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An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”

Benjamin Graham, The Intelligent Investor (1949)


As a mission, Phocion sets out to elevate operating control standards within the investment industry. It accomplishes this by focusing on three core areas:

  • Performance
  • Compliance
  • Due Diligence

Phocion authors meaningful articles that enlighten and educate the investment industry. The articles influence the industry towards greater integrity and away from the “speculative” nature of operations that Ben Graham referred to in his opus magnum.

December 5, 2017

No Room to Gamble With Fair Dealing Which Sits at Core of Market Integrity

The structure of client fair dealings is an investment industry practice that is often implemented in a sub-optimal manner. Treating investors fairly is at the forefront of reinforcing market confidence. Should the  preponderance of market participants deem themselves to be unfairly treated, the market will be prone to fall apart. ‎This article brings fair dealing
November 27, 2017

GIPS Guideline Statement Outlines Proper Disclosure When Changing Benchmarks

Most would agree that benchmarks are fundamental to fair representation as they provide a point of reference for both performance and risk. As well, they serve as a focal point for the relationship between investor and manager as they assist in defining expectations (i.e. what is considered a success and failure). Given their importance, it
November 15, 2017

Existence of NAVs Does Not Dictate Manager Performance ‎Accuracy

Throughout our discussions with industry professionals a pervasive concept often emerges: a confusion between financial and performance accounting. In particular, when managers are asked whether they ensure the accuracy of their performance system’s outputs by annually reconciling their system, they often respond “no” citing that their administrator calculates net asset value (NAV). Notably, this answer
November 10, 2017

Bullying Runs Rampant Throughout Investment Industry

Society is afflicted by a bullying epidemic. ‎Though the investment industry is made up of fine, intelligent people from Wall Street, to London, Hong Kong and other parts of the world, many can attest to being the recipient of some form of bullying. Phocion’s mission is to assist the global investment industry to elevate its
November 9, 2017

Index Managers Require Skills that Benefit Investors Seeking to Avoid Excessive Fees and Under-Performance in Efficient Large Cap Equity Markets

A growing segment of investors desiring exposure to highly efficient equity markets (i.e. large caps in the U.S., Canadian and European markets) see little reason to seek alpha. Instead, they are content with owning cheap beta. For these investors, index managers are not paid to outperform and doing so would constitute a red flag. Rather,
October 24, 2017

Canadian Hedge Fund Managers Need to Want to Play to Win

Last month I attended a conference dedicated to bringing Canadian hedge fund managers together with Canadian investors. One of the organizers asked me whether I thought next year’s edition should include US and other foreign managers as a means of broadening investor appear. My answer was “no”. Canadian investors already have a favorable predisposition to
October 17, 2017

Private Equity Valuation Shortcomings Can Be Mitigated With Adoption of GIPS

Private Equity is an asset class that has garnered increased interest from institutional and accredited investors since the Financial Crisis, with Pension Funds and Family Offices demonstrating especial keenness. The driving force for the fervor is that PE investors are attracted to investment premiums for assuming PE’s poor liquidity and reduced degree of single asset
October 4, 2017

Phocion’s Good Friend, Frank Casey, Brings Integrity and Wherewithal to the Investment Industry

Hedge fund managers that generate exceptional returns over time are often held in high esteem by investors. Moreover, the few that possess charisma or are staunchly outspoken even become household names. Society puts a great value on these people because few possess their highly sought money making skills.  This begs the question: “Do we have
September 27, 2017

Natural Selection Will Eventually Rear Its Ugly Head across All Compliance Departments

Just because an investment firm tells you that they have compliance controls in place means little. Unless they actually outline and then walk you through their operations, investors simply cannot trust what is being told to them. To emphasize this point, some very smart people that work for the very largest investment firms are just
September 19, 2017

Hedge Funds’ First Line of Defense is the Risk Assessment

Hedge fund managers are some of the brightest‎ professionals in the investment industry. In many cases, after having worked for other firms there are those that choose to set up their own operation because they have reached the point of no longer wanting to be answerable to anyone. In essence, they are the epitome of