Comments on: Dumping the Labour-Sponsored Investment Fund http://www.canadiancapitalist.com/dumping-the-labour-sponsored-investment-fund/ Helping you invest and prosper Sun, 12 Feb 2012 00:54:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Canadian Capitalist http://www.canadiancapitalist.com/dumping-the-labour-sponsored-investment-fund/#comment-85002 Canadian Capitalist Fri, 23 Nov 2007 14:20:36 +0000 http://www.canadiancapitalist.com/2007/11/22/dumping-the-labour-sponsored-investment-fund#comment-85002 Looks like quite a few of us were singed by LSIFs. It's bad enough that we subsidize these investments through our tax dollars, it's worse to put our own money in it as well. The only people consistently making money on these dogs are advisers and fund management. Hopefully, this asset class will start to die as soon as the Ontario tax credits dry up. It deserves to. Looks like quite a few of us were singed by LSIFs. It’s bad enough that we subsidize these investments through our tax dollars, it’s worse to put our own money in it as well. The only people consistently making money on these dogs are advisers and fund management. Hopefully, this asset class will start to die as soon as the Ontario tax credits dry up. It deserves to.

]]> By: CanadianInvestor http://www.canadiancapitalist.com/dumping-the-labour-sponsored-investment-fund/#comment-84984 CanadianInvestor Fri, 23 Nov 2007 13:21:46 +0000 http://www.canadiancapitalist.com/2007/11/22/dumping-the-labour-sponsored-investment-fund#comment-84984 Congratulations on the success of your blog, which has become a fixture on the scene, deservedly recognized even by the mainstream financial press. Best of success in future. I've been stung by the LSVCC fiasco too, just waiting till 2008 to cash out. The academic evaluations of LSVCC is about as uncomplimentary as they can get. One by Douglas Cumming and Jeffrey MacIntosh titled Comparative Venture Capital Governance: Private versus Labour Sponsored Venture Capital Funds concludes that LSVCCs should be terminated. Congratulations on the success of your blog, which has become a fixture on the scene, deservedly recognized even by the mainstream financial press. Best of success in future.

I’ve been stung by the LSVCC fiasco too, just waiting till 2008 to cash out. The academic evaluations of LSVCC is about as uncomplimentary as they can get. One by Douglas Cumming and Jeffrey MacIntosh titled Comparative Venture Capital Governance: Private versus Labour Sponsored Venture Capital Funds concludes that LSVCCs should be terminated.

]]> By: Big Cajun Man http://www.canadiancapitalist.com/dumping-the-labour-sponsored-investment-fund/#comment-84737 Big Cajun Man Thu, 22 Nov 2007 23:46:12 +0000 http://www.canadiancapitalist.com/2007/11/22/dumping-the-labour-sponsored-investment-fund#comment-84737 LSIF's always confused me, so I just stayed away, and now I am glad I did. If I wanted a tax kick back that badly, I would have given money to the Green Party, or something like that. c8j LSIF’s always confused me, so I just stayed away, and now I am glad I did. If I wanted a tax kick back that badly, I would have given money to the Green Party, or something like that.

c8j

]]> By: WhereDoesAllMyMoneyGo.com http://www.canadiancapitalist.com/dumping-the-labour-sponsored-investment-fund/#comment-84650 WhereDoesAllMyMoneyGo.com Thu, 22 Nov 2007 15:50:28 +0000 http://www.canadiancapitalist.com/2007/11/22/dumping-the-labour-sponsored-investment-fund#comment-84650 I just read through the 10 Commandments link, if you haven't read it yet, do so - it is a phenomenal collection of wisdom and a very enjoyable read. I just read through the 10 Commandments link, if you haven’t read it yet, do so – it is a phenomenal collection of wisdom and a very enjoyable read.

]]> By: FourPillars http://www.canadiancapitalist.com/dumping-the-labour-sponsored-investment-fund/#comment-84644 FourPillars Thu, 22 Nov 2007 15:32:53 +0000 http://www.canadiancapitalist.com/2007/11/22/dumping-the-labour-sponsored-investment-fund#comment-84644 Nothing gets me more annoyed than LSIFs. They are a terrible investment. My initial $15,500 investment is down to about $5500 which even with the tax breaks is just horrible. I can get some of it out next year and the remainder out the following year. As CC said, the fees are ridiculous - this form of investment was just the government subsidizing some rich guys (who didn't know any thing about investing) investment funds. Mike Nothing gets me more annoyed than LSIFs. They are a terrible investment.

My initial $15,500 investment is down to about $5500 which even with the tax breaks is just horrible. I can get some of it out next year and the remainder out the following year.

As CC said, the fees are ridiculous – this form of investment was just the government subsidizing some rich guys (who didn’t know any thing about investing) investment funds.

Mike

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/dumping-the-labour-sponsored-investment-fund/#comment-84604 Canadian Capitalist Thu, 22 Nov 2007 13:07:18 +0000 http://www.canadiancapitalist.com/2007/11/22/dumping-the-labour-sponsored-investment-fund#comment-84604 The trouble with LSIF is that their high expense structures (MER of 4% is supposed to be low!) negates any excess returns this asset class could provide. Add to that the initial 6% sales charge (hidden because it is paid directly to the advisor) and the only reason these dogs sell is the tax break. I remember reading somewhere that LSIF returns are poor even when compared to private venture capital (I can't recall the exact details). I don't plan to invest in these funds ever again because the odds of a decent return is pretty low. The trouble with LSIF is that their high expense structures (MER of 4% is supposed to be low!) negates any excess returns this asset class could provide. Add to that the initial 6% sales charge (hidden because it is paid directly to the advisor) and the only reason these dogs sell is the tax break. I remember reading somewhere that LSIF returns are poor even when compared to private venture capital (I can’t recall the exact details). I don’t plan to invest in these funds ever again because the odds of a decent return is pretty low.

]]> By: Phil S http://www.canadiancapitalist.com/dumping-the-labour-sponsored-investment-fund/#comment-84591 Phil S Thu, 22 Nov 2007 12:44:37 +0000 http://www.canadiancapitalist.com/2007/11/22/dumping-the-labour-sponsored-investment-fund#comment-84591 To oxCC. As a group, I agree they don't perform well, but you definitely can't say that about Frank Mersch's Front Street LSIF fund (in the Energy sector, I can't recall the exact name). For me personally, I don't like to make money off of the destruction of the planet in the oil & gas industry any more than I would want to make money off cigarettes which is in the business of essentially killing people. Unfortunately in Canada with our ridiculously high taxes, we have to try to take advantage of every bone that the government tosses our way and the LSIF tax credit is one of them. The LSIF structure is basically private equity and I wish that there were an LSIF fund out there that is run by the smartest money on Bay Street in the form of private equity. To oxCC. As a group, I agree they don’t perform well, but you definitely can’t say that about Frank Mersch’s Front Street LSIF fund (in the Energy sector, I can’t recall the exact name).

For me personally, I don’t like to make money off of the destruction of the planet in the oil & gas industry any more than I would want to make money off cigarettes which is in the business of essentially killing people.

Unfortunately in Canada with our ridiculously high taxes, we have to try to take advantage of every bone that the government tosses our way and the LSIF tax credit is one of them. The LSIF structure is basically private equity and I wish that there were an LSIF fund out there that is run by the smartest money on Bay Street in the form of private equity.

]]> By: 0xCC http://www.canadiancapitalist.com/dumping-the-labour-sponsored-investment-fund/#comment-84577 0xCC Thu, 22 Nov 2007 12:20:09 +0000 http://www.canadiancapitalist.com/2007/11/22/dumping-the-labour-sponsored-investment-fund#comment-84577 LSIF are a tricky thing. I bought some LSIF in 2004 so I am only about 50% of the way through the holding period but my original $5000 investment is now worth $5800 and if you add in the $1500 tax credit it hasn't been a bad investment. When I put the money into the fund in the first place I was just hoping that I would have my original $5000 left in it after 8 years. I don't think I would invest in a LSIF again though. The tax perks aren't as good as they used to be and on average as a group they don't really perform that well compared to the rest of the market. LSIF are a tricky thing. I bought some LSIF in 2004 so I am only about 50% of the way through the holding period but my original $5000 investment is now worth $5800 and if you add in the $1500 tax credit it hasn’t been a bad investment. When I put the money into the fund in the first place I was just hoping that I would have my original $5000 left in it after 8 years.

I don’t think I would invest in a LSIF again though. The tax perks aren’t as good as they used to be and on average as a group they don’t really perform that well compared to the rest of the market.

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