New Mackenzie Mutual Fund Expands Retail Investor Access to Private Equity Growth and Diversification Opportunities

Pioneering Mackenzie Private Equity Replication Fund aims to democratize access to the risk-return profile of private markets

TORONTO, Jan. 8, 2021 /CNW/ - Mackenzie Investments today announced the launch of Mackenzie Private Equity Replication Fund ("the Fund"). A pioneering investment strategy, the mutual fund seeks to provide access to the amplified return and managed volatility characteristics of U.S. private equity buyouts. It does this by replicating key elements of the private equity investment profile including active exposures to specific industries, leverage, and volatility management. In turn, the Fund has the potential to improve an overall portfolio's performance and market resilience.

The Fund invests in U.S. publicly traded companies (as opposed to private equity) that possess characteristics similar to what private equity firms select for investments, such as high quality companies with elevated profitability that trade at attractive valuations. The aim is to outperform a broad U.S. small-mid cap index, which most closely represents the focus area for private equity. Financial leverage will be employed to resemble the process private equity firms use in leveraged buyouts, and a tail risk hedging strategy is intended to help manage volatility.

"Generally, private equity has historically exhibited less downside than traditional investments during periods of market stress and has outperformed public markets during challenging economic conditions," said Michael Schnitman, Senior Vice President and Head of Alternative Investments, Mackenzie Investments. "To date, retail investors have had limited access to private equity risk-return opportunities. We believe that through dedicated research and quantitative expertise, public markets can be leveraged to achieve similar returns and volatility levels to that of U.S. private equity in a format that offers investors daily liquidity, high transparency, and low investment minimums."

The investment rationale was developed through extensive research in an exclusive partnership with Harvard Business School's Randolph Cohen, Ph.D. The new Fund will be managed by Arup Datta, Senior Vice President, Head of the Mackenzie Global Quantitative Equity Team and Nelson Arruda, Senior Vice President, Portfolio Manager and Co-Lead of the Mackenzie Multi-Asset Strategies Team. Professor Cohen's firm, PEO Partners, will also act as a sub-advisor to the Fund.

"We believe the collaboration between specialist teams from our boutiques and thought leadership from our academic partnership will result in disciplined security selection, portfolio construction and downside mitigation processes," Mr. Schnitman explained.

This is Mackenzie Investments' sixth fund offering in the liquid alternatives space since it launched Canada's first absolute return fund for retail investors in May 2018. Liquid alternatives are expected to grow to $100 billion in assets under management in Canada within the next few years.¹ Mackenzie is well positioned to capitalize on this growth and its approach to Accessible Alternatives™ aims to help investors better understand and embed alternative strategies into their portfolios.

The Mackenzie Private Equity Replication Fund is now available for sale.

¹ CIBC Industry Update, July 2019, Alternative Mutual Funds: Growth Potential Looks Solid Coming Out of the Gate

About Mackenzie Investments
Mackenzie Investments ("Mackenzie") is a leading investment management firm with approximately $187 billion in assets under management as of December 31, 2020. Mackenzie provides investment solutions and related services to more than one million retail and institutional clients through multiple distribution channels. Founded in 1967, Mackenzie is a global asset manager with offices across Canada as well as in Boston, Dublin, London, Hong Kong and Beijing. Mackenzie is a member of IGM Financial Inc. (TSX: IGM), one of Canada's premier financial services companies. For more information, visit mackenzieinvestments.com.

SOURCE Mackenzie Investments

Rebecca Ellison, Mackenzie Investments, 647-983-4963, [email protected]