In 2003, Quebec’s largest lender, credit union Desjardins Group, approached Mr. Desjardins to try to revamp the company’s asset-management business. The emissary was Monique Leroux, who is now chief executive officer of the credit union behemoth. Would Mr. Desjardins run the unit?
“I said no, but I’d be interested in buying it.” He ultimately bought about $5-billion of assets that became the seeds of Fiera, which through a series of acquisitions he had turned into almost $30-billion in assets under management by the end of 2011.
Then came the big coup. National Bank of Canada head Louis Vachon had come calling. Would Mr. Desjardins be interested in combining Fiera with his bank’s Natcan unit? It would almost double Fiera’s size instantly, so he was intrigued. But how would he convince National and Desjardins Group, rivals in many ways, to co-exist as minority investors in his firm?
After 14 more months of talks, with Desjardins Group on one side, National Bank on another, and Mr. Desjardins in the middle, the deal was done.
But he is not.
Mr. Desjardins wants to take on the U.S. with Fiera. He didn’t with TAL, something he calls a “big strategic mistake.” He doesn’t plan to make the same mistake twice.
“The dream that Louis and Monique and I share is we have an opportunity with Fiera to build over the next 10 years an investment management organization with the scope to compete on a North American scale.”
That means tripling Fiera’s size. Right now it’s big for Canada, but one of dozens of mid-sized players on the North American scene.
“To be a serious player you have to have $150-billion. At $55-billion, on a North American basis …” Here comes that pause again. “Phhhfff. Do you know how many $55-billion firms there are?” He shakes his head and takes a bite of spaghetti.
He knows that time is limited to build a big independent. He expects the huge Canadian banks will soon be moving in to gobble up anything that’s worth having in asset management. They’ve done it with investment banks. And mutual funds. They are going to do it in insurance, he figures.
“You tell me the investment management industry will be the exception to the rule?” He shakes his head.
Over coffee, the talk turns to Mr. Carney, and what’s next for him. Since his appointment, he has been named head of the Financial Stability Board, an international banking regulator based in Switzerland. With governments around the world trying to find ways to avoid another crisis, it’s one of the most critical jobs in global finance.
Mr. Carney has even been raised as a possible successor to Mervyn King, the current head of the Bank of England.
“Honestly, in my opinion, I don’t think he’d be interested,” Mr. Desjardins says.
Canadians don’t realize what a plum job running the Bank of Canada is, he adds. The bank produces top-notch research, and the governor has total independence.
Running the Bank of England isn’t exactly a step up, in his opinion, with more government meddling and work that isn’t as stimulating.
“In Canada, I find it so sad, we should be so proud of an institution like that in a small country,” Mr. Desjardins says.
“We have institutions that are first-class and we don’t cheer them on.”
Undergraduate degree from College Mont-Saint-Louis and a Masters of Business Administration from the University of Montreal’s renowned HEC business school. He is also a chartered financial analyst.
One of his most important negotiations was with the woman who is now his second wife. They met after the sale of TAL. He wanted a second family. She wasn’t sure. “I managed to turn her around,” he says. “So we got married.”
They now have two daughters, six and five, in addition to three children from his first marriage, and nine grandchildren.
Where he began
His first job was as a stock analyst at Sun Life, in 1969, researching companies in the technology business. He already had a sneaking suspicion that he wasn’t cut out for that particular job, preferring instead to think about macro issues. One day his boss came around and asked for volunteers to be measured on their ability to create value with their stock picks.
A statistical analysis of Mr. Desjardins’ ability to pick stock showed it “turned out to be negative,” he laughs. “I wasn’t really surprised.”
Instead he focused on a relatively new concept in finance, modern portfolio theory, which emerged in the 1950s. That became the basis for his career running money.
His first company
He partnered with the wealthy Timmins family, which made a fortune in mining, to run money. Over three decades he turned it into the hugely successful TAL Global Asset Management, now owned by Canadian Imperial Bank of Commerce.