Toronto-based horizons ETFs Management (Canada) Inc. is on the hunt for a new CEO following the abrupt departure of Adam Felesky, the young and entrepreneurial co-founder, CEO and head of the Americas for Horizons. Felesky exited after a clash with controlling shareholder, South Korea-based Mirae Asset Global Investment Co.
Felesky’s management duties have been assumed by Taeyong Lee, Horizons’ executive chairman, until a new CEO is appointed. There’s no deadline for deciding on Felesky’s replacement and any search could involve both internal and external candidates.
“We realize the importance of having a permanent CEO in place and are in the early stages of the search,” Lee says.
Felesky guided Horizons’ business strategy and product development and has been described as the firm’s “driving force” behind the scenes. His departure is related to his support of a strategy regarding the future direction of the firm that Mirae AGI did not endorse.
Horizons president Howard Atkinson would not comment on speculation about what specific plans Felesky had been advocating or about “any potential deals – past, present or future.”
Adds Atkinson: “Adam saw a path and Mirae didn’t agree. If there’s one thing I’ve learned in my years in business, it’s that whether you agree with a major shareholder or not, they can exercise their prerogative to make major decisions – and Mirae is the major shareholder.”
Mirae AGI acquired an 85% stake in Horizons in November 2011. Felesky continues to maintain a smaller stake in the firm, which has approximately $4.5 billion in assets under management (AUM) and sponsors 71 exchange-traded funds (ETFs) listed on the Toronto Stock Exchange, making the Horizons family of ETFs one of the largest in Canada.
Lee serves as the president of the global business unit at Mirae AGI and has been dividing his time between Seoul, New York and Toronto. Mirae AGI is part of Mirae Asset Financial Group of South Korea, which has US$64 billion in AUM. Lee’s priorities are for Horizons to “continue its tradition of being an innovative ETF provider” and to develop “two-way synergies” among the various global Mirae AGI offices regarding product innovation and cross-selling.
Horizons began in 2005 as a Caribbean-based holding company with three hedge funds. The firm changed its name to BetaPro Management Inc. of Toronto, and became known for bringing leveraged and inverse ETFs to Canada.
Prior to Mirae AGI’s 2011 acquisition of its stake in Horizons, the majority owner of Horizons was Jovian Capital Corp. of Toronto, which bought control in 2006. Atkinson, formerly the head of business development for ETF-provider Barclays Global Investors Canada Ltd. (now called BlackRock Asset Management Canada Ltd.), then joined BetaPro as executive vice president and became the better known face of the company.
“Felesky always kept a low profile; he wasn’t one to be in the spotlight,” says Rudy Luukko, investment funds and personal finance editor with Morningstar Canada in Toronto, who adds that disagreements between entrepreneurial founders and corporate owners aren’t unusual. “He was the founder of the firm, built it up, sold out to new ownership and has decided to leave.”
Lee has a 10-year association with Horizons going back to its days as BetaPro, when Lee was a portfolio manager with ProFunds Distributors Inc., a U.S.-based alternative fund provider that was the subadvisor to Horizons on its inverse/leverage products. Lee later joined Mirae AGI, and when that firm acquired its majority stake in Horizons, he became chairman of Horizons’ board.
Mirae AGI’s global ETF business has about US$9 billion in AUM. The Horizons acquisition was Mirae AGI’s first foray into the ETF world.IE
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