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Groundlayer Capital Inc.

100 King Street West
First Canadian Pace, Suite 6101, PO Box 61
Toronto, Ontario M5X 1B1
(416) 365 - 2300
whouse@groundlayer.com
www.groundlayer.com/

Robert Grundleger
President
Tel: (416) 365 - 2300
info@groundlayer.com

Private: $2,000,000
Institutional: $2,000,000

* indicates a physical location in this province

Concentrated Long/Short North American equity fund
Long bias
Focused portfolio typically consists of 20 to 25 securities
Top 10 stocks = 55% of invested portfolio
Focus on securities listed on major exchanges with market capitalizations of $500 million to $3 billion
Rigorous fundamental research of individual companies
Shorts are opportunistic and fundamental
“Big Idea” hunting

Rigorous fundamental research process leads to intrinsic value calculation and identification of a catalyst
Valuation and margin of safety are important criteria
On long side, features of selected companies include growth, reasonable price, significant free cash flow, experienced management with integrity, large insider holdings or opportunistic situations such as broken IPO’s, situations where stock market pricing has not caught up with improving business fundamentals or where complex fundamentals distort value
On the short side, relevant features include deteriorating fundamentals, changes in balance sheets, extreme overvaluation
Time horizon 2-4 years on the long side. The short side is an opportunistic strategy with a shorter time horizon

Significant investment by principals
Deep fundamental research and scrutiny of individual securities
Minimal leverage
Maximum concentration limits in one stock
Pairs trading and minimal option writing
Opportunistic short position risk is managed by limiting positions to 3-4%, adhering to stop loss parameters
Employ index derivatives for hedging strategies
Employ currency hedges
Liquid portfolio – 85% could be liquidated within one day, remainder within 1 week
Outside independent administrator, auditor and prime broker