M arch 31, 2020 Prosperously navigating unexpected events with - - PowerPoint PPT Presentation

March 31, 2020

Prosperously navigating unexpected events with great skill and agility

2

AGENDA

Who We Are Investment Methodology Performance by sectors Risk Management Current Opportunity and Investment pipeline Performance Summary

3

DISCLAIMER: The information and opinions expressed herein are current as of this document date and Black Swan Dexteritas Inc. assumes no obligation to provide updates or advise on further developments. Any reference should not be considered as investment advice or a recommendation to buy or sell nor should it be considered as any indication of the portfolio of any Black Swan Dexteritas investment fund or how it will be invested. Commissions, trailing commissions, management fees and expenses may all be associated with fund

• investments. Please read the prospectus before investing.

Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

WHO WE ARE

4

BLACK SWAN DEXTERITAS (“BSD”)

TECHNOLOGY EXPERTISE

• Unique insight

from entrepreneurs leading international tech development based on needs creation

• Advisory Committee of tech leaders

who determine the global adoption and success of new technologies

• Representation in all BSD-invested

tech sectors and sub-sectors, for unrivalled expertise

• Portfolio Manager with 30 years of

portfolio management experience across various asset classes at asset management companies (LGT, TAL, CIBC Asset Management), and a pension (British Petroleum)

• Exceptional research team with a

wide breadth of knowledge in research, finance, and engineering

• Intense due diligence process for our

stock selection process

• Unique risk management overlay

to minimize drawdowns and volatility

PORTFOLIO MANAGEMENT EXPERIENCE

5

INVESTMENT METHODOLOGY

SECTOR ASSESSMENT

• Life Cycle: Sectors in introduction and growth stages with

high Total Addressable Market (TAM)

• Competition: High barrier of entry with differentiated products

and services within the sector COMPANY ANALYSIS

• Business Model: Public ccompanies with high recurring revenue,

easily able to leverage network effects, strong negotiating power with suppliers and customers, and strong corporate governance

• Size: Target small (500M+) to large cap public companies with

established track record of executing the business.

• Growth: Public companies with high and/or consistent revenue

growth

• Valuation: Determine if opportunities exist based on our fair

value expectation of stocks versus current stock prices PORTFOLIO CONSTRUCTION

• Weightings: Determine % of portfolio allocated to holdings

based on risk-reward expectations

• Diversification: Well-diversified across 35 to 40 holdings to

maximize risk-adjusted returns

• Hedging: Utilize derivatives and fixed income products to

minimize drawdowns and generate alpha IDEATION

• BSD Investment Advisory Committee: seek out global

growth themes and trends to overweight and underweight various subsectors

• Experienced investment team sourcing trade ideas and

discussing vital macro economical forces in play

• Draw on sector experiences from members of the committee and

discuss emerging technology from the private and public space

• Deep dive into industry verticals to identify beneficiaries in other

primary, secondary, and tertiary markets

PORTFOLIO CONSTRUCTION

IDEATION SECTOR ASSESSMENT COMPANY ANALYSIS

PUBLIC COMPANIES

TOP 10 STRATEGIC TECH TRENDS FOR 2020-2021

6

INVESTMENT METHODOLOGY DIVERSIFICATION

BSD seeks out high potential technology sectors with promising unit sales projections and revenue projections and minimizes exposure to low potential sectors

PORTFOLIO BY MARKET CAP PORTFOLIO BY TECH SUBSECTOR

$5B to $10B 5.0% Over $10B 91.0% As of March 31, 2020

BSD is well-diversified across 10 technology subsectors across 30 to 35 holdings with minimal correlation.

Under $5B 4.0%

7

1.99% 3.63% 3.69% 3.95% 4.05% 7.13% 8.90% 13.42% 13.79% Consumer Electronics Technology Real Estate Automation Cyber Security Consumer Services Fintech Communication Equipment Semiconductors Internet Software

HEDGING OVERLAY

HEDGING STRATEGY The goal of the hedging strategy is threefold:

• 1. Minimize the portfolio’s drawdown
• 2. Lessen the portfolio’s volatility
• 3. Generate alpha

HEDGING TACTICAL PROCESS There are 3 tactical steps in the execution of the hedging process:

• 1. The neutral market position is set at 20% of the stock portfolio, ex-cash
• 2. The hedging position will deviate from the neutral market position to underweight or
• verweight, based on macro fundamental, technical, and capital flow factors
• 3. The combination of various futures instruments ( for example, S&P 500 futures,

Nasdaq 100 futures, and Russell 2000 futures) is determined by a proprietary hedging model HEDGING P&L IMPACT The hedging strategy is an “insurance” policy in anticipation of an adverse market event The hedging tactical process limits drawdowns, and potentially generates alpha

RISK MANAGEMENT

8

• 35.00%
• 25.00%
• 15.00%
• 5.00%

5.00% 15.00% 31-Dec-19 2-Jan-20 4-Jan-20 6-Jan-20 8-Jan-20 10-Jan-20 12-Jan-20 14-Jan-20 16-Jan-20 18-Jan-20 20-Jan-20 22-Jan-20 24-Jan-20 26-Jan-20 28-Jan-20 30-Jan-20 1-Feb-20 3-Feb-20 5-Feb-20 7-Feb-20 9-Feb-20 11-Feb-20 13-Feb-20 15-Feb-20 17-Feb-20 19-Feb-20 21-Feb-20 23-Feb-20 25-Feb-20 27-Feb-20 29-Feb-20 2-Mar-20 4-Mar-20 6-Mar-20 8-Mar-20 10-Mar-20 12-Mar-20 14-Mar-20 16-Mar-20 18-Mar-20 20-Mar-20 22-Mar-20 24-Mar-20 26-Mar-20 BSD Global Tech S&P/TSX Composite Blended Nasdaq/Russell 2000

When we see certain signs of market deterioration, we increase our hedging positions.

RISK MANAGEMENT

Our prudent risk management system allows us to navigate market corrections and black swan events with lower drawdowns and higher returns 9

2020 CORRECTION

CASE STUDY

*BSD’s Global Technology Hedge Fund benchmark is a 50/50 Nasdaq/Russell and any references to other indices are made for information purposes only; including the S&P/TSX Composite Index (Canada’s primary exchange) which is the 9th largest stock exchange in the world, based on the market capitalization. It is the equivalent of the S&P 500 market index in the USA. Since the S&P/TSX is comprised of Canada's largest and most prominent companies, it is often used as a barometer for the health of the Canadian economy. Used here, the S&P/TSX has two primary functions: to provide an easily understood snapshot of how Canada's public companies are performing, and to provide a benchmark against which fund managers can compare their results to assess their success.

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE

• DIGITALIZATION & ELECTRIFICATION

The automotive revenue pool will grow and diversify with new services potentially becoming a ~USD 1.5 trillion market in 2030

• 5G DEPLOYMENT

The 5G market will grow to $1.23 trillion by 2026, according to a new report by Ericsson announced at the Mobile World Congress

• DIGITAL TWINS

The digital twin market is expected to grow at a CAGR of 37.87%, to reach USD 15.66 Billion by 2023

• BIG DATA

Worldwide Big Data market revenues for software and services are projected to increase from $42B in 2018 to $103B in 2027, attaining a CAGR of 10.48%.

• AUTOMATION & ROBOTIZATION

After growing at a compound rate of 17 per cent a year, the robot market will be worth $135bn by 2019, according to IDC

• GAMING

Gaming market to grow at a CAGR of +11% toward 2021 to reach $180.1 billion

10

Source: Statista, Gartner, Ericson, Newzoo

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE

DIGITALIZATION & ELECTRIFICATION

11

• Entire industries are changing with and through digitalization, while car drivers are demanding even

more from their vehicles. In addition to vehicle dynamics and consumption, the perceived intelligence, comfort, and convenience of the car also play a significant role.

• We are convinced that electromobility in its many different forms will be an essential component of

future mobility.

• The automotive revenue pool will grow and diversify with new services potentially becoming a ~USD

1.5 trillion market in 2030.

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE

5G

12

• 5G networks are the next generation of mobile internet connectivity, offering faster speeds and more

reliable connections on smartphones and other devices than ever before.

• The 5G market will grow to $1.23 trillion by 2026, according to a new report by Ericsson announced at

the Mobile World Congress

• Verizon CEO: 5G is a lot closer than people think.

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE

DIGITAL TWINS

13

• A digital twin is a virtual representation of a physical object or system across its lifecycle, using real-

time data to enable understanding, learning and reasoning.

• Digital twins integrate artificial intelligence, machine learning and software analytics with data to create

living digital simulation models that update and change as their physical counterparts change.

• The digital twin market is expected to grow at a CAGR of 37.87%, to reach USD 15.66 Billion by 2023.

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE

BIG DATA

14

• Data Analytics is the process of examining data sets in order to draw conclusions about the

information they contain, increasingly with the aid of specialized systems and software.

• Worldwide Big Data market revenues for software and services are projected to increase from $42B in

2018 to $103B in 2027, attaining a CAGR of 10.48%.

• Big Data applications and analytics is projected to grow from $5.3B in 2018 to $19.4B in 2026,

attaining a CAGR of 15.49%.

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE

AUTOMATION & ROBOTIZATION

15

• The term robotic automation or robotization refer to the automation of industrial and business

processes using robots, of various guises.

• Manufacturing is undergoing its greatest transformation since the Industrial Revolution. A wave of

intelligent technologies is shaping a more connected, flexible and efficient factory floor—and redefining the ecosystem of equipment providers in the process.

• After growing at a compound rate of 17 per cent a year, the robot market will be worth $135bn by

2019, according to IDC

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE

GAMING

16

• Modern personal computers owe many advancements and innovations to the game industry: sound

cards, graphics cards and 3D graphic accelerators, faster CPUs, and dedicated co-processors like PhysX are a few of the more notable improvements.

• As of 2017, games industry generated $108.4bn in revenues worldwide, and were the third-largest

segment in the U.S. entertainment market, behind broadcast and cable TV.

• Gaming market to grow at a CAGR of +6.2% toward 2020 to reach $128.5 billion

PERFORMANCE

PERFORMANCE METRICS* FUND RETURNS

FUND S&P 500 Return Since Inception YTD Return 60 Day Return 20 Day Return Daily Standard Dev. Sharpe Ratio Sortino Ratio Correlation 79.72% 16.18% 15.28% 9.47% 0.80 0.70 1.01

• 53.70%
• 20.00%
• 20.10%
• 13.94%

1.06 0.38 0.52 0.92

* Management fees and expenses may be associated with investments. Investment 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.

October 1, 2013 to March 31, 2020

17

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD S&P 500 YTD

GLOBAL TECH FUND MONTHLY PERFORMANCE SINCE INCEPTION

BSD has outperformed our portfolio benchmark with lower risks through active diversification across various subsectors

2013 1.32% 0.35% 2.82% 4.55% 9.60% 2014 -2.08% 3.63% -2.07% -4.39% 2.38% 2.80% 2.21% 3.53% -1.64% 4.95% 2.89% -1.51% 10.69% 11.43% 2015 0.53% 5.39% -0.16% 2.98% 0.90% -0.91% 0.43% -6.67% -1.48% 9.68% 0.63% -0.76% 10.16% 0.47% 2016 7.41% -2.78% 5.31% -0.02% 2.33% -0.29% 3.66% 0.65% 1.63% 0.38% -3.75% -0.71% -1.63% 9.50% 2017 4.97% 2.14% 2.99% 2.08% 3.85% -2.55% 2.68% 2.12% 0.51% 3.41% 0.11% -0.20% 24.49% 19.42% 2018 2.89% 0.63% -0.62% -1.57% 4.11% -1.63% 0.63% 1.72% -2.18% -7.87% 2.70% -7.41% -10.01% -6.55% 2019 7.09% 1.55% -0.91% 1.86% 0.44% 0.70% 1.83% -0.27%

• 0.13% -1.43%

0.52% -0.85% 10.62% 29.59% 2020 0.92% 5.08% 8.26% 16.18% -20.00%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 BSD Tech Fund Returns Nasdaq / Russell 2000 Return

18

HOW BSD COMPARES TO OTHER HEDGE FUNDS

HEDGE FUND STRATEGIES‘ RETURN BY YEAR*

PERFORMANCE

BSD Global Technology Hedge Fund Absolute Return Multi-Region Equal Weighted Strategies Relative Value Arbitrage Macro/CTA Fixed Income - Credit Global Hedge Fund Equity Hedge North America Emerging Markets Composite Market Directional Event Driven 10.69% 0.79% 1.72%

• 0.49%
• 3.14%

5.24%

• 1.77%
• 0.58%

1.42%

• 4.13%
• 7.83%

5.13%

• 4.06%

Our outperformance relative to other funds are indicative of our core competency in generating outsized returns and navigating a challenging market environment

* Hedge fund index data is provided by Hedge Fund Research Index (HFRI) as of February 2020.

10.16% 2.86%

• 1.19%
• 1.54%
• 3.10%
• 1.96%
• 4.38%
• 3.64%
• 2.33%
• 9.35%
• 5.26%
• 8.58%
• 6.94%
• 1.63%

0.31% 1.95% 3.78% 1.03%

• 2.93%

4.97% 2.50% 0.10% 4.14%

• 1.77%

9.86% 11.08% 24.99% 3.39% 5.29% 4.81% 3.80% 2.51% 3.87% 5.99% 9.98% 4.42% 8.77% 3.16% 6.48%

• 10.02%
• 0.49%
• 5.90%
• 5.35%
• 1.17%
• 3.25%
• 2.55%
• 6.72%
• 9.42%
• 7.62%
• 7.55%
• 12.54%
• 11.68%

10.62% 4.37% 8.62% 5.33% 6.55% 4.84% 6.22% 8.62% 10.71% 4.55% 2.05% 6.77% 9.96% 16.18%

• 5.80%
• 5.68%
• 7.07%
• 5.44%
• 1.18%
• 6.39%
• 6.85%
• 13.33%
• 2.18%
• 20.90%
• 10.39%
• 5.51%

73.37% 5.19% 4.01%

• 1.26%
• 1.99%

2.91%

• 0.77%
• 1.77%
• 5.22%
• 10.71%
• 30.37%
• 8.85%
• 3.09%

2014 2015 2016 2017 2018 2019 2020YTD TOTAL

19

SUMMARY

• We bring unique, proven strengths
• Principal with 30 years of portfolio management experience
• Dynamic stock selection methodology
• Disciplined risk management process
• Our expertise in technology is unparalleled
• Team consisting of seasoned entrepreneurs that have co-founded billion dollar companies
• Global networks of advisors and analysts examining tech vendors and tech end-users
• Significant out-performance in risk-adjusted returns
• The BSD Global Tech Hedge Fund returned 79.72% since inception versus S&P 500 index

return of 53.70%

• Exhibited only 83% of the benchmark volatility
• Hedging strategy acts as an “insurance policy” in anticipation of adverse market events,

by limiting drawdowns and often generating alpha

* Management fees and expenses may be associated with investments. Investment 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.