PANURBAN 112°W 
Where Opportunity meets Experience

For nearly a decade prior to founding Accilent Capital, I was a trader at one of the “Big Five” Canadian banks.  The events of the past year and recent weeks have been disconcerting to seasoned market veterans, and most certainly would be cause for concern to investors around the world. I have never seen anything this dramatic before, but I was on the institutional trading desk during the Long Term Capital bailout, the Asian currency crisis, and the Russian debt crisis, all of which at the time produced significant bouts of drama, fear, and opportunities for politicians to confidently stand up and talk about subjects that they clearly knew nothing about. I want to point out that current events – while larger in magnitude and global in scope- are not unmanageable by the regulators whose job it is to ensure the system return to normal function. 

With this in mind I urge everyone to remain cautious in their investing, but also to be vigilant for opportunities that this situation has and will create. I am following my own advice here, and have even developed an investment product specifically targeted to control risk, provide a small current return, and profit from an eventual calming global environment.

Being an alternative asset manager, Accilent is virtually by definition, and by design less susceptible to the volatile market fluctuations that have been witnessed around the world recently. We are steadily moving forward on our path, to launch new offerings of Pavilion Resource Fund (our Flow-Through), and Wine Investment Fund Canada this fall. In addition we are launching our newest real estate investment product, Panurban 112°W, possibly our most timely response vehicle yet.

As the headlines have stated, housing prices around the U.S.A. have fallen and this has been one of the root causes of all the hand-wringing on Wall Street. In Arizona, they have been hit harder than most and while bitter sweet, this has given rise to the investment opportunity that we as Canadians need right now. I believe that in the banking sector’s rush to liquidate the houses upon which they have been forced to foreclose, house prices are being pushed well below their intrinsic value. Normally, opportunistic investors in the U.S. would be buying these properties themselves, and stop the decline in its tracks. However, in most cases they can’t get the high leverage financing they like to use and there are too many properties being thrown on a weak market, overwhelming local investor demand. Right now it is difficult for Americans to buy the house next door even when it is 20, 30, or even 50% off what it was even just a few years earlier, because the value of their own house has fallen by the same amount. In many cases they have already borrowed too much money against their own house. This is why it is good to be a Canadian investor right now. We have the strong currency with which to invest in U.S. real estate at a time when the banks there are falling over each other to sell what they have.

Accilent has responded by partnering our investment strategy with the Arizona real estate expertise of Mark Dziedzic from Arizona for Canadians, to bring you Panurban 112°W. Our approach is simple. In desirable areas of Phoenix, Arizona, we buy single family houses selling at significant discounts to their former prices; predominantly in a current price range of $125,000 to $200, 000. We then rent the houses out to local families for an amount that they can afford, while still covering our cost of ownership. We provide 2-3% in excess cash flow back to the investor while housing prices recover. That’s it.

What we do is control risk, provide that small current return, and profit from an eventual calming global environment, as mentioned before. What we don’t do is expose investor capital to risk in the fringe areas of half-finished developments and virtual ghost-towns of vacant housing purchased by speculators. That may be an area of opportunity in the future, but for our clients’ risk versus reward we like to be a little closer to the present. Only the current fundaments of Phoenix communities play into our strategies, not the projected improvements in employment or industry development when the market turns.

We also like to be a little closer to town. Literally. Remember, with gasoline prices as high as they are people want to live closer to jobs and services. But we’re not just talking about buying criteria: we mean that we’re in touch with the everyday needs of the renters there, and the investors here.

I have referred to this as a distressed housing opportunity, and that’s true. But it is also an investment into neighbourhoods, healthy communities, and a stable economy. The real estate recovery that we expect will begin in these very neighbourhoods, near the city’s core and like a ripple on a pond, spread outwards. That is the reason Accilent has introduced this investment opportunity, and why we will keep looking for ways to generate a positive turn from these events. The market is right, because the time is right, and the location is right. And that’s where Opportunity meets Experience.

I look forward to working alongside you to reach your investment goals, now and tomorrow.

Yours truly,

President
Accilent Capital Management Inc.

VINES MAGAZINE

Vines magazine is celebrating its 10th Anniversary with its November/December issue that packs thoughtful and lively writing into a bold and streamlined layout. To celebrate its decade milestone, editor Christopher Waters is chronicling the top wine influencers and evolutions of the industry in its Vines Index feature in addition to its regular column by wine royalty Jancis Robinson and its Top 20 guide on the best wines for the holiday season.

And just in time for the impending festive time of year, Vines is promoting its annual Gourmet Food & Wine Expo in Toronto running from November 20th to the 23rd where attendees can samples cuisine from top chefs and swirl premium order and private consignment offerings around their taste buds. Waters will be one of the wine experts and media personalities that will host the tasting sessions available at the Expo.

Go to www.vinesmag.com to read the Wine Blog and to receive Vines at your home.
Go to www.foodandwineexpo.ca to get your tickets for the Gourmet Food & Wine Expo.

Heather Riley, Sales Manager (center), celebrates the 10th anniversary of Vines Magazine.