2. raintreeEMD.com
INNOVATIVE ON BEHALF OF OUR CLIENTS
RAINTREE FINANCIAL SOLUTIONS IS CHANGING THE WAY CANADIANS THINK ABOUT INVESTING THEIR MONEY
IN THE BEGINNING
Three partners with common values and a novel purpose founded
Raintree Financial Solutions in 2010, with the intention of changing
the way Canadians think about investing their money. It should not be
a surprise that Raintree was created in the years following the greatest
financial crisis of our generation. The financial crisis was a time in which
the financial system was tested – and by all accounts, almost failed entirely.
In subsequent years, stories emerged that described the characteristics
that led to the crash. Stories about conflicts of interest, managing to
quarterly targets, an absence of oversight and a general lack of
alignment between the financial interests of investors and of those
influencing the results. It was for these reasons that the Partners at
Raintree believed it was time to give investors an alternative choice.
OUR STORY
Raintree is a private investment brokerage, technically referred to as an
Exempt Market Dealer. We specialize in sourcing and selling financial
securities of alternative investments. In 2010, the securities regulators
across Canada created this investment dealer category to enhance
oversight within the industry.
We are proud to be headquartered in Edmonton, Alberta – the birthplace
of a number of Canada’s most successful financial organizations. Our
geographic reach is not limited to Western Canada, as we have financial
advisors across the country and we distribute investments that are
focused all over North America. Raintree is the connection between
private investments and investors.
Raintree has assembled a team of dedicated financial professionals,
called Private Wealth Advisors, who work with our clients to help make
strategic decisions about which investments are right for their portfolios.
These Private Wealth Advisors have made the decision to join Raintree
in pursuit of bringing clients a platform that is truly different than what you
find at ordinary, faceless financial institutions.
We endeavor to find the best private investments and make them available
to our clients. Our team has reviewed hundreds of investment opportunities
to select only the ones that we think have the greatest merit. We have
diverse exposure to asset classes and industries, and provide investments
across a spectrum of risk - from conservative to aggressive, depending on
what is most suitable for each client.
WHAT MAKES US DIFFERENT?
We believe the investment industry is fraught with conflicts of interest.
This is due to the imbalance of information between investors and those
that influence their decision-making. The result is an industry that has
consolidated and vertically-integrated dramatically over the past 20
years. So much so, that it is difficult to understand whether the advice
being given is really in the client’s best interest.
Raintree is an independent investment dealer and the securities that we
sell are selected based on their own merit. We have developed innovative
internal systems to minimize inherent conflicts that many other financial
institutions face due to their integrated business models. We believe this
gives us an advantage in delivering objective advice to clients.
Ourdrivetocreatewin-winrelationshipsbuiltontrustandprofessionalism
is the foundation of our business. It is this commitment that helps us
grow and build lasting connections with clients and partners.
Exhibit 1: Values Matrix
“We started Raintree to give our clients a fighting chance. All we
saw around us was a financial industry rife with conflicts, balanced
in the favour of everyone BUT the client.”
— D.R. (Nick) Fournier, President and CEO
GLOBAL VALUES
PRIMARY VALUES
CORE VALUE
Consistently
uphold and
champion integrity
in all of
our business
practices.
Prioritize Alignment
Innovative
Transparent
Independent
Obje
ctive
Dedicated
to
Excellence
Trusted
E
xpert
Professi
onal
3. IS YOUR PORTFOLIO COMPLETE?
THE CASE FOR ADDING ALTERNATIVE INVESTMENTS TO YOUR PORTFOLIO
WHAT ARE ALTERNATIVE INVESTMENTS?
The phrase “alternative investment” is often misunderstood throughout
the financial industry today.
Alternative investments are generally private (non-market traded)
securities, focused in unique markets, asset classes, strategies or
sectors. These investments are established based on distinctive
strategies that may not be available in traditional stocks, bonds or
mutual funds. These investments can be equity or debt securities, and
they can be complex or very simple.
We have witnessed a shift in the last 25 years for institutional and high-
net-worth individuals to allocate a growing proportion of their portfolio
to alternative investments. Raintree makes alternative investments
available to everyone, as long as they are suitable.
Alternative investments can display the following benefits:
Low correlation to other investments
Reduced volatility
Preservation of capital
Unique risk-adjusted return profiles
Access to new markets
Pre-IPO or high growth opportunities
Unique income sources
Beneficial tax treatment
Alternative investments are not at the periphery anymore – they are
increasingly becoming more mainstream. Though our investments may
not be suitable for everyone, they generally complement most portfolios.
Selected properly, their diversifying benefits can protect downside risk
and enhance returns, which is one reason why sophisticated investors
have been using alternative investments for many years.
WHY INVEST IN PRIVATE COMPANIES?
Alternative investments can be public or private, though most are
categorized as private. At Raintree, we specialize in private investments
that are not traded on a public stock exchange. Many small and medium
sized enterprises (SMEs) and funds that list on public exchange do not
necessarily receive the full benefit of their listing which can result in a
lack of liquidity, increased trading volatility and extraordinary costs to
maintain reporting and other listing standards.
By staying private in the capital accumulation stage, a private company
can focus more attention on management and long-term value creation,
rather than stock promotion and quarterly bonuses.
Canada has over 1.1 million SMEs, which create over $500 billion in GDP
annually and account for 90% of jobs.1
SMEs are the engine of growth
in the economy – they stimulate innovation and grow quicker than large
companies.
Most Canadians are not business owners, and therefore don’t get
to participate financially in the SME economic engine. That is what
distinguishes Raintree – we allow all Canadians to participate in this
segment of the economy, in a meaningful way.
PORTFOLIO BENEFITS
The typical investment portfolio is made up of stocks and bonds, which
may be packaged in mutual funds or segregated funds. Although these
investments are important, what we saw during the recent financial crisis
was that they started to perform very similarly (negatively) together. When
investments consistently move in the same direction, they can enhance the
risk to investors who are drawing on those funds. High correlation may also
increase volatility in one’s portfolio.
According to the conventional wisdom of Modern Portfolio Theory,
diversification is very important. To create a superior portfolio,
investments that have low or negative correlations against the other
holdings in the portfolio, will perform best over time when combined.
Alternative investments have been shown to display low or negative
correlation with other investments. By integrating many investments
together in the same portfolio, an investor has the potential to enhance
their returns for each increment of risk taken.
“Private and alternative investments are not for everyone, but they
do complement almost every portfolio by providing access to
innovative financial products, diversification and unique return
attributes.”
— Peter Kinkaide, Managing Director – Corporate Finance
1
http://www.ic.gc.ca/eic/site/061.nsf/eng/02804.html
