Investment Management

The Company’s owns, directly or indirectly, long-term investments in the common shares of some publicly traded Canadian companies and a managed diversified portfolio of common shares of publicly traded global companies. As of December 31, 2016 the long-term investments comprised approximately 53.2% (2015 – 52.8%) of the Company’s investment portfolio.

The long-term investments consist primarily of common shares of E-L Financial Corporation Limited (“E-L Financial”) (41.0% (2015 – 41.2%) of total investments), Algoma Central Corporation (“Algoma”) (4.4% (2015 – 5.3%) of total investments) and The Bank of Nova Scotia (6.7% (2015 - 5.3%) of total investments). E-L Financial, Algoma and the Company can be significantly influenced by the same party. Further related party information is provided in Note 12 to the financial statements and in the statement of investments.

The global investment portfolio is managed by Burgundy Asset Management Ltd. (“Burgundy”), a global equity manager based in Toronto. Burgundy manages the portfolio using a long-term bottom-up investment philosophy, which is to purchase good companies with strong economics and management, whose shares are selling below Burgundy’s estimate of intrinsic value. The portfolio, of approximately 40 - 60 publicly traded companies, invests primarily in mid to large capitalization companies which are publicly traded. For the year ended December 31, 2016, 97.5% (2015 – 99.3%) of the global investment portfolio was made up of non-Canadian companies.

Information related to Burgundy is available at www.burgundyasset.com.

The Company faces a broad range of risks and uncertainties in managing a global equity portfolio. These risks are described in the Risk Factors section of the Company’s 2016 Annual Information Form which may be found on SEDAR at www.sedar.com.