FAQ

Frequently Asked Questions

Click on the commonly asked questions below to see the answers.

Who manages the funds?

Jimmy Chu and Jerome Hass are the Portfolio Managers for the Funds. Jerome has been managing the funds since their inception. Jimmy joined Lightwater in 2009.

Who manages the funds?

Jimmy Chu and Jerome Hass are the Portfolio Managers for the Funds. Jerome has been managing the funds since their inception. Jimmy joined Lightwater in 2009.

What are the Funds' goals?

The funds aim to diversify clients’ portfolios by taking advantage of the inefficiencies of the Canadian mid-cap stock market and provide returns that are uncorrelated with the TSX index.

What is a mid-cap stock?

Based on Lightwater’s market segmentation (see chart below), a ‘mid-cap’ stock has a market capitalization between $200 million at the lower end and $2.5 billion market capitalization at the upper end. This is an entirely subjective definition. The $200 million lower boundary is used because we view it as the smallest possible valuation for an ‘institutional’ stock in Canada (i.e. a stock that can be bought and sold by an institution based upon its stock liquidity). The upper end was used because it provided at least 150 stocks defined as ‘large cap’, which we view as a realistic representation of what the average Canadian equity funds hold. Based on these definitions, only 4% of listed Canadian stocks are ‘large-cap’ and 13% are mid-cap, while 82% of stocks falls into the small and micro cap category.

Segment	Lightwater Segment Definitions	Stocks Listed in Canada	% of Totals
Large Cap	> $2.5 billion CAD mkt. cap.	150 stocks	4%
Mid-Cap	$200 million to $2.5 billion CAD mkt. cap.	450 stocks	13%
Small Cap	< $200 million CAD mkt. cap.	2,800 stocks	82%
Total		3,400 total stocks	100%

What are the Benchmark Indexes for the Funds?

The funds are not benchmarked to any index. There is no known index in Canada that tracks mid-cap stocks. We do not hold many (if not zero) stocks that compose the TSX indices, so they are not appropriate benchmarks.
Imagine a Canadian equity fund that holds:

no banks
no telecoms
no pipelines nor utilities
no railways
no gold stocks

Who can invest in the funds?

Unfortunately, the Funds are only available Accredited Investors. To qualify as an Accredited Investor, one generally has to have an annual income of $200,000 or investment assets (excluding your home) of over $1 million. Please refer to the Ontario Securities website or our Offering Memorandum for more details.

How can I invest?

You can invest directly with Lightwater Partners with no transaction fees or through many brokerage firms. Please contact us to assist you.

Who are your service providers?

TD Securities is our Prime Broker. They act as the custodian (or holder) of our cash and securities.
SGGG Fund Services Inc. is the Fund Administrator. They calculate the monthly and annual performance of the funds.
Goodman & Associates LLP are the funds’ auditors.

What Types of Accounts Can Hold the Funds?

The funds can be held in your existing brokerage account at a brokerage. The funds are eligible for all registered accounts (e.g. RRSP, RESP, LIRA, RRIF, RHSA) as well as non-registered accounts. We can also set up a direct account with Lightwater Partners if you prefer.

What are the FundSERV codes?

Lightwater Long Short Fund
Fundserv Codes	Class	Type of Brokerage Account Held by Investor
LWP 113	Class P	Direct Investment with Lightwater Partners Ltd.
LWP 113	Class P	Self-Directed Investors
LWP 111	Class F	Managed by an Investment Advisor (fee based on % AUM)
LWP 110	Class A	Managed by an Investment Advisor (transaction-based account)

The Nimble Fund
Fundserv Codes	Class	Type of Brokerage Account Held by Investor
LWP 213	Class P	Direct Investment with Lightwater Partners Ltd.
LWP 213	Class P	Self-Directed Investors
LWP 211	Class F	Managed by an Investment Advisor (fee based on % AUM)
LWP 210	Class A	Managed by an Investment Advisor (transaction-based account)

What Fees Do the Funds Charge?

Both funds charge a 2.0% management fee which is based upon the amount invested. The funds also charge a performance fee, based up the profit you make (not on the amount you invest). The funds also utilize a permanent high water mark. See the tables below or consult our Offering memoranda for more details.

If your brokerage accounts are managed by a ‘fee for service’ Investment Advisor, you would hold Class A units of our funds. For Class A units, we split the 2% management fee with your Investment Advisor.

If your brokerage accounts are managed by a ‘wrap fee’ Investment Advisor who charges you a fee based upon your assets under management, you would hold Class F units of our funds. For Class F units, we only charge 1.0% management fee because your investment Advisor is already charging you a fee (about 1.0%) on your investment.

In all of the scenarios, the investor pays the same 2.0% management fee, it is just the split between Lightwater and your Investment Advisor that changes with each class.

Lightwater Long Short Fund
Fundserv Codes	Class	Management Fee	Performance Fee	High Water Mark
LWP 113	Class P	2.00%	20% of profit	Permanent
LWP 113	Class P	2.00%	20% of profit	Permanent
LWP 111	Class F	2.00%	20% of profit	Permanent
LWP 110	Class A	1.0% + 1.0%	20% of profit	Permanent

The Nimble Fund
Fundserv Codes	Class	Management Fee	Performance Fee	High Water Mark
LWP 213	Class P	2.00%	25% of profit	Permanent
LWP 213	Class P	2.00%	25% of profit	Permanent
LWP 211	Class F	2.00%	25% of profit	Permanent
LWP 210	Class A	1.0% + 1.0%	25% of profit	Permanent

How Often Are the Funds Valued?

The funds are valued once a month on the last trading day of each calendar month. Our prime broker (TD Securities), our Fund Administrator (SGGG Fund Services Inc.) work with us to calculate the net asset values of the funds. We do so on the tenth business day of each month. Subscriptions and redemptions are calculated based upon the net asset value of the funds at month end.

Is There an Early Redemption Fee?

Yes, but it only applies to investors who sell within the first three months. This is to discourage short-term trading in and out of the funds, which is disruptive for the rest of our unitholders.

What are the Redemption Fees?

There are no fees to withdraw your funds, provided they were held in the funds for more than three months.

What are the Redemption Terms?

There is a 30 day notice period before the end of a month. There is no redemption fees. The redemption amount is based upon the net asset value of the fund at month end.