A letter from our CEO: Cautious optimism for a sustained recovery

As the spring thaw takes hold, this time of year always brings a renewed sense of optimism and hope. While the current landscape is vastly different from the past, I can’t help but feel there is light at the end of the tunnel. As the pace of vaccinations ramps up, and we begin to see how global economies will recover from the pandemic, we are hopeful this unprecedented time will soon come to an end.

As many of you have read, levels of interest rates today are starting to make headlines. The first quarter of 2021 saw U.S. bonds with maturities of 10-plus years endure their worst three months since 1980. Fixed income ETFs incurred losses anywhere from 5–12% in North America and selling pressure for fixed income markets is expected to intensify. Government bonds continue to price in the economic recovery, higher inflation expectations and record issuance required to fund the deficits created by stimulus spending.

Given this challenging backdrop, we are incredibly pleased with our fixed income performance in the first quarter. Our public equity strategies have also performed well, buoyed by our continued focus on cyclical beneficiaries and strength in financials and energy on both sides of the border this past quarter. At Gluskin Sheff, we continue to differentiate our offering with our partners at Onex and are resilient in the face of the aforementioned market challenges. Our actively managed, fixed income strategies and credit alternatives allow us the opportunity to provide yield and income while hedging out some of the headwinds a traditional fixed income portfolio may incur with such market conditions.

We are currently working closely with our partners at Onex Credit to ensure expedited access to Onex Falcon, one such unique solution to Gluskin Sheff. As we first mentioned in December, Onex Falcon is a leading U.S. private credit manager, providing credit financing solutions to middle and lower-middle market companies. With more than 20 years of experience, the Onex Falcon team will bring its distinct sourcing capabilities and an enviable performance record to the already competitive lineup of alternative strategies available at Gluskin Sheff.

We continue to build on our integration with Onex, creating an environment for diverse ideas and a client-centric culture of collaboration, teamwork and information sharing. The majority of our employees and our Onex colleagues continue to work remotely. While we would all love to get back to the office, we continue to reframe our internal policies to ensure the safety of our teams is maintained, allowing us to continue to serve our clients.

As we continue to operate in a virtual world, we are pleased to announce Gluskin Sheff and Onex are once again the presenting sponsors for the Munk Dialogues series, which kicked off its spring programming on April 22^nd. This live, on-demand video series brings an exciting, thought-provoking lineup of the world’s most fascinating speakers and thinkers into a virtual experience.

On behalf of the entire team at Gluskin Sheff, we look forward to the day we can gather in person again to share a meal or raise a glass with you. We wish you and your loved ones, continued health and success for 2021.

Sincerely yours,

Jeff Moody

President & Chief Executive Office