Goldmining equities are issued by companies engaged primarily in the extraction, processsing and marketing of gold. Goldmining equities are much more volatile as gold and offer a higher beta to the gold price. Most of these companies are listed on the Canadian stock exchange.
January 30th, 2020
Falcon Gold Equity UCITS Fund
The manager invests worldwide mainly in stocks issued by companies engaged primarily in the extraction, processsing and marketing of gold. In companies engaged in extracting, processing or marketing other precious metals respectively precious stones or non-ferrous metals, the fund may invest up to 25% of its assets. The net earnings of the investment fund are distributed in February of each year.
The managers’ investment philosophy is contrarian and value oriented with a bottom-up approach. However, due to the specialized nature of the Gold Equity strategy, the investment team is aware of macroeconomic trends in order to monitor the investment case for gold.
The major source of value added stems from the investment team’s research capabilities and deep fundamental knowledge of the precious metals sector. The team focuses on a range of companies from their very early stages of evolution to full maturity but tends to invest in smaller to mid-cap companies that are beneath the “radar screens” of other investment managers. Smaller companies tend to be more attractive to the team as they represent a greater scale of upside return should these companies uncover meaningful resources. In addition, the breadth and depth of the investment team’s understanding of geology allows them to seek unique opportunities that may otherwise be unnoticed by the market. The group’s primary efforts are focused on identifying potential value that the market may not recognize or which the market excessively discounts because of a lack of available information.
The investable universe is comprised of gold and precious metals mining shares and bullion. The investment team typically invests in common stocks with initial holdings of 1% or less. Mature holdings ideally range between 2% and 6%. Position weights are not targeted on a mechanistic basis and position size is a result of the evolution of the specific company, fundamental developments, and analyst’s research findings. The approach taken to building or reducing position size is generally gradual.
The manager has a bottom-up approach to conducting research. Company specific opinions are based on fundamental research and regular dialogue with company management. Traditionally, the best investment ideas have initiated from internal research, which is formed through the analysis of company reports, management meetings, on-site visits, and internal discussion.
Securities may be sold if position limits are exceeded, points of over valuation are consistently exceeded, or as a result of fundamental disappointment.
Gold Equity UCITS Fund (Falcon Gold)
The managers of the Falcon Gold Equity UCITS Fund are award winning Fund Managers. For instance, John Hathaway has received three gold Sauren medals for outstanding fund management in the category Equity Goldmines.
Mr. Hathaway is a Portfolio Manager at Tocqueville Asset Management L.P. Mr. Hathaway joined Tocqueville in 1997 where he is a co-portfolio manager of the Tocqueville Gold Fund as well as other investment vehicles in the Gold Equity strategy. He is also the portfolio manager of Tocqueville Gold Partners and Tocqueville Gold Offshore. Prior to joining Tocqueville, Mr. Hathaway founded and managed Hudson Capital Advisors followed by seven years with Oak Hall Advisors as the Chief Investment Officer in 1986. In 1976, he joined the investment advisory firm David J. Greene and Company, where he became a Partner. Mr. Hathaway began his career in 1970 as an Equity Analyst with Spencer Trask & Co. Mr. Hathaway earned a B.A. from Harvard College and an M.B.A. from the University of Virginia. He also holds the CFA designation.
Mr. Groh joined Tocqueville in 2003, where he is a co-portfolio manager of the Tocqueville Gold Fund as well as other investment vehicles in the Gold Equity strategy. Prior to joining Tocqueville, Mr. Groh was Director of Investment Research at Grove Capital from 2001 to 2003. From 1990-2001, he held investment research and banking positions at J.P. Morgan, Merrill Lynch, and ING Bank. During the late 1980s, Mr. Groh served as a portfolio manager of gold mining equity funds for U.S. Global Investors and IDS Financial Services, after beginning his career as a mining and precious metals analyst in 1985 at U.S. Global Investors.
Mr. Groh earned a B.S. in Geology/Geophysics from the University of Wisconsin – Madison and an M.A. from the University of Texas at Austin, where he focused on mineral economics.
Mr McIntyre, CFA, is a Senior Research Analyst for the Gold Investment team at Tocqueville Asset Management L.P. and Co-Portfolio Manager of the Falcon Gold Equity Fund and the Falcon Gold Equity UCITS Fund. Mr. McIntyre joined Tocqueville in 2008 and focuses on generating ideas and monitoring investments related to precious metals. Prior to joining Tocqueville, Mr. McIntyre was an associate focused on mergers and acquisitions in the metals and mining sector with the Macquarie Group. He earned a B.A. in Commerce with Distinction (majoring in finance) from Dalhousie University and an M.B.A. from the Yale School of Management. He also holds the CFA designation.
About Tocqueville Asset Management
Tocqueville Asset Management (“TAM”) was founded in 1985 by Francois Sicart as a subsidiary of Tucker Anthony & R.L. Day, which at the time was an investment banking and brokerage firm.
TAM was established to manage private accounts for high net worth clients and has been providing investment management services to high net worth, institutional, and retail investors over the last 25 years.
The firm became an independent limited partnership in 1990, though Tucker Anthony retained a 7% ownership, and re-organized with Tocqueville Management Corporation (“TMC”) as General Partner in 1995. In November 2001, the Royal Bank of Canada purchased all assets of Tucker Anthony, including the 7% interest in TMC. In 2004, TMC employees purchased back the 7% interest owned by the Royal Bank of Canada.
TAM filed its investment adviser registration with the SEC on April 27, 1990.
TAM focuses exclusively on growing and preserving the long-term capital of its clients and manages investment portfolios with the independent thinking and rigorous research that was the hallmark of Alexis de Tocqueville, the great nineteenth-century chronicler of American democracy. The firm is contrarian and believes that the best investment results over time are achieved outside the mainstream consensus. The investment process is built around identifying undervalued companies that possess long-term earnings power.
In TAM’s view, recognizing value before it is discerned by the market at large is the most certain way to build wealth and mitigate investment risk.