Epic deploys a bottom-up, long/short investment style, concentrating primarily on Canadian securities (equities and bonds). The approach is research intensive, with a specific emphasis on value and risk/reward. When we enter a meaningful position, our primary focus is on understanding the fundamental downside potential. Indeed, it is our belief that our best risk management tool is the quality of the research we do upfront.
Our Canadian emphasis is premised on our extensive experience investing in the resource sector and our familiarity with the Canadian exchanges. As a result, the bulk of our investment weighting tends to be in mid- and small-cap companies. We do take views on the macro market and on particular sectors. If we are positively predisposed, we will use a manageable amount of leverage to increase our net exposure to above 100% net. If we are negative on the market or a sector, we will lower our exposure through hedging strategies or by increasing our cash component.
We have explicitly decided to manage relatively small assets sizes in order to improve our liquidity profile.