Investment Philosophy & Process
Our primary focus is to deliver superior risk-adjusted returns in all market cycles. As a result we are committed to constructing portfolios that deliver income and growth over the long term while mitigating potential capital drawn downs. We do this by starting with a traditional investable universe of stocks, bonds, cash and include a meaningful allocation to alternative investments to adjust the risk profile of the portfolio.
Within our funds, we analyze the various sectors of real estate and have identified the safest – multi-family in urban areas. For example, in our Alitis Mortgage Plus Fund, the vast majority of mortgages are residential. The Alitis Private REIT again focuses on multi-family, in this case with a bias toward rental properties as this is generally the least risky portion of the real estate market. The goal here is to maintain steady, stable returns while reducing volatility.
Our funds’ holdings are engaged in numerous mortgage and real estate companies. We have worked diligently to find skilled and experienced teams to work within all of our funds. This serves to spread the risk across a variety of organizations enabling us to mitigate the risk of utilizing single managers. In the Alitis Mortgage Plus Fund, we have 13 different investments from different managers and in the Alitis Private REIT, 7.
On top of manager diversification, we ensure regional diversification which limits the influence of an individual region’s real estate market fluctuations. In the Alitis Mortgage Plus Fund, we reduce economic risk with sizable allocations in BC, MB, ON and the USA. The Alitis Private REIT has sizable exposure in BC, MB, ON and the USA.
We look for ways to add extra value by maintaining flexibility in where to find value. For the Alitis Mortgage Plus Fund, we can operate in both the public and private markets which give us the flexibility to earn higher returns; when the public markets decline, we can buy mortgages for less than we would pay in the private markets. For the Alitis Private REIT, we look for extra value by partnering with developers to construct buildings as it is currently cheaper to build them than buy them.
Our investment committee continually monitors the market and reallocates from time to time as circumstances change. For the Alitis Mortgage Plus Fund, we greatly reduced our exposure to public mortgages as the price recovered from the lows in 2015. We recently found some buying opportunities when prices dropped irrationally with these purchases helping to increase the value of the fund. In the Alitis Private REIT, we manage the portfolio of holdings selling when it makes sense and reallocating to new opportunities, potentially with new developers in new markets to help increase our diversification and fund’s long-term returns.