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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (58210)	4/6/2008 12:58:33 PM
From: tyc:>	Read Replies (2) \| Respond to of 78408

I stole this posting from Yahoo. Of interest are the later paragraphs in which they describe the "130/30 strategy" of money management funds, "to satisfy institutional demand..." shorting stocks "they don't like" and using the money etc. Schulich brings his magic to New Gold Barry Critchley, Financial Post Published: Saturday, April 05, 2008 For a person who is officially a senior citizen, Seymour Schulich doesn't have much downtime. The latest example was played out this week when it became known that Schulich is a major shareholder at New Gold Inc., one of the companies involved with a three-way merger announced earlier this week. In that all-stock merger, New Gold is acquiring two other gold miners -- Metallica Resources and Peak Gold Ltd. --for about $1.37-billion. Schulich, best known for forming Franco-Nevada, which was sold to Newmont Mining a few years back, owns about 14% of New Gold, having bought all of his four-million stake after the deal was announced. If shareholders of the three companies approve the merger, he will end up with more than 5% of the resultant entity. His long-time colleague, Pierre Lassonde, will also own about 5% of New Gold, a company Schulich believes will become the next Goldcorp. (Lassonde will be a director of the "new" New Gold). That company grew by a series of mergers into the world's third-largest gold producer. "What we are trying to cobble together is [made of ] companies that trade below net present value and turn it into a big one which trades at two-three times NPV," Schulich said. Its worth noting that Ian Telfer, Goldcorp's chairman, will be a director of New Gold. Two decades earlier the two hooked up when Telfer was the chief financial officer at TVX. (TVX was ultimately acquired by Newmont.) Clifford Davis, a former executive with RTZ, is also slated to be a director. Naturally enough, Schulich thinks New Gold will be a winner. Indeed, given his track record since selling Franco-Nevada to Newmont, it's tough to disagree. He has been an investors' friend because of his success with, among others, Blackrock Ventures, Canadian Oil Sands Trust and Birchliff Energy. Vancouver-based Genus Capital Management is the latest money-management firm to launch a so-called 130/30 equity strategy. "The [Canadian equity] strategy is designed to extract greater returns from the firm's existing quantitative equity-management processes and provide institutional investors with a new means to take advantage of Genus alpha in Canada's equity market," said Wayne Wachell, the firm's chief executive. Wachell, said the 130/30 strategy was developed in response to institutional demand and "because it's a natural extension of our proven alpha-generating process, which is one critical element for an alpha-extension strategy to be successful. Our skill at stock selection, experience at shorting and sharp focus on risk management are equally critical elements," he added. A 130/30 strategy defines a situation where the fund has a short position on the stocks that it doesn't like and uses the cash from those sales to invest in stocks that it does like. In this way, the fund is 130% long and 30% short. "What differentiates [us] is the firm's distinctive investment approach, which blends attributes of value, growth and quality strategies to create style-diversified, risk-controlled portfolios," Wachell said.