Following a four-year hiatus from the financial services industry, Robert McKim, a former CEO of Halifax-based Seamark Asset Management Ltd., is launching a new investment-management firm, LeeSide Capital Management Inc., also of Halifax.

McKim, along with George Loughery and Don Wishart, two former Seamark employees, have banded together in a reunion they are calling a “renaissance in Atlantic Canada’s financial [services] community.” McKim, Loughery and Wishart, each of whom has more than 20 years of experience in the financial services industry, are taking on the roles as principals and portfolio managers.

“What we like about this is collegiality, and to be all involved in it together,” says McKim. “We are getting back together to offer services that clients wouldn’t have had available from us for the past several years.”

During those years, investment managers have been pursuing growth without regard to the level of risk they were inserting in portfolios, says Wishart: “With their collective focus on beating irrelevant market indices, they ratcheted up clients’ portfolio risk until the whole thing tumbled last year. When we previously worked together, we had a track record of superior returns with less risk than that taken by our peers.”

The idea of starting up a new firm came to McKim in early 2008, while he was conducting a search for a money manager for the Canadian Cancer Society’s investment advisory committee, which he joined after leaving Seamark in 2005.

“I realized there was a short list of money managers, and many of them were our old competitors from when we were in the business,” says McKim. “Listening to their stories made me realize that our approach to money management was second to none.”

McKim then met with Loughery and the two discussed the opportunities that had become possible now that both of their non-compete agreements with Seamark had expired.

Soon, Wishart jumped at the chance to work with McKim, who had drawn him to Seamark in the first place. Says Wishart: “Also knowing that George [Loughery] would join us convinced me that we, collectively. possessed all of the requisite skills for success.”

LeeSide, which officially launched this past September, has offices in Halifax and Saint John, N.B., with plans to expand over time. “This is the first phase of our plan: to operate in a space in which we have had clients historically,” Wishart says. “But we are looking to get out and serve clients wherever they exist.”

During the three partners’ time with Seamark, they were principally institutional money managers who oversaw pension funds, endowments, foundations, pooled funds and mutual funds. Names such as Clarington Funds Inc. (now IA Clarington Investments Inc.), BMO Nesbitt Burns Inc. and Manu-fac-turers Life Insurance Co., all based in Toronto, were among their top clients. Working with these companies, Wishart says, provided the LeeSide co-founders with the experience to jump into various opportunities.

Today, McKim, Loughery and Wishart are looking to start LeeSide with segregated accounts of $1 million or more in assets. The plan is to expand to include mutual funds and pooled funds. LeeSide already has several clients and has contacted more than 100 prospects; the partners also hope to make contact soon with many of the former clients with whom they had previous relationships.

“We want to reconnect, and we expect to go back to all of our old clients and reintroduce ourselves,” says McKim. “We have everything set up to be as robust as possible for taking on as many clients as want to come with us, whether they be institutional or private.”

LeeSide is one of the few investment-counsellor, portfolio-management firms in Atlantic Canada that are fully owned and operated by their portfolio managers. One of LeeSide’s many competitors will be Seamark, but the LeeSide executives welcome the respectful competition.

“There are many competitors in the institutional investment-management arena, most of which are larger than Seamark,” says Wishart. “We respect the Seamark team, and hope for their success in the longer term.”

Recently, Seamark announced a merger with Vancouver-based GrowthWorks Ltd. to form a national asset-management company with $3 billion in assets under management. Seamark was once known as the star of Atlantic Canada’s investment industry, when it had a total of $11 billion in AUM in 2004.

McKim joined Seamark 20 years before that, when it was known as Elliot & Page Atlantic. At that time, the firm had $50 million in AUM. McKim participated in a variety of stages in the investment-management process, including research, trading, portfolio management, client services and business development. He became Seamark’s CEO and chief investment officer in 2004, but left the firm less than two years later, in 2005, citing “irreconcilable differences” with Seamark’s board of directors.

@page_break@Loughery met McKim in 1996, when he joined Seamark as head of equities. Shortly after McKim’s departure, Seamark announced a reorganization, prompting Loughery to resign.

Loughery’s bottom-up approach with a focus on individual companies and a strategy of investing in one stock at a time, forms the basis of LeeSide’s style of portfolio construction. The investment style, which he describes as “growth at a reasonable price,” identifies companies with superior long-term investment merit based on proven management, competitive position and strong financial history.

“We tend to want to own larger companies with a durable footprint for growth,” Loughery says. “We want to buy them opportunistically and hold them over a longer period of time to realize the returns through normalization and compounding of the growth metrics.

“A lot of our process is driven by knowledge of the companies,” Loughery continues, “and then having the confidence to buy them in periods of adversity and restraint.”

Wishart joined McKim and Loughery at Seamark in 2002, holding the positions of chief financial officer, chief operating officer and chief portfolio manager.

He spent several years as one of three members of the executive portfolio-management team and was lead portfolio manager for the firm’s foreign and international pooled funds until this past April, when the LeeSide opportunity was presented to him.

For now, the trio is focusing on developing LeeSide and confronting what they feel is their biggest challenge, according to Loughery: “The fear within the investment community is that they will err by utilizing a start-up firm. Fortunately, our experience works in our favour, as does the trend toward the most successful portfolio managers leaving larger firms to create their own.” IE