In a highly unusual move for someone of her rank, Rowe decided to take a year-long sabbatical to help her parents transition into an assisted-living building in Toronto, and to travel the world with her long-time partner, Tammy McBrien. The bank promised her that a job would be waiting for her upon her return.
So she and Tammy travelled to all seven continents. “Antarctica to Asia to Africa, saw it all,” Rowe says. “Doing that was something that nobody can ever take away from me; it was awesome.”
She had to kick back up into competitive gear upon her return, overseeing the credit side of retail lending, including workouts. “That is one of the toughest jobs in a bank,” Waugh says. “You have to be tough, deliver tough medicine.”
The file that earned Rowe her first moment of public attention was CanWest Global Communications Corp. Its spendthrift CEO Leonard Asper wrote lengthy, impassioned letters imploring her not to force the company to file for bankruptcy protection after it had fallen months behind on its debt payments. But Rowe was having none of it, and she shot back with concise rebuttals that became the talk of Bay Street. In one noted slapdown, she told Asper, “we remind you of the following facts: ...[the newspaper division of CanWest]is insolvent. It is plain and obvious that it cannot support its massive debt, and that a transaction will have to occur that fundamentally alters the balance.”
And that is exactly what happened.
It was around this time that Teachers’ head of private equity quit to start his own firm. “The phone rang, and it was a recruitment firm that had seen me at work on CanWest,” Rowe recalls. “And they said, ‘We’ve got this job at Ontario Teachers’ in private equity. We know you’ve been at Scotia for 23 years, but would you think about it?’”
Private equity was her favourite part of the business, but one that banks were doing less of as the financial crisis took its toll. And Rowe was fairly certain that she had gone as high as possible at Scotiabank. “When you’re one of the top 20 or 24 out of 68,000, really, that’s pretty good,” she says.
The head of private equity at Teachers’ is a high-profile job—the very one that Jim Leech himself held before he became the CEO. For all pension funds, the asset class has become more important lately as they seek to reduce their reliance on turbulent stocks and bonds. Certainly it’s a critical and growing component at Teachers’, accounting for more than 10% of its portfolio. Teachers’ 40-strong private equity team has invested in more than 300 companies, among them leading vitamin peddler GNC and the mattress maker Simmons. MLSE was one of its largest PE investments.
Part of Rowe’s appeal to Teachers’ was her solid understanding of many of the moving parts of the capital markets; another, says Leech, is that she was used to running a large team. “Obviously you are working in private equity, but you also have to play a role as a senior executive in Teachers’ overall,” Leech says. “Having a perspective and an understanding of what goes on in fixed income and in other areas of the business is a real asset when you’re sitting at the table with your colleagues.”
Despite Rowe’s credentials, there was still some surprise at the hire, which took effect in October, 2010. “A lot of people said, ‘Who is this?’” says an investment banker who has worked with her. “But I already knew who she was, and I said, ‘Well, there’s a new sheriff.’”
In the 17 years since Teachers’ first invested in what was then Maple Leaf Gardens Ltd., ownership of the Leafs has become a defining characteristic of the pension plan. Indeed, when former Teachers’ CEO Claude Lamoureux and former executive vice-president Robert Bertram accepted the Ivey Business Leader Award at a ritzy gala in 2007, the latter sported a Leafs jersey.
“It’s an iconic holding,” Rowe acknowledges. That said, a crucial element of her job is to constantly examine a $12-billion portfolio and determine whether the money that’s tied up in some investments would be better spent elsewhere. Some 295,000 current and retired schoolteachers are counting on Teachers’ to make these calls correctly.