MANDATETo provide investors with annual profit distributions while simultaneously growing assets through trading and investing in micro and small cap companies primarily listed in Canada. The LP may also invest in pre-public companies.
GENERAL PARTNERAccolade Capital Inc. is the General Partner of the Insight Limited Partnership II.
The fund is co-managed by Grant Howard and Harvey Brovald.
Management – Accolade Capital
- Scott Harkness – Director
- Dale Hodgson – Director
- Grant Howard – Director & President Accolade Capital
- Donald Morrison – Director
- Glen Russell – Chairman of the Board
DUE DILIGENCE PROCESSA structured investment review process is utilized when reviewing each major investment opportunity. Accolade Capital is initially responsible for reviewing companies to determine their acceptability for investment. Click here for a detailed description of the Due Diligence Process.
Accolade management provides a summary report to the independent members of the board for a preliminary review and discussion. Candidates for investment will be invited to make a presentation to the Board of Directors. Upon concurrence of the majority of the Board of Directors, the level of investment will be communicated to the company.
At the time an investment decision is made, all unit holders in the Limited Partnership are electronically informed of the decision and the reasons for the investment.
INSIGHT LP II OPERATING CRITERIA
- Equivalent emphasis will be placed on maximizing profits and managing downside risk.
- All positions will be viewed as trading opportunities.
- The LP expects to restrict its holdings to not more than 30 positions.
- All holdings will be actively charted and followed on a technical basis.
- The board will be provided with a monthly portfolio update including summary comments from Accolade Capital, the General Partner (GP) on current holdings as well as notice of companies that are being reviewed.
- The board will hold set quarterly meetings to follow within four weeks of quarter end.
- The board will be notified and general feedback solicited when the GP is reviewing companies of interest.
- The board will receive a written summary report from the co-managers should the recommended investment exceed discretionary or operating criteria as specified (below). All efforts will be made for the board to receive a presentation from management of the investee company under review.
- The partners will be notified by email as soon as possible when the Board of Advisors has finalized an investment decision.
- Should the board's investment decision be by way of private placement, the partners whenever possible, will have the opportunity to co-invest.
- Should the investment be in a company that was introduced through The Howard Group, the partners would be notified at the outset that a success fee may be paid to HG.
- The partners will be notified by email of trading activity undertaken by the GP.
- The monthly portfolio update will be posted on the web site in a password protected area for the partners, which will include current holdings, realized and unrealized losses & gains and other financial information.
- The GP will host a quarterly conference call and presentation update on the LP's holdings and performance.
- An initial investment in a company will not exceed 5% of the Net Asset Value of the LP unless in the opinion of the board members, compelling reasons exist for a larger initial investment.
- The LP will strive to find companies that graduate to "core holding status".
- Investment in a core holding can rise to 10% of Net Asset Value (NAV).
- The market value of a core holding is not to exceed 20% of NAV unless compelling reasons exist in the opinion of the Board of Advisors for exceeding this limit.
- A company can become a "core holding" based on reaching objectives and milestones in accordance with information provided during the initial due diligence and review process. Company management will be required to provide a business plan with specified management objectives including risk mitigation to qualify to become a core holding.
- Why would a company want to graduate to core holding status?
- Potential additional investment from the LP.
- More attractive company to the board members.
- Additional credibility with LP partners.
- Should a core holding materially miss milestone objectives, timelines and stated management goals, an orderly liquidation will be undertaken of all or a portion of the core holding.
- Individual investments in non-core holdings will not exceed 5% of NAV.
- GP has discretion to invest up to 3% of NAV per company.
- The total of the GP's discretionary investment decisions will not exceed 50% of NAV.
- The GP has discretion to sell 100% of any discretionary position and one-third of a board-authorized position.
- The GP will avoid discretionary investments that are less than 1% of NAV.
CompensationHow the General Partner is Compensated
The General Partner will receive 14% of annual profit distributions until such time as investors receive 100% of their original investment (in cash) and thereafter the GP profit participation rises to 20% Year one expense contribution of the greater of $75 thousand or 1.5% of initial funds raised and $50 thousand or 1.0% of initial funds raised in subsequent years. The General Partner does not receive a management fee.
How the Directors are Compensated
The Board of Directors has been granted options equaling 10% of the total number of Units issued at closing exercisable at $25,000 per Unit to vest 50% on December 31, 2008 and 50% on December 31, 2009 and expiring December 31, 2010. Any other compensation for members of the Board of Directors of the General Partner is the responsibility of the General Partner to establish from proceeds received under the above profit sharing formula.
Distributions to Unit Holders
Distributions of 25% to 50% of net annual realized gains will be provided annually to limited partners.