The Ravensource Fund is a publicly listed, closed-end investment fund. The principal objective of Ravensource is to achieve absolute annual returns, with an emphasis on capital gains, through investments in selected North American securities. Ravensource invests in distressed securities, alternative credit and special situation equity securities.
Ravensource is unique in its approach, seeking attractive investment opportunities from situations that are overlooked by traditional investors. Ravensource focuses on capturing value from the turnaround and recovery of financially distressed securities and from other deep-value investments, through extensive due diligence and active involvement by the manager, Stornoway Portfolio Management.
As of December 31, 2021, Ravensource had $10.2mm of unused capital losses and $0.9mm of unused non-capital losses, collectively representing 53% of the NAV of the Fund. As such, Ravensource is unlikely to generate taxable capital gains for the foreseeable future.
We believe the most attractive opportunities arise from situations that are overlooked, misunderstood or underfollowed:
However, uncovering opportunities is not sufficient to produce results. Our approach demands the following:
The Stornoway Edge allows us to invest in companies and situations that other investors can’t or won’t.
We conduct deep analysis and diligence at the outset to determine if these “diamonds in the rough” merit investment of financial and intellectual capital. Our low purchase price for these unwanted assets both decreases risk and increases returns. After an investment is made we take an active approach to effect change — joining boards, creditor committees, and engaging with key stakeholders. Our creativity in providing solutions and ability to partner with others are key ingredients in our success.
Ravensource employs this approach across three strategies to create value for its unitholders:
Investing in corporate debt, creditor claims and/or equity securities of companies, which are in, or perceived to be in financial distress or insolvency
Investing in corporate debt, on either a primary or secondary basis to earn a yield that we believe is attractive given the underlying credit risk.
Investing primarily in Canadian and U.S. small- and mid-cap equities that have catalysts to bridge the gap between market price and intrinsic value
|Investments By Industry||% of Net Assets|
|Metals & Mining||26.6%|
|Media & Publishing||16.4%|
|Oil & Gas||6.9%|
|Food & Beverage||2.4%|
At the time of investment and throughout the period which we own a security, we do consider its risk and the impact that it has on the overall risk of the portfolio. However, despite our thorough analysis and good intentions, sometimes we are wrong in our investment decision or have not found the proverbial snake that lurks under the rock resulting in a fall in the market value of the investment and net asset value of the Fund. In addition to the risks specific to a particular investment, the Fund is exposed to changes in foreign exchange rates, interest rates, credit conditions and other macro economic factors as described in the Annual Information Form and in the notes to our financial statements. Investors are encouraged to carefully read the Fund's financial statements, including the additional disclosure contained in the notes to the financial statements, just as we do prior to making an investment.
An investment in the Fund is suitable for those investors seeking long-term capital growth, have a long-term investment horizon and possess a medium to high risk tolerance to withstand the ups and downs that go along with investing in out-of-favor securities.
Ravensource Fund's dividend policy is to make semi-annual distributions to unitholders of record in June and December, which in aggregate allows for the fund to not incur any tax liability for the fiscal year due to the generation of Income and/or Capital Gains.
|Year||Date||Per Unit Distribution|
Ravensource Fund offers an annual redemption privilege that allows unitholders to redeem 100% of their units for cash at Net Asset Value - adjusted to reflect expenses incurred to effect the redemption - as calculated as of the Annual Redemption Date.
In parallel, Ravensource has the right to re-sell units tendered for redemption as opposed to cancelling the units by entering into a Recirculation Agreement with one or more investment dealers to use commercially reasonable efforts to find purchasers of the units surrendered for redemption.
For further details, please refer to the Declaration of Trust which can be found in the “Investor Resources - Key Documents" section of the Ravensource Website or on SEDAR.