Préfontaine Capital Inc. is registered with the Quebec Autorité des marchés financiers, and was set up in February 2004 by Stéphane Préfontaine. The firm manages investments for private individuals, family trusts and estates, holding companies, and private foundations.
Our firm’s mission is to help clients achieve their financial objectives. Through a personalized portfolio management service, we strive to provide an optimal risk/return ratio for our clients’ portfolios, while respecting the risk profile and particular needs of each client.
Préfontaine Capital is entirely independent. We sell no financial product nor are we related to any brokerage firm, bank, mutual fund or insurance company. Our sole loyalty is towards our clients, and our own financial interests are linked to those of our clients. The manager’s personal investments and those of his family are invested basically the same way our clients’ investments are, providing for differences in risk tolerance and special needs. This we think ensures more effort in research, more conviction and more prudence in investment decisions. Préfontaine Capital seeks to provide a superior level of service and portfolio attention for its clients. Our goal is to develop long-term relationships with satisfied clients.
Personalized portfolio management services for discerning high net worth families. Portfolios safely kept at affiliates of National Bank of Canada or the Bank of Nova Scotia.
We help our clients achieve their long term financial objectives with solid investment returns.
We invest along with you - We do not sell any fund or other product.
Industry leading retention rate of 85% for discretionary mandates since 2004.
Direct holding of securities, efficient tax management of investments, fewer intermediaries, no commission or hidden costs, transparent fees.
Préfontaine Capital’s central mission is to help our clients achieve their financial objectives through building well-balanced and resilient portfolios, consisting of direct holdings of stocks, bonds and money market instruments.
This is the most cost effective way to enhance wealth since there are fewer intermediaries between you and the growth generating assets, and you can compound returns with less tax costs. Reducing total costs and tax consequences over time makes a huge and often critical difference in attaining your long-term financial objectives.
This means once your objectives and your investment policy are agreed upon, your portfolio manager has the discretion to invest in the securities deemed appropriate. It is a relationship based on trust and the higher expertise of registered portfolio managers. Préfontaine Capital has worked hard to deserve its clients’ trust, with a retention rate of 85% of clients in full discretionary management since 2004, an enviable track record of very satisfied clients. Since our service requires personalized attention, there is a minimum amount required in order for it to be a win-win proposition. The current minimum amount stands at $1 million. We manage all types of non-registered and registered accounts (RRSP, TFSA, LIRA, RESP, IPP, RRIF).
We believe the quality of our network of competence is directly linked to the quality of our investment ideas, our services, and ultimately the investment returns that benefit our clients. We have developed and we continue to develop relationships with a number of top quality professionals in each area of expertise relevant for families with more complex needs.
“I don’t believe in predicting markets;
I believe in buying great companies.” - Peter Lynch
“The hard part is discipline, patience, and judgment. Investors need discipline to avoid the many unattractive pitches that are thrown, patience to wait for the right pitch, and judgment to know when it is time to swing.” - Seth Klarman
Contrarian Investing:
“Be fearful when others are greedy and greedy when others are fearful.” – Warren Buffett
“The secret to winning is to make the
fewest mistakes and to be patient.” – Phil Mickelson
Préfontaine Capital’s investment style is based on tried and tested conservative principles seeking capital preservation and long-term growth of clients’ portfolios. We avoid any investment we consider speculative or pretending to generate a quick profit. Each client’s risk profile and particular needs are analyzed and a tailor made investment policy is established, containing amongst other things an asset allocation program, which frames investment decisions. We take great care in assessing the tax implications of our transactions in order to maximize after tax returns to the benefit of our clients.
Our management style for common shares has its roots in the “value” approach to fundamental investing. We invest in first class quality companies on a contrarian basis, in situations where we believe the stock price is temporarily below its intrinsic value, while leaving ourselves a margin of safety in the establishment of this value. We seek to minimize risk by diversifying in different sectors and limiting our purchases to companies meeting our investment criteria.
A solid understanding of a company and its competitive environment is required in order to distinguish a temporary setback in its results from a more permanent downward trend in its prospects. When we are convinced of our analysis, we invest for the long-term, and capitalize the dividends, thus minimizing portfolio turnover for a superior after-tax return.
We view the two basic functions of fixed income securities as first to provide clients with their ongoing income needs, and secondly as a way to reduce the volatility of portfolios, since fixed income securities are generally negatively correlated with the stock market.
We restrict our investments to quality bonds and preferred shares, rated A (P-2) or better. We offer a simple and prudent management, giving our clients the double advantage of minimized tax consequences and the best rates and inventory of the institutional market.
Our clients’ assets are securely held by two external custodians. Custodians used by our company are National Bank Independent Network (NBIN), a wholly owned subsidiary of National Bank of Canada and the Bank of Nova Scotia Trust Company (‘Scotiatrust’), a wholly owned subsidiary of the Bank of Nova Scotia. Préfontaine Capital does not have access to clients’ funds; its mandate is limited to managing clients’ funds in accordance with the investment policy established with each client. Cash withdrawals and inflows are made through the custodian.
Clients receive a monthly report from their custodian, which includes a positions report of all securities held at month end plus a transactions report for the period. They also receive a year-end comprehensive tax report. Préfontaine Capital sends an additional report which provides positions, transactions and performance calculations on a consolidated basis. Préfontaine Capital works with an advanced portfolio management software. We also publish a quarterly financial letter in which we review economic and market activities, along with our firm’s quarterly transactions and activities, and our thinking on diverse financial matters of interest to our clients.
Stocks, bonds, and money market transactions are made via institutional brokers, at institutional prices, to the benefit of our clients.
Préfontaine Capital receives no commission or kickback of any sort, there are no hidden costs. Our only remuneration is a professional fee based on a percentage of assets under management. This percentage is regressive, meaning the larger the assets under management the smaller the percentage. These fees are fully tax deductible for taxable accounts.
After an initial meeting during which an evaluation of a client’s investment profile and needs are made, regular meetings are organized to review the portfolio and needs of the client, and the very personalized relationship allows the client to freely exchange at any time with his/her manager.
Our clients’ interests precede our own firm’s interest. We believe that by following this principle, Préfontaine Capital will prosper and benefit from a solid and most importantly durable growth, based on trusting long-term relationships and superior service. Our business model seeks to systematically prevent any conflict of interest. The financial interests of our clients are closely connected to those of Préfontaine Capital. There are no commissions, hidden costs, nor financial deals with any brokerage firm, mutual fund, insurance company or bank.
Absolute integrity, candidness and frankness are part of our DNA.
Stéphane Préfontaine has a bachelor’s degree in law from University of Montreal (Dean’s Prize), and a Master of Laws from Columbia University in New York. He then pursued studies in France in philosophy and politics at the Institut d’Études Politiques de Paris, where he received a Dîplome d’Études Approfondies (DEA – first year doctorate). While practicing law, he also completed at night an MBA in finance at McGill University.
Stéphane started to practice law in 1989. He started to manage a family portfolio in 1992. While practicing law, he was involved as a board member at UAP Inc. a nationwide public company controlled by his extended family and sold in 1998. Since then, Stéphane has been managing full time part of the liquidities generated from this sale. He joined Montrusco Bolton in 1999 as Vice President, Family Wealth Management.
In February 2004, Stéphane set up Préfontaine Capital in order to offer to other families the same services he offers the Préfontaine family.
Fiona oversees administrative activities and participates in compliance operations. She supports the Portfolio Manager in monitoring our clients’ portfolios, participates in cash management activities and contributes to discussions regarding fixed income. She also assists clients, responding to inquiries regarding account openings, transfers, contributions, and withdrawals.
Fiona is pursuing her bachelor’s degree in finance at McGill University.
Registered Accounts offer various tax advantage:
INVESTMENT CRITERIA
We limit our investments to premier quality companies which: