applies different equity long-short strategies when managing assets, some of them being market neutral, hedged income and a concentrated best ideas portfolio. Apparently, the combination of its risk management program and intensive research-driven stock selection is a winning one since the firm records more positive than negative years when it comes to market returns.

For instance, its Waratah Performance fund, one of its three core funds, has been recording the positive returns over the years. In 2013 the fund returned 22.37% which was the biggest return in the last five years. In 2014 and 2015, the fund returned 7.39% and 2.09%, respectively. Then, in 2016, the fund tripled its 2015 return to 7.15%, followed by 13.74% in 2017. Finally, according to the data from January to October 29th, 2018 the fund returned 3.25%. Waratah Performance had a total return of 127.93%, and a compound annual return of 10.05%. Its worst drawdown was 13.22.

When it comes to its other fund, Waratah One, some minor fluctuations were recorded. In 2013, the fund returned 10.85%, followed by 5.97% in 2014. In the next three years, there haven’t been major fluctuations with returned 3.69%, 4.31%, and 3.85%, respectively. This year, at least according to the data retrieved on October 29th, is a down year for Waratah One, since it lost 1.41%. Waratah One had a total return of 54.05%, and a compound annual return of 5.38%. Its worst drawdown was 4.72. As of March 2017, Waratah Capital Advisors manages $1.2 billion in assets and over $2.1 billion in capital deployed.

Insider Monkey’s flagship strategy identifies the best performing 100 hedge funds at the end of each quarter and invests in their consensus stock picks. This way it is always invested in the best ideas of the best performing hedge funds and is able to generate much higher returns than the market. Since its inception in May 2014, our flagship strategy generated a cumulative return of 96.9%, beating the S&P 500 ETF (SPY) by over 40 percentage points (see the details here).

Out of 142 positions which Waratah Capital Advisors’ equity portfolio counted on September 30th, 59 were the new ones. In addition, 57 companies were dropped. At the end of the third quarter, the fund’s equity portfolio was valued at $996.62 million. Among the stocks in the fund’s portfolio are some of the 30 Stocks Billionaires Are Crazy About, such as Microsoft Corp (NASDAQ:MSFT), in which the fund boosted its stake by 337% in Q3 to 157,815 shares worth $18.04 million. To find out more details about the biggest changes check out the next page.

Let’s start with the largest two positions Waratah Capital Advisors held at the end of the Q3. The largest one is, without doubt, Roper Technologies, Inc. (NYSE:ROP), a technology company dealing with software developing and designing, which occupies 6.13% of its portfolio. The fund increased its stake in the company by 2%, holding 206,345 shares valued at $61.12 million. The other one is a real estate investment trust Sun Communities, Inc. (NYSE:SUI), with an interest in manufactured housing and  recreational vehicle communities, in which the fund raised its stake by 34%, holding 363,003 shares valued at $36.86 million what is 3.69% of its portfolio.

As for the biggest newcomers during the Q3, the most prominent new position is Xylem, Inc. (NYSE:XYL) a large American water technology provider, in which the fund acquired 337,502 shares valued at $26.96 million. The second one is Brookfield Property Partners L.p. (NASDAQ:BPY) a company which owns, operates and invests in commercial property. As of September 30th, the fund holds 842,574 shares of the company valued at $17.6 million.

When it comes to the fund increasing and lowering its stake in companies, the significant changes during the third quarter are evident. It seems the fund is quite optimistic regarding Diamondback Energy, Inc. (NASDAQ:FANG) and ServiceNow, Inc. (NYSE:NOW) since it raised its stakes in these companies by 3280% to 127,493 shares and 2720% to 53,854 shares, respectively. Quite the opposite is with Devon Energy Corp (NYSE:DVN) and Umh Properties, Inc. (NYSE:UMH), in which the fund actually lowered its stake by 99% to 5,307 shares and 89% to 36,609 shares respectively.

The biggest positions Waratah Capital Advisors Ltd. decided to completely sell during the third quarter were in Lexington Realty Trust (NYSE:LXP), and Kimco Realty Corp (NYSE:KIM) with 22,121 and 12,897 shares, respectively.

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