Laketon's investment style and process

Laketon offers concentrated, large-cap mandates designed to generate strong long-term performance. Laketon employs a bottom-up investment approach that combines qualitative and quantitative analysis. Investors benefit from select securities held with conviction about the growth opportunities they present. Laketon's disciplined and market-tested selection and investment processes help achieve an optimal balance between return potential and risk management.

Laketon's active investment style is focused on high quality Canadian equities and is designed to create the appropriate balance between positive return generation in up markets and capital preservation in down markets. Here's how we do it:

Screening: we define the investment landscape for each portfolio and then use established parameters to define the group of companies that will be considered for the portfolio.

Laketon's investment mandates tend to hold companies with these key attributes:

  • Large-cap bias
  • Sustainable profitability
  • Proven management teams
  • Attractive history of return on capital
  • Strong free cash flow

Qualitative analysis and idea generation: we perform intensive company-by-company analysis.

Laketon's portfolio managers and analysts generate proprietary research to gain insight into select companies we are considering for our portfolios, including:

  • Analysis of a company's ability to achieve a strong return on invested capital coupled with a company's opportunity to reinvest that capital over the long term to drive earnings growth
  • Proprietary and detailed forecasting of a company's cash flow generation ability
  • Sensitivity analysis and scenario testing to assess a company's value

Portfolio construction and risk management: high-quality companies that meet investment criteria are also expected to add long-term value to the portfolio as a whole.

Measured positions are taken, with sensitivity to both the absolute and relative risk-return opportunities of the portfolio. Each Laketon mandate tends to exhibit:

  • Well-diversified holdings
  • A fully invested, concentrated portfolio of 30-45 holdings
  • A responsive sell discipline that incorporates both tactical and fundamental buy/sell strategies.