Marty Weinberg is once again looking to make his mark on Canada’s financial services sector. The founder and former CEO of Assante Corp., the one-time Winnipeg-based mutual fund manufacturer and distributor, has launched Pavilion Investment House Ltd., a firm targeting ultra- high net-worth clients.
Pavilion is the parent company of Canterbury Park Capital LP, a private-equity fund Weinberg helped get off the ground in the fall of 2005, and of Harrow Partners Ltd. , a high-end asset manager. All the firms are based in Winnipeg.
Pavilion’s strategy is to combine traditional asset management of globally balanced portfolios with alternative investments, Weinberg says. It’s a formula that has been proven both academically and in the “real world” to be the most sophisticated way of balancing risk and reward for an investor, he adds.
CLIENT SOLUTIONS
“By having both companies under one parent, we’re efficiently able to provide solutions to our clients,” Weinberg says. “Plus, a significant number of each company’s investors were continually asking about and were interested in the services available at the other.”
Weinberg says the seed for Pavilion was planted after a number of executives at Assante and some of their key clients needed to invest their money after the company was sold to CI Fund Management Inc. for $846 million in the summer of 2003. After evaluating numerous options on both sides of the border, the former Assante executives decided the only way they would be able to get what they wanted was to build it themselves, which they did with the launch of Harrow Partners in 2004.
With Pavilion now in business, Harrow Partners’ approximately 100 clients will have core holdings, such as stocks, bonds and REITs, as well as a 10%-20% allocation in alternative products, Weinberg says.
Thanks to Pavilion’s subsidiaries, it isn’t starting from scratch. It has about $900 million combined from actual assets and assets that clients have agreed to commit to the firm, with an average account size of several million dollars, Weinberg says.
Pavilion’s goal is to develop the alternative products side of the business, either through acquisitions or by building capabilities internally. Another five or six platforms, such as hedge funds, mezzanine debt and structured products, will be added to the mix.
Each of the alternative products will also accept money from outside investors, which could be institutions, other high net-worth individuals or other players in the investment business.
Weinberg says Pavilion is a unique concept that is not available anywhere else in Canada, as far as he knows, and can only be otherwise accessed by the largest financial institutions in the world.
“It takes us back to the core of what we do best,” he says. “We kept the best people that we had at Assante.”
That group includes Daniel Friedman, Assante’s former executive vice president; Bruce Warnock, its former general counsel and corporate secretary; and Denis Taillieu, its former chief financial officer and the man who oversaw the company’s initial public offering.
This time around, however, Weinberg says, “[The] intention is to have Pavilion work more as a partnership than as a public company.”
TOP MONTREAL ADVISOR
Weinberg is hoping to open four or five new offices across the country — ideally, in Toronto and a couple of cities in Western Canada — with a sales force of three or four advisors in each office. Already, a top financial advisor in Montreal, Armand Kessous, was recently recruited to open a Harrow Partners office in Quebec’s largest market.
“These advisors would really be partners in the company, not advisors in the traditional sense. We think we can execute the plan and cover our target market with 10 to 20 advisors,” Weinberg says. “This will give them leading-edge tools for their clients, an ability to be on the ground floor and become a partner in what will be a leading-edge boutique in the country, similar in nature to some of the European investment houses.”
But while there is no denying Weinberg’s success at Assante’s helm, Pavilion is a different kettle of fish altogether, says Paul Bates, dean of the DeGroote School of Business at McMaster University in Hamilton, Ont., and former CEO of Charles Schwab Canada Co.
“This is a very different business and demographics in terms of clientele. Whether he can take the expertise he used to build Assante and do it again remains to be seen,” Bates says. “Weinberg’s a smart businessman and he has proven that he knows how to build a business. But this is a very different game.”
@page_break@Bates agrees with Weinberg’s decision to focus on the private-equity side, an area that has seen continued growth over the past decade. “A lot of big pools of money — pension funds and the like — have expressed an appetite for private equity,” Bates says. “This is now spreading further out into the marketplace.”
For his part, Weinberg is adamant that he is not going to stray from his stated intention of serving Canada’s wealthiest people.
“The last time I did this, I didn’t expect it to grow as rapidly or as broadly as it did,” he says of Assante. “This time, we are determined to have the business focused on the ultra-high net-worth marketplace.”
Weinberg adds that even though he started off serving a similar market at Loring Ward Investment Counsel Ltd. in the early 1990s, that firm eventually morphed into a mutual fund company serving traditional retail investors.
Now that he is back in the game, Pavilion isn’t the last splash he intends to make in the financial services pool. Says Weinberg: “There is always more to come.” IE
Weinberg’s new venture targets the ultra-rich
Pavilion to combine traditional asset management of globally balanced portfolios with alternative products
- By: Geoff Kirbyson
- April 3, 2007 April 3, 2007
- 09:17