Without fanfare—or any pre-launch fundraising—Blair Levinsky and Brad Dunkley launched their new investment firm, Waratah Advisors, in July 2010. Having started with $25 million of their own capital, they’ve increased their AUM to $50 million in just four months and are starting to attract investor attention north of the U.S. border.
“Waratah is a Toronto, Canada-based equity long/short manager with three strategies,” Levinsky told FINalternatives during a recent interview. “What’s common to all three is risk-adjusted returns.”
Levinsky is an 11-year veteran of TD Securities (the institutional equity division of the TD Bank financial group) where he served as managing director of institutional equities. He met Dunkley, a 12-year veteran of Canadian investment giant Gluskin Sheff, through business.
Gluskin Sheff, with about $5 billion AUM, had been a strictly long-only shop until Dunkley started their long/short funds about six years ago. Managing $1 billion in assets, Dunkley developed a reputation for producing impressive risk-adjusted returns and for protecting capital in periods of extreme market drawdowns.
In January 2010, Dunkley left Gluskin Sheff to join Levinsky in founding Waratah (the name comes from an Australian plant known for its resilience and ability to survive in inhospitable environments).
The company runs three equity long/short strategies: the Waratah Performance Fund, with YTD returns (for the period July—October 2010) of 15.5%; the Waratah Income Fund, with YTD returns of 6.4%; and the Waratah One Fund, which has returned 7.0% YTD. Volatility associated with each of those strategies has been well below that of the market, according to company materials.
Waratah has done no marketing to date, attracting investors strictly by word of mouth, but Levinsky says the risk-adjusted approach, specifically the low volatility and low drawdown nature of their returns—and Dunkley’s record of producing such returns—appeals to an institutional audience. They’ve been meeting with pension funds ranging in size from $2 billion to $100 billion.
The company has plans for a February 1, 2011 offshore launch for all three strategies.