After law school at the University of Toronto, he knew he didn’t want to be a lawyer. He went to business school at Wharton, graduating in 1990, then took a job at a merchant bank in Toronto. He shunned New York because he wanted to be close to his sister and his newborn nephew. Before he started his new job, he decided to go on safari to photograph animals, “with the view that I was not going to have a vacation again for a very, very long time.”
He returned to a voice mail summoning him to a meeting at the firm, where he found out everyone was being laid off and he would be let go before ever working a day. The severance paid half his student loans, and he quickly found a new job at what was then one of the country’s more prominent private equity firms, Canadian Corporate Funding Ltd. It was there he gained his taste for distressed debt situations. He landed just in time for the recession of the early 1990s.
“The private equity side was in huge trouble. Because of my legal background and business school I fell into being heavily involved in working out portfolio companies and I fell in love with it.”
There were a couple more stops, including one turning around an auto parts firm. He eventually moved to New York-based Cerberus Capital, a giant in the world of distressed investments. He helped run telecom and oversaw Canadian investments. While there, he watched Cerberus grow massively. It taught him how a firm really operates, but also rubbed him the wrong way. He believed private equity firms should stay small, rather than trying to pull in as much in assets as possible to earn big management fees and, perhaps, big investment gains.
“It’s a privilege to be in this business. There is no other business like it in the world,” he said, pointing to the large potential profits. “My view is that doesn’t mean you can exploit it to the nth degree at the expense of investors. There is a limited scale and scope that anybody can run.”
He left Cerberus and wrote a business model for a new firm. As he launched it in 2002, he met a young executive from Mexico named Gabriel de Alba. A mutual friend was badgering Mr. Glassman to interview Mr. de Alba for a job at his new firm. Finally, he agreed. He grilled Mr. de Alba on an obscure telecommunications deal. He knew everything about it, and “literally took me to school.” Their partnership was sealed over a dinner at Morton’s steakhouse in Toronto.
Mr. Glassman now calls Mr. de Alba “the firm genius.”
In the early years, more money went out than came in. “Gabriel and I were writing cheques into the firm and funds and I was watching my chequing and savings accounts go to zero, literally get very, very close to zero for the first three years, four years.”
These days, with Catalyst firmly established, money is not an issue. Its next fund will be bigger than $1.25-billion, Mr. Glassman says, because the openings are increasing for distressed investors. (That’s good news for Catalyst. It’s less so for the rest of the country: “Canada is not doing as well as an economy as we’d like, as we’d hope. We’re seeing more opportunity.”)
With that success, a lot of time is spent not making money, but giving it away. He has help from what he calls “the two most expensive friends that anyone could ever have.” That would be developer Peter Gilgan and Tim Hockey, who runs Canadian banking at Toronto-Dominion Bank. They ride together in a cycling group called Les Domestiques, and spend time thinking about charitable work while in the saddle.
The group’s name is a sly joke for a group with a bunch of high achievers. In cycling, domestiques are the worker bees on a team who are charged with getting the team leader on the podium. They rarely get any credit.