HomeMy WebLinkAbout2007 03 08 Handout Regarding Voyager Asset Management, Inc. (2)
March 8, 2007
HANDOUT GIVEN TO THE
BOARD OF TRUSTEE
MEMBERS AT THE SPECIAL
MEETING ON MARCH 8, 2007.
Voyageur Asset Management Inc
PROPOSAL FOR INTERNATIONAL EQUITY
INVESTMENT MANAGEMENT
PREPARED FOR
Winter Springs Employees' Pension System
and
Bogdahn Consulting, LLC
'1\
March 2, 2007
Prepared by
V6yageur ASSET MANAGEMENT INC.
Institutional Services
100 South Fifth Street, Suite 2300
Minneapolis, Minnesota 55402-1240
(800) 553-2143 / (612) 376-7000
www.voyageur.net
V6yageur ASSET MANAGEMENT INC
March 2, 2007
Table of Contents
1. Questionnaire
2. Organizational Chart - Voyageur
3. Organizational Chart - Polaris Capital (sub-advisor)
4. Portfolio Characteristics by Sector and Market Cap
5. ADV Part II - Voyageur
6. ADV Part II - Polaris Capital (sub-advisor)
7. Performance Presentation and Disclosures
Prepared for
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Voyageur ASSET MANAGEMENT INC.
March 2, 2007
I. FIRM BACKGROUND
1. Please provide the following contact information:
Name:
Title:
Address:
Jack Farland
Managing Director
2429NE 12th Street
Ft. Lauderdale, FL 33304
jfarland@Voyageur.net
(954) 630-2722
(954) 630-2724
www.voyageur.net
Email Address:
Phone Number:
Facsimile Number:
Firm's Internet (www) Address:
2. Please give a brief history of the firm. Include the date the firm was founded, and how
long the current portfolio management team has been together. Include any special
expertise or experiences that would be relevant to the board.
History
Founded in 1983, Voyageur is an SEC-registered investment adviser serving clients in the
U.s. and Canada. Voyageur's charter has been to provide exemplary equity and fixed
income portfolio management to clients with a wide range of financial needs.
In 2000, Voyageur was acquired by RBC Dain Rauscher Corp., which merged Voyageur
with its existing investment adviser, Insight Investment Management. In 2001, Royal Bank
of Canada (RBC), one of the premier financial institutions in North America, acquired RBC
Dain Rauscher Corp. Both Voyageur and RBC Dain Rauscher Corp. are part of the RBC
Financial Group in the U.s. Within RBC, Voyageur is the principal, U.S.-based institutional
investment manager.
In 2006, Voyageur Asset Management Inc. and Freedom Capital Management, LLC reached
an agreement whereby Voyageur acquired substantially all of the assets of Freedom
Capital. The transaction closed on 1/5/07.
Investment Team
Voyageur's International Equity strategy is managed by Polaris Capital Management Inc.
under a sub-advisory agreement. Prior the 1/5/07, Polaris sub-advised the strategy for
Freedom Capital. Bernard R. Horn, Jr. has been the lead portfolio manager of the strategy
since its start in June 1998. The strategy's two portfolio managers have worked together for
five years. Polaris has added three analysts to the investment team in the past two years.
"
Experience
Voyageur has a long history managing assets for institutional clients, particularly for public
funds. As of 12/31/06, we managed $7,590.2 million for 67 public clients. For these clients,
we manage investment pools, operating funds, reserve assets, bond proceeds, insurance
funds, and retirement funds. We believe our conservative investment style combined with
our "client first" approach will continue to be the key to our success in serving public fund
clients.
,
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3. State whether the firm is a subsidiary of, or related in any way to a brokerage firm,
insurance company, bank or other entity. If applicable, please describe any material
relationship (financially or otherwise) with any other entity.
Voyageur is a wholly owned subsidiary of RBC Dain Rauscher Corp., which is owned by
RBC. RBC and its subsidiaries provide a wide range of financial services including banking,
investment banking, custody, brokerage, insurance, and investment management to clients
in the U.S., Canada, and internationally.
Voyageur operates as a separate entity from our affiliates. RBC Dain Rauscher Corp. has
representation on Voyageur's Board of Directors and Voyageur obtains certain compliance,
legal, information technology, and human resources services from it. However, day-to-day
decision-making lies with Voyageur's senior managers who are also responsible for
Voyageur's strategic planning initiatives.
4. Explain in detail any potential conflicts of interest that would be created by your firm's
serving the Pension Fund.
Voyageur foresees no potential conflicts of interest in providing services to Winter Springs
Employees' Pension System.
5. Please state the percentage of the firm owned by the employees. List the owners of the
firm (from largest to smallest with respect to ownership) and their ownership
percentages.
Voyageur is a wholly owned subsidiary of RBC Dain Rauscher Corp., which is owned by
RBC-a publicly held company traded on the New York and Toronto Stock Exchanges. As
employees of a wholly owned subsidiary, Voyageur's employees have no ownership in the
firm. However, bonuses and long-term incentives align employees' interests with those of
the firm.
6. Please provide an organizational chart of your firm.
Voyageur's firmwide organizational chart is attached.
7. List the key management people within the firm, along with the number of years with
the Firm and the number of years of investment industry experience
Name Title Tenure Experience
John G. Taft Executive Vice President, Chief 16 26
Executive Officer
Michael T. Lee, CFA President, Chief Investment Officer 13 17
Senior Portfolio Manager
John M. Huber, CFA Senior Managing Director, Chief 2 17
Investment Officer-Fixed Income
Charles F. Henderson Senior Managing Director, Chief 7 41
Investment Officer-Equity
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8. State the number of investment managers employed by the firm.
As of 12/31/06, Voyageur employed 23 portfolio managers. This does not include the
portfolio management team at Polaris Capital, the sub-advisor for Voyageur's International
Equity strategy.
9. How are the portfolio manager(s) and analyst team compensated? On what basis are
bonuses determined?
Voyageur calibrates salaries by position and performance, and gears them to be
competitive in the national marketplace. Annual bonuses for portfolio managers and
analysts are driven by the performance of Voyageur's composites versus benchmarks and
peer groups. For equity analysts, bonuses also depend on the performance of their
recommended stocks. In addition, portfolio managers and analysts participate in incentive
plans that provide a share of the operating profits generated by their divisions above a
predetermined hurdle. This plan serves as a proxy for ownership benefits.
10. Over the last twelve months, has there been any change in the management team?
There have been no changes to the senior management team at Voyager in the past twelve
months.
11. Are there changes in the ownership of the firm anticipated over the next twelve months?
Voyageur does not anticipate any changes in our ownership in the next twelve months.
12. During the last three years how many investment professional employees have left the
firm? Please state the reason.
In the last three years, Voyageur's turnover among portfolio managers has been modest
with few departures. Only three portfolio managers left the firm during this period; of
these, two were fixed income portfolio managers and one was an equity portfolio manager.
13. Please provide the number of institutional accounts lost in the past five years and the
reason for the loss. Additionally, how many clients does the firm have as of the most
recent quarter-end?
Number of Clients Lost
Voyageur has lost relatively few institutional equity clients over the past five years. We do,
however, manage fixed income assets for clients who have a finite investment horizon
(with debt or construction funds) and clients whose operating needs have depleted assets.
These accounts are pools of operating funds, not pension plan assets.
As of 12/31/06, Voyageur had 331 clients.
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14. Provide the coverage amount of your Errors and Omission (E&O) insurance policy and
the name of the insurance carrier.
Voyageur carries errors and omissions insurance with a maximum of $10 million per
occurrence and $20 million in aggregate. The carrier is American International Specialty
Lines (AIG).
15. Have there been any claims paid against the E&O policy in the last 18 months? No. If so,
please state the amount paid and the nature of the claim. Not applicable.
16. Has your firm ever been cited by any regulatory agency that resulted in a fine, cease &
desist order or other disciplinary action? No. If so, please explain. Not applicable.
17. List all office locations and the number of individuals working in each office. Specify
which office would primarily serve the Pension Board.
As of 12/31/06, Voyageur maintained 13 offices. Voyageur and Freedom Capital
Management, LLC reached an agreement, which closed on 1/5/07, whereby Voyageur
acquired substantially all of the assets of Freedom Capital. Because Voyageur calculates
employee data every quarter-end, the offices and employees related to the acquisition are
not included in the list below. Asset management for the International Equity strategy is
conducted in Polaris Capital's office in Boston. The Pension Board would be serviced from
the Minneapolis office and Jack Farland's office in Fort Lauderdale.
Headquarters, Fixed Income Division, and Tamarack Funds Administration
Minneapolis, Minnesota
93 employees
Equity Division
Chicago, Illinois (two offices)
14 employees
Jackson, Mississippi
1 employee
Boston, Massachusetts
4 employees
Fixed Income Portfolio Management
Lancaster, Pennsylvania
1 employee
Sales and Client Service
Washington, District of Columbia
2 employees
Sudbury, Massachusetts
1 employee
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Voyageur ASSET MANAGEMENT INC.
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Tamarack Funds Administration
Leawood, Kansas
1 employee
Advisory Services: Sales and Client Service
Dallas, Texas
1 employee
Mount Airy, Maryland
1 employee
Raleigh, North Carolina
2 employees
Santa Monica, California
1 employee
18. Please provide by calendar year for the trailing five years the firm's total assets under
management (AUM), the total number of accounts and the percentage of assets by
strategy and client type (i.e., public, corporate, high net worth)? What is the firm's total
AUM as of the most recent quarter-end?
AUM- Last 5 Calendar Years
2006 2005 2004 2003 2002
# Clients 331 384 413 396 401
Total AUM ($ mil.) 30,708.3 27,018.8 26,858.3 22,518.8 20,245.8
cr
T
B kd
L t5C I d Y
lent . ype rea owns- as a en ar ears
2006 2005 2004 2003 2002
Commingled Fund 0.1% 0.1% 0.1% 0.0% 0.0%
Corporate 6.4% 7.1% 11.0% 12.8% 13.1%
Foundation 0.5% 0.6% 0.7% 0.7% 0.6%
Individual 0.7% 1.0% 1.0% 1.1% 1.2%
Mutual Fund 49.1% 45.9% 47.3% 54.9% 56.7%
Other 0.5% 1.0% 1.0% 0.8% 0.7%
Public 24.7% 26.2% 21.9% 13.3% 13.2%
Union 11.0% 14.5% 14.5% 14.2% 12.9%
Wrap Program 7.0% 3.6% 2.6% 2.3% 1.6%
GRAND TOTAL 100.0% 100.0% 100.0% 100.0% 100.0%
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Strate Breakdown- Last 5 Calendar Years
2006
EQUITY
0.00%
0.08%
3.18%
2.47%
22.01 %
0.57%
0.55%
0.04%
0.93%
1.13%
2005
2004
0.00% 0.00%
0.03% 0.04%
3.01% 1.27%
3.30% 3.03%
23.26% 21.18%
0.00% 0.00%
0.75% 0.81%
0.00% 0.00%
1.31%
0.00%
1.51 %
0.00%
2003
0.00%
0.00%
0.80%
1.72%
10.90%
0.00%
0.95%
0.00%
1.81%
0.00%
2002
0.00%
0.00%
0.21%
0.63%
9.13%
0.00%
0.77%
0.00%
0.00%
0.00%
Microca Core E ui
Other Equity (Concentrated
Microca , Microca Value) 1.10% 2.47% 2.77% 3.98% 0.74%
* Voyageur did not offer an International Equity Strategy as of 12/31/06. Voyageur and Freedom
Capital Management, LLC reached an agreement, which closed on 1/5/07, whereby Voyageur
acquired substantially all of the assets of Freedom Capital. The acquisition included the
International Equity strategy, which is sub-advised by Polaris Capital. International Equity assets
managed historically by Freedom Capital are reported under strategy assets on page 15.
2006 2005 2004 2003 2002
FIXED INCOME
Broad Market Core Plus 0.43% 0.53% 0.55% 0.27% 0.00%
Broad Market Core 1.67% 2.12% 2.93% 4.78% 7.27%
Core Cash Management 51.35% 48.95% 50.12% 55.45% 65.90%
Enhanced Cash Management 0.29% 0.18% 0.00% 0.00% 0.00%
Intermediate Core 1.76% 2.00% 1.09% 0.87% 0.39%
Intermediate Government 1.91% 2.24% 1.11% 1.06% 1.35%
Mortgage Strategy 0.71% 0.77% 1.00% 1.00% 0.81%
Short Core 4.31% 4.64% 5.62% 5.63% 2.63%
Intermediate Muni Core 0.85% 0.48% 0.52% 0.58% 0.67%
Other Fixed Income 4.65% 3.96% 6.45% 10.19% 9.50%
GRAND TOTAL 100.00% 100.00% 100.00% 100.00% 100.00%
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II. THE INVESTMENT PRODUCT I PROCESS
Name of the Investment Product:
International Equity
1. What index is the best performance benchmark for the strategy and why?
Because the investment process seeks to identify the best values in the world across
countries and market capitalizations, portfolio construction is not tied to a particular index.
We use the MSCI-EAFE Index as a general comparative benchmark, and believe the index
is widely accepted as an appropriate measure of international equity market performance.
2. State whether the firm offers a commingled fund for any or all of your products. If yes,
please indicate which products have a commingled fund and the fee associated with that
product.
Voyageur offers a number of commingled funds across different investment strategies,
including the International Equity strategy. If an individual IPS client is interested in the
Voyageur International Fund, Voyageur will supply additional information upon request.
Interests in the fund are not registered under the Securities Act of 1933 and are offered only
as a private placement to a limited number of "accredited investors" or "qualified
investors" as defined in Regulation D under the 1933 Act. Consultants should not engage in
any form of general solicitation or advertising of these funds.
The standard fee for the Voyageur International Fund is 0.95% of the portfolio's value.
3. How would this product be delivered (i.e., separate account or commingled)? In
addition, please provide the fee schedule.
We are proposing to manage the assignment in the commingled vehicle. The fee schedule
for the Voyageur International Fund is 0.95% of the portfolio's assets.
4. Provide a brief statement describing the firm's approach to this engagement.
We are proposing to manage the Winter Springs portfolio in the Voyageur International
Fund, a privately offered commingled group trust open to qualified institutional investors.
The strategy is sub-advised by Polaris Capital Management. Polaris' objective in
International Equity investing is to identify the best values in the world using a disciplined
bottom-up value approach, encompassing proprietary investment technology and in-depth
fundamental research. The firm seeks high risk-adjusted returns that exceed the global cost
of equity with a focus on absolute risk. The underlying investment philosophy is grounded
in two basic beliefs:
· Companies exist to generate cash flow for owners
· Superior returns can be generated by purchasing the most undervalued streams of
']ree" cash flow
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The sub-advisor's strict adherence to a pure value style has been a key factor in the
strategy's success, and remains as constant today as when portfolio manager Bernie Horn
commenced development of the strategy in 1980. Polaris is a deep value manager, whose
professionals believe that the best way to generate above average risk-adjusted returns is to
wait for market fluctuations to produce undervalued companies.
5. Indicate who will be managing the account and provide the number of years managing
the strategy, the number of years with the firm, and the number of years of investment
industry experience.
International Equity Team Started with Years
strate erience
Bernard R. Horn, Jr., Senior Portfolio Mana er Jun-98* 26
Sumanta Biswas, CFA, Assistant Portfolio Mana er Jan-02 10
Michael M. S encer, CFA, Senior Portfolio Mana er Ma -02 23
Andr Sutanto, Anal st Jan-OS 2
Richard V. Howe, CFA, Anal st and Account Mana er Jun-OS 33
Bin Xiao, Anal st Au -06 1
*June 1998 reflects the inception date of the sub-advisory relationship for the strategy between
Polaris and Freedom Capital. With the exception of Mr. Spencer, investment professionals directly
involved with the International Equity investment process are employees of Polaris Capital
Management of Boston (sub-advisor).
Polaris Capital's investment team controls the day-to-day investment decision making
process. The team is led by Portfolio Manager Bernard R. Horn, Jr. and includes Assistant
Portfolio Manager and VP Sumanta Biswas, Analyst and Account Manager Rich Howe,
Analyst Andry Sutanto, and Analyst Bin Xiao. The group meets daily to discuss investment
guidelines, bottom-up research results, potential trades, and overall portfolio management.
Team members discuss all potential buy and sell decisions and Bernie Horn makes the final
investment decision.
In addition, Michael Spencer, CF A, of Voyageur, is a generalist and serves as Voyageur's
senior client service portfolio manager for our International Equity clients. As the primary
liason between Voyageur and Polaris, Mike is in close communication with the team at
Polaris and, he has the added responsibility of attending client meetings.
6. State the number of accounts and asset size of the accounts run by the manager(s).
Polaris manages three International Equity Portfolios for Voyageur:
Voyageur International Fund
Separate Accounts (2)
Total managed for Voyageur
$222.4 million
$ 60.2 million
$282.6 million
Values are as of 12/31/06 and reflect the International Equity assets managed for Freedom
Capital. As of 12/31/06, sub-advisor Polaris Capital managed $2.6 billion in International
and Global Equity mandates including Freedom's portfolios.
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7. Please provide (in a spreadsheet) the GICS equity sector allocation for the product by
quarter relative to the benchmark index for the trailing three-year period.
A spreadsheet with sector allocations versus the broader MSCI-World Index is attached.
8. Please provide (in a spreadsheet) the market capitalization allocation of the equity
portfolio by quarter for the trailing three-year period, using the following breakpoints:
< $1 B, $1 B to $5 B, $5 B to $10 B, $10 B to $20 B, $20 B to $50 and> $50. Additionally,
please provide the product's weighted-average market capitalization for each period.
A spreadsheet with market capitalization allocations is attached.
9. Please describe the investment process for the product. Include specifics, such as how
the initial universe of investable securities is defined, the screening process
(fundamental, top down, quantitative), the buy and sell decision process, whether there
is a targeted tracking error to the benchmark, number of holdings, and maximum sector
and security positions, the use of leverage, etc.
The investment process is an active, all cap bottom-up value approach, encompassing
proprietary investment technology and in-depth fundamental research.
Database Screening
Using proprietary valuation criteria, the International Equity team regularly screens a
universe of roughly 24,000 companies from the Standard and Poor's' Compustat and
Global Vantage databases. These companies must pass the following initial screens among
other criteria: real maintenance cash return on market value is greater than 8%, cash flow
growth is greater than sales growth over the last five years, and debt as a percentage of
assets is less than 50%. The universe is narrowed to 300-500 more closely followed
companies with the greatest potential for undervalued streams of sustainable cash flow or
assets, regardless of industry or location. The screening process has been consistent since
Polaris' founding in 1995.
Fundamental Research
The team's primary time commitment is intensive fundamental research of each buy
candidate identified in the screening process. Fundamental research entails a thorough
financial analysis of companies; researching their respective suppliers, customers, and
competitors; and visiting or contacting company management. The team assesses industry
conditions, competitive advantages, profitability, operating and financial leverage, and the
quality of a company's management team. Personal contact with management is also a
valuable source of information; contacts are made through onsite visits, at industry
conferences, and management meetings.
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Follow-up Screening
The team then employs proprietary investment technology using Polaris Capital's Multi-
factor Global Valuation Model. The model analyzes aggregate country and industry data
including valuation statistics, industry activity, cash flow, and interest rates, producing a
ranking of country and industry "value" sectors. Polaris' model provides a matrix for
finding the best values in the world and identifies the most undervalued industries in the
most undervalued countries. Polaris believes this reduces the chance of overlooking
investment opportunities.
Buy Discipline
The team makes investment decisions based on this three-step process. The most important
considerations in stock selection include: overall financial strength of a company, valuation
of a company's sustainable free cash flow relative to Polaris' global cost of equity, market
capitalization, liquidity, margins, corporate governance, industry structure, pricing power,
and margin expansion.
Polaris uses a discount rate to value each potential investment in the course of fundamental
analysis. The discount rate, the global cost of equity, is the sum of three components. The
measure consists of the sum of 6% (the historical real rate of return on stocks over time), a
2% alpha (the required risk-adjusted excess return), and the real bond yield (a country risk
premium) in the host country of the stock. The investment team applies this discount rate
to extremely conservative estimates of future cash flows to determine the fair value of the
investment. The company is a buy candidate if the current market price of the shares is at
or below the fair value of the shares and the company has withstood the scrutiny of
fundamental analysis.
Sell Discipline
The decision to sell is based primarily on the common stock valuation and the extent to
which the expected return on the stock still meets the global cost of equity. Companies are
held until the valuation of the stock is no longer priced to include the 2% alpha.
If the team's investment analyses, financial models, and assumptions change over time, the
target price is altered to conform to actual company results and the value of the firm is re-
assessed. Companies that no longer meet Polaris' valuation criteria are replaced from a
watch list of more than 250 companies.
Portfolio Construction Parameters
Bottom-up stock selection results in county and industry weightings that are a function of the
companies identified as the most undervalued. Portfolio construction is not tied to a
particular index; therefore, Polaris does not monitor tracking error relative to the index.
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The minimum market capitalization for any security at purchase is $100 million; there is no
maximum. At purchase, each company is equally weighted; however, after purchase the
weight may grow if the valuation remains within the firm's guidelines. The maximum
position size in any security is 5%. The portfolio is well diversified with a historical range of
38-54 investments in at least 15 industries and 15 or more countries. It is possible that the
portfolios may be more heavily weighted in certain industries/ sectors versus the market
weighting; likewise, the portfolios may be underweighted if portfolio managers feel the
industry / sector is overvalued.
10. How long has the investment style stated in the above questions been in place without
deviation?
The proposed investment style has been in place from inception of the product in June
1998. Portfolio Manager Bernard R. Horn, Jr. has been following the same philosophy and
process for 25 years.
11. Describe the investment environments in which your approach can be expected to
outperform its benchmark/style peers, and under-perform its benchmark/style peers.
Polaris' pure value philosophy and process are expected to perform best in markets
displaying distress or high volatility since these markets present the best value
opportunities. The strategy may underperform in markets characterized by strong
sustained upward momentum, or in markets in which growth stocks outperform. Polaris
believes that its pure value strategy offers considerable downside protection and the
management team attempts to minimize downside risk.
12. Are model portfolios incorporated in the management of the strategy?
A model portfolio is used for portfolio construction and managing the consistency of
position sizes across similarly managed portfolios.
13. Describe the use of cash in the investment process. What range of cash is typical? Do
you equitize the cash holding to enhance returns? Do you have a policy for staying fully
invested? If so, what is your definition of fully invested? If you are not always fully
invested, what factors lead you to hold cash? Is there a maximum amount of cash you
are likely to hold?
Cash does not playa material role in the investment process. The portfolio is generally fully
invested with an average cash range of 0-5%. We define a "fully invested" portfolio as one
with full exposure to the market where the allocation between equity and cash is not
managed strategically for defensive purposes. Polaris may hold cash temporarily in
anticipation of a client's withdrawal or over the course of investing large cash deposits.
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14. Is there a policy regarding industry or sector diversification? What is the maximum
concentration allowed in a single industry or sector? To what extent might you have
large concentrations in specific industries?
Bottom-up stock selection results in county and industry weightings that are a function of the
companies identified as the most undervalued. The investment team maintains exposure
across at least 15 different industries, and 15 or more countries. It is possible that the
portfolio may be more heavily weighted in certain industries / sectors versus the market
weighting; likewise, the portfolio may be underweighted if portfolio managers feel the
industry / sector is overvalued.
15. Detail the account turnover and trading costs. Does the firm employ a specialized
trading procedure? If so please explain.
Turnover is expected to average less than 30% annually. Over the last several years, the
average annual turnover rate is less than 20%. Low turnover helps to keep transaction costs
low. Portfolio managers block trades whenever possible to obtain volume executions. The
average transaction cost is approximately five basis points of trade value depending on
account size and country market weightings. Polaris does not employ a specialized trading
procedure as it relates to the International Equity strategy. Portfolio managers are directly
responsible for trading, and they monitor executions in real time relative to current and
near-term trading expectations.
16. To what extent are derivatives utilized.
Derivatives are not utilized.
17. What methods do you use to insure "best price and execution" in trading?
Polaris Capital, sub-advisor, selects brokers based on the value a broker adds to efficient
trading execution. Portfolio managers are directly responsible for trading and monitor
executions in real time relative to current and near-term trading expectations.
18. What criteria does your firm use to determine that there is sufficient liquidity for the
firm's total position in a stock?
The team typically purchases securities that have enough trading volume that allows them
to enter or exit a position within two to four weeks. Polaris' general liquidity guideline is to
limit illiquid holdings to no more than two percent of the portfolio.
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19. Please provide, by calendar year for the trailing five years, the assets under management
and the number of accounts in the investment product.
2006 2005 2004 2003 2002
Assets ($Mil)* 282.6 153.4 89.9 33.6 20.6
Accounts 3 2 1 1 1
*Voyageur did not offer an International Equity strategy to clients as of 12/31/06. In 2006,
Voyageur Asset Management Inc. and Freedom Capital Management, LLC reached an agreement
whereby Voyageur acquired substantially all of the assets of Freedom Capital. The transaction closed
on 1/5/07. The International Equity strategy assets reported are those managed at Freedom Capital.
20. State whether your firm participates in any brokerage wrap programs. State whether the
firms proposed product is included.
Voyageur participates in brokerage wrap programs for some of our other investment
strategies. We do not participate in such a program for the International Equity strategy.
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III. RESEARCH
1. How do you obtain your research (in-house or third party)? What percentage of research
is generated internally?
Typically, less than 10% of the research effort for the International Equity strategy is
obtained from external sources. Occasionally, team members will contact research analysts
who provide information that adds to previous knowledge gained from primary sources of
information and analyses. The team prefers locally based analysts who tend to have more
current and II on-the-ground" information. Research services are selected based on the value
that the service adds to the research process.
Polaris typically does not begin to look at outside research until after completing internal
fundamental research. The firm actively seeks outside research that is contrary to Polaris'
opinions on a company, allowing the managers to view possible investments from different
perspectives. The firm may utilize research from broker-dealers such as historical price
information for securities, reports on individual companies, and business news.
2. Please describe how your firm obtains and pays for outside research reports.
As it relates to the International Equity strategy, our sub-advisor Polaris Capital relies
primarily on internally generated research. Polaris pays for security databases from
Standard and Poors, Bloomberg, and MSCI with hard dollars. Polaris does not have soft
dollar arrangements for the receipt of third party research. However, the sub-advisor may,
in accordance with the safe harbor provision of Section 28(e) of the Securities Exchange Act
of 1934, receive research from broker-dealers that supports the investment decision making
process, such as historical price information for securities, reports on individual companies,
and business news retrieval.
3. Please name the three primary sources of data and/or analyses upon which your firm
relies.
International Equity
Standard and Poors' security databases
MSCI publications
Bloomberg
Prepared for
Winter Springs Employees' Pension System
16
l/6yageur ASSET MANAGEMENT INC.
March 2, 2007
IV. MISCELLANEOUS
1. Please state whether you are willing to acknowledge that you are a fiduciary of the fund
as defined in the Employee Retirement Income Security Act of 1974 ("ERISA") and, for
Florida Public Programs: Section 112.656, Florida Statutes.
Voyageur Asset Management Inc. is willing to acknowledge that, if selected, the firm is a
fiduciary of the fund as defined in the Employee Retirement Income Security Act of 1974
("ERISA") and, for Florida Public Programs: Section 112.656, Florida Statutes.
2. Please state whether you agree that the agreement shall be construed under the laws of
the State in which the prospective client resides and federal law where applicable.
We are proposing an investment in the Voyageur International Fund, available through a
privately offered commingled Group Trust. In accordance with the Amended and Restated
Agreement of Trust Establishing the Voyageur Asset Management Group Trust, the Trust
is organized and governed under the laws of the Commonwealth of Massachusetts.
3. Please state whether you agree to venue for any judicial proceeding to be in the county
in which the Board sits.
To the extent permissible under the proposed Agreement of Trust, Offering Brochure and
relevant subscription documents, Voyageur agrees that the venue for any judicial
proceeding relating to the proposed assignment be held in the county in which the Board
sits.
Prepared for
Winter Springs Employees' Pension System
17
J
Lance James
Managing Director
SrPM
Daman Blakeney
EO Analyst
Terri Brandys
Office Marnager
Rebecca.Cook
EO Analyst
Shireen Eddleblute
PM & Sr EO Analyst
Matt Neska
Jr EO Analyst
Mike Albert
Sr Fl Analyst
Scott Cabalka
SrPM
Raye Kanzenbach
SrPM
Cortney Madden
FI Analyst
Brandon Swensen
PM
Nathan Mendes
EQ Analyst
Mike Spencer
SrPM
Mike Lee
President & CIO
Lou Nanne
Director, National Sales
Kathleen Callahan
Institutional Sales
Gene Durgin
Institutional Sales
Jack Farland
Institutional Sales
Jerry Gudmundson
Institutional Sales
Pat Harris
Institutional Sales
Jennifer Hunt
Institutional Sales
Terry Magnuson
Admin Assistant
L Mark Monroe
Institutional Sales
Howard Reich
Institutional Sales
Jim Roberts
Institutional Sales
Ray Depelteau
Institutional Sales
Mike Marino
Marketing Support
Associate
Carl Herman
Sr PA Analyst
Edith Lotterman
PA Analyst
John Taft
CEO
Kathleen Gorman
Chief Compliance Officer
Jason Bebler
WRAP Ops
Matt Brice
WRAP Ops
Tim Bruns
WRAP Ops
Jody Totton
WRAP Ops
Fixed Income PAs
Joe Lee
Team Lead
Jon Bouley
Portfolio Admin
Greg Carlson
Sr Portfolio Admin
John Northup
Portfolio Admin
Spencer Ung
Portfolio Admin
f,UyageurAssET MAN
Cindl Bruns
Sr Performance Analyst
Matt Curtis
Product Analyst
Christine Waggoner
Marketing Manager
I-
I
Susan Beste
Sales AssoclAdmin
Juanita Hernandez
Admin Assistant
Paul Holt
AdminfReception
William Nelson
Office Associate
Cheryl Stratton
Admin Assistant
Meghan Butts
Proposal Writer
Brian Matzke
Marketing Support
Analyst
Maura Smith
Marketing Associate
Darlene Moore
Jr Graphic Designer
Jim Stitt
Portfolio Admin Manager
Scott Cullen
Systems Admin
Sarah Dillon
Systems Admin
Andrew Huss
Systems Admin
Alicia Jones
Sr Systems Admin
Tracy Hubert
Systems Assoc
Stacy Letz
Sr Consultant Relations
JP Farrar
Consultant Relations
Jeremy Herman
Portfolio Admin
Sarah Legler
Portfolio Admin
David Vasichek
Portfolio Admin
Brian Abernathy
PA Specialist
Vua Thor
Admin
,EMENT
c.
m__m~_..m_ I I
Bridget Tompkins Erik Preus
Director, Pres, Tamarack Funds l
Client Services Head, Retail Services
r
I
I
I
Jean Oaleki
Client Service Liaison
Kelly Haremza
Client Service Liaison
RBe Oaln Legal
Lee Greenhalgh
Associate General Counsel
RBC Oaln Finance
Brandon Lew
Sr Financial Analyst
RBC Daln Accounting
Mustafa Zafar
Accounting Manager
Brook Hanssen
Associate Accountant
Andrew Wolf
Staff Accountant
Barry Peters
Director,
Advisory Services
Brady Clemons
Consultant
Scott Erie
Director
National Accounts
Justin Felicetta
Regional Sales Assoc
Ben Foreman
Sales Rep
Jane Hastings
Sales Rep
Greg Jackson
Consultant
Sabin Khemlani
Sales Rep
David Larrick
Sales Rep
John Rutledge
Sales Rep
Jen Schultz
Sales Rep
Dave Lux
Director
Mutual Fund SelVices
Martin Cramer
Operations/Admin Manager
Lynne Jungman
Sr Admin Assistant
T-Dyageur ASSET MANAGEMENT INC.
Organizational Chart for Polaris Capital Management, Inc.
Sub-advisor of International Equity Strategy
Bernard R. Horn, Jr. - President
Portfolio
Management
Research
Trading
Marketing
Client Service
Bernard R. Horn, Jr.
Sumanta Biswas, CFA
Bernard R. Horn, Jr.
Sumanta Biswas, CFA
Richard Howe, CF A
Andry Sutanto
Bin Xiao
Bernard R. Horn, Jr.
Sumanta Biswas, CFA
Kathy Jacobs
Richard Howe, CF A
Kristin Weisker
Bernard Maitai
'~
"
lI6yageur ASSET MANAGEMENT INC.
International Equity Strategy - Representative Portfolio
Sector Weights v. MSCI-
World Index Dee-06 Sep-06 Jun-06 Mar-06 Dee-OS Sep-OS
Portfolio Index Portfolio Index Portfolio Index Portfolio Index Portfolio Index Portfolio Index
Consumer Discretionary 16.9 11.4 17.8 11.3 18.2 11.3 18.9 11.5 22.2 11.8 20.9 11.8
Consumer Staples 7.6 8.0 7.2 8.2 8.0 8.0 7.3 7.9 3.0 8.2 2.9 8.4
Energy 3.8 9.5 3.8 9.1 4.0 9.9 4.5 9.3 4.6 9.2 8.0 10.3
Financials 11.2 26.4 9.5 26.3 9.7 25.6 8.4 25.5 9.7 25.0 9.1 23.8
Healthcare 0.0 9.2 0.0 10.0 0.0 9.7 0.0 10.0 0.0 10.3 0.0 10.4
Industrials 21.0 10.7 20.2 10.5 20.1 10.8 17.9 10.8 14.2 10.5 14.6 10.2
Information Technology 3.6 10.4 4.3 10.3 3.3 10.4 3.4 11.2 5.1 11.2 5.0 11.0
Materials 26.2 6.0 27.3 5.7 26.5 6.1 29.2 5.8 31.7 5.6 28.6 5.4
Telecom Services 5.7 4.0 6.0 4.3 6.0 4.2 6.0 4.1 4.8 4.2 6.0 4.5
Utilities 4.0 4.4 3.9 4.3 4.2 4.0 4.4 3.9 4.7 4.0 4.9 4.2
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Sector Weights v. MSCI-
World Index Jun-OS Mar-OS Dee-04 Sep-04 Jun-04 Mar-04
Portfolio Index Portfolio Index Portfolio Index Portfolio Index Portfolio Index Portfolio Index
Consumer Discretionary 22.2 11.8 23.1 12.0 21.9 12.4 21.9 12.2 25.0 12.4 27.9 12.1
Consumer Staples 3.2 8.4 2.6 8.8 2.7 8.6 2.6 8.7 0.0 9.2 0.0 9.2
Energy 7.2 10.3 8.3 9.0 8.2 7.9 10.1 8.3 9.0 7.5 11.7 7.2
Financials 10.1 23.9 10.2 24.0 10.8 24.5 12.0 24.1 8.5 23.6 8.5 24.2
Healthcare 0.0 10.4 0.0 10.3 0.0 10.3 0.0 10.8 0.0 11.1 0.0 11.1
Industrials 14.8 10.2 15.8 10.7 15.5 10.4 16.2 10.4 15.0 10.3 19.8 9.9
Information Technology 4.3 11.0 5.0 10.9 4.9 11.6 5.3 11.6 9.2 12.8 11.0 12.8
Materials 28.2 5.4 24.0 5.5 24.3 5.3 27.7 5.1 25.7 4.8 18.2 4.8
Telecom Services 5.3 4.5 6.2 4.7 6.7 5.0 4.2 5.0 1.9 4.8 2.9 5.0
Utilities 4.7 4.1 4.8 4.1 5.0 4.0 0.0 3.8 5.7 3.5 0.0 3.7
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
.;1J
V6yageur ASSET MANAGEMENT INC.
International Equity Strategy - Representative Portfolio
Please note: We are providing market cap allocations in a similar but slightly different format from that requested in the questionnaire.
% of Portfolio In Cap
Range: Dec-06 Sep-06 J un-06 Mar-06 Dec-05 Sep-05 Jun-05 Mar-05 Dec-04 Sep-04 J un -04 Mar-04
> $50 Billion 7.1 8.2 7.8 7.9 5.0 7.4 9.7 13.1 7.8 5.9 5.2 5.4
$15-50 Billion 32.6 28.7 27.3 11.2 26.7 29.4 21.6 18.7 24.9 17.6 20.6 16.0
$7.5-15 Billion 13.8 13.8 16.0 32.0 21.2 14.3 18.6 18.2 18.0 25.0 19.0 19.5
$1.5-7.5 Billion 35.5 36.7 35.9 36.9 35.9 35.7 34.5 32.8 34.5 33.5 33.5 36.5
< $1.5 Billion 11.0 12.6 13.0 12.0 11.2 13.2 15.6 17.2 14.8 18.0 21.7 22.6
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Wgtd Ave. Mkt Cap
$Mil 16,888 16,392 15,135 15,526 15,333 18,385 16,624 16,561 15,553 14,391 12,053 12,624
OMB APPROVAL
OMB Number: 3235-0049
FORM ADV
Part II - Page 1
Uniform Application for Investment Adviser Registration
Expires:
July 31, 2008
Estimated average burden
hours per response. . . . . . 9.402
Name of Investment Adviser: Voyageur Asset Management Inc.
Address: (Number and Street) (City) (State) (Zip Code) Area Code: Telephone Number:
100 South Fifth Street, Suite 2300, Minneapolis, Minnesota 55402-1240 (612) 376-7000
This part of Form ADV gives information about the investment adviser and its business for the use of clients.
The information has not been approved or verified by any governmental authority.
Table of Contents
2
3
4
5
6
7
8
9
10
11
Advisory Services and Fees.. ....... .................................. ........... ..... .....................................
Types of Clients............................................................ ..... ................................. ......... .......
Types of Investments................ ....... ....... ........................ .................. .................. ......... ... ....
Methods of Analysis, Sources ofInformation and Investment Strategies ........................
Education and Business Standards................................ ......... .... .............. ................. .........
Pal!e
2
2
3
3
4
Item Number
Item
Education and Business Background .................................................................................
Other Business Activities ......... ....... ....... .... .................. ........................... ..... ......... .............
4
4
4
5
5
5
6
6
6
Other Financial Industry Activities or Affiliations ............................................................
Participation or Interest in Client Transactions..................................................................
Conditions for Managing Accounts ...................................................................................
Review of Accounts........................ ........... ........................ ........ .......... ...... .... ......... ............
12
13
14
Investment or Brokerage Discretion... ....... ....... ................ ......... .... ....... ....... .......................
Additional Compensation........ ....... .... ....... .... .................... ......... ............... ............. ............
Balance Sheet. .... ... .... .... ....... .... ....... .... ....... .... ................ .... ..... .... .... .... ... .... ........... ..............
Continuation Sheet. .... ... .... ....... .... ... ............... ... ..... .............. .......... .... .... ... .... ......... .... .........
Schedule F
Balance Sheet, if required... ....... ....... .... .............. ......................... ........... ............................
Schedule G
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(Schedules A, B, C, D, and E are included with Part I ofthis Form, for the use of regulatory bodies, and are not distributed to clients.)
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Potential persons who are to respond to the collection of information contained in this form
are not required to respond unless the form displays a currently valid OMB control number.
FORM ADV Applicant: SEe File Number: Date:
Part II - Page 2 Voyageur Asset Management Inc. 801 - 20303 February 21, 2007
1. A. Advisory Services and Fees. (check the applicable boxes)
Applicant:
For each type of service provided, state the approximate % of
total advisory billings from that service. (See instruction below.)
[&J (I) Provides investment supervisory services.. .... ............... .... .... ...... ... .... ........ ................... ...... ..... ... ..... ..... ............. .... ........................... ........ ..... ... .
[&J (2) Manages investment advisory accounts not involving investment supervisory services .................................................................................. .
o (3) Furnishes investment advice through consultations not included in either service described above ..................................................................
o (4) Issues periodicals about securities by subscription.. ..... ......... ................ ............................. ..... ..... ......... .... ..... .... .... ..... .... ........ ......... ....................
o (5) Issues special reports about securities not included in any service described above ...........................................................................................
o (6) Issues, not as part of any service described above, any charts, graphs, formulas, or other devices which clients may use to evaluate
securities..................................................................................................................... ...........................................................................................
o (7) On more than an occasional basis, furnishes advice to clients on matters not involving securities ....................................................................
o (8) Provides a timing service ........ ...... ..... .... .... .... ........................ ......................... ....... ................ .......... .... ..... .... .............. ... .... .... ............. .... ..............
o (9) Furnishes advice about securities in any manner not described above ................................................................................................................
~%
~%
%
%
_%
%
%
%
%
[&J (I) A percentage of assets under management
o (4) Subscription fees
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(Percentages should be based on applicant's last fiscal year. If applicant has not completed its first fiscal year, provide
estimates of advisory billings for that year and state that the percentages are estimates.)
Yes No
B. Does applicant call any of the services it checked above financial planning or some similar term? ........................................................................... 0 [&J
C. Applicant offers investment advisory services for: (check all that apply)
o (2) Hourly charges
o (5) Commissions
[&J (3) Fixed fees (not including subscription fees)
[&J (6) Other
D. For each checked box in A above, describe on Schedule F:
If'
· the services provided, including the name of any publication or report issued by the adviser on a subscription basis or for a fee
· applicant's basic fee schedule, how fees are charged and whether its fees are negotiable
[&J A. Individuals
[&J E. Trusts, estates, or charitable organizations
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· when compensation is payable, and if compensation is payable before service is provided, how a client may get a refund or may terminate an investment
advisory contract before its expiration date
2.
Types of Clients - Applicant generally provides investment advice to: (check those that apply)
[&J B. Banks or thrift institutions
[&J F. Corporations or business entities other than those listed above
[&J C. Investment companies
[&J G. Other (describe on Schedule F)
[&J D. Pension and profit sharing plans
FORM ADV
Part II - Page 3
Applicant:
Voyageur Asset Management Inc.
SEe File Number:
801 - 20303
Date:
February 21,2007
3. Types of Investments. Applicant offers advice on the following: (check those that apply)
A. Equity Securities lRl H. United States govemment securities
lRl (I) exchange-listed securities
lRl (2) securities traded over-the-counter I. Options contracts on:
lRl (3) foreign issuers lRl (I) securities
0 (2) commodities
lRlB. Warrants
J. Futures contracts on:
lRlC. Corporate debt securities 0 (I) tangibles
(other than commercial paper) lRl (2) intangibles
lRlD. Commercial paper K. Interests in partnerships investing in:
0 (I) real estate
lRlE. Certificates of deposit 0 (2) oil and gas interests
0 (3) other (explain on Schedule F)
lRlF. Municipal securities
lRl L. Other (explain on Schedule F)
G. Investment company securities:
0 (I) variable life insurance
0 (2) variable annuities
lRl (3) mutual fund shares
4. Methods of Analysis, Sources of Information, and Investment Strategies.
A. Applicant's security analysis methods include: (check those that apply)
(I) lRl Charting (4) lRl Cyclical
(2) lRl Fundamental (5) 0 Other (explain on Schedule F)
(3) lRl Technical
B. The main sources of information applicant uses include: (check all that apply)
(I) lRl Financial newspapers and magazines (5) lRl Timing services
(2) lRl Inspections of corporate activities (6) lRl Annual reports, prospectuses, filings with the
Securities and Exchange Commission
(3) lRl Research materials prepared by others (7) lRl Company press releases
(4) lRl Corporate rating services (8) lRl Other (explain on Schedule F)
C. The investment strategies used to implement any investment advice given to clients include: (check those that apply)
(I ) lRl Long term purchases (5) lRl Margin transactions
(securities held at least a year)
(2) lRl Short term purchases (6) lRl Option writing, including covered options,
(securities sold within a year) uncovered options or spreading strategies
(3) 0 Trading (securities sold within 30 days)
(7) 0 Other (explain on Schedule F)
(4) lRl Short sales
"'",
Answer all items. Complete amended paRes in full, circle amended items and file with execution paRe (paRe 1 ).
'\
,
FORM ADV
Part II - Page 4
Applicant:
Voyageur Asset Management Inc.
SEe File Number:
801 - 20303
Date:
February 21, 2007
5. Education and Business Standards.
Are there any general standards of education or business experience that applicant requires of those involved in determining or giving Yes No
investment advice to clients? .. ... .......... ........ ......................................................................................... ................................................................ [&J 0
(If yes, describe these standards on Schedule F.)
6. Education and Business Background.
For:
. each member of the investment committee or group that determines general investment advice to be given to clients, or
. if the applicant has no investment committee or group, each individual who determines general investment advice given to clients (if more than five,
respond only for their supervisors)
. each principal executive officer of applicant or each person with similar status or performing similar functions.
On Schedule F, give the:
. name
. year of birth
. formal education after high school
. business background for the preceding five years
(For each checked box describe the other activities, including the time spent on them, on Schedule F.)
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7. Other Business Activities. (check those that apply)
[&J A. Applicant is actively engaged in a business other than giving investment advice.
o B. Applicant sells products or services other than investment advice to clients.
[&J C. The principal business of applicant or its principal executive officers involves something other than providing investment advice.
8. Other Financial Industry Activities or Affiliations. (check those that apply)
o A. Applicant is registered (or has an application pending) as a securities broker-dealer.
o B. Applicant is registered (or has an application pending) as a futures commission merchant, commodity pool operator or commodity trading adviser.
C. Applicant has arrangements that are material to its advisory business or its clients with a related person who is a:
[&J (I) broker-dealer 0 (7) accounting firm
[&J (2) investment company 0 (8) law firm
[&J (3) other investment adviser 0 (9) insurance company or agency
o (4) financial planning firm 0 (10) pension consultant
o (5) commodity pool operator, commodity trading 0 (II) real estate broker or dealer
adviser or futures commission merchant
0 (12) entity that creates or packages limited partnerships
o (6) banking or thrift institution
(For each checked box in C, on Schedule F identify the related person and describe the relationship and the arrangements.)
Yes No
D. Is applicant or a related person a general partner in any partnership in which clients are solicited to invest? ............................................0 [&J
.'
(If yes, describe on Schedule F the partnerships and what they invest in.)
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FORM ADV
Part II - Page 5
Applicant:
Voyageur Asset Management Inc.
SEe File Number:
801 - 20303
Date:
Februal)' 21,2007
9. Participation or Interest in Client Transactions.
Applicant or a related person: (check those that apply)
D A. As principal, buys securities for itself from or sells securities it owns to any client.
lRl B. As broker or agent effects securities transactions for compensation for any client.
D C. As broker or agent for any person other than a client effects transactions in which client securities are sold to or bought from a brokerage customer.
lRl D. Recommends to clients that they buy or sell securities or investment products in which the applicant or a related person has some financial interest.
lRl E. Buys or sells for itself securities that it also recommends to clients.
(For each box checked, describe on Schedule F when the applicant or a related person engages in these transactions and what
restrictions, internal procedures, or disclosures are used for conflicts of interest in those transactions.)
Describe, on Schedule F, your code of ethics, and state that you will provide a copy of your code of ethics to any client or prospective client upon request.
10. Conditions for Managing Accounts. Does the applicant provide investment supervisory services, manage investment advisory accounts
or hold itself out as providing financial planning or some similarly termed services and impose a minimum dollar value of assets or Yes No
other conditions for starting or maintaining an account? ........................................................................................................................................ lRl D
(If yes, describe on Schedule F.)
11. Review of Accounts. If applicant provides investment supervisory services, manages investment advisory accounts, or holds itself out as providing financial
planning or some similarly termed services:
A. Describe below the reviews and reviewers of the accounts. For reviews, include their frequency, different levels, and triggering factors. For reviewers,
include the number of reviewers, their titles and functions, instructions they receive from applicant on performing reviews, and number of accounts assigned
each.
Portfolio managers and other investment personnel (including accounting personnel designated and supervised by investment personnel) review each client's
investment portfolio on a regular basis to ensure that investments are made in conformity with clients' stated objectives. Trades for client accounts are
verified after execution by portfolio managers for accuracy and appropriateness. Generally, and unless the client dictates more frequent meetings, portfolio
managers will meet with each institutional client on an annual basis to review goals, objectives, holdings, and portfolio performance to ascertain the
continued appropriateness of the institutional client's investment strategy. Voyageur does not conduct regular meetings with clients in the various wrap
programs in which it participates, but is available for meetings upon request.
B. Describe below the nature and frequency of regular reports to clients on their accounts.
Upon request, clients may receive confirmations of purchase and sale transactions directly from the executing broker-dealer. On a monthly or quarterly basis
(as directed by each client), Voyageur sends reports to clients showing transactions for the period, portfolio holdings, performance reporting, and appropriate
commentary.
Investors in the Private Funds will receive unaudited quarterly statements of account and, for certain private fund investors, an annual report containing a
balance sheet, an auditor's report, other financial information, and a narrative summary of the Fund's business and activities for that year.
For clients who engage Voyageur to manage their account through a wrap program, reporting is provided by the broker dealer sponsoring the wrap program.
Answer all items. Complete amended pa2es in full, circle amended items and file with execution pa2e (pa2e I).
FORMADV
Part II - Page 6
Applicant:
Voyageur Asset Management Inc.
SEC File Number:
80 I - 20303
Date:
February 21, 2007
12. Investment or Brokerage Discretion.
A. Does applicant or any related person have authority to determine, without obtaining specific client consent, the:
Yes No
(I) securities to be bought or sold? ...................................................................................................................................................................[RJ 0
Yes No
(2) amount of the securities to be bought or sold?...........................................................................................................................................[RJ 0
Yes No
(3) broker or dealer to be used? .......................................................................................................................................................................[RJ 0
Yes No
(4) commission rates paid? ............................................................................................. ............... ........................................................ .......... [RJ 0
Yes No
B. Does applicant or a related person suggest brokers to clients? ...........................................................................................................................[RJ 0
For each yes answer to A describe on Schedule F any limitations on the authority. For each yes to A(3), A(4) or B, describe on Schedule F the
factors considered in selecting brokers and determining the reasonableness of their commissions. If the value of products, research and services
given to the applicant or a related person is a factor, describe:
. the products, research and services
. whether clients may pay commissions higher than those obtainable from other brokers in return for those products and services
. whether research is used to service all of applicant's accounts or just those accounts paying for it; and
. any procedures the applicant used during the last fiscal year to direct client transactions to a particular broker in return for product and research
services received.
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13. Additional Compensation.
Does the applicant or a related person have any arrangements, oral or in writing, where it:
A. is paid cash by or receives some economic benefit (including commissions, equipment or non-research services) from a non-client in Yes No
connection with giving advice to clients? ............................................................................................................................................................0 lRl
Yes No
B. directly or indirectly compensates any person for client referrals? ....................................................................................................................[RJ 0
(For each yes, describe the arrangements on Schedule F.)
e:
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14. Balance Sheet. Applicant must provide a balance sheet for the most recent fiscal year on Schedule G if applicant:
Yes No
Has applicant provided a Schedule G balance sheet?.........................................................................................................................................0 [RJ
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. has custody of client funds or securities (unless applicant is registered or registering only with the Securities and Exchange Commission); or
. requires prepayment of more than $500 in fees per client and 6 or more months in advance
If
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Schedule F of Applicant: SEe File Number: Date:
Form ADV Voyageur Asset Management Inc. 80 I - 20303 February 21, 2007
Continuation Sheet for Form ADV Part II
(Do not use this Schedule as a continuation sheet for Form ADV Part I or any other schedules.)
I. Full Name of applicant exactly as stated in Item IA of Part I of Form ADV: Voyageur Asset Management Inc.
I IRS Empl. Iden!. No.:
Item of Form
(identify)
Answer
1.0
SERVICES AND FEES
Voyageur Asset Management Inc. ("V AM" or "Voyageur") provides discretionary and non-discretionary
investment supervisory services to state and local entities (separately managed and pooled funds);
corporations; financial, insurance and health care institutions; pension and profit sharing plans; foundations
and endowments; registered investment companies; and individuals, primarily through wrap fee programs in
which Voyageur participates.
INSTITUTIONAL ACCOUNTS
Each institutional account is generally subject to a standard minimum annual revenue requirement as part of
the investment management agreement. Generally, the minimum annual revenue for both fixed and equity
accounts is $25,000 and is automatically charged as part of the billing process.
Advisory fees paid by clients are generally based upon a percentage of assets under management and will
depend upon the type and size of the account and the specific investment strategy employed. However, from
time to time VAM may offer investment advisory services on a fixed fee, or performance fee basis. The fee
charged to a client may be payable either in advance or arrears. While fees may be individually negotiated,
managed account clients will generally pay advisory fees based on a percentage of assets under management
in accordance with the following schedule:
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Standard Fee Schedule - Institutional Division
Core Cash Management:
First $20 million of assets
Next $30 million of assets
Assets exceeding $50 million
$20 million minimum account size
0.20%
0.15%
0.08%
Enhanced Cash Management:
First $25 million of assets
Next $25 million of assets
Next $50 million of assets
Assets exceeding $100 million
$20 million minimum account size
0.25%
0.20%
0.15%
0.08%
Short Core:
First $25 million of assets
Next $25 million of assets
Next $50 million of assets
Assets exceeding $100 million
$10 million minimum account size
0.30%
0.20%
0.15%
0.10%
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Mortgage-Backed Strategy:
First $25 million of assets
Next $25 million of assets
Next $50 million of assets
Assets exceeding $100 million
$10 million minimum account size
0.35%
0.25%
0.20%
0.15%
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Large Capitalization Core:
First $10 million of assets
0.75%
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Next $15 million of assets
Next $25 million of assets
Assets exceeding $50 million
$10 million minimum account size
0.60%
0.50%
0.40%
Large Capitalization Growth:
First $10 million of assets
Next $15 million of assets
Next $25 million of assets
Assets exceeding $50 million
$10 million minimum account size
0.75%
0.60%
0.50%
0.40%
Large Capitalization Value:
First $10 million of assets
Next $15 million of assets
Next $25 million of assets
Assets exceeding $50 million
$10 million minimum account size
0.75%
0.60%
0.50%
0.40%
All Capitalization Growth:
First $10 million of assets
Next $15 million of assets
Next $25 million of assets
Assets exceeding $50 million
$10 million minimum account size
0.85%
0.70%
0.60%
0.50%
Concentrated Value:
First $10 million of assets
Next $15 million of assets
Next $25 million of assets
Assets exceeding $50 million
$10 million minimum account size
0.90%
0.75%
0.65%
0.50%
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International
$100 million minimum account size
0.95%
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Short Government/ Agency Mandates:
First $25 million of assets
Next $25 million of assets
Next $50 million of assets
Assets exceeding $100 million
$10 million minimum account size
0.25%
0.15%
0.10%
0.08%
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Government Loan Strategy:
First $25 million of assets
Next $25 million of assets
Next $50 million of assets
Assets exceeding $100 million
$10 million minimum account size
0.35%
0.25%
0.20%
0.15%
Intermediate Municipal Core:
First $5 million of assets
Next $5 million of assets
Next $5 million of assets
Next $5 million of assets
Assets exceeding $20 million
$5 million minimum account size
*This is an institutional minimum and may be negotiated for a HNW!MAP program
0.50%
0.40%
0.30%
0.20%
0.15%
High Yield:
First $25 million of assets
Next $25 million of assets
Next $50 million of assets
Assets exceeding $100 million
0.50%
0.40%
0.35%
0.25%
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$10 million minimum account size
Small Capitalization Growth:
First $10 million of assets 1.00%
Next $15 million of assets 0.90%
Next $25 million of assets 0.80%
Assets exceeding $50 million 0.70%
$10 million minimum account size
Microcapitalization Core:
First $25 million of assets 1.25%
Assets exceeding $25 million 1.00%
$10 million minimum account size
Small Capitalization Core:
First $10 million of assets 1.00%
Next $15 million of assets 0.90%
Next $25 million of assets 0.80%
Assets exceeding $50 million 0.70%
$10 million minimum account size
SMID Capitalization Growth:
First $10 million of assets 0.95%
Next $15 million of assets 0.80%
Next $25 million of assets 0.70%
Assets exceeding $50 million 0.60%
$10 million minimum account size
Mid-Capitalization Growth:
First $10 million of assets 0.85%
Next $15 million of assets 0.70%
Next $25 million of assets 0.60%
Assets exceeding $50 million 0.50%
$10 million minimum account size
Mid-Capitalization Value:
First $10 million of assets 0.85%
Next $15 million of assets 0.70%
Next $25 million of assets 0.60%
Assets exceeding $50 million 0.50%
$10 million minimum account size
Balanced:
First $25 million of assets 0.55%
Next $25 million of assets 0.40%
Assets exceeding $50 million 0.30%
$10 million minimum account size
Broad Market Core:
First $25 million of assets 0.35%
Next $25 million of assets 0.25%
Next $50 million of assets 0.20%
Assets exceeding $100 million 0.15%
$10 million minimum account size
Broad Market Core Plus:
First $25 million of assets 0.40%
Next $25 million of assets 0.30%
Next $50 million of assets 0.25%
Assets exceeding $100 million 0.20%
$10 million minimum account size
Intermediate Core:
First $25 million of assets 0.35%
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Next $25 million of assets
Next $50 million of assets
Assets exceeding $100 million
$10 million minimum account size
0.25%
0.20%
0.15%
Intermediate Government/Agency Mandates:
First $25 million of assets
Next $25 million of assets
Next $50 million of assets
Assets exceeding $100 million
$10 million minimum account size
0.30%
0.20%
0.15%
0.10%
Fees are payable quarterly or monthly, either in arrears or in advance, as agreed to on a client by client basis.
For accounts that pay in advance, if the account is terminated during a calendar quarter, the fee will be
prorated based on the period of time during the quarter that the account was open and any unused portion of
any fees paid in advance will be retumed to the client.
WRAP FEE PROGRAMS
Wrap fee programs generally include programs whereby investment advisory services and brokerage
execution services are provided by a sponsor for a single predetermined "wrap" fee (regardless of the number
of trades completed by the client). VAM currently participates in the following wrap fee programs: RBC
Dain Rauscher Consulting Solutions Program; Wachovia Network Program; Charles Schwab & Co. Managed
Account Program; Credit Suisse USA Preferred Advisors; Edward Jones Managed Account Program; Smith
Barney Access Program; AG. Edwards Select Advisor Program; Prudential MACS Program and UBS Access
Program. Each Program sponsor has retained VAM through a separate advisory contract. Generally, clients
participating in wrap fee programs pay a single all-inclusive fee quarterly in advance to the wrap fee program
sponsor based on net assets under management. Each of the wrap fee program sponsors have prepared a wrap
fee brochure that contains detailed information about the program. Copies of the brochure are available from
VAM upon request. Other terms and conditions of the Programs are included in the various account
agreements available from the wrap fee sponsor. Wrap fee program agreements may generally be terminated
at will upon 30 day advance notice given by VAM or the wrap fee sponsor. Upon termination of a wrap fee
agreement all pre paid unearned fees will be refunded.
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VAM may also participate from time to time in other wrap fee programs with agreements similar to those
described above. Total fees charged by the wrap fee sponsor are described in detail in the brochures
delivered by the sponsor to such clients.
MODEL PORTFOLIOS
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VAM also participates in certain model-based wrap programs, whereby VAM may provide model investment
portfolios to a program sponsor or overlay manager that is ultimately responsible for evaluating the
recommendations, implementing the portfolio and executing transactions. Clients of these programs
generally pay the program sponsor a single all-inclusive fee based on net assets under management. VAM
contracts separately with the program sponsor and/or overlay manager to provide its model portfolios.
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REGISTERED INVESTMENT COMPANIES
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VAM serves as investment adviser to the Tamarack Funds Trust. More information concerning the Tamarack
Funds is available in their prospectuses and statements of additional information.
PRIVATE FUNDS
VAM serves as manager to certain privately offered funds available only to qualified investors. Please
contact VAM for additional information.
VAM also serves as sponsor and investment adviser to a group trust which offers several private investment
funds available only to qualified investors. Please contact VAM for additional information.
2.G
Investment advisory services may also be provided to state and local entities, health and welfare plans,
foundations and endowments.
3.L
VAM may also provide investment advice with respect to mortgage-backed and other asset-backed, fixed-
income securities, commercial mortgages, bank loans, structured notes, derivatives and life insurance
products.
4.B(8)
VAM may use any sources of financial or other information available to it that are believed by VAM to be
relevant in determining the advice which it will render.
5.
VAM generally requires, at minimum, a college degree and preferably an MBA, or other advanced degree, a K
CFA or comparable business experience as its standard of education and business background for those i
employees providing investment advice to clients. ~
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6.
Lee, Michael (born 1963)
Education:
DePauw University, 1985, BA Economics
University of Minnesota Carlson School of Management, 1993, MBA
Chartered Financial Analyst (CFA) 1995
Business Background:
Director, ChiefInvestment Officer, President 2005-Present
Director, Chief Operating Officer, Senior Vice President, Senior Portfolio Manager 2003-2005
Vice President, Equity Portfolio Manager 1996 - 2003
Kermeen, Deborah J. (born 1953)
Education:
College ofSt. Catherine, 1979 BAAccounting and Economics
University of Minnesota, Carlson School of Management, 1991 MBA
Business Background:
Chief Financial Officer; joined VAM in 2004
Accounting Risk and Funding Director, Senior Vice President and Treasurer, RBC Dain Rauscher Inc.;
present
Risk and Regulatory Director, RBC Dain Rauscher Inc.; 2001-2004
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Weast, Linda L. (born 1964)
Education:
Metropolitan State University; pending 2008; BS Business Administration
Duluth Area Technical Institute; 1984; Diploma, Marketing & Management
Business Background:
Chief Administrative Officer; 2006
Director, VAM Systems & Operations; 2000-2006
VP, Systems & Administration; Dougherty Financial Group (VAM's former parent); 1994-2000
Office Manager; joined VAM in 1990
Henderson, Charles F. (born 1940)
Education:
Dartmouth College; 1964; BA History
Business Background:
Senior Managing Director, ChiefInvestment Officer-Equity; joined VAM in 1999
ChiefInvestment Officer; Voyageur Asset Management LLC; 1999-2000
Gorman, Kathleen A. (born 1964)
Education:
Michigan State University; 1987; BA
Business Background:
Chief Compliance Officer; joined VAM in 2006
Director, Asset Management Compliance; American Express Financial Corporation/RiverSource
Investments; 2004-2006
Senior Compliance Officer; U.S. Bancorp Asset Management; 2001-2004
Taft, John G (born 1954)
Education:
Yale University; 1977; BS French/Eng. Lit.
Yale School ofOrganizationlManagement; 1981 M.P.P.M.
Business Background:
CEO & Director; joined VAM in 1999
Huber, John M. (born 1968)
Education:
University of Iowa; 1990 BA
University of Minnesota; MBA Finance
Chartered Financial Analyst
Business Background:
Senior Managing Director, Chief Investment Officer-Fixed Income; joined VAM in 2004
Principal and Senior Portfolio Manager, Galliard Capital Management; 1995-2004
7.A
VAM provides certain administrative services to the Tamarack Funds Trust. VAM may also provide certain
administrative services to other investment advisory firms. In addition, for certain public fund clients for
which VAM acts as investment adviser, VAM may also provide certain administrative and marketing support I
services.
7.C
John Taft, CEO of Voyageur Asset Management Inc. is also the President and CEO of RBC Dain Rauscher
Inc. and spends a majority of his time serving RBC Dain Rauscher Inc. Deb Kermeen, CFO of Voyageur
Asset Management Inc is also the CFO ofRBC Dain Rauscher Inc. and spends a majority of her time serving
RBC Dain Rauscher Inc.
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8.C
VAM is an indirect, wholly-owned subsidiary of Royal Bank of Canada ("RBC"). RBC provides certain
administrative and operational services that may be material to VAM's advisory business.
VAM is an affiliate of RBC Dain Rauscher Inc., a registered broker-dealer. RBC Dain Rauscher Inc.
provides certain administrative and operational services that may be material to VAM's advisory business.
VAM is the investment adviser, and VAM's affiliate, RBC Dain Rauscher Inc., is the distributor and
shareholder account servicing agent, for certain Tamarack Funds Trust money market funds. These
arrangements are described in detail in the Funds' current Prospectuses and Statements of Additional
Information. VAM is also the investment advisor and VAM's affiliate, Tamarack Distributors Inc., is the
distributor for ten funds in the Tamarack Funds Trust.
As discussed under item l.D, above, VAM participates as an investment adviser in the wrap fee program,
Consulting Solutions Program, sponsored by RBC Dain Rauscher Inc., an affiliate ofVAM.
RBC Dain Rauscher Inc. is the placement agent for the Private Funds described in section I.D, above. As
described more fully in section 13.B, below, VAM has entered into solicitation agreements with its affiliates,
RBC Centura Bank and RBC Dain Rauscher Inc., providing that in exchange for referring clients to VAM
each entity may receive, as compensation, a portion of the management fees received by VAM.
9.B
In very limited circumstances, RBC Dain Rauscher Inc. may provide brokerage services to certain VAM
advisory clients pursuant to a written directed brokerage arrangement.
9.D
As more fully discussed in 8.C (above), VAM is the investment adviser, and VAM's affiliates RBC Dain
Rauscher Inc. and Tamarack Distributors Inc. act as distributors and a shareholder account servicing agent
(in the case of RBC Dain Rauscher Inc.) for the Tamarack Funds. VAM and RBC Dain Rauscher Inc. may
from time to time recommend to their clients the purchase of shares of one or more of the Tamarack Funds,
but only to the extent that such securities are suitable for the client. VAM does not charge a client level
advisory fee on those client assets invested in the Tamarack Funds.
In addition, as more fully discussed in 8.C (above), RBC Dain Rauscher Inc. is the placement agent for the
Private Funds.
9.E
VAM manages one proprietary account that may transact in some securities that VAM recommends to clients.
VAM does not engage in cross trades between the proprietary account and client accounts.
VAM has adopted and will maintain and enforce a Code of Ethics which sets forth the standards of conduct
expected of employees and requires compliance with the federal securities laws and VAM's fiduciary duties,
including the duties to put client interests first at all times and to maintain the confidentiality of client
information. The Code also addresses the personal securities trading activities of access persons in an effort
to detect and prevent illegal or improper personal securities transactions and requires initial and annual
holdings reports, quarterly personal securities transaction reports and pre-approval of certain personal
securities transactions. All such reports and requests are reviewed by YAM's Compliance Department.
Finally, the Code provides that all employees are to certify their compliance on an ongoing basis and makes
the Chief Compliance Officer responsible for administering and enforcing the Code and maintaining all
records the Code requires. A copy of the Code is available upon request by writing or calling VAM at the
address or phone number contained on Page 1.
10.
Minimum account sizes generally begin at $10,000,000 for institutional accounts. Generally, a fixed fee may
be assessed for all accounts in which assets are below the minimum account size. From time to time, VAM
may negotiate fees and waive account minimums.
Smaller minimum account sizes generally apply to participants in wrap fee programs discussed under I.D
(above).
The minimum subscriptions for investments in the Private Funds are set forth in the relevant offering
materials. Please contact VAM for additional information related to its Private Funds.
12.
BROKERAGE ARRANGEMENTS
General
The accounts over which VAM exercises investment discretion are generally subject to investment
restrictions and guidelines developed in consultation with clients. These restrictions and guidelines
customarily impose limitations on the types of securities that may be purchased and also generally limit the
percentage of account assets that may be invested in certain types of securities. Additional policies may be
set by a client's board or investment committee. VAM is generally authorized to make the following
determinations, consistent with the each client's investment goals and policies, without client consultation or
consent before a transaction is effected:
· Which securities or other investments to buy or sell;
· The total amount of securities or other investments to buy or sell;
· The broker or dealer through whom securities are bought or sold;
· The commission rates at which securities or other investment transactions for client accounts are
effected; and
· The price at which securities or other investments are to be bought or sold, which may include
dealer spreads or mark-ups and transactions costs.
However, from time to time, VAM may accept accounts for which it has discretionary authority to purchase
securities for the account, but not to select broker-dealers for transactions. See the sections "Directed
Brokerage" and "Wrap Programs" below. VAM may also accept non-discretionary arrangements, where
clients retain investment discretion with respect to transactions in the account. In these situations, the client's
retention of discretion may cause the client to lose possible advantages that discretionary clients may derive
from factors that result from our ability to act on its recommendations for those discretionary clients in a
more timely fashion, such as the aggregation of orders for several clients as a single transaction.
Trading Practices
General
As a fiduciary, VAM has an obligation to seek to obtain the best execution of client transactions under the
circumstances of the particular transaction. VAM seeks to satisfy this best execution obligation by creating
the conditions under which best execution is most likely to occur, i.e., by following procedures designed to
achieve it. YAM's procedures are also designed to address the conflicts of interest that arise as a result of
managing multiple types of accounts, including client accounts, client accounts that pay VAM higher fees
(i.e., performance fees) and accounts owned or controlled by VAM ("proprietary accounts"). VAM monitors
compliance with the trading procedures and has formalized committee oversight of certain trading-related
matters such as compliance, the use of soft dollars and overall best execution.
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Aggregation
VAM provides investment advisory services to many different types of client accounts. Certain portfolio
management decisions may affect more than one account, for example when VAM decides to take an
investment action with respect to all of the accounts YAM manages in a certain style. This results in
multiple trading orders relating to the same security but for different client accounts. In these cases, YAM
may combine or aggregate purchase or sale orders for more than one client when YAM believes such
aggregation is consistent with its duty to seek best execution. This includes aggregating orders involving
both client and proprietary accounts. Such aggregation may be able to reduce commission costs or market
impact on a per-share and per-dollar basis, because larger orders tend to have lower commission costs. The
decision to aggregate is only made after YAM determines that: the aggregation will not result in favoring
any account over another; it does not systematically advantage or disadvantage any account; it does not
receive any additional compensation or remuneration solely as the result of the aggregation; and each
participating account will receive the average share price and will share pro rata in the transaction costs.
However, there may be occasions when clients may pay disparate transaction costs due to minimum charges
per account imposed by either the broker effecting the transaction or the client's custodian. If there is an
open order and a subsequent similar order for the same security for a different account is received by YAM's
trading desk, such subsequent order will generally be aggregated with any remainder of the original order
consistent with the considerations set forth above.
From time to time an aggregated order involving multiple accounts does not receive sufficient securities to
fill all of the accounts. If an aggregated order cannot be filled in one day (a "partial fill"), the executed
portion of the order is allocated to the participating accounts pro rata on the basis of order size, subject to
certain exceptions.
YAM may determine that an order will not be aggregated with other orders for a number of reasons. These
reasons may include: the account's governing documents do not permit aggregation; a client has directed that
trades be executed through a specific broker-dealer; aggregation is impractical because of specific trade
directions received from the portfolio manager, e.g., a limit order; the order involves a different trading
strategy; or if YAM otherwise determines that aggregation is not consistent with seeking best execution.
When YAM determines that multiple orders cannot be aggregated, YAM has adopted procedures that seek to
ensure that client account orders are treated fairly and equitably over time and that client account orders are
executed before proprietary account orders. This includes requiring that multiple client order instructions be
transmitted to the multiple executing brokers at the same time. YAM may use other methods to ensure fair
and equitable treatment over time.
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As a general matter, YAM executes orders in the following sequence: account orders with no trading
limitations or with trading limitations that may be satisfied using step-outs are executed first, followed by
execution of wrap fee program trades and client account orders with trading limitations that cannot be
satisfied with step-outs, such as certain client directed brokerage. For the model portfolio programs in which
YAM participates, changes to model portfolios are sent to overlay managers or program sponsors after all
other trading is completed.
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From time to time an aggregated order involving multiple accounts does not receive sufficient securities to
fill all of the accounts. If an aggregated order cannot be filled in one day (a "partial fill"), the executed
portion of the order is automatically allocated to the participating accounts pro rata on the basis of order size,
subject to certain exceptions. Partial fills that are small odd lots will either be fully-filled or excluded on that
day pursuant to an automated formula applied by our trading system. If this method does not address a
particular circumstance or would produce an inappropriate result, another fair and reasonable method may be
used. Partial fills that include both client accounts and affiliated accounts will be allocated to the client
accounts first. Only after client accounts are filled will the remainder of the partial fill be allocated pro rata
to the affiliated accounts.
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For fixed income clients, YAM is committed to ensuring that client account orders are treated fairly and
equitably over time. YAM recognizes that certain types of securities may be better suited for particular
accounts given each account's benchmarks and/or investment restrictions. In allocating orders to fixed
income clients, YAM first determines that the securities are consistent with guidelines and a particular style
of account. YAM then addresses specific account needs, which generally includes, among other factors, a
review of portfolio duration, sector allocation, security characteristics, cash positions and typical size of
positions within the ac count.
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YAM manages a number of small municipal bond portfolios, and many of the issues purchased are also
small. It is often impractical to allocate a bond purchase across all eligible accounts as block sizes are often
too small. In most instances, it is possible for the portfolio manager to prioritize the allocation of a bond
among accounts in order to meet "the best fit and need." Factors considered in such prioritization include:
specific needs, amount of cash available, state specific needs, amount of portfolio in similar types of credits,
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current maturity structure of portfolio, and whether the account was allocated bonds in recent purchases. It is
YAM's policy to allocate various purchases over time in a manner that is fair to all clients.
OTC
From time to time, YAM places over-the-counter ("OTC") transactions with a broker, which executes the
trade as agent, rather than as a market-maker in the security. YAM will retain a broker on an OTC trade
when YAM cannot trade directly with a market-maker or if it is justified under the circumstances and will
result in the best price on the trade. To make this determination, YAM will contact several sources, including
a market-maker, for price quotations to determine if the broker's price really is the most favorable under the
circumstances. Under no circumstances does YAM "interposition" a broker in such trades for the purpose of
generating a commission for such broker.
Cross Transactions
From time to time, YAM may effect cross transactions between advisory clients that are not employee benefit
plans governed by ERISA or proprietary accounts. YAM will not receive any compensation for effecting a
transaction between advisory clients. The desire to liquidate, change asset allocation, or otherwise raise cash
in a client account may necessitate selling a security that is attractive to another client account. In order to
facilitate the sale of the security, YAM may arrange with a third party broker for one of YAM's client
accounts to sell the security and one or more of YAM's client accounts to purchase the security. Such cross
transactions will be effected only if, in YAM's judgment, the transaction is beneficial to both the client
account(s) selling the security and the client account(s) purchasing the security. The ability to effect a cross
transaction between client accounts may be a conflict of interest for YAM and present a conflicting division
of loyalty because it provides YAM with an opportunity to advantage one client over another. Any cross
transactions involving the Tamarack Funds are subject to Funds' 17a-7 procedures.
Limited Availability Offerings
With respect to initial public offerings, other new issues and private placements, YAM generally does not
invest client accounts in such securities. To the extent that it does, YAM ensures that all eligible accounts are
treated fairly and equitably by requiring the trade order to be placed before the offering prices and all
participating accounts must be indicated. In determining whether a client account is eligible to participate,
YAM generally considers, among other things, a client's investment objectives, restrictions and tax
circumstances; a client's tolerance for risk and high portfolio turnover; the nature, size and investment merits
of the limited offering; the size of a client's account and the client's cash availability and other holdings; and
other current or expected competing investment opportunities that may be available for the account. If the
allocation received is less than that requested (which is often the case), the securities received will be
allocated pro rata based on the amount initially requested for each account, subject to any adjustments
necessary to avoid odd lots. YAM does not permit affiliated accounts to participate in initial public offerings
or other new issues.
Trade Errors
On occasion, a mistake may occur in the execution of a trade. As a fiduciary, YAM owes clients duties of
loyalty and trust, and as such must treat trade errors in a fair and equitable manner. Errors may occur for a
number of reasons, including human input error, systems error, communications error or incorrect application
or understanding of a guideline or restriction. Examples of errors include, but are not limited to the
following: buying securities not authorized for a client's account; buying or selling incorrect securities;
buying or selling incorrect amounts of securities; and buying or selling in violation of one of our policies. In
correcting trade errors, YAM does not: make the client account absorb the financial loss due to the trade
error; use soft dollars or directed trades to fix the error; or attempt to fix the error using another client
account. To the extent correction of the error unfavorably impacts the client's account, YAM reimburses the
account. To the extent correction of the error favorably impacts the client's account, YAM allows the client
to keep the benefit.
Selection of Brokers
General
It is YAM's policy to seek the best execution of client security orders at the best security price available with
respect to each transaction, in light of the overall quality of brokerage and research services provided to it or
its clients. The best price means the best net price without regard to the mix between purchase or sales price
and commissions.
YAM maintains an approved list of broker-dealers. For trading in equity securities, YAM's Trading and
Compliance Committee is responsible for the initial approval of the broker-dealers on the approved list. Such
approval process involves the review of financial statements and the regulatory history of the firm. In
deciding to add a broker to the approved list a determination of relevant factors is made which includes such
items as the broker's ability to provide best execution in the types of securities traded, to accomplish defined
client directives for use of minority and women owned brokerage firms, general reputation and trade desk
opinion of the firm.
For trading in fixed income securities, YAM's Fixed Income Committee is responsible for the initial review
and approval of the broker-dealers on the approved list. In deciding to add a broker to the approved list the
Fixed Income Committee will consider the following factors: best execution capabilities, investment ideas,
research capabilities, accessibility of trading personnel, financial stability and the regulatory history of the
firm.
With respect to a specific order, VAM seeks to choose the broker most capable of providing the brokerage
services necessary in seeking to obtain the best available price and most favorable execution. VAM notes the
particular characteristics of a security to be traded including relevant market factors. VAM will also consider
other factors such as: ability to minimize trading costs; level of trading expertise; infrastructure; ability to
provide information or services; financial condition; confidentiality provided by broker-dealer;
competitiveness of commission rates; evaluations of execution quality; promptness of execution; past history;
ability to prospect for and find liquidity; difficulty of trade and security's trading characteristics; size of
order; liquidity of market; block trading capabilities quality of settlements; specialized expertise; overall
responsiveness; and willingness to commit capital. All of these considerations (and others as relevant) guide
VAM in selecting the appropriate venue (e.g., an Electronic Communications Network ("ECN") or
Alternative Trading System ("ATS"), a traditional broker, a crossing network, etc.) in which to place an order
and the proper tactics with which to trade.
· the direction may result in higher commissions, greater spreads or less favorable net prices than
would be the case ifVAM selected the brokers;
· the direction may result in trades for the client's account not being aggregated with similar trades
for other client accounts and thus not eligible for the benefits that accrue to such aggregation of
orders;
· that as a result of not being aggregated, client transactions will generally be executed after client
accounts whose trades are aggregated and may receive less favorable prices; and
· that because of the direction the client's account may not generate returns equal to those of other
client accounts which do not direct brokerage.
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In selecting a broker, VAM may also consider research or brokerage services provided by the broker-dealer,
consistent with the requirements of Section 28( e) of the Securities Exchange Act and related interpretative
guidance. More information on YAM's client commission policies and procedures is contained in the section
"Use of Client Commissions" below.
Under no circumstances does VAM consider the marketing efforts of broker-dealers on behalf of the funds
for which VAM serves as investment adviser in selecting broker-dealers to execute trades. Such marketing
efforts include the sales of mutual funds VAM advises, the inclusion of our products on a broker-dealer's
wrap program platform (other than to the extent such program requires VAM to trade with such broker-
dealer), and referrals of clients or prospects. This prohibition is not intended to prevent trading with broker-
dealers that make marketing efforts on behalf of the funds; it simply prevents such efforts from being taken
into consideration when selecting broker-dealers with which to place trades.
Client Direction
Another factor VAM may consider in selecting broker-dealers is whether a client has directed VAM in writing
to execute a portion of the client's trades through a particular broker-dealer. Typically, the client has an
arrangement with such broker-dealer which results in the client receiving some benefit from the broker-dealer
in exchange for the directed brokerage. Although VAM generally discourages such direction, VAM does
permit client direction in certain circumstances, ensuring that clients are apprised of the potential risks
associated with directed brokerage. These include:
Similarly, in the case of client accounts that are custodied at broker-dealers, VAM may have discretion to
select brokers or dealers other than the custodians when necessary to fulfill its duty to seek best execution of
transactions for clients' accounts. However, brokerage commissions and other charges for transactions not
effected through the custodian may be charged to the client. For this reason, it is likely that most, if not all,
transactions for such clients will be effected through the broker custodian.
VAM may, on occasion, instruct the executing broker to credit a portion of a block trade to another broker, a
common practice known as a step out. Generally, this may occur when numerous allocations are blocked into
one single trade order, whereas one or more of the clients participating in the block may have placed trade
direction to one or more brokers other than the executing broker. A step out, in this case, allows YAM's
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traders to block a trade order where all participating allocations receive the same price and facilitates specific
client direction to trade with a specified broker(s). No client is disadvantaged by means of a step out.
Wrap Programs
Another factor in the selection of broker-dealers is whether the client account is part of a wrap program. As
disclosed elsewhere, VAM has been retained as an investment manager in a number of wrap fee programs.
Under most wrap programs, clients are not charged separate commissions or other transaction costs on each
trade so long as the wrap sponsor (or its broker-dealer affiliate) executes the trade. A portion of the wrap fee
generally is considered as in lieu of commissions or other transaction costs. Where permitted by wrap
program terms, VAM may execute a transaction through a broker-dealer other than the wrap program sponsor
where VAM believes that such trade would result in the best price and execution under the circumstances.
However, in most situations trades will be executed with the introducing wrap program sponsor (or its
broker-dealer affiliate) so as to avoid incurring brokerage costs or other transaction costs in addition to the
wrap fee by using other broker-dealers.
In wrap programs where VAM is directed to use the wrap sponsor or its affiliate as broker-dealer, VAM may
be unable, under those circumstances, to obtain volume discounts, best price or best execution. Although it
has been the experience of YAM's professionals that the broker-dealers to which VAM is required to direct
transactions under a wrap program generally can offer best execution under the circumstances, no assurance
can be given that such will continue to be the case in the future. VAM clients in wrap programs will generally
have their transactions executed after other VAM clients and in conjunction with other non-wrap clients that
have directed brokerage. Thus, the considerations set forth in the section "Client Direction" also apply to
wrap program clients. Depending upon the level of the wrap fee charged by a wrap sponsor, the amount of ,
portfolio activity in a client's account, the value of the custodial and other services that are provided under a
wrap arrangement and other factors, a wrap client should consider whether the wrap fee would exceed the
aggregate cost of such services if they were to be provided separately and if VAM were free to negotiate
commissions. Program clients should review all materials available from a third party sponsor concerning
the program, the sponsor and the program's terms, conditions and fees.
Use of Client Commissions
Subject to the criteria of Section 28( e) of the Securities Exchange Act of 1934, as amended, and regulatory
guidance from the SEC, VAM may pay a broker a brokerage commission higher than that which another
broker might have charged for effecting the same transaction in recognition of the value of the brokerage and
research services provided by the broker. In other words, VAM may use client commissions or "soft dollars"
to obtain research or brokerage services that benefit VAM and its client accounts. Because the use of client
commissions to pay for research or brokerage services for which VAM would otherwise have to pay presents
a conflict of interest, VAM has adopted policies and procedures concerning soft dollars, which address all
aspects of its use of client commissions and require that such use be consistent with Section 28(e), provide
lawful and appropriate assistance in the investment decision-making process, and that VAM determine that
the value of the research or brokerage service obtained be reasonable in relation to the commissions paid.
VAM may use client commissions to pay for research prepared by broker-dealers who execute client
transactions ("proprietary research"), research prepared by third parties but for which executing broker-
dealers are obligated to pay ("third-party research") and certain other research or brokerage services.
Research services provided by brokers may include information on the economy, industries, groups of
securities, individual companies, technical market information, risk measurement analyses, performance
analyses and analyses of corporate responsibility issues. Such research services may be received in the form
of written reports, telephone contacts and personal meetings with securities analysts. In addition, such
research services may be provided in the form of access to various types of computer-generated data,
meetings arranged with corporate and industry spokespersons, economists, academicians and government
representatives. VAM currently receives the following research services: FactSet, Columbine, Call Street,
Stock Val, RKIM (Multex), Russell, Wonda, and Value Line.
VAM also currently receives certain brokerage services from Charles River Investment Management System
and utilizes Able Noser's trade execution analysis service.
>")
It is possible that research services received for a particular order will not inure to the direct benefit of the
client for which an order is placed. VAM has concluded, however, that the aggregate benefits received from
all orders will benefit all of its clients. VAM reviews all such research and brokerage services annually to
determine the reasonableness of the brokerage allocation and/or price for such services. Receipt of products
or services other than brokerage or research is not a factor in allocating brokerage..
Where VAM receives both administrative benefits and research and brokerage services from the services
provided by brokers, a good faith allocation between the administrative benefits and the research and
brokerage services will be made, and VAM will pay for any administrative benefits with cash. In making
good faith allocations between administrative benefits and research and brokerage services, a conflict of
interest may exist by reason of the allocation by VAM of the costs of such benefits and services between
those that primarily benefit VAM and those that primarily benefit clients. VAM documents and retains these
"mixed-use" allocations.
VAM may enter into informal arrangements with various brokers whereby, in consideration for providing
research services and subject to Section 28(e), VAM will allocate brokerage to those firms, provided that the
value of any research and brokerage services is reasonable in relation to the amount of commission paid and
subject to best execution. In no case will VAM make binding commitments as to the level of the brokerage
commissions it will allocate to a broker. Nor does VAM "backstop" or otherwise guarantee any broker's
financial obligation to a third party for such research or services.
The Trading Compliance and Policy Committee periodically reviews YAM's soft dollar arrangements to
ensure that soft dollar commissions are priced at competitive levels, that VAM continues to seek best
execution, and the brokerage and research services being paid for with soft dollars continue to be used to
directly assist VAM in its investment decision-making process.
13.B.
From time to time, VAM may engage solicitors to whom it may pay a retainer and/or a portion of the
advisory fees paid by clients referred to it by those solicitors. In such cases, this practice is disclosed in
writing to the client and VAM complies with the other requirements of Rule 206(4)-3 under the Investment
Advisers Act of 1940, as amended, to the extent required by applicable law. These requirements impose an
obligation on non-affiliated solicitors to provide a separate disclosure document to potential clients
describing, among other things, the nature of the solicitation arrangement and the terms ofVAM's
compensation arrangement with the solicitor. Such disclosure document must be signed by the client before
VAM pays the solicitor. Client fees are not increased as a result of any referral fees.
VAM also has arrangements with certain of its employees and affiliates concerning cash compensation for
soliciting potential clients. VAM requires each of these parties to disclose their relationship to VAM at the
time of solicitation.
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Proxy Voting
Many of Voyageur's clients have granted it discretion to vote proxies on their behalf. In order to assist it in
exercising that discretion, Voyageur has adopted a Proxy Voting Policy and has retained Taft-Hartley
Research Services (T-HRS), a division of Institutional Shareholder Services Inc. (ISS Inc.), to act as its
primary provider of proxy research and voting recommendations.
Voyageur has satisfied itself that T-HRS' analysis of proxy issues and the matters it takes into consideration
in making voting recommendations are consistent with Voyageur's belief that proxies should be voted in
shareholders' long-term interests.
Voyageur has also satisfied itself that T-HRS has implemented adequate policies and procedures, including
information barriers, to ensure that its staff involved III the preparation of proxy research and
recommendations are independent of the clients for whom its sister division, ISS Corporate Services,
provides corporate governance advice and services and can make recommendations for voting proxies in an
impartial manner and in the best interests of Voyageur's clients.
The engagement ofT-HRS is not intended to be a delegation of Voyageur's proxy voting responsibilities and
does not relieve Voyageur of its fiduciary obligations to clients with respect to the voting of proxies.
Accordingly, Voyageur retains the right to vote clients' proxies in a manner that is different from what T-HRS
recommends, where Voyageur believes that to do so would be in the client's best interests and is not contrary
to the terms of the investment management agreement.
Voyageur has established a Proxy Committee which is responsible for establishing, monitoring and reviewing
Voyageur's policies and guidelines with respect proxy voting, but which does not generally consider the
manner in which specific proxies are or have been voted. The Proxy Committee is responsible for providing
oversight of the relationship with T-HRS.
Clients may choose to engage a proxy-voting and research service other than T-HRS. If a client engages one
of ISS Inc.'s other divisions as its proxy-voting research provider, Voyageur will ensure that clients' securities
are voted as recommended by the research service, but will exercise no discretion to vote differently than
recommended. Voyageur and the Proxy Committee will perform no oversight function with respect to any
other proxy-voting and research service.
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Complete amended pages in full, circle amended items and file with execution page (page 1).
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FORM ADV
Part II - Pa e 1
Uniform Application for Investment Adviser Registration
Name ofInvestment Adviser:
Polaris Capital Management, Inc.
Address:
(Number and Street)
(City)
(State) (Zip Code)
Area Code:
Telephone Number:
125 Summer Street, 14th Floor
Boston
'MA
02110
(617 )
951-1365
This part of Form ADV gives information about the investment adviser and its business for the use of clients.
The information has not been approved or verified by any governmental authority.
Table of Contents
Item Number Item
~
Advisory Services and Fees ....................... ........... ...... ........................... ........... ...... ...................... ........... ....... 2
2
Types of Clients. ..... ............................ ...... ........... ................ ...... ...... ..... ........... ....................... .... ..... .. ...... ........ 2
3
Types of Investments. ................. ............................ ..... ............................ ........... ...... ................. ..... ......... ..... ... 3
4
Methods of Analysis, Sources ofInformation and Investment Strategies ..................................................... 3
5
Education and Business Standards ..................................................................................................................4
6
Education and Business Background ..... ........... ............ ..... ...... ................ ........... ...... ................. ........... .......... 4
7
Other Business Activities.................................................................................................................... ............ 4
8
Other Financial Industry Activities or Affiliations .........................................................................................4
9
Participation or Interest in Client Transactions .............................................................................................. 5
10
Conditions for Managing Accounts .... ................ ...... ...................... ...... ........... ........... ................. ........... ..... ... 5
11
Review of Accounts .................................................................................................... .................................... 5
12
Investment or Brokerage Discretion .. ........... ........... ...... ...................... ..... ............ ...................... ................ .... 6
13
Additional Compensation........................................................................................................................ ........ 6
14
Balance Sheet ................................................................................................................................... ............... 6
Continuation Sheet .......................................................................................................................... Schedule F
Balance Sheet, if required .............................................................................................................. Schedule G
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(Schedules A, B, C, D, and E are included with Part I of this Form, for the use of regulatory bodies, and are not distributed to clients.)
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Potential persons who are to respond to the collection of information contained in this form
are not required to respond unless the form displays a currently valid OMB control number.
FORM ADV
Part II - Pa e 2
Applicant: SEC File Number:
,Polaris Capital Management, Inc. 801_43216
Date:
,03-27-2006:
1. A. Advisory Services and Fees. (check the applicable boxes)
For each type of service provided, state the approximate
% of total advisory billings from that service.
(See instruction below.)
Applicant:
0 (I)
0 (2)
0 (3)
0 (4)
0 (5)
0 (6)
0 (7)
D (8)
0 (9)
Provides investment supervisory services
100 %
%
%
~'O
%.
%
- - 0/0
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Manages investment advisory accounts not involving investment supervisory services
Furnishes investment advice through consultations not included in either service described above
Issues periodicals about securities by subscription
Issues special reports about securities not included in any service described above ...
Issues, not as part of any service described above, any charts, graphs, formulas, or other devices which clients may
use to evaluate securities ......... ................................................................................... ........ .......... ........ .....................
On more than an occasional basis, furnishes advice to clients on matters not involving securities
Provides a timing service ...
Furnishes advice about securities in any manner not described above
(Percentages should be based on applicant's last fiscal year. If applicant has not completed its first fiscal year,
provide estimates of advisory billings for that year and state that the percentages are estimates.)
B
Does applicant call any of the services it checked above financial planning or some similar term?
Yes No
...00
C
Applicant offers investment advisory services for: (check all that apply)
o
o
o
(I) A percentage of assets under management
(2) Hourly charges
(3) Fixed fees (not including subscription fees)
o (4) Subscription fees
o (5) Commissions
o (6) Other
D. For each checked box in A above, describe on Schedule F:
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the services provided, including the name of any publication or report issued by the adviser on a subscription basis or for a fee
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. applicant's basic fee schedule, how fees are charged and whether its fees are negotiable
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. when compensation is payable, and if compensation is payable before service is provided, how a client may get a refund or may
terminate an investment advisory contract before its expiration date
2.
Types of clients - Applicant generally provides investment advice to: (check those that apply)
0 A. Individuals IZI E. Trusts, estates, or charitable organizations
0 B. Banks or thrift institutions 0 F. Corporations or business entities other than those listed above
0 C. Investment companies 0 G. Other (describe on Schedule F)
0 D. Pension and profit sharing plans
Answer all items. Complete amended pages in full, circle amended items and file with execution page (page 1).
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Applicant: '."_~__H~_"~~__._' ___
,Polaris C?P.ital M_~r1c:lgelllent,lrlc.!
SEC File Number:
80lj43216
Date:
,03-27 -2006.
3. Types of Investments. Applicant offers advice on the following: (check those that apply)
A Equity securities IZI H. United States government securities
12] (I) exchange-listed securities I. Options contracts on:
~ (2) securities traded over-the-counter
(3) foreign issuers ~ (I) securities
(2) commodities
12] R Warrants ], Futures contracts on:
0 C Corporate debt securities (other than commercial paper) 0 (I) tangibles
0 (2) intangibles
IZl D, Commercial paper
IZl E. Certificates of deposit K, Interests in partnerships investing in:
0 F, Municipal securities ~ (I) real estate
(2) oil and gas interests
G, Investment company securities: (3) other (explain on Schedule F)
0 (I) variable life insurance
@ (2) variable annuities 0 L Other (explain on Schedule F)
(3) mutual fund shares
4, Methods of Analysis, Sources of Information, and Investment Strategies.
A, Applicant's security analysis methods include: (check those that apply)
(I) D Charting (4) IZl Cyclical
(2) IZl Fundamental (5) 12] Other (explain on Schedule F)
(3) D Technical
R The main sources of information applicant uses include: (check those that apply)
(I) 0 Financial newspapers and magazines (5) D Timing services
(2) IZl Inspections of corporate activities (6) IZI Annual reports, prospectuses, filings with the
Securities and Exchange Commission
(3) IZl Research materials prepared by others
(7) IZI Company press releases
(4) IZl Corporate rating services
(8) IZl Other (explain on Schedule F)
C, The investment strategies used to implement any investment advice given to clients include: (check those that apply)
(I) IZl Long term purchases (5) 0 Margin transactions
(securities held at least a year)
(2) 0 Short term purchases (6) 0 Option writing, including covered options, uncovered
(securities sold within a year) options, or spreading strategies
(3) IZl Trading (securities sold within 30 days) (7) 0 Other (explain on Schedule F)
(4) 0 Short sales
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Answer all items. Complete amended pages in full, circle amended items and file with execution page (page 1).
Applicant: 'c..~_~
:Eplaris _g9:pltCiI Management, Inc.
SEC File Number:
801- 43216
Dat~:
03-27 -2006
'c.
5. Education and Business Standards.
Are there any general standards of education or business experience that applicant requires of those involved in determining
or giving investment advice to clients? HHH'HH.'.H HHHHHHHH'HHHHHH'HHH'H'HH'H HHH'H'H 'HH"HHHH' HH' H'HH 'HH'HHC. HHHHHHHH'H'HHHH
(If yes, describe these standards on Schedule F.)
Yes No
HH IZI D
6. Education and Business Background.
For:
. each member of the investment committee or group that determines general investment advice to be given to clients, or
. if the applicant has no investment committee or group, each individual who determines general investment advice given to clients
(if more than five, respond only for their supervisors)
. each principal executive officer of applicant or each person with similar status or performing similar functions.
On Schedule F, give the:
.
name
.
formal education after high school
business background for the preceding five years
year of birth
7. Other Business Activities. (check those that apply)
.
.
o A- Applicant is actively engaged in a business other than giving investment advice.
o B. Applicant sells products or services other than investment advice to clients.
o C. The principal business of applicant or its principal executive officers involves something other than providing investment advice.
(For each checked box describe the other activities, including the time spent on them, on Schedule F.)
.
.
.
.
8. Other Financial Industry Activities or AffIliations. (check those that apply)
.'
D A-
D B.
Applicant is registered (or has an application pending) as a securities broker-dealer.
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Applicant is registered (or has an application pending) as a futures commission merchant, commodity pool operator or commodity
trading adviser.
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C. Applicant has arrangements that are material to its advisory business or its clients with a related person who is a:
t,
D (I) broker-dealer D (7) accounting firm
D (2) investment company D (8) law firm
0 (3) other investment adviser D (9) insurance company or agency
0 (4) financial planning firm D (10) pension consultant
D (5) commodity pool operator, commodity trading D (II) real estate broker or dealer
adviser or futures commission merchant
0 (6) banking or thrift institution D (12) entity that creates or packages limited partnerships
(For each checked box in C, on Schedule F identify the related person and describe the relationship and the arrangements.)
.'
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Answer all items. Complete amended pages in full, circle amended items and file with execution page (page 1).
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Yes No
D. Is applicant or a related person a general partner in any partnership in which clients are solicited to invest? HHC.HHHHHHHHCHHHHHH.lZl D
(If yes, describe on Schedule F the partnerships and what they invest in.)
FORM ADV
Part II - Page 5
Applicant:,.,,_, _"""."."~~""'~"'~~'."_""""'" ,'"
lPoICi~i,~ CCipitCi! tv1ar1.Cig.~m.e.n.t,.J.r1~~j
D!lt!'~
!Q3.:?~:?'Q.Q(3,
9. Participation or Interest in Client Transactions.
Applicant or a related person: (check those that apply)
As principal, buys securities for itself from or sells securities it owns to any client
D
D
o
A.
B.
e,
As broker or agent effects securities transactions for compensation for any client
As broker or agent for any person other than a client effects transactions in which client securities are sold to or bought from a
brokerage customer.
o
D,
Recommends to clients that they buy or sell securities or investment products in which the applicant or a related person has some
financial interest
o
E.
Buys or sells for itself securities that it also recommends to clients.
(For each box checked, describe on Schedule F when the applicant or a related person engages in these transactions and
what restrictions, internal procedures, or disclosures are used for conflicts of interest in those transactions.)
10.
Conditions for Managing Accounts. Does the applicant provide investment supervisory services, manage investment advisory
accounts or hold itself out as providing financial planning or some similarly termed services and impose a minimum dollar value of
assets or other conditions for starting or maintaining an account? . ..... .. ................................ ........ .......... .... ........... . ...... ...
Yes No
..0 D
(If yes, describe on Schedule F.)
11. Review of Accounts. If applicant provides investment supervisory services, manages investment advisory accounts, or holds itself
out as providing financial planning or some similarly termed services:
\
A. Describe below the reviews and reviewers of the accounts. For reviews, include their frequency, different levels, and triggering factors.
For reviewers, include the number of reviewers, their titles and functions, instructions they receive from applicant on performing reviews,
and number of accounts assigned each.
As a general matter, with respect to Polaris Global Value Fund, Quant Foreign Value Fund, and Freedom International Fund, each
account is reviewed by Bernard R. Horn Jr., as portfolio manager, on a daily basis. Matters that are reviewed include but are not
limited to, current market activity, macro and micro economic outlooks, review and analysis of individual issues, portfolio composition,
and portfolio comparisons.
As a general matter, all accounts (including but not limited to the above) are reviewed by Bernard R. Horn, Jr. as portfolio manager, on
a monthly basis. The reviews focus on each accounts portfolio composition and performance relative to a model portfolio and on its
composition and performance relative to the client's objectives.
B. Describe below the nature and frequency of regular reports to clients on their accounts.
See Schedule F
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Answer all items. Complete amended pages in full, circle amended items and file with execution page (page 1).
SEe File NUll!ber:
: F>.~I?~1~.9(3J>i.t.ClI.Manag~rT1~~!.'_~IEI~.) 801. 1432..~~.
D!l.!~:
!03-27-2006;
12. Investment or Brokerage Discretion.
A. Does applicant or any related person have authority to determine, without obtaining specific client consent, the:
Yes No
(I) securities to be bought or sold? ..................................................................... ............ ....................................... ............. ............. 0 0
Yes No
..00
(2)
amount of the securities to be bought or sold?
(3)
broker or dealer to be used?
Yes No
................................00
(4)
commission rates paid?
Yes No
............................00
B.
Does applicant or a related person suggest brokers to clients?
Yes No
00
For each yes answer to A describe on Schedule F any limitations on the authority. For each yes to A(3), A(4) or S, describe on
Schedule F the factors considered in selecting brokers and determining the reasonableness of their commissions. If the value
of products, research and services given to the applicant or a related person is a factor, describe:
Has applicant provided a Schedule G balance sheet?
Yes No
..............00
C
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the products, research and services
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whether clients may pay commissions higher than those obtainable from other brokers in return for those products and
services
.
whether research is used to service all of applicant's accounts or just those accounts paying for it; and
.
any procedures the applicant used during the last fiscal year to direct client transactions to a particular broker in return for
products and research services received.
13. Additional Compensation.
Does the applicant or a related person have any arrangements, oral or in writing, where it:
A. is paid cash by or receives some economic benefit (including commissions, equipment or non-research services) Yes No
from a non-client in connection with giving advice to clients? .............................................................................................................. 0 0
B.
directly or indirectly compensates any person for client referrals?
Yes No
...........................00
(For each yes, describe the arrangements on Schedule F.)
14. Balance Sheet. Applicant must provide a balance sheet for the most recent fiscal year on Schedule G if applicant:
. has custody of client funds or securities; or
. requires prepayment of more than $500 in fees per client and 6 or more months in advance
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Schedule F of
Form ADV MPlic.a.1!i: ....~ ... .... SEe FileJ~~)!!l1ber:
Continuation Sheet for Form ADV Part II lpo.~~riS Capital Man~g:ment, Inc. 801- :43216
(Do not use this Schedule as a continuation sheet for Form ADV Part I or any other schedules.)
I. Full rame.of applicant exactly as stated in Item lA ofPart.J.of Form AOV'
Polaris Capital Management, Inc.
Item of Form I
(identify)
.IIRS Empl.ldent. NQ,:
I
Item 1D-
Advisory Services and Fees
Item 3K -
Types of Investments
Item 4A(5)-
Methods of Anaylsis, Sources
of Information, and Investmer
Stategies
I:
,Item 4B(8) -
,Item 5 - Education and
Business Standards
Item 6 - Education and
Business Background
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Answer
Applicant provides discretionary portfolio management for individuals, banks and thrift institutions, investment
companies, pension and profit sharing plans, trusts, estates, and charitable organizations. The particular investmenl
iadvice fumished to a client varies with that clients's objectives and other preferences; however, it generally consist
,of investment research and portfolio management, including the selection of securities for the account of the client
'and the selection of brokers through which transactions on behalf of the client's accounts are executed. For its
,services, Applicant receives an advisory fee that is payable monthly or quarterly in arrears at the annual rate of 1.0 Yo
of the market value of the account. Fees are however negotiated separately with each client based on services
provided (and size of account) and range from 0.35% to 1.0% of the account. Account minimum of $25 million.
'Applicant serves as investment advisor to Polaris Global Value Fund, a separate series of an investment company
. registered under the Investment Company Act of 1940, as amended (the "1940" Act). The advisory agreement ma
be terminable upon 60 days written notice by either party.
'Applicant serves as investment advisor to Quant Foreign Value Fund, a separate series of an investment company
,registered under the 1940 Act. The advisory agreement may be terminable upon 60 days written notice by either
party.
, . Applicant serves as investment advisor to Freedom International Fund, a common trust fund. The advisory
! lagreement may be terminable upon 60 days written notice by either party.
,Applicant serves as investment advisor to individuals, banks and thrift institutions, pension and profit sharing plans
, 'trusts, estates, and charitable organizations that are clients in its investment management program. In the event
that the client relationship is terminated, fees are prorated for the current quarter.
In the instance where mutual fund shares are purchased for and held in a client account, the client will be paying tv 0
management fees, one to the Applicant and one to the Mutual Fund Adviser.
Please refer to 8(D) below.
In a typical monthly investment cycle, Applicant applies a three-step process to identify companies with the most
undervalued streams of sustainable cash flow. As the first step, Applicant analyzes country and industry data to
produce a ranking of country and industry value sectors. This ranking is achieved by evaluating the interaction of
cash flow, inflation, and interest rates, utilizing a proprietory investment model developed by Applicant. As the
second step, using traditional valuation criteria, Applicant regularly screens its database of more than 24,000 globa
companies to produce a list of approximately 500 companies that appear to have the greatest potential for
undervalued streams of sustainable cash flow. As the third step, with the ranking of country and industry value
sectors identified, Applicant conducts rigorous fundamental research on the companies identified through the
investment process. This includes an assessment of management quality and competitive advantage and often
includes direct contact with the company prior to the initial investment. Subsequent contact is made when
necessary.
The applicant also uses the following information and services; computerized information compiled by others;
reports and filings of foreign issuers; information collected, prepared and processed by the applicant.
All individuals that render investment advisory services on behalf of the Company must have earned a BA or
higher education and have a minimum of 10 years of investment-related experience.
1. Bernard R. Horn, Jr., b. 01-04-1955
Education: Northeastern University 1978, BS Business Admin./Finance
Alfred P. Sloan School of Management, M.I.T. 1980, SM Management/Finance
Recent Business Background: Polaris Capital Management, Inc., President 04/95 - Present
MDT Advisers, Inc., Investment Officer 09/92-03/95
2. Edward E. Wendell, Jr., b. 10-26-1940
Education: Harvard College 1963, BA Math
University of Washington 1966, MA Math
Recent Business Background: Polaris Capital Management, Inc., Treasurer 05/98-Present
Boston Investor Services, Inc., President 02/93-Present
Boston Overseas Advisers, LLC, Principal 08/03-Present
Summit Intemationallnvestments, Inc., Director 01/96-Present
Complete amended pages in full, circle amended items and file with execution page (page 1).
2 for Form ADV Part II
Do not use this Schedule as a continuation sheet for Form ADV Part I or an
1. Full name of apP!icantexactly as stated in Item 1A of Part I of Form ADV:
Polaris Capital Management, Inc.
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Item of Form
identi
SCHEDULE F of
FORM ADV
Continuation Sheet
8C(3) - Other Financial
Industry Activities or
Affiliations
8D
10
9D,E - Participation or
Interest in Client
Transactions
10 - Conditions for
Managing Accounts
11B-
Review of Accounts
Applicant:
Polaris Capital Management, Inc.
Date:
03-27 -2006
Answer
Polaris Capital Management, Inc. receives administrative research, sales and marketing support from Boston Investor
services, Inc. Edward E. Wendell, Jr., President of Boston Investor Services, Inc. is also treasurer of Polaris Capital
Management, Inc.
Polaris Capital Management, Inc. is general partner of Thrift Investors Limited Partnership, a Massachusetts limited
partnership. The Partnership was formed to invest in a portfolio of common stocks of federal or stare chartered thrift
institutions which are or have converted from the "mutual" to "stock" form of ownership. To achieve its objectives, the
partnership opens savings accounts that entitle the partnership to participate in the subscriptions offering when the institution
converts. Partnership funds not used for bank accounts or purchasing stock upon the conversion of mutual institutions, are
invested in stock thrift institutions trading in the secondary market.
The applicant may recommend, purchase, or sell on behalf of clients, securities in which the applicant has a position or
interest. Employees of Polaris Capital Management, Inc. will not execute a transaction on their own behalf which would: result
in purchases or sales which compete with orders placed on behalf of clients; be for the purpose of or result in transactions
which benefit from recent, imminent or contemplated trades of clients; or take place surrounding a client open market
transaction until the effects of the client open market transaction have dissipated. All employees of Polaris Capital
Management, Inc. comply with the trading policy stated in the Code of Ethics. Please see Additional Information for details on
The Code of Ethics.
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The minimum account size for Polaris Capital Management, Inc. is $10 Million. The minimum may be waived based on
factors such as the number of related accounts controlled by the same persons, the expected growth of the accounts and the
investment objectives.
Applicant prepares (or causes to be prepared) and delivers reports on a quarteriy basis to Investment Management Program
clients and to partners in Thrift investors Limited Partnership. The quarterly reports contain: Cover Letter; Performance
History by Asset Class, Portfolio Appraisal, Statement of Dividends, Interest and Expenses, and Statement of Realized
Capital Gains an d Losses. Limited Partners also receive annual audited financial statements prepared in accordance with
generally accepted accounting principles.
With respect to Polaris Global Value Fund, to which Applicant serves as investment adviser, Applicant causes to be provided
more detailed information so that Fund directors may satisfy their fiduciary responsibilities. Such information, which is
furnished daily, includes detailed trial balances and account analyses, portfolio listings, daily activity summary, daily net asset
value analysis, and other reports.
With respect to each of Quant Foreign Value Fund and Freedom International Fund, to which Applicant serves as sub-adviser,
Applicant causes to be provided to each Funds adviser certain information so that each adviser can satisfy its obligations to
the applicable Fund. Such information, which is furnished daily, includes daily activity reports and other reports as requested
by the advisor(s).
In addition, each client receives (i) periodic statements from financial institutions holding securities in custody and (ii) reports
on each transaction from the broker executing the transaction.
12A(1 ,2) - Investment or Generally, the applicant maintains complete discretion with respect to client security transactions. Which securities, and the
Brokerage Discretion amount of those securities bought or sold are determined by the applicant except where a client requests contact prior to such
transactions.
12A(3)
12B
Applicant generally has the authority to select brokers and the applicant exercises this authority based upon the size of the
order, the quality of clearance and custody services. Clients may direct brokerage account activity in the management
contract.
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Services furnished by brokers may be used in servicing all client accounts even though all client accounts have not paid
commissions to the broker providing such services.
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Complete amended pages in full, circle amended items and file with execution page (page 1).
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Applicant:
3 for Form ADV Part II Polaris Capital Management, Inc.
Do not use this Schedule as a continuation sheet for Form ADV Part I or an
1. Full.name.. otapplicantexactlY as .stated in Item 1AQLPar11 of Form ADV:
Polaris Capital Management, Inc.
Item of Form
identi
SCHEDULE F of
FORM ADV
Continuation Sheet
12B (continued)
13.B.
Additional
Compensation
Additional Information
Proxy Policy:
..
Date:
,03-27-2006
Answer
[The primary goal of Polaris Capital Management, Inc. in choosing broker.dealers is to obtain executions at the most f
avorable commission rates in relation to the benefit received by its accounts. To achieve this goal, Polaris Capital
Management, Inc. evaluates broker.dealers on the basis of their professional capabilities, the value and quality of their
services and their comparative commission rates. For this reason, the commission paid may not necessarily be the lowest
available.
A broker.dealer may be selected because it provides research, as will brokerage services, and such research may benefit
numerous client accounts. Such research may include, for example, historical price information for securities, reports on
. individual companies and business news retrieval.
[Polaris Capital Management, Inc. may purchase or sell the same securities at the same time for different clients. No client
account will be favored over any other, and all clients participating in the aggregate order shall receive an average share price
with all other transaction costs shared on a pro.rata basis. Polaris Capital Management, Inc. will review its aggregation
,i procedures annually to ensure that such procedures are adequate to prevent any account from being systematically
'disadvantaged as a result of the aggregation of orders',
Iln determining whether to accept non.brokerage services from broker.dealers, Polaris Capital Management, Inc. evaluates th
extent which such services will provide assistance in the investment decision-making process. Polaris Capital Management,
'jlnc. does not have any procedures whereby a specific amount of brokerage is allocated to particular broker-dealers.
[The Colony Group, Boston, MA ("Colony")
,Polaris Capital Management, Inc. has a client referral and service arrangement with Colony. For clients Colony refers to
"Polaris, Polaris pays Colony a percentage of the fees it charges its clients. The arrangement does not impact fees paid by th
referred clients.
Polaris Capital Management, Inc. will vote all proxies delivered to it by the Custodian. The vote will be cast in such a manner,
which, in our judgment, will be in the best interests of shareholders. Polaris Capital Management, Inc. contracts with Boston
Investor Services, Inc. for the processing of proxies.
Polaris Capital Management, Inc. will generally comply with the following guidelines:
Routine Corporate Governance Issues
PCM will vote in favor of management.
Routine issues may include, but not be limited to, election of directors, appointment of auditors, changes in state of
incorporation or capital structure. In certain cases PCM will vote in accordance with the guidelines of specific clients.
For example, for Taft.Hartley clients PCM will vote proxies using AFL-CIO Proxy Voting Guidelines.
Non-routine Corporate Governance Issues
PCM will vote in favor of management unless voting with management would limit shareholder rights or have a negative
..impact on shareholder value. Non.routine issues may include, but not be limited to, corporate restructuring/mergers and
acquisitions, proposals affecting shareholder rights, antHakeover issues, executive compensation, and social and political
,issues. In cases where the number of shares in all stock option plans exceeds 10% of basic shares outstanding, PCM
generally votes against proposals that will increase shareholder dilution. In general PCM will vote against management
regarding any proposal that allows management to issue shares during a hostile takeover.
Non Voting of Proxies
PCM may not vote proxies if voting may be burdensome or expensive, or otherwise not in the best interest of clients.
Conflicts of Interest
Should PCM have a conflict of interest with regard to PCM voting a proxy, PCM will disclose such conflict to the client and
obtain client direction as to how to vote the proxy.
Complete amended pages in full, circle amended items and file with execution page (page 1).
""l
'~,
SCHEDULE F of
FORM ADV
Continuation Sheet
Applicant:
3 for Form ADV Part II Polaris Capital Management, Inc.
Do not use this Schedule as a continuation sheet for Form ADV Part I or an
1. Full name.of applicant exactly as .slated in Item 1A .of Part I .of Form ADV:
Polaris Capital Management, Inc.
Item of Form
identi
Date:
03-23-2005
Answer
Additional Information
Code of Ethics
The Company has adopted a Code of Ethics and Insider Trading Procedures (the "Code"). The Code states that each
employee should place the interests of the Company's clients ahead of their own. Each employee is required to conduct all
personal securities transactions in a manner that is consistent with the Code
and to avoid any actual or potential conflict of interest. No access person shall use the knowledge of securities purchased or
sold by any client of the Company or securities being considered for purchase or sale by any client
of the Company to profit personally, directly or indirectly, by the market effect of such transactions; No access person shall,
directly or indirectly, communicate to any person who is not an access person any material non-public information relating to
any client of the Company or any issuer of any security owned by any client of the
'j Company, including, without limitation, the purchase or sale or considered purchase or sale of a security on behalf or any
client of the Company, except to the extent necessary to effectuate securities transactions on behalf of the client of the
Company.
. Transaction Reporting - To comply with the rules of the Securities and Exchange Commission, all Access Persons
of the Company must pre-clear transactions with the Compliance Officer and must complete quarterly reports on personal
security transactions in Covered Securities for their own accounts or any accounts in which they have a direct or indirect
beneficial interest. In addition, each Access Person must submit an annual Holdings Report of Covered Securities and must
certify annually that they complied with the Company Code.
Short Term Trading - All employees shall avoid profiting by securities transactions of a short-term trading nature (including
'market timing) involving shares of an Investment Company. Transactions which involve a purchase and sale, or sale and
purchase, of shares of the same series of an Investment Company (excluding Money Market Funds and Short Duration Fund
or similar short-term fixed income fund) within thirty (30) calendar days shall be deemed to be of a trading nature and thus
prohibited unless prior written approval of the transaction is obtained
from the Review Officer.
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Access Persons shall avoid profiting by securities transactions of a trading nature, which transactions are defined
as a purchase and sale, or sale and purchase, of the same (or equivalent) securities
within sixty (60) calendar days
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A copy of the Company's Code of Ethics is available to any prospective or existing client upon request to Lucy C. Goreham,
Boston Investor Services, Inc., 125 Summer Street, Suite 1470, boston, MA 02110.
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Complete amended pages in full, circle amended items and file with execution page (page 1).
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Anti-Money
Laundering Policy:
" The U.S.A. Patriot Act (the "Patriot Act"), effective October 24, 2001, revised the Bank Secrecy Act and other anti-money
laundering laws to require certain financial institutions to establish and implement anti-money laundering compliance
programs. Although the Company is not currently subject to the requirements of the Patriot Act, the Company is committed to
complying with federal initiatives designed to combat money laundering and any activities that facilitate money laundering or
funding of terrorist or criminal activity. It is the Company's policy:
. Although not subject to the SEC's anti-money laundering regulations, to follow voluntarily the general principals of the
regulations requiring a financial institution to know its clients and be alert to and identify suspicious or unusual activity;
. To refrain from entering into an advisory relationship with a known or suspected terrorist or other prohibited person under
Treasury regulations as identified on the list maintained by the U.S. Office of Foreign Assets Control;
. To comply with the applicable regulations of the Department of the Treasury relating to cash or currency transactions; and
. To report suspicious activities to the Treasury Department's Financial Crimes Enforcement Network (FinCEN) Hotline.
Therefore, clients of the Company should be aware that there may be instances where the Company will seek certain
additional identifying information relating to their account.
Mi."
V6yageur ASSET MANAGEMENT INC.
INTERNATIONAL EQUITY
JANUARY 5, 2007
Institutional Services
100 South Fifth Street, Suite 2300
Minneapolis, Minnesota 55402-1240
800.553.2143
612.376.7000
wvvvv.voyageur.net
_I OVERVIEW
The investment objective of the International Equity strategy is to
identify the best values in the world using a disciplined bottom-up value
approach, encompassing proprietary investment technology and in-depth
fundamental research. The strategy seeks high risk adjusted returns that
exceed the global cost of equity with a focus on absolute risk.
PORTFOLIO CHARACTERISTICS (as of 12.31.06)
PE (Trailing 12 Months):
Dividend Yield:
Beta (Verses the S&P 500 Index):
Weighted Average Market Cap:
16.5%
2.1%
1.15x
$16.9 Billion
~ ANNUALIZED RETURNS (as of 12.31.06)
34.6
25%
30%
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20%
15%
"
10%
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'1\
5%
0%
1 Year
3 Years
5 Years Since Inception (7.1.98)
. International Equity (Gross)
. MSCI-EAfE Index
Annualized Returns
International (Gross)
MSCI-EAFE Index
QTD YTD 1 Year 3 Years 5 Years Since Inc.
14.5% 34.6% 34.6% 26.8% 27.3% 15.7%
10.4% 26.9% 26.9% 20.4% 15.4% 7.4%
Performance is presented gross of fees. See the "Performance Presentation and
Disclosures" on the reverse of this page for more information.
~ INVESTMENT PROFESSIONALS
The International Equity strategy is sub-advised by:
Polaris Capital Management, Inc.
Michael M. Spencer, CFA
Senior Portfolio Manager
23 years of experience
Bernard R. Horn, Jr.
Polaris Capital Management, Inc.
Portfolio Manager
26 years of experience
Sumanta Biswas, CFA
Polaris Capital Management, Inc.
Assistant Portfolio Manager
10 years of experience
Richard V. Howe, CFA
Polaris Capital Management, Inc.
Analyst
33 years of experience
Andry Sutanto
Polaris Capital Management, Inc.
Analyst
2 years of experience
Bin Xiao
Polaris Capital Management, Inc.
Analyst
1 year of experience
TOP TEN PORTFOLIO HOLDINGS (as of 12.31.06)
Yara International ASA
KCI Konecranes PLC
Andritz AG
Methanex Corp.
Maruichi Steel Tube LTD
Cargotec Corp.
CRH PLC
Greencore Group PLC
Meiji Dairies Corp.
Bellway PLC
There is no guarantee that the holdings of an actual account will always be identical to the holdings presented here. This presentation should not
be construed as a recommendation to buy or sell any financial instruments. The information contained herein should not be relied upon as the sole
investment-making decision.
_I PERFORMANCE PRESENTATION AND DISCLOSURES
-I
YTD YTD MSCI-EAFE Composite Number of Mkt. Value Percent of Total Firm
Period Gross Net Index Dispersion Accounts ($MM) Firm Assets Assets
1998* -12.0% -12.4% 3.7% N/A 1 $10 0.2% $6,797.2
1999 22.1% 21.0% 27.3% N/A 1 $12 0.2% $6,821.3
2000 -4.7% -5.6% -14.0% N/A 1 $12 0.1% $14,103.0
2001 0.8% -0.2% -21.2% N/A 1 $19 0.1% $15,061.3
2002 5.9% 4.9% -15.7% N/A 1 $21 0.1% $20,245.8
2003 54.9% 53.5% 39.2% N/A 1 $34 0.2% $22,518.8
2004 29.8% 28.6% 20.7% N/A 1 $90 0.3% $26,858.8
2005 16.7% 15.6% 14.0% N/A 2 $153 0.6% $27,018.8
2006 34.6% 33.3% 26.9% N/A 3 $283 1.0% $28,561.4
NOTES
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*Performance calculated from 7.7.98 to 72.37.98
Voyageur Institutional Services ("VIS") has prepared and presented this report in compliance with the Global Investment Performance Standards
(GIPS@). Compliance with GIPS has been verified firm-wide by an independent third party from January 7, 7993 through June 2006.
VIS is a division of Voyageur Asset Management Inc. ("VAM") a federally registered investment adviser founded in 7983. VAM was purchased by
RBC Dain Rauscher Corp. in December 2000 and was merged with Insight Investment Management ("Insight"), at that time a federally registered
investment adviser and subsidiary of RBC Dain Rauscher. Effective January 7, 2006, VAM's wrap fee/SMA business was defined as a separate division
under the name Voyageur Advisory Services ("VAS") for purposes of complying with the CFA Institute's Global Investment Performance Standards
("GIPS"). Prior to January 1, 2006, the firm was defined to include all discretionary and non-discretionary assets managed by VAM. The International
Equity composite includes fully discretionary accounts invested in a diversified portfolio of foreign equity securities deemed to be undervalued by the
strategy's investment team. For comparison purposes, this composite is measured against the MSCI-EAFE (Gross) Index (gross of withholding taxes
on dividends). Effective 7.3 7.06, the firm changed the benchmark for comparison purposes from the MSCl-EAFE Net Index to the MSCI-EAFE Gross
index in order to align the comparison against the industries more widely reported Gross index. The MSCI-EAFE Index uses withholding tax rates
applicable to a Luxembourg based holding company. Additional information regarding the percentage of the composite which may not be invested
in countries or regions included in the MSCI-EAFE index is available upon request. Prior to January 5, 2007 the performance represents that of a
composite from Freedom Capital Management, LLC ("Freedom"). On January 5, 2007, VAM purchased substantially all of the assets of Freedom. For
all periods presented, Total Firm Assets is based on only those assets managed at VAM. The minimum account size for this composite is $7 million.
Composite performance is presented net of foreign withholding taxes. The index grosses-up dividends, where this is appropriate, to reflect the
position of an international investor with the benefit of double taxation agreements, if any. Withholding taxes may vary according to the investor's
domicile. Composite returns represent investors domiciled in the United States. Trade date accounting is used and returns are presented in U.S. dollars.
Returns include the effect of foreign currency exchange rates. This composite was created on 7.5.07, and has an inception date of 7. 7.98. Returns are
presented gross of management fees and include the reinvestment of all income. Actual returns will be reduced by investment advisory fees and other
expenses that may be incurred in the management of the account. The collection of fees produces a compounding effect on the total rate of return
net of management fees. For example, a $70 million portfolio earning a 70% annualized return over 5 years would be valued at $76.4 million. The
same portfolio with an annual fee of O. 95% would be valued at $15.6 million net of investment management fees. Advisory fees are described on this
page and in Form ADV Part II. Prior to 1.7.07, asset weighted standard deviation was used. A complete list and description of Voyageur composites
is available on request. Additional information regarding the policies for calculating and reporting returns is available upon request. All material
presented is compiled from sources we believe to be reliable and current, but accuracy cannot be guaranteed. This is not to be construed as an offer to
buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future
profitability or expectations. As with all investments there are associated inherent risks. Please obtain and review all financial material carefully before
investing.
Institutional Fee Schedule: 0.95% on all assets. Voyageur reserves the right to negotiate all advisory fees.
@ 2006 Voyageur Asset Management Inc.
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