Patient Capital Q1 2024 Commentary

Equity markets performed strongly in the first quarter and full year ended March 31st, 2024. The S&P 500, the MSCI World Index and the S&P/TSX gained 10.56% , 9.01% and 6,62% respectively for the quarter, The year over year returns were 29.88%1, 25.72%2 and 13.96%3 respectively. These equity returns were substantially above long term average returns. The hope that Central Bankers would implement several rate cuts in 2024 and that inflation would be tamed fueled investor optimism.

Investor enthusiasm for the Magnificent Seven-Amazon, Apple, Alphabet, Meta, Microsoft, Nvidia and Tesla- also drove positive sentiment across the broad market indices. As a result of these strong returns and the extremely high valuations the Magnificent Seven overall equity valuations are now substantially above average long term levels. Chart 14 below illustrates today’s excessive valuation.

Historically long term equity returns have been in the low single digits and market volatility has been quite high when valuations reach these extreme levels. In addition, there is the risk of the permanent loss of capital as equity valuations fail to recover to current levels and/or as investors react to market volatility and fear sets in. A value based investment strategy has protected long term investors and has the potential to substantially outperform the broad equity indices as the consequences from this exuberance come to bear.

During the first quarter of 2024, Lysander-Patient Capital Equity Fund (the “Fund”) increased its positions in BCE Inc., Bank of Nova Scotia, CIBC, Canadian Utilities and Firm Capital Investment Trust.

The Fund continues to be well positioned for current market conditions.

  1. Source: S&P ↩︎
  2. Source: MSCI ↩︎
  3. Source: S&P/TSX ↩︎
  4. Source: The ↩︎

Lysander Funds Limited (“Lysander”) is the investment fund manager of Lysander-Patient Capital Equity Fund (the “Fund”). Patient Capital Management (“Patient Capital”) is the portfolio manager of the Fund. This document was prepared by Patient Capital as portfolio manager of the Fund. In this presentation, “we”, “us”, and “our” means Patient Capital. This document has been prepared solely for information purposes. Information in this document is not intended to constitute legal, tax, securities or investment advice and is made available on an “as is" basis. Neither Lysander nor Patient Capital make any warranties or representations regarding the information herein. Information in this document is subject to change without notice. Neither Lysander nor Patient Capital assume any duty to update any information herein. Certain information in this document has been derived or obtained from sources believed to be trustworthy and/or reliable. Neither Lysander nor Patient Capital assume responsibility for the accuracy, currency, reliability or correctness of any such information.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

This document is not an invitation to invest in the Fund and does not constitute a public offering of sale. Purchases in the Fund can only be made through an Investment Professional on the terms in the applicable Fund’s offering document by eligible investors. Each purchaser of units in a fund may have statutory or contractual right of action.

This document may contain forward-looking statements. Statements concerning a Fund’s or entity’s objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition are forward looking statements. The words “believe”, “expect”, “anticipate”, “estimate”, “intend”, “aims”, “may”, “will”, “would” and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward- looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from current expectations. Readers are cautioned not to place undue reliance on these forward-looking statements. While Lysander and Patient Capital consider these risks and uncertainties to be reasonable based on information currently available, they may prove to be incorrect.

Nothing in this document should be considered a recommendation to buy, sell or short a particular security. Any specific securities or positions discussed are intended as an illustration of the portfolio manager’s selection process. The portfolio manager may sell these positions at any time, or purchase positions that have previously been sold. The positions may increase or decrease in value after the date hereof, and the portfolio that hold such positions may accordingly gain or lose money on the investment. The statements by the portfolio manager in its commentaries are intended to illustrate its approach in managing the portfolio, and should not be relied upon for any other purpose. Certain information in this document has been derived or
obtained from sources believed to be trustworthy and/or reliable. Neither Lysander nor Patient Capital assume responsibility for the accuracy, currency, reliability or correctness of any such information.

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