Black Swan Dexteritas

We are a private, independent investment management firm focused in the technology sector.

At Black Swan Dexteritas, we are dedicated to generating strong financial performance for our investors and fostering long-term relationships with our clients to create exceptional investment opportunities while keeping in mind each client’s return and risk objectives. We promote strong independent governance and frequent reporting, and strive to provide superior transparency for all of our investors.

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Who We Are

Black Swan Dexteritas
Black Swan Dexteritas Inc. (“BSD”) was founded in 2012 by Kim Bolton and is a technology focused investment management firm. BSD’s objective is to achieve superior performance in the markets by utilizing a bottoms-up approach in finding mispriced stocks within the technology sector and diversifying within various subsectors to minimize risks while maximizing returns. At BSD, we work closely with each client to understand their return and risk objectives, which may span from capital preservation to cash flow generation.

We believe superior transparency is the key to showing our conviction and commitment to what we do at Black Swan Dexteritas. We publish a “Weekly Commentary” to our investors to keep them updated on key economic drivers and portfolio related news, and inform of the performance results and holdings held within the fund.

Black Swan Dexteritas Inc. is a private, independent investment management firm. We are a registered Investment Fund Manager, Portfolio Manager, Commodity Trading Manager and Exempt Market Dealer with the Ontario Securities Commission.

As of April 2017, we manage USD $47,500,000 under all of our investment platforms.

Major Milestones
MARCH 2012 – Incorporated as a Canadian, Ontario based, investment management company

DECEMBER 2012 – Ontario Securities Commission (“OSC”) grants BSD their Investment Fund Manager, Portfolio Manager and Exempt Market Dealer registration

MAY 2013 – OSC grants BSD their Commodity Trading Manager license

JULY 2013 – BSD initiates the systematic Global Technology Hedge Fund investment thesis

OCTOBER 2013 – The Cayman Emerging Manager Platform (“EMP”) / BSD Global Technology Hedge Fund launched.

MAY 2014 – BSD Global Technology Hedge Fund was chosen to be the sub-adviser of Redwood Asset Management’s Pension Class Mutual Fund.

JUNE 2014 – BSD successfully completed their OSC Field Compliance Review.

MAY 2015 – BSD Global Tech Hedge Fund L.P.

Investment Team

Our Approach

Why Invest in a Global Technology Hedge Fund?

The technology sector has traditionally served as an essential constituent in any investment portfolio, and we believe that innovation and invention often associated with this sector will ultimately drive the next leg of growth in the stock market. We seek out technology companies that have proprietary technologies which will provide them with the competitive advantage for sustainable growth, and favor companies that have a stellar track record in pushing the frontiers of technology in their respective subsectors. At BSD, we believe buying and holding these companies and are trading at reasonable valuations will maximize our returns and minimize our risks over the long term.

At BSD, we have formed an Investment Advisory Committee for the team to seek out global technology themes and trends to overweight and underweight various subsectors. The Committee consists of the BSD team and investors that have significant experience in the technology field.
We utilize a proprietary system to identify potential investment opportunities in the universe of technology stocks through quantitative means. Many metrics are considered such as the company size, growth stage, margins, and recent price action that may indicate oversold/overbought stocks.
The attractiveness of the subsector is determined by doing extensive research on market trends and Total Addressable Market. We then make an assessment on whether the sector fits our growth stage criteria for the stocks we hold in our portfolio. Levels of competition in the subsector is also crucial in our assessment for the subsector to determine if long term value exists for all of our investments.
Upon finding a suitable investment for our portfolio, we engage in further due diligence including but limited to analyzing company business model, quarterly/annual reports, earnings/conference calls, and proprietary research. Recent events and news are analyzed more closely to determine if any material changes have occurred in the company that may lead to a secular shift in business model and ultimately price trends.
We believe that sound diversification within this sector is key to maximizing risk-adjusted returns. We hold 35 to 40 stock positions in different technology subsectors to gain exposure to the broader market where opportunities in other industries may exist. Despite having a remarkable investment approach in place, we also utilize many hedging tools at our disposal to minimize volatility and ultimately reducing our drawdowns. We use various derivatives to generate additional alpha for the portfolio by keeping a close watch on market sentiments and macro-driven events and positioning our portfolio accordingly.

Global Technology Fund

Investment Thesis

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The derivatives overlay portion of the portfolio both hedges and leverages our stock portfolio by evaluating macro fundamentals, technicals and capital flow investment changes, and using futures and options on futures in equity indices, ETFs, fixed income products, commodities and currencies, to opportunistically capitalize on these events. The derivatives are positioned to lessen the volatility of our downside risk and complement our long bias mandate.

Our proprietary investment process and risk management process will appeal to investors by shielding subscribers from costly setbacks when markets fall and earning respectable returns with a hurdle rate of 8%.

Performance

Fund Platform
Cayman EMP /
BSD Global Tech
Hedge Fund

LAUNCH DATE October 1st, 2013
TOTAL ASSETS USD $5,600,000
STRUCTURE Segregated Portfolio
ELIGIBLE INVESTORS Foreign Investors
RRSP ELIGIBILITY No
BENCHMARK 50% Nasdaq Composite and 50% Russell 2000
INVESTMENT MANAGER Emerging Asset Management Ltd, Bermuda
INVESTMENT ADVISOR Black Swan Dexteritas Inc., Toronto
CUSTODIAN / PRIME BROKER Interactive Brokers LLC, Greenwich, CT
FUND ADMINISTRATOR Apex Fund Services Ltd., Bermuda / Toronto
AUDITORS Deloitte LLP, Walkers LLP
LEGAL ADVISORS Walkers LLP, Stikeman Elliott, Toronto

BSD Global Tech Hedge Fund L.P.

LAUNCH DATE May 5th, 2015
TOTAL ASSETS USD $1,000,000
STRUCTURE G.P./L.P.
ELIGIBLE INVESTORS North American Investors
RRSP ELIGIBILITY No
BENCHMARK 50% Nasdaq Composite and 50% Russell 2000
INVESTMENT MANAGER BSD G.P. Inc., Toronto
INVESTMENT ADVISOR Black Swan Dexteritas Inc., Toronto
CUSTODIAN / PRIME BROKER Interactive Brokers LLC, Greenwich, CT
FUND ADMINISTRATOR Apex Fund Services Ltd., Toronto
AUDITORS MNP LLP
LEGAL ADVISORS Stikeman Elliott, Toronto

Separately Managed
Accounts

LAUNCH DATE May 1st, 2015
TOTAL ASSETS USD $33,500,000
STRUCTURE Account Specific
ELIGIBLE INVESTORS North American Investors
RRSP ELIGIBILITY No
BENCHMARK 50% Nasdaq Composite and 50% Russell 2000
INVESTMENT MANAGER Account Specific
INVESTMENT ADVISOR Black Swan Dexteritas Inc., Toronto
CUSTODIAN / PRIME BROKER Interactive Brokers LLC, Greenwich, CT
FUND ADMINISTRATOR Account Specific
AUDITORS Account Specific
LEGAL ADVISORS Account Specific

Terms and Conditions
Cayman EMP /
BSD Global Tech
Hedge Fund

VALUATION DATE Last business day of month
MINIMUM INVESTMENT $150,000
REDEMPTIONS Monthly
MER CEILING 2%
MANAGEMENT FEE 2%
PERFORMANCE FEE 20%
HIGH WATER MARK Yes
HURDLE RATE 8%

BSD Global Tech Hedge Fund L.P.

VALUATION DATE Daily
MINIMUM INVESTMENT $50,000
REDEMPTIONS Monthly
MER CEILING 3%
MANAGEMENT FEE 2%
PERFORMANCE FEE 20%
HIGH WATER MARK Yes
HURDLE RATE 8%

* Management fees and expenses may be associated with hedge fund investments. Please read the BSD Global Tech Hedge Fund S.P. Supplement before investing. Hedge funds are not guaranteed, their values change frequently and past performance may not be repeated. The indicated rate of return is the historical compounded total return including changes in share value and reinvestment of all dividends.

** The benchmark is a blend of 50% Nasdaq Composite Index and 50% Russell 2000 Index. The blended index is chosen as the indices are generally followed as indicators of the performance of technology stocks and growth stocks, and our portfolio has approximately 50% of positions more correlated with the Nasdaq Composite Index, and 50% of positions more correlated with the Russell 2000 Index.

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News

  • Daily BSD Global Tech Hedge Fund Update

    Despite the U.S. rally on Tuesday, the price action in Asia overnight was generally ugly – TPX -0.76%, NKY-0.68%, Hang Seng -1.55%, HSCEI -1.95%, SHCOMP -2.08%, Shenzhen -2.12%, Taiwan -0.99%, and Australia +0.47% (South Korea and India were closed). Tencent slumped another ~3.6% ahead of its after market close earnings report (negative headlines from China around gaming license approvals, along with some bad China internet earnings in the U.S. on Tuesday, weighed on the stock). Shares in Europe closed lower ~150 to 200 bps on Wednesday, and U.S. equity indices finished between 0.5% to 1.25% lower.The key reason for the Wednesday pullback was the disappointing Tencent earnings report at ~6:00 AM EST which exacerbated a couple critical points of vulnerability, including undercutting super-cap tech in the U.S., and exacerbating emerging market anxieties (Tencent is a key member of both EEM and FXI).  A host of additional risk barometers flashed warnings signs, including the VIX (+25%), USD/JPY (-0.5%), U.S. Dollar index (13-month high), and copper (broke below May 17th low). Oil prices slid 3% after weekly inventory readings showed rising crude stockpiles and a jump in U.S. production. As money moved away from stocks and commodities, U.S. Treasury prices rallied and the 2/10-year yield spread dipped back below 25 basis points. Stock flows were few and far between, with pockets of strength in bond proxies like utilities, consumer staples, and telecom, while most other sectors saw broad declines.   – After Market Movers: – BGG Reports Q4 $0.47 v $0.47e, Rev $502M v $499Me; +6% afterhours – CSCO Reports Q4 $0.70 v $0.69e, Rev $12.8B v $12.8Be; Guides Q1 $0.70-0.72 v $0.69e, Rev +5-7% y/y v +4.1%e; +4.1% afterhours – SPTN Reports Q2 $0.50 v $0.57e, Rev $1.90B v $1.88Be; Cuts FY18 $1.96-2.08 v $2.26e; -5.1% afterhours.

  • Weekly BSD Global Tech Hedge Fund Update

    Global stock market momentum built for much of last week as investors looked past the U.S./China trade spat to push U.S. indices within striking distance of the all-time highs made earlier this year. The NASADAQ led with that index posting a string of 8 straight daily rises before Friday. Oil began the week bid as traders looked to handicap the most recent round of Iran sanctions that took effect at midnight on Monday. Rates drifted sideways most of the week despite a record amount of issuance from the U.S. Treasury helped by relatively benign U.S. inflation readings. The U.S. dollar strengthened against a broad array of currencies. Trade worries held back the Yuan, Italian budget negotiations caused some consternation around the Eurocurrency, emerging market currencies were dogged by geopolitics (Lira, Ruble), and the Pound remained beholden to Brexit concerns. By Friday, the plunge in the Turkish Lira had accelerated leading some in Europe to worry about potential contagion risks for the European banks. That narrative resulted in a flight from risk including global stocks while buoying bond prices. For the week, European bourses lost 1% to 2%, Asian equity indices were volatile but closed relatively unchanged, the S&P500 slipped 0.3%, the DJIA fell 0.6%, the Nasdaq rose 0.3%, and the BSD Global Tech Hedge Fund eked out a 0.1% gain. This week should be very quiet other than China’s July economic data (IP, retail sales, and FAI out Monday night/Tuesday morning) and the start of the July-end earnings season (HD Tuesday morning, A Tuesday night, M Wednesday morning, CSCO/NTAP Wednesday night, JCP/WMT Thursday morning, AMAT/JWN/NVDA Thursday night, and DE Friday morning). Also, Trump said he would make a drug price announcement this week and obviously investors will be watching for any updates out of Turkey.  The BSD portfolio management team still believes we will see a S&P 3,000 price-target this year, but we are also expecting an August/September sell-off; on average, U.S. mid-term election years have pullbacks, particularly in the summer months. The list of catalysts to instigate such a sell-off is quite lengthy, and your BSD team is prepared for both a market pullback and a year-end rally. Your BSD Global Tech investment mandate is 95% fully invested across 10 tech vendor sectors and a number of legitimate technology end-users, while carrying a 41% short equity indice derivatives position (on the notional value of the stock portfolio) to protect us from those inevitable market drawdowns. If the market’s fundamental / technical / capital flow foundations suffer a material change, We will adjust our long biased stock portfolio and our short derivatives hedge. We have a ‘shopping list’ of technology vendors and end-users ready to invest when those inevitable pullbacks occur. Meanwhile, our technology stock portfolio still permits us to participate in the melt-up of this secular bull market.

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