Recession? What recession?
This article is reprinted from Skulematters 2009.
Of all the asset management firms in Canada, we’re the only one that posted net positive sales every month through 2008,” says Som Seif (MIE 9T9), president and CEO of Claymore Investments, Inc. “And this is against some of Canada’s largest mutual fund companies, the big banks, and other major players in the fund industry.”
At a time when global financial markets are tanking, investors are watching their holdings shrink, and the economy is in one of its deepest crises in history, Claymore — a provider of exchange- traded funds (ETFs), closed-end funds, and institutional funds — is managing to increase its market share.
Seif, who founded Claymore in 2005, attributes the company’s strong performance in these turbulent market conditions to the numerous innovative investment products it has launched since its inception. Claymore revolutionized the ETF industry in Canada with affordable products that cover broad markets and make investing in ETFs easy. The company was the first in the world to offer an actively managed ETF (a departure from traditional ETFs, which passively track indices) and ETF wrap portfolios (which combine ETFs in multiple asset classes into one balanced product). It was also the first in Canada to bundle a dividend and interest strategy into an ETF, and to develop ETFs that invest directly in international securities.
Crediting the learning and problem-solving skills he developed as an undergrad, Seif, who regularly appears on the Business News Network, says the company’s ability to recognize and respond to shifts in investor thinking and demand at the market- and investor-level has played a crucial role in the success.
“Prior to the down market, we saw there was a movement on the part of investors towards low-cost investment products, and products that provide flexibility and simplicity in investing. Positioning ourselves relative to that has definitely helped us in this environment," he said.”
Of course, Seif, a 2007 recipient of U of T’s prestigious Arbor Award is no stranger to big wins. In the seven years he’s volunteered as head coach of the Varsity Blues men’s water polo team, he’s led the squad to five Ontario University Athletic championships.
Also serving up optimism
Other Engineering grads turned Bay Street experts concur that the forward thinking and analytical mindset fostered by their studies has been indispensable in their work in finance.
John Bajc (CivE 8T2), a senior executive financial consultant with Investors Group, explains: “Financial advising is a fact-finding mission. Putting together a proper financial plan for someone involves piecing together many different components — insurance, tax, retirement, estate planning, cash flow management, risk tolerance, and so on — so the analytical abilities immediately kick in. You have to be able to see how everything fits together for each individual client.”
Also responsible for managing assets within those plans, Bajc says a big part of his job is keeping people focused on the long term. With many clients seeing sizable declines in their portfolios, the knee-jerk tendency is to try to avoid losing more money by selling off equities in favor of the money market, treasury bills, and guaranteed investments. As well as advising these clients to maintain their long-term strategies when rebalancing their portfolios (“the markets will eventually recover”), Bajc is encouraging those with cash on hand to step up their investing at this time. “I believe that three to five years from now, we’ll look back and see what a buying opportunity this was.”
In Bajc’s practice, clients at or nearing retirement, on the other hand, already have more conservative portfolios protecting their income stream. “I work with people three if not five years ahead of retirement to design a portfolio that can weather a minimum of five years in a negative equity environment,” he explains.
Managing risk while exploring opportunities is also a focus for Donovan Pollitt (Mining 0T4). As vice president of corporate development at Wesdome Gold Mines Ltd., Pollitt has played a key role in successful project financings, mergers, and property acquisitions since joining the firm in 2004. Wesdome, which currently has two mines in production and a brand new discovery in Val d’Or, Quebec, generated a positive cash flow of $12.1 million CDN in the first three quarters of 2008, Pollitt reports.
Responsible for evaluating projects within the company and business options outside of it, Pollitt anticipates that, in current market conditions, increasing company revenues and “the lack of risk capital available to smaller development companies should put Wesdome in a good position to repeat its strategy of regional acquisition and development.”
Despite the transformations now rippling through the international marketplace, our Engineers have been able to find bright spots not only in finance but also the environment.
Economic growth without concern for environmental impact adversely affects the quality of life for everyone on the planet — including the developed world. Improving the state of our financial marketplace goes hand-in-hand with improving our quality of life.
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