John Simpson, managing director of newly launched Toronto-based money-management firm Ridgewood Capital Management Inc., has always dreamed of owning a financial services firm. Not only that, but he has been carrying the name “Ridgewood” around in his head for many years, just waiting for the opportunity to use it.

Simpson’s dream came true in early September, when he and partner Paul Meyer bought half the assets under management of Toronto-based Mulvihill Wealth Management Inc. and set up their own shop.

“Ridgewood is the first street I ever lived on, growing up as a kid in Sarnia, Ont.,” Simpson says. “The name is solid; it signifies stability. We didn’t want our own names on the door, as we are encouraging employee share ownership in the firm. Ridgewood had a nice Canadian — but not Toronto-centric — ring to it.”

Ridgewood is entering the investment-counselling business with a huge leg up. The firm started with $1 billion in AUM purchased from Mulvihill and has already increased that by another $250 million with the snagging of a few new clients.

Ridgewood was formed by buying Mulvihill’s institutional and private wealth-management divisions while leaving Mulvihill as a business consisting largely of structured products such as closed-end funds. John Mulvihill, chairman and founder of Mulvihill, is also a shareholder in Ridgewood, along with six of Ridgewood’s employees and the two founding partners.

In addition to a critical mass of AUM, Ridgewood is hitting the ground with a seasoned team of 14 employees.

The key staff members who supported them in their endeavours at Mulvihill have joined Ridgewood — and share ownership will be expanded for employees as the firm matures.

Simpson and Meyer worked together at Mulvihill for 13 years. As vice president of equities, Meyer, 41, oversaw the investment of financial assets; Simpson, 55, worked on client relations and business development as the firm’s president. Simpson is best known to the advisor community from his days as president of Fidelity Investments Canada ULC in Toronto, for which he worked prior to joining Mulvihill.

“Founding Ridgewood is an opportunity for us to ensure continuity for existing clients and staff, as well as to build for the future,” Simpson says. “The institutional and private wealth-management businesses were easy to hive off; we had already been running them.

“All the staff members remain the same,” he continues. “The only change is the name and the colour of the logo. It’s a comfortable transition for clients.”

Ridgewood’s business includes the accounts of First Nations groups, foundations, endowments, pensions and wrap programs. The firm also serves private individuals with a minimum of $1 million to invest. Management fees are competitive, starting at 1% of assets on the first $3 million and declining as amounts increase.

Ridgewood also has replaced Mulvihill Fund Services Inc. as the manager and trustee of four Mulvihill mutual funds: Canadian Money Market, Canadian Bond, Global Equity and Total Return. These funds are offered to Ridgewood’s private clients but are not sold to the public.

With investment counsellors such as Phillips Hager & North Investment Management Ltd. of Vancouver and Saxon Financial Inc. of Toronto having recently become part of larger firms, Simpson and Meyer see opportunities for independent, entrepreneurial firms to carve a niche.

“We’ve already built a reputation for steady performance and good service,” Meyer says. “In these turbulent times, clients want to be able to pick up the phone and get a response to their concerns; and here, they can talk directly to the people who are managing their money.”

Meyer, whose investment style is “growth,” says the market downturn has led some good companies to trade at attractive prices. Ridgewood’s investments are “long only” and the money manager does not participate in short-selling or other hedge fund strategies.

Meyer uses both top-down and bottom-up strategies and will avoid a company, sector or entire geographical region if he senses the risks are too high.

“Clients want consistent performance and capital preservation,” Simpson says. “A lot of people are rethinking their investment managers right now, and that presents an opportunity for us to pick up business.” Simpson adds that communication is vital, and clients like to be kept informed of the firm’s strategy, especially during tough times.

“Clients may not be pleased with what the market is doing,” Simpson says. “But they can be pleased with what you’re doing, in terms of managing it.” IE