I know Chad Wasilenkoff's secret: He doesn't sleep. Back when he was a teenager, the CEO of fast-growing Fortress Paper tried every sort of solution for his insomnia-sleep clinics, acupuncture, hypnosis. Nothing worked.
And nothing works now. This explains why, around midnight recently, I received an e-mail from Wasilenkoff. Lying awake, he'd figured out the solution to a problem in one of the deals he's trying to stitch together. Why waste time counting sheep when you're vibrating with a self-described "drive to find a better solution for everything"?
Wasilenkoff has accomplished what no one thought was possible: He has made a fortune in forestry, a sector that has been dead money for years. Building on an $8-million private offering in 2006 and a $46-million IPO in 2007, Wasilenkoff's creative deal-making has rocketed Fortress to a $770-million market capitalization. An astounding stock-price surge of 306% in the past year is bested by only one other name in the 244-member S&P/TSX composite, the benchmark index that Fortress is poised to join, and in the past three years Fortress has outpaced all comers with its 817% gain. As investors have piled in, Wasilenkoff's own fortune-he owns about a sixth of the company he founded-has jumped to $130 million.
No mere hewer of wood, Fortress is a unique animal that makes money in three cherry-picked specialties. The first is making banknote paper at a mill in Switzerland that also manufactures high-security paper for other uses: passports, visas, lottery and train tickets. The second business is non-woven wallpaper, produced at a mill in Germany. Fortress dominates this quality niche.
The third, and latest, leg is the most counterintuitive of them all: the rag trade. Wasilenkoff scooped up a pulp mill in Quebec dirt cheap and is overhauling it, with the bulk of the money supplied by the Quebec government. The plan is to make dissolving pulp, a suddenly hot commodity used to produce rayon, which is a popular substitute in China for cotton.
Wasilenkoff's title is CEO, but he's more like a good hedge fund manager-a relentless value hound, in other words. It's always been this way, says his mother, Nina. When he was 8, while on a family holiday in Hawaii, he asked to borrow $20 to buy a supply of watermelon bubble gum, which wasn't available back home in Calgary. The stuff wasn't for chewing; it was for flipping. Wasilenkoff quadrupled his money selling the gum to classmates. "He was always looking for action," says Nina. "His mind never stops. He's constantly searching."
By the time he was a teenager, Wasilenkoff was in the habit of wearing a suit, and his arbitrage had moved past gum to everything from video-game cartridges to Robert Bateman prints to beater cars. He earned enough to buy a used Porsche 911, canary yellow, for $14,500. The occasional presence of the car in the school parking lot and the frequent absence of its owner from class led the school's vice-principal to suspect Wasilenkoff was dealing drugs. He hauled mother and son in for a chat. "School wasn't the place for him," says Nina. They discounted the drugs notion in no time. "Chad and I left smiling. They had no clue what he was about."
Wasilenkoff arrived at the University of British Columbia in Vancouver with ambitions of becoming a real estate developer. But on graduation, he realized he couldn't abide the wait to get to the top of that business. Curious about the stock market, he got a two-month gig at Canaccord Capital, the legendary brokerage on Howe Street, stapling stock receipts. He got into an introductory broker's course after he finished the Canadian Securities Course in a dizzying three weeks. He had convinced Canaccord's chairman, Peter Brown, that he could sprint the marathon.
Wasilenkoff is a famous persuader, though not a voluble one. "You get sold before you realize you're being sold," says Richard Whittall, a Fortress director and Vancouver investment banker. "Chad's a tremendous listener. He chooses his words very carefully. He'll sit patiently. I don't want to call it a poker face, but he's basically very good at not betraying any emotion."