Description of Business

The Corporation was founded as an independent, employee-owned asset management company to provide a comprehensive range of asset management services consisting principally of (i) the sponsorship and management of the Mavrix Funds, and (ii) the provision of consulting and portfolio management services to Specialty Funds.

Mavrix became a public listed company commencing April 19th, 2004 upon completion of an Initial Public Offering of Common Shares. The shares trade on the TSX under the stock symbol: MVX.

Investment Management Culture
The Corporation was founded by experienced portfolio managers as an asset management firm dedicated to (i) serving the needs of investment advisors and financial planners by providing direct access to the Corporation’s portfolio managers, and (ii) developing investment products that address their specific investment objectives.

Differentiated, Niche Investment Products
Management believes that the Canadian market is well served in the mainstream equity and fixed income product area by the larger Canadian mutual fund companies. However, these funds typically have large, very diversified portfolios that tend to be highly correlated with major market indices. In contrast, the Corporation focuses on the development of differentiated products that complement these equity and fixed income funds by offering more ‘‘concentrated’’ portfolios. Management believes that superior investment performance can be achieved by (a) investing in fewer companies thereby concentrating the portfolio, (b) under/over-weighting industry sectors where appropriate, (c) trading more actively where suitable opportunities exist, and (d) focusing investment on small and mid-cap companies that are the subject of less published analytical research. The Corporation intends to introduce additional products to satisfy the needs of its current advisor clientele.

Targeted Marketing to Investment Advisors and Financial Planners
The Corporation engages in sales and marketing initiatives targeted at third-party distribution channels rather than the public at large, and in particular, investment advisors and financial planners who recognize the merit of the differentiated products offered by the Corporation and the value of access to the Corporation’s portfolio managers. The Corporation uses e-mail, teleconferencing and its website to market new Mavrix product offerings, to facilitate interviews with specific portfolio managers and research analysts, and to provide independent advice targeted to advisors to assist them in making investment decisions for their clients. 

Cost-Efficient Infrastructure
From its inception, the Corporation has focused on developing a scalable infrastructure capable of supporting significant growth in AUM on an efficient and cost-effective basis. Management believes that higher profit margins in the medium to long term can be achieved by performing unitholder record keeping, and other administrative services internally rather than by outsourcing such services to third party service providers, as is often the case with other fund management companies.

Develop the Mavrix Brand
Each of the above elements of the Corporation’s strategy reinforces the continued development of the ‘‘Mavrix Brand’’ to investment advisors and financial planners. The Corporation seeks to create an image and reputation as an independent provider of differentiated, actively-managed portfolios that create added value for client portfolios. It also seeks to develop a reputation as having a portfolio management team that is highly experienced and independent-thinking and provides candid views on companies and portfolios to clients.

Management

The Mavrix team has grown to 54 employees, allocated as follows within the Mavrix Group:

• Investment Management, Research & Trading (14 employees)
• Sales & Marketing to third-party distribution channels (17 sales employees)
• Client Services (6 employees)
• Fund Accounting (4 accounting employees)
• Operations & Administration (11 employees)

All individuals employed by the Mavrix Group for more than one year are shareholders of the Corporation and/or own stock options pursuant to the Employee Stock Option Plan. Senior management believes that employees who own equity in the business are highly motivated and more readily embrace a culture that promotes integrity, teamwork and leadership.

Senior Management
Set out below is a description of the areas of responsibility and relevant experience of the Mavrix Group’s senior management team.

Mal Spooner, BA, MA, MBA, CFA – President and CEO and Portfolio Manager
As President and Chief Executive Officer, Mr. Spooner oversees all business activities of Canadian equity funds. Mr. Spooner has over 20 years of investment experience during which he has been responsible for investment management of institutional, mutual funds and segregated client portfolios. He is a past Director of the Toronto Society of Financial Analysts and has been published frequently in leading investment journals. Mr. Spooner is the author of ‘‘Resources Rock’’, a recently published book about investing in the natural resource industries.

Ray Steele, B.Comm, CMA, CFA – Senior Vice-President, CFO and Portfolio Manager
Mr. Steele is responsible for corporate reporting and accounting, and supervises related personnel, for the Corporation. For more than 20 years, Mr. Steele has been a portfolio manager with several investment management companies. His clients have included mutual fund companies, banks, insurance companies, unions, and some of Canada’s largest pension funds. During his career, he was Comptroller of the investment counseling division of a financial services company. Mr. Steele was a founding member of the Atlantic Canada Chapter of the Toronto Society of Financial Analysts.

William Shaw, BA, BAS, CA, CMA, MBA, CFP – Senior Vice-President and Portfolio Manager
Mr. Shaw is portfolio manager of value-oriented Canadian equity, dividend and income funds. Mr. Shaw brings over ten years of experience in equity research and portfolio management to the Corporation. Earlier in his career, Mr. Shaw spent five years with a leading accounting firm, obtaining his CA designation. Mr. Shaw is the portfolio manager for the Mavrix Dividend & Income Fund, which was named the 2003 Canadian Dividend Fund of the Year by the sponsors of the Canadian Investment Awards. 

Sergio Di Vito, BA – Vice-President Trading
Mr. Di Vito is responsible for equity and fixed-income trading, and supervises all trading professionals. Mr. Di Vito has over 15 years of experience in the investment industry. In recent years he has been responsible for institutional equity trading, for pension and insurance, institutional and retail client accounts. He also has several years of prior experience in pension trust banking. Mr. Di Vito is a member of the Institutional Equity Traders Association.

Mario Arra – Senior Vice-President, National Sales
Mr. Arra oversees marketing and all sales staff for the Corporation. Mr. Arra began his career in the investment industry in 1981 in retail sales. Over the past decade he has held increasingly senior sales positions for mutual fund companies.

David Balsdon – Vice-President, Operations and Administration and Secretary-Treasurer
Mr. Balsdon is in charge of systems and operations, including fund accounting and administration staff, and is also Secretary-Treasurer of the Corporation. Mr. Balsdon has held positions of increasing responsibility in mutual fund operations and administration management for over 15 years. Mr. Balsdon served on an IFIC committee that helped formulate industry reporting guidelines.

• Mavrix Team

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