Founded in 1998, LDIC Inc. is a registered Portfolio Manager in all provinces in Canada except Newfoundland and New Brunswick, and an Investment Fund Manager in Ontario, Quebec and Newfoundland. The Firm provides disciplined, performance-oriented investment services and independent portfolio management. Today, with over 400 clients, the firm manages nearly $500 million in assets; $450 million of these assets are in independent individual segregated accounts and $50 million in mutual funds.
The Canadian Business Journal spoke with Robert Stabile and Genevieve Roch-Decter, Portfolio Managers at LDIC about the upside of building wealth using LDIC’s services.
“There are three competitive advantages to LDIC in the market: lower fees, lower minimums, and personalized portfolio managers. While the management fees of the competition often start at two per cent, we are at one per cent, and we also offer a performance-based fee option, which can be as low as 50 basis points. Our minimums are also very low compared to the competition. Our minimum asset requirement for the segregated accounts starts at $250,000 versus the industry average of $1 million, and if the clients have less than that, we pool these investments through mutual funds.
The asset management industry has been facing a certain paradox — the fact that many wealthy individuals do not realize where the line is drawn when it comes to determining who is a “high net worth” individual.
“Many high net worth individuals have their assets managed by a broker and don’t realize that they are eligible to have their assets managed with more attention, customization, and individual service that the segregated portfolios provide. There are firms such as LDIC that are willing to take on these smaller accounts,” says Roch-Decter.
Clients with investment amount below $250,000 have their monies placed with LDIC and invested in funds managed or advised by LDIC, and clients with funds above $250,000 may choose whether to invest in these funds, or whether to work with LDIC to create an individual segregated portfolio of stocks and bonds that best serve their financial objectives, choosing from one of six investment mandate models ranging from; Conservative to Aggressive Growth.
LDIC also advise on three funds for Redwood Asset Management Inc.: the Redwood Diversified Income Fund, the Redwood Diversified Equity Fund, and the Redwood Global Small Cap Fund. The funds employ the same investment philosophy as the individual segregated accounts. The minimum investment in these funds is $1,000 and these Funds are 100 per cent RRSP eligible, and the price of Funds is reported daily in The Globe and Mail and the Financial Post.
“We have been advising the Redwood Diversified Income Fund and the Redwood Diversified Equity Fund for eight years, and the Redwood Global Small Cap Fund for over six years. Besides the track record with these funds, we have just launched a fund under the LDIC banner,” says Roch-Decter.
Roch-Decter speaks of the LDIC North American Energy Infrastructure Fund. This fund capitalizes on the spread between North America and global energy prices to provide long term capital appreciation with potential for income. The fund invests in pipelines, liquefied natural gas, energy infrastructures and electrical grid utilities, and services affiliated with the energy sector (civil construction, engineering, trucking, logistics, etc.).The risk of this fund is rated as medium-to-high, and is suitable for investors with medium to high-risk tolerance and a need for regular monthly income.
“We are still quite positive on the improving economy and the consumer, and the big thing right now is energy and spending on the energy infrastructure. The energy prices in North America are at a discount compared to global prices, and there needs to be more money spent to move the energy around. North of $100 billion a year will be spent on energy infrastructure over the next five years, so we are investing in companies that will benefit from this. The energy infrastructure space generally offers lower risk companies because they are not as exposed to the volatility in the energy prices, and often have a long track record of paying dividends,” explains Stabile.
“We have some of our clients’ assets in this fund, and we have also been marketing this fund to retail brokers and it’s available on almost all the bank platforms and independents,” adds Roch-Decter.
“The emergence of lower cost investment vehicles such as ETFs (Exchange Traded Funds) has been a challenge to the investment advisory
industry, but we counter that. People work so hard to build up their wealth, so why should they want to find the cheapest way to manage their hard-earned money? Professional services such as medical and legal always carry a cost and therefore we believe the value of quality investment advisors and portfolio managers should not be dismissed.”
While LDIC’s business growth relies mainly on the word of mouth, the firm plans to push its services and its North American Energy Infrastructure Fund in front of more clients, and has built the internal infrastructure to accommodate more clients and more assets. The firm increased its ability to handle twice as many assets as it currently holds, and is currently working to double its assets under management, planning to reach the $1 billion mark within the next five years.
Disclosure LDIC Inc. is a registered Portfolio Manager in all provinces in Canada except Newfoundland and New Brunswick and an Investment Fund Manager in Ontario, Quebec and Newfoundland. The materials and discussions in this article are for general information purposes only and do not constitute an offer to buy or sell securities. The opinions expressed herein are the opinions of the individuals and not necessarily the opinions of LDIC Inc. Third party information provided herein has been obtained from sources believed to be accurate, but cannot be guaranteed. The information herein is current as of the date of this document and LDIC Inc. assumes no obligation to provide updates or advise on further developments. Returns in the chart are historic weighted average returns of segregated managed accounts, grouped by mandate type. Past returns do not reflective of future performance. The performance of a specific managed account within the groups may vary based on the account’s specific holdings and restrictions. Details on the compilation of these figures are available upon request by contacting LDIC Inc. Unauthorized publication or re-distribution of these materials may be illegal, please contact LDIC Inc. for permission prior.