CAPITAL MANAGEMENT LTD.
ACTIVE. ALIGNED. DIGITAL.
We recognize that it takes time and sacrifice to accumulate capital. White Falcon's objective is to protect and compound this capital over the long term on a risk adjusted basis.
We achieve this by conducting deep fundamental research into publicly listed companies and then carefully picking good quality businesses that can grow their intrinsic value with time. We seek to hold a relatively concentrated portfolio of businesses and do not rely on diversification to compensate for risks we do not understand. We also retain the ability to hedge when we deem market risks to be excessive.
NO MANAGEMENT FEE
As an investor in White Falcon, you are not a client but a partner. The fee structure at White Falcon is a demonstration of this relationship. Unlike traditional asset managers and advisors, we do not charge fees to you just for holding onto your capital. We only make money when you make money.
No management fee
Incentive fee of 15% on any profits generated in the account.
Incentive fee will only be charged if the account has surpassed its prior quarters high; meaning no fee for us if we don't keep growing your investments.
*This fee structure was inspired by Buffett Partnership Ltd. which was a investment partnership run by Warren Buffett before he became the CEO of Berkshire Hathaway
White Falcon is a digital first investment management firm. Each partner will have direct access to their separately managed account (SMA) with details on portfolio, balances, and reporting on a daily basis.
In addition to cash accounts, we can manage registered accounts such as TFSA and RRSPs.
We have outsourced key functions at the firm so that we can focus on research and portfolio management. SMAs reduce operational risk as custody of the accounts is with Interactive Brokers (a member of IIROC and CIPF). This is a model of transparency and accountability.
Balkar founded White Falcon in 2021 to democratize investing for every investor and give them a product and service that is currently only in the reach of the very rich. We are an independent entity and have a mandate to do the right thing for the portfolio and the partners. No committees, no dogma, no closet indexing, no asset gathering...just rational investing. We aspire to buy and hold a collection of wonderful businesses run by like minded managers and owners. Our goal is to protect and compound capital over the long term on a risk adjusted basis.
Our name - White Falcon - is a symbol of purity, self-reliance, freedom, humility, resilience, and courage. These are the core values with which we will operate and run the firm. Almost all of Balkar and his family's liquid net worth will be invested in the same strategy as the partners of White Falcon. We are aligned in more ways than one.
There are very few competitive advantages in an investment management business and one of the most important is aligned, supportive and understanding partners. We are registered to accept partners in Ontario, Alberta and BC.
BALKAR SIVIA, CFA
Balkar is the founder and portfolio manager of White Falcon Capital Management. Balkar has more than 10 years of experience in investment management.
He recently worked with Burgundy Asset Management as a Vice President and Investment Analyst. Balkar is experienced in portfolio management as he managed an internal portfolio at Burgundy. Before Burgundy, Balkar worked as an Investment Analyst with Tim McElvaine at McElvaine Investment Management.
Balkar has a degree in Electrical Engineering from University of British Columbia and is a CFA Charter holder. Balkar also attended the Investment Management Workshop at Harvard Business School. He lives in the GTA with his wife and two children.
We draw inspiration from the teachings of Warren Buffett and Charlie Munger. We believe that intellectual honesty, creativity, and a lack of 'biases' are required for good stock picking along with rigorous analysis.
We believe in investing by thoroughly studying business fundamentals. We study the businesses history, business model, financials, culture and management incentives
While these businesses can be popularly classified as growth or value our yardstick will be that the discounted total sum of cash flow we expect to get in perpetuity from the business should be more than price paid. We believe in a margin of safety.
We think of stocks not as symbols on a screen but as owning part ownership stakes in a business
We do not see volatility or temporary declines in share price as a risk but as an opportunity to accumulate more of the businesses we like for better valuations. Risk to us is permanent impairment in value of the investment. Due to this, we will always focus more on downside risks than on upside potential.
Our portfolio construction approach is similar to that of building a sports team with both offensive and defensive capabilities. We will have between 15-25 positions at any one time. Our philosophy is to be diversified enough to survive but concentrated enough to matter. The portfolio will contain three principal components:
Compounders - Compounders are good quality companies with a runway for growth run by competent management teams . They typically have intangible assets or market positions that are difficult to replicate due to which they earn a high rate of return on capital
Special Situations - We can opportunistically buy businesses that are cyclical or businesses that are facing temporary problems with the condition that we are able to buy these businesses at a deep discount to their intrinsic value.
Hedges - Bonds, cash, gold and selective ETFs can act as effective hedges in times of uncertainty. We monitor macro fundamentals, technicals, flows, sentiment, and positioning. These hedges will be cautiously and tactically deployed to protect partners against large drawdowns.