Dundee Bancorp reported its financial results for the first half of fiscal 2000. Substantial revenue and asset growth reflects the acquisition of Fortune Financial by Dundee Bancorp's subsidiary, Dundee Wealth Management. We believe that Dundee Bancorp is an overlooked net asset play, with the sum of its individual assets worth substantially more than the company itself. With solid operating results and good performance from the bank and non-bank financial sectors recently, we are anticipating greater investor interest in Dundee Bancorp.

Revenue in the first six months of 2000 was $184.7 million, up 66% from the $111.3 million earned in the comparable period in 1999. Fully diluted earnings per share for the period were $0.64 versus $0.59 in 1999. Mutual fund assets under management grew from $5.3 billion to $6.1 billion as of June 30. Despite the increase in assets under management, the Company is still experiencing net redemptions, indicative of the tough conditions that most mutual fund companies are facing. On a more positive note, financial services revenue earned during the first half of the year totaled $82.9 million, significantly greater than the $18.4 million earned the previous year. These improvements inspire confidence in management's ability to integrate various acquisitions and position Dundee for superior long-term performance.

Many Bay Street analysts do not closely follow Dundee Bancorp. As a result, Dundee trades at a discount to its net asset value, though it has appreciated somewhat over the past several months. Management recognized that the Company is considerably undervalued and announced a normal course issuer bid for a maximum of 1,614,907 shares. In lieu of paying dividends, Dundee has taken this opportunity to purchase approximately 10% of the public float of its subordinate voting shares. We believe that this buyback, at anti-dilutive prices, represents a good long-term use of funds for Dundee Bancorp and its shareholders. We believe that investors' patience will be rewarded.

Dundee Bancorp's Dynamic Mutual Funds have returned to a net sales position after an agonizingly long period of net redemptions. Improving sales are directly related to deteriorating investor sentiment towards the technology, media and telecommunication sectors. This has allowed traditional value managers to outperform growth investors on a relative basis.

Despite the top line growth, Dundee Bancorp remains a net asset value (NAV) play. The Company's holdings include an investment portfolio and an 85% interest in Dundee Wealth Management. The total value of Dundee Bancorp's net assets fluctuate between $30 to $35 per share, depending on the current value of its publicly held securities. Management has recognized that the Company trades at a discount to both net asset and book value and has taken action in an effort to improve the market value of the shares.

On March 23, 2001, Dundee Bancorp renewed its normal course issuer bid for up to a maximum of approximately 1.5 million shares or 10% of the public float. The Company has already repurchased almost 500,000 shares at an average price of $14.03 per share since March 27, 2000. Given the discount to book value, we believe that share buybacks continue to be an excellent use of the firm's capital.

We have been long-time supporters of Dundee Bancorp. However, the stock price has stubbornly remained below the $20 level, in large part due to difficult capital market conditions and a lack of coverage by the major investment houses. Even after recently returning to a position of net sales, implying the potential for both revenue and earnings growth, Dundee remained overlooked by the investment community.

Several developments led us to re-examine and re-evaluate our investment in Dundee Bancorp. The Company's net asset value was negatively impacted in the fourth quarter due to onetime write-downs at two equity-accounted investments. Also, we had surmised that a return to net sales would stimulate share price appreciation. Unfortunately this has not occurred. Though we feel that the Company has good long-term value, it is very illiquid, is barely followed by analysts and continues to be saddled with a holding company discount. With a slim likelihood of some other catalyst materializing in the near-to-medium term, we have sold our entire position of Dundee Bancorp.