About Us

Tranquility. Since 2007

Our History

Lightwater Partners is an independent Toronto-based investment manager founded in 2007. We manage funds on behalf of individuals, families, Investment Advisors, family offices and corporations, both domestically and internationally. Lightwater Partners is registered in Canada with the Ontario Securities Commission as a Portfolio Manager, Investment Fund Manager, and Exempt Market Dealer.

Our investment focus is mid-Cap Canadian stocks. We seek to identify “uncrowded” or under-followed companies that are under-valued or over-valued by the market. This approach has allowed Lightwater to outperform Canadian equity markets over the past 12 years while exhibiting lower risk and volatility than the market. To maintain a lower-risk profile, we have portfolio protection in place at all times: short positions are used to hedge long investments.

Lightwater Approach

  • Independent Thought. We march to our own drummer at Lightwater. We do not rely on external sources for ideas or analysis.
  • Rigorous Analysis. We believe in financial modelling and we have spent 17 years building our library of models, customized for each company. We utilize a variety of valuation metrics.
  • Concentrated Portfolios. We do our homework so we want to earn a good return on that investment in research.  We are not afraid to hold large positions in our highest conviction names.
  • Investors, Not Traders. We have a patient approach to investing.

 

Lightwater Philosophy

  • Bottom Up” Stock-Pickers. We analyze and invest in stocks on their individual merits. We do not use “top-down” or macro-economic trends to determine our positions.
  • Know What You Own Well. We invest in stocks that are ‘knowable’. We know our stocks in depth. With concentrated portfolios, we emphasize depth over breadth.
  • Sleep Soundly. We want to sleep soundly at night.  We want our investments to make that easier.  We want to avoid downside risks.
  • Valuations Matter. Markets tend to dismiss valuations. While we are not ‘value’ investors strictly, we do believe low valuations can protect against downside risks.

 

Tweaks to Our Strategy in 2023

  • Less Shorting of Mid-cap Stocks. Less risk of short-squeezes.
  • Lower Hedging Overall. We want to make clear that we still have portfolio hedging at all times. Looking back, we believe we were over-hedged in the past, owing to the naturally low correlation of our holdings.
  • More Upside Participation. The funds should now ‘make more hay when the sun shines’ and should rise higher when the tide is rising.
  • Greater Use of Beta Hedging. This will reduce stock borrowing costs while still lowering beta exposures.
  • Modified our Ban on Resource Stocks. We relaxed our self-imposed ban on oil stocks due to their compelling long-term fundamentals. We still avoid all other resource stocks.

 

The Fund Post-Changes

  • Funds will still be hedged at all times.
  • Funds should retain low correlation with market indexes
  • We will remain focused on Canadian mid-cap stocks (on long side)
  • Funds should make money when markets do. We aim to eliminate the historical performance drag when markets are frothy.
  • Low beta nature of long positions will require less hedging. Gross exposure will fall, net exposures will rise.

 

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Our Team

Jerome Hass

Partner & CFA

Jerome joined Lightwater as a Portfolio Manager in 2007 and has over 20 years experience in the financial industry. Previously, he worked as a Portfolio Manager at a prominent Canadian hedge fund and Montrusco Bolton Investments. Mr. Hass also worked as a Portfolio Manager in London, England for Canada Life Assurance Company. He started on the buy-side at Scottish Amicable Investment Managers in Scotland. Mr. Hass also worked as a sell-side Analyst with HSBC Investment Bank in Singapore and Malaysia. He began his career as an Economist with the Ministry of Finance. He holds a Bachelor degree in Economics from the University of Western Ontario, a Master of Arts in Applied Economics from the University of Victoria as well as a Master of Science degree in Economics from the London School of Economics, and obtained a Chartered Financial Analyst (“CFA”) designation in 1998.

Jimmy Chu

Partner & CFA

Jimmy joined Lightwater in 2009. He is a Portfolio Manager with fifteen years of experience in the financial services industry. Previously, he was a Senior Analyst at Investor Economics Inc., a private Toronto-based research and consulting firm where he was an industry voice on various facets of the Canadian financial services industry. He holds a Bachelor of Commerce degree from the University of Toronto, and is a holder of the Chartered Financial Analyst (“CFA”) designation.

Awards

Best Canadian Equity Hedge Fund
2021 Hedgeweek

Top Performing North American Based Hedge Fund
2015 Prequin

Best Performing Canadian Hedge Fund 1yr.
2015 Hedgewatch