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In this issue:

  • Veronika Hirsch on BNN
  • Manager Profile: Burlington Capital
  • Mutual Funds begin Short Selling
  • BluMont News
  • Industry News
  • Hedge-o-pedia

BluMont News

BluMont Augen Limited Partnership 2007-1 Completes Closing Of Flow-Through Offering Raising Over $16 Million CAD
(November 1, 2007)

Industry News

AIMA Canada Luncheon: Can Alternatives Go Main Street?

On October 17, 2007 the Toronto chapter of the Alternative Investment Management Association Canada  (“AIMA Canada”) in conjunction with Business News Network (“BNN”) hosted a well-attended lunch event at the National Club entitled “Can Alternatives Go Main Street?”  The lunch, which was moderated by BNN’s Amanda Lang featured a panel of investment professionals who debated the pros, cons, advantages and disadvantages of adding alternative investments to retail portfolios. 
 
The panelists – Mike Hayhoe of IPC Securities, Christopher Kruczynski of Scotia McLeod and Gordon Kim of Aon Consulting – put forth their views on alternative investments and related their experiences with this asset class to an audience composed largely of retail investment advisors. 
 
Topics of discussion included: (i) differing hedge fund strategies and their suitability; (ii) proper due diligence procedures that an advisor should undertake (iii) recommended allocation to alternatives; and (iv) the importance of properly educating the client about this increasingly-important asset class.  Concerns were raised about the lack of transparency on certain alternative strategies as well as whether or not hedge funds should be regulated. 
 
The event illuminated and educated many retail advisors who still had questions about this asset class.  AIMA Canada  has indicated that the overall response was very positive and that it looks forward to putting on further events for the Canadian retail advisor community.

Hedge-o-pedia

Equity Risk Premium

The equity risk premium is the additional return or “premium” above the risk-free rate an investor can expect for taking on the higher level of risk in equities.

Issue 37 - November 13, 2007.

We hope you enjoyed reading BluMont eNews. You can expect our next issue in December.

BluMont eNews is a monthly email publication.

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Email: feedback@blumontcapital.com

Fund Performance as of October 31, 2007

Fund Name

CDN$
NAVPS

% chg vs
prev mnth

YTD
(%)

BluMont Canadian Opportunities Fund

171.13

3.62

6.69

BluMont Hirsch Long/Short Fund

188.66

4.19

12.53

BluMont Hirsch Performance Fund

30.05

4.11

16.74

BluMont Core Hedge Fund

113.66

0.53

9.21

Man-IP 220 S1 Notes*

14.22

8.50

8.27

Man-IP 220 S2 Notes*

13.61

8.46

8.66

Man-IP 220 S3 Notes*

10.13

8.13

7.96

Man-IP 220 S4 Notes*

10.58

8.16

6.58

Man Multi-Strategy, S1*

11.44

4.53

-1.13

Man Multi-Strategy, SA*

11.64

4.45

-1.56

Man Multi-Strategy, S2*

11.33

4.45

-1.17

Man Multi-Strategy, S3*

12.18

4.44

-1.36

Man Multi-Strategy, S4*

11.33

4.41

-1.12

Man Multi-Strategy, S5*

10.94

4.40

-1.80

* As of September 30, 2007

Click to view full fund performance and pricing tables.

Veronika Hirsch -

Veronika Hirsch on BNN’s Market Call

Veronika Hirsch, Chief Investment Officer for BluMont Capital, recently appeared on BNN’s Market Call to talk about general market themes, her top stock picks, Canadian equities and alternative investing.

Ms. Hirsch’s top three stock picks included:
1. Petrobank Energy and Resources (PBG.TSX)
2. Hanfeng Evergreen (HF.TSX)
3. Detour Gold (DGC.TSX)

Click here to watch Veronika’s appearance on BNN’s Market Call

Manager Profile: Burlington Capital

Burlington Capital is the investment advisor of the BluMont Core Hedge Fund, a single manager long/short equity fund with a North American focus.

Founded in September 2004 by Allan Brown and Geoff Barth, Burlington Capital Management Ltd. ("Burlington") identified a void in the Canadian hedge fund industry to which it brings a new level of expertise.  Burlington's investment style utilizes a qualitative, bottom-up approach to portfolio construction with a focus on pairs trading.

Burlington Capital’s success comes from its fundamental stock research that has enabled them to unearth significant investment opportunities. Allan Brown and Geoffrey Barth have worked together for more than ten years and have almost 30 years of combined investment experience, including over 20 years of portfolio management experience across a number of market sectors, asset classes and fund portfolios.

Click here for more information on the performance of the BluMont Core Hedge Fund for the quarter.  Burlington’s commentary on the market, outlook for the remainder of 2007, as well as detail on some of their new ideas are included.

Mutual Funds begin short selling

Globe and Mail
Shirley Won
October 15, 2007

A recent article in the Globe and Mail highlighted the growing trend among prominent mutual fund companies to seek regulatory approval for their funds to use short selling. The author quoted an independent analyst who sees the trend as part of a wider convergence between traditional long-only equity mutual funds and hedge funds. Several prominent mutual fund managers and analysts mentioned in the article agreed that short selling provides a mutual fund with more tools and flexibility to protect client assets in a market downturn.

Front Street Capital, Dynamic Mutual Funds, Sprott Asset Management, Sentry Select Capital, Desjardins Funds, National Bank Securities, Guardian Group of Funds, and CI Investments were all mentioned in the article as having received regulatory approval to begin short selling in their mutual funds; while other firms such as AGF Management and Franklin Templeton Investments are assessing the merits of short selling. AGF’s CEO is quoted as stating that the world is changing, and mentions that AGF is exploring new tools to help generate better returns for investors.

The author points out that OSC approval for short selling is accompanied by certain restrictions. Under Canadian securities regulations, proceeds from selling a stock short cannot be used to buy more stocks and 150% of the value of a stock sold short must be kept in cash. A senior Ontario Securities Commission lawyer explains in the article that this restriction is meant to maintain a conservative approach to short selling by mutual funds.

Past performance is not indicative of future results.

This communication is not, and under no circumstances is to be construed as, an invitation to make an investment in the BluMont Funds nor does it constitute a public offering to sell the any of the Funds described herein. Applications for the BluMont Funds will only be considered on the terms of the Offering Memorandum ("OM"). Terms defined in the OM shall have the same meaning in this material. Each purchaser of the Units may have statutory or contractual rights of action under certain circumstances as disclosed in the OM. Please review Schedule A  to the OM or provisions of the applicable securities legislation for particulars of these rights. Potential investors should note that alternative investments can involve significant risks and the value of an investment may go down as well as up.