Front Street Capital sells division to former CEO

Gerard Ferguson is launching J2 Capital Management, which is buying Jemmek Capital Management and two funds from Front Street, the firm he led from February to July

By: Tessie Sanci
October 17, 2016 October 17, 2016
10:30

Gerard Ferguson is leaving Toronto-based Front Street Capital 2004 and taking two of the firm’s funds with him for his new venture.

Ferguson, who is currently a senior portfolio manager at the firm and was briefly its CEO earlier this year, is one of the names behind J2 Capital Management Inc., a newly created corporation that’s buying Jemekk Capital Management Inc. and its two funds from Front Street Capital, according to an announcement released Monday.

The agreement between Front Street Capital and J2 Capital would see the investment management and portfolio advisory agreements related to Jemekk Total Return Fund LP and Jemekk Long/Short Fund LP transferred to J2 Capital, subject to the newly created firm obtaining registration from the Ontario Securities Commission (OSC).

The transaction is expected to close on or prior to Nov. 15. With the sale’s closing, Ferguson will leave Front Street Capital and manage the Jemekk funds through J2 Capital. Ferguson’s role as co-manager of Front Street Tactical Equity Class will then be transferred to Greg Taylor, a senior portfolio manager at Front Street Capital.

Rick Ummat, also a portfolio manager at Front Street Capital, is expected to join J2 Capital with the move of the funds.

Ferguson initially co-founded Jemekk Capital Management in 2004 and joined Front Street Capital in 2013 when it purchased Jemekk. He was appointed CEO and president of Front Street Capital in February but was replaced by Nevin Markwart in July.

In September, Front Street Capital and Toronto-based Aston Hill Financial Inc. announced that they’re linking up to create an independent money management firm with $3.1 billion in assets under management (AUM). The deal is expected to close by yearend and CEO and industry veteran Joe Canavan will lead the expanded firm, which will continue under the Aston Hill name for now.

J2 Capital Management is an employee-owned, private investment management firm formed initially to manage two investment pools, Jemekk Long/Short Fund LP and Jemekk Total Return Fund LP. The firm is currently seeking registration with the OSC as investment fund manager, portfolio manager and exempt-market dealer.

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