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| Tim Gallagher, President, Inflection Capital Inc., a private equity fund manager at the marcus evans Private Wealth Management Summit Fall 2012, on what value gold assets can bring to a private wealth portfolio. |
NEW YORK, N.Y., Oct 22, 2012 - (ACN Newswire) - Many investors know the value of gold assets in a private wealth portfolio, with some gaining access to the asset class through Exchange Traded Funds (ETFs), but that does not necessarily give them the gains that are possible, according to Tim Gallagher, President, Inflection Capital, Inc. They should invest in emerging gold producers with a good growth profile, he suggested.
A private equity fund manager at the upcoming marcus evans Private Wealth Management Summit Fall 2012, in Las Vegas, December 2-4, Gallagher shares his perspective on how the private wealth management industry can capitalize on gold's true potential.
- Why gold? What value can it bring to a private wealth portfolio?
Gold has gone from around USD 250 in 2001 to USD 1,750 today. It is up seven times and that is really expressed in the form of currencies that have declined in value, in this case the USD. Therefore, gold is the combination of an inflation hedge and a currency.
With the expansion of government debt everywhere, gold is in a unique position. If you overlay a chart of the increase in US government debt, it pretty well matches the increased rise in the price of gold.
- How do Canadian gold assets compare against others?
As a resource rich country, Canada leads the way with several of the largest gold companies in the world and 1,600 junior mining companies, which is what we focus on in terms of financing. Larger organizations with projects all over the world, tend to have hiccups and those over USD 5 billion market cap find it tougher to grow, so we target those that are less than USD 100 million that can grow to the USD billion market cap.
- Why don't ETFs give investors what they are looking for?
ETFs do not expose investors to the potential liquidity and operating risks of an individual gold company, but investors do not necessarily get leverage from the potential capital gains plus the yield that they could get from the rising price of gold.
- What should private wealth managers look for in gold companies?
They should first determine what liquidity profile they are looking for and the size of their target investment. They need to consider the company's growth profile, and ideally find one that has good margins, making at least USD 1,000 an ounce on average, and the ability to pay out to shareholders in the form of dividends. That is key.
- What are the risks of investing in this space?
Gold is a global business. Investors need to think about the political risk of the country, as there could be a risk of government royalties increasing, union unrest or even nationalization of mines. Having local community support helps. There should also be infrastructure around the mine, with roads and power lines for example. Once investors take these into consideration, they will know what projects and countries they are more comfortable with.
- Can you discuss the investment opportunities that they should focus on today?
Beyond ETFs, they need to focus on publicly listed gold producing companies, listed in Canada, Australia, New York and the UK. There are probably around 100 companies to choose from.
Given our view of rising gold prices, our focus is on finding emerging gold producers, who may not be well known to investors which are committed to paying out some of their high margin cash flows, in order to create the ideal investment in terms of generating both superior capital gains and an above average yield.
About the Private Wealth Management Summit Fall 2012
This unique forum will take place at the Red Rock Casino, Resort & Spa, Las Vegas, Nevada, December 2-4, 2012. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes presentations on the global economic outlook, family governance structures, sustainable wealth management and succession planning. For more information please send an email to info@marcusevanscy.com or visit the event website at www.privatewealthsummit.com/TimGallagherInterview.
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Please note that the Summit is a closed business event and the number of participants strictly limited.
About Inflection Capital, Inc.
Inflection Capital Inc. is a Toronto-based private company which is focused on identifying yield investments in the Gold Sector emanating from the high margin cash flow generated by precious metals production. One investee is Excalibur Resources Ltd., a near-term gold producer, with a goal to pay out half of its cash flow in a dividend, which will generate a double digit yield. www.excaliburresources.ca.
Contact:
Sarin Kouyoumdjian-Gurunlian
Press Manager, marcus evans, Summits Division
Tel: + 357 22 849 313
Email: press@marcusevanscy.com
Topic: Research / Industry Report
Source: marcus evans Summits
Sectors: Daily Finance, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
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