At best, Vancouver is an afterthought in the world of finance, a distant contender behind London, Hong Kong and New York. Yet the city boasts a stellar cast of money managers who oversee some of the biggest funds in Canada and consistently beat the averages. Maybe it’s something in the water. Or just a love of all things green.
As a Vancouver investment manager, Wayne Deans works in the import business. “There’s not much money here,” says the chair and CEO of Deans Knight Capital Management Ltd. from across the blond-wood table of his 15th-floor downtown boardroom, which offers floor-to-ceiling views of Burrard Inlet and the North Shore Mountains. “So if you’re going to be an investment management firm here, you’ve got to be prepared to go somewhere else and get the money.”
Like some of his local peers, Deans is adept at winning capital from across Canada and around the world. A specialist in managing wealth for the super rich, he’s got the Ferraris to prove it. “We’re an international firm,” Deans says. “We just happen to be here. We could do what we do from anywhere.”
Maybe so, but Vancouver punches above its weight when it comes to homegrown investment firms. During the past several decades, the city’s money managers have built a diverse and thriving industry that’s earned the trust of everyone from B.C. clients to the globally wealthy and big foreign pension funds. A few of them have long-term performance numbers that would raise eyebrows in New York, London and, heaven forbid, Toronto.
The city is home to Phillips, Hager & North Investment Funds Ltd., a key division of Canada’s largest investment house. It’s also spawned investors with world-beating track records – and the country’s biggest independent money manager, Connor, Clark & Lunn Financial Group Ltd. On top of that, a growing number of traders and analysts on Wall Street and elsewhere got their start here.
None of this happened by accident. The Vancouver investment industry owes much of its strength to a handful of local pioneers. Founded in 1964 by Art Phillips – who later became mayor – Bob Hager and Rudy North, PH&N started with just $3 million in capital. Royal Bank of Canada bought the firm in 2008; by then it managed close to $70 billion in assets.
The early 1980s saw the launch of three other pivotal shops: Connor, Clark & Lunn, Leith Wheeler Investment Counsel Ltd. and M.K. Wong & Associates. The latter was co-founded by the late Milton Wong who, with Leith Wheeler principal Murray Leith Sr. and others helped establish the Portfolio Management Foundation program at UBC’s Sauder School of Business, a rich source of talent. And like PH&N, M.K. Wong spun off several local startups. Thanks to this remarkable legacy, a second generation has flourished and a third one is asserting itself.
Known as a bond trading centre, Vancouver has some star performers in the alternative investment space, too. Take $1.3-billion-plus Vertex One Asset Management Inc.: founded by a trio of M.K. Wong alumni, it runs one of Canada’s biggest and most successful hedge funds. Its Vertex Fund and PH&N’s Absolute Return Fund were two of just three Canadian offerings to make Barron’s list of the 100 top-performing global hedge funds for 2009 through 2011.
Past performance is no guarantee of future results. But here’s what several of Vancouver’s leading investment pros have to say about where their industry came from, how it works – and what it could become.