Mr. Chevalier: Pembroke Management is a 40-year old plus organization based in Montreal, that manages a billion dollars in assets for a select list of Canadian pension funds, wealthy families and the GBC family of mutual funds. Our asset mix is primarily invested in Canada, about 80% of which is invested in Canada and 20% invested in the United States. We invest in small to mid-cap growth stocks, we're buy-and-hold investors, we don't short sell stocks, and we typically own stocks on average for about three years, so we've got a longer-term view on things. Three years is an average, sometimes we hold stocks for six months, when we make mistakes and there are certain stocks in the portfolio where we've been shareholders for more than ten years. Pembroke Management is a partnership, there are nine partners, all of which are involved in the investment process and I am one of the portfolio managers and partners of the organization.
TWST: Would you start with a brief background on Canada, and how the markets have been impacted by the dramatic events in the United States over the last 12 to 18 months, and what the outlook is going forward?
Mr. Chevalier: The Canadian economy has been affected by the global recession, not surprisingly. It hasn't been impacted as much as US economy has despite the fact that Canada is a big exporter to the US, and certainly Canadian exports to the US have come down, and with the strength of the Canadian dollar, this has certainly compounded the export market. What may have saved the Canadian market to certain extent is that our financial system has historically been much more conservative in its approach versus that of the US. Our large banks have not been as overly aggressive in their lending practices as maybe some of the US financial institutions have, particularly in the housing sector. Our Canadian banks are pretty strong and throughout all of this have continued to offer credit to most businesses. If you look at the fabric of the Canadian economy, there is a much bigger component of the economy tied to commodities and certainly with demand coming out of China for commodities, many of our resource-intensive companies have continued to fair well
Tickers included in this excerpt: ATB, CFW, CUQ, DLLR, DSGX, LPSN, LSG, SNC, TCW
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