Wekerle has friends on Bay Street, sure, but he also hangs with movie stars—counting Mark Wahlberg as a friend—as well as tattoo artists. “I have some great friends who are artists,” he says. “They have a different sense of life.”
Wekerle still has plenty of business ventures on the go. He’s laid a big bet on Florida real estate, using the high Canadian dollar to snap up property at depressed prices. And after leaving GMP, he ran into gold executive Pierre Lassonde. During a walk, Lassonde counselled Wekerle to go back to work on the Street.
So he joined a group of buddies to try to build a fund company. Wekerle and his partners bought stakes in a mid-sized Toronto asset manager, Galileo Global Equity Advisors, and have ambitious plans to turn it into a multifaceted financial services firm. Although he is more enthusiastic than specific about plans at this point, he wants to use his ties to the rich and famous to advise them on managing money. As usual for Wekerle, he’s bubbling with ideas. “This is just the beginning of something that is going to be spectacular as a financial services firm,” he says. “I look at this in a broader sense, including private equity, including other products that, as the cycles change, we want to be at the forefront of those changes.”
What about GMP and its expansion globally? How will that end? He points to the problems other Canadian companies have had abroad. “I wish them the best, but it’s a difficult challenge.”
For Fricker, the aficionado of martial arts, it’s all about leverage. In a fight, he uses jiu-jitsu or wing chun, techniques that seek to overcome an opponent with minimum effort. There’s a lesson there for GMP. The smaller opponent can defeat the larger. Fricker likes to quote Archimedes: “Give me a lever and a place to stand, and I will move the world.”
Fricker is the first CEO to run GMP who wasn’t there at the beginning. At the best of times, being CEO of an investment bank is a grind. Egos at the firms, fed by million-dollar paycheques, get big fast. The fights can be vicious, mostly driven by money.
Unlike banks, which pay base salaries and bonuses once a year, GMP pays monthly, in cash, using a formula tied directly to how much revenue the staffer generates. The formula is 60% to the house, 40% to the bonus pool.
The bonus pool is a zero-sum game. If one person gets a dollar more, someone else has to get a dollar less. This can be as divisive at GMP as anyplace else. “It’s not an easy place to run,” says Barry Allan, head of Marret Asset Management, a client of GMP’s. “Anybody who can keep it under control is doing a really good job. He [Fricker]has only been in the job a year, but so far there’s every indication he’s doing that.”
It doesn’t make things any easier that the markets are awful. Firms like GMP that are focused on resource stocks and smaller companies are hit hard when the world wants big safe stocks, dividends and bonds. None of those have been core plays for GMP, and the firm is suffering. Bonuses are nosediving, GMP is struggling to make money, and some analysts are questioning whether a commitment to paying out a high dividend makes sense for a cyclical business like a brokerage. (GMP’s stock, meanwhile, was trading around $6 and $7 in November, compared to the $20 to $25 range it was in five years ago.)
Against that backdrop, Fricker and his partners at GMP are trying to also defy history. They face a challenge that has spelled the end of many of the fast-growing independent firms that Bay Street has spawned in the past three decades.