TWC Risk-Managed Canadian Energy Fund Presentation June 29 Mini

TWC Risk-Managed

Canadian Energy Fund Introducing a safer way of investing

in Canadian energy.

June 29, 2012

Proprietary & Confidential

Disclaimer

This presentation is for discussion purposes only, for use by its authors and confidential

use by those who have been furnished with this information by the authors. This

presentation does not constitute an offer or solicitation in any jurisdiction to any person or

entity. Offers to sell interests in TWC Risk Management Canadian Energy Fund are

currently made available by opening a discretionary account with TriVest Wealth Counsel

Ltd. and not by this presentation. A potential investor considering an investment in TWC

Risk Management Canadian Energy Fund should read the Subscription Agreement for

purposes of making an investment decision.

No representations or warranties, express or implied, have been made as to the accuracy

or the completeness of the information in this presentation and this presentation should

not be relied upon for making an investment decision. The information provided herein is

obtained from sources believed to be reliable as of the date indicated. TriVest Wealth

Counsel Ltd. makes no warranty as to its accuracy, completeness or suitability for any

purpose. Any opinions expressed herein may be subject to change without notice.

This presentation is confidential and is not intended for public use or distribution.

2 Proprietary & Confidential

Why TriVest for your energy investments?

Canadian energy represents approximately 26% of the S&P TSX Index and therefore is an important

influence on the performance of a manager’s Canadian equity portfolio.

There are three options currently available to these managers when making their energy allocations:

1) Invest in an ETF such as the iShares Capped Energy Index (XEG), which is a low cost

benchmark solution. However, it offers no risk-management solutions other than changing the

weighting to the sector.

2) Invest in an active Canadian energy fund manager. However, few managers undertake risk-

management solutions and with most being long-only who target to add alpha through stock

selection. In addition, fund MERs can be prove to be overly costly.

3) Invest directly in the energy sector with individual stocks. The problem is that this requires a

tremendous amount of time and resources in order to do an effective job.

OR a fourth option:

The TWC Risk-Managed Canadian Energy Fund which offers a safer and cost-effective way

to invest long-term in the Canadian energy sector.


Fund overview

TWC Risk-Managed Canadian Energy Fund (“Fund”) – a long biased fund designed to

replace the energy component of an investor’s Canadian equity portfolio.

The Fund actively employs various risk management practices and targets to

outperform the S&P/TSX Capped Energy Index.

Concentrated portfolio in large capitalisation Canadian oil & gas companies that

are optionable.

Tactical and strategic positioning in selective public and private junior oil and gas

companies.

Active use of derivatives to assist with risk-management and tax-efficient income

generation strategies.

Will employ other risk management strategies such as commodity and foreign

exchange hedging, arbitrage, short positions, pair trading etc.


Fund overview cont.

Distinctive Competitive Advantages

Unique investment strategies - currently not being offered by existing “long-only”

energy fund managers.

Superior adjusted returns - a safer alternative to both the Capped Energy Index

and the many other energy fund managers in Canada.

Liquidity advantage - larger firms have liquidity issues when investing in the

Canadian energy.

Local expertise - situated in Calgary, the heart of the Canadian oil patch. Able to

utilize extensive industry relationships and first mover advantage.

Very competitive fee structure - average MERs of active energy funds in

Canada are too high at approximately 2.2% (avg. class F, institutional). The Fund has

a 1% management fee and 15% performance fee with a high watermark.


Fund leadership

Martin Pelletier, CFA

Managing Director, Portfolio Manager

Martin's 15 year career in the investment and finance sector was focused

primarily in institutional energy research including such firms as Blackmont

Capital, Canaccord Capital and GMP Securities. As a Brendan Woods

ranked Energy Analyst, Martin provided regular investment recommendations

to institutional fund managers located in Canada, the U.S. and Europe.

Martin's research has lead to the establishment of senior management and

board level relationships among those in the Canadian and International

energy sector. Martin’s technical expertise included conducting many in-the-

field diligence trips including onshore and offshore operations in South

America, India and North America.

Martin is a weekly contributor to the Financial Post’s Investment Pro section

and has been interviewed by the Calgary Herald, Edmonton Journal, CTV,

CBC, BNN, the Globe and Mail, La Presse, the Wall Street Journal, and

Reuters. Martin was also more recently selected as one of Oilweek

Magazine’s 2012 Rising Stars.

Martin has also been sought out as an energy expert having undertaken

public speaking engagements on National Energy and Investing in Oil & Gas

symposiums.

Martin holds a Bachelor of Commerce degree with a specialization in finance

from the University of Alberta and is a Chartered Financial Analyst (CFA)

Charterholder.

Fund led by 15 year

energy insider both in

Canada and abroad.

Extensive relationships

with oil and gas

management teams,

board members,

financiers and key

technical advisors.

Fundamentals based

investor with a focus on

those management teams

with a proven track

record.


Fund leadership

Craig Stanford, MBA, CFA


Craig has over 20 years of senior-level portfolio management experience.

His prior Portfolio Manager and Investment Counsellor positions include the

following: Partner / Director of Private Client Portfolio Management Mawer

Investment Management; Managing Director / Portfolio Manager Cypress

Capital Management; and, Managing Director / Portfolio Manager at

Brickburn Asset Management.

Earlier in his career he worked for the Royal Bank Financial Group as a

Senior Account Manager, Global Private Banking and as a Trust and

Investment Advisor for Royal Trust.

Craig is a Chartered Financial Analyst (CFA) Charterholder. He obtained a

Master of Business Administration degree and a Bachelor of Science

(Agriculture) degree from the University of Alberta. In addition, he holds and

maintains Trust and Estate Practitioner (TEP) and Professional Agrologist

(P.Ag.) designations and is a Certified Financial Planner (PFP).

Over 20 years of

senior-level portfolio

management experience

at buy side firms varying

in size from smaller

specialised boutiques to

multi-billion dollar AUM

firms.

Extensive experience

working with family

offices, endowments and

foundations.

Career focused on

strong fundamental

research and risk

management.


Investment thesis

Of all the sub sectors in the S&P TSX, Canadian Energy has delivered the highest

returns over the past 10 years with reasonable levels of volatility.

Source: Original chart from Martin Roberge, North American Portfolio Strategist,Canaccord Genuity, red-line adjustment by TriVest

Wealth Counsel Ltd.


Investment thesis – short-term

We believe we are in a secular flat, and very volatile range- bound market in the

near-term not unlike previous periods of consolidation.

A simple buy and hold strategy is not the most prudent action in this

environment.

iShares S&P/TSX Capped Energy Index (XEG.TO): Last eleven years

Source: data from Bloomberg, Chart by TriVest Wealth Counsel Ltd.

0

5

10

15

20

25

30

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

11-year average 14

-60%

-33%


Investment thesis – long-term

We believe that energy markets, especially Canadian Energy, will directly benefit

from the continued rapid growth in emerging markets such as Southeast Asia and

China.

On a risk-adjusted basis we believe that the Canadian Energy sector is a

safer way to participate in this growth.


An excellent time to begin allocating to the Canadian energy sector

Investors have also been very selective in their equity exposures, recently buying

U.S. equities and fixed income while selling emerging markets and resource

focused economies such as Canada – this includes Canadian oil and gas stocks.

For example, the % deviation of the implied oil price in stock valuations

versus the actual oil price was more recently at its widest deviation in over 10

years – even wider than levels reached during the financial crisis of 2008.


Investment process and portfolio construction

Deep primary research and diligence

screen – often involves meeting with senior

management of each company.

Top down macro research on crude oil, natural gas, specific new play-types

and participants, sector activity and weightings etc.

Portfolio additions and/or

deletions

Option overlay

and/or other risk

management

strategies

Portfolio Composition at June 29, 2012

Current Portfolio


For

Clients

Only

Security selection – our bottom-up process

Qualitative Analysis

• We diligently screen our short listed companies by the quality of their management

team, underlying assets, and current valuation.

• Extensive use of both Primary or Secondary sources, and direct access to management.

PEOPLE ASSETS VALUE

• Expertise

• Track record

• Ability to raise capital

• Strong Corporate Governance

• Shareholder and Mgmt alignment

• Management ownership structure

• Independent Board of Directors

• High-quality, long-life reserves

• Oil vs Natural Gas

• Growth vs. Dividends and/or both

• Strong market positioning

• Reasonable inventory of prospects

• Ability to generate attractive IRR on

internal projects

• Low cost structure

• Reasonable financial position

• We prefer to own those companies

trading at a reasonable value given

their underlying growth outlook


Focus on active risk management

Our Option Overlay is an excellent risk-management tool. It

enables:

1. Absolute return from option writing income.

2. Timing opportunities – ability to automate buying and selling

of companies when they deviate from their intrinsic values.

3. Hedging or downside protection.

We will also employ other risk management strategies such as

commodity and foreign exchange hedging, arbitrage, short

positions, pair trading etc.


Summary of terms and fund contact details

TriVest Wealth Counsel Ltd.

1717 9 Street SW

Calgary, Alberta

T2T 3C1

Main: 1.855.565.8378

[email protected]

Martin R. Pelletier, CFA


403.536.6444

[email protected]

Craig B. Stanford, MBA, CFA


403.536.6443

[email protected]


Portfolio Managers: Martin Pelletier

Craig Stanford

FUND DETAILS

Structure: Unit Trust

Min. Investment: $100,000, RRSP Eligible

Management Fee: 1% per annum

Incentive Fee: 15% of performance

Watermark: Yes

Liquidity: Monthly

Auditor: Meyers Norris Penny

Custodian: Penson Financial Services

Fund Admin: SGGG

Trustee: Valiant Trust Company

Documents

TWC Risk-Managed Canadian Energy Fund Presentation June 29 Mini