Vancouver-based Nicola Wealth Management Ltd. has elbowed aside Canada’s biggest bank to snag three veteran executives of Gluskin Sheff + Associates, the asset manager that Onex Corp. is winding down.
On Monday, Nicola Wealth announced it hired managing director Claire Blessing alongside vice-presidents Derrick Abraham and Ori Mandowsky, who together manage about $1-billion in assets at Gluskin Sheff. The trio of advisers will begin to transition their businesses to Nicola Wealth over the next month.
In March, Toronto-based Onex and Royal Bank of Canada had signed an agreement to transfer Gluskin Sheff employees, who oversee approximately $8.2-billion in client assets, to the bank. The move was coupled with Onex’s exit from a business it purchased four years ago for $445-million.
Nicola Wealth’s chief legal officer, Danielle Skipp, said she immediately began pursuing the group of Gluskin Sheff advisers the same day the company announced the transfer to RBC.
“When I saw that it was not an acquisition of Gluskin Sheff by RBC, I quickly realized the entire company – including the advisers – would not be signing individual employment contracts that you typically see with a deal,” Ms. Skipp, who is also the managing director of the Ontario offices, said in an interview. “And that made it a huge opportunity for us.”
Prior to Nicola Wealth’s announcement, RBC executives had predicted they would hire all of Gluskin Sheff’s 80 employees, including the group of 41 senior advisers, analysts, associates and wealth planners. (Before joining Gluskin Sheff, Ms. Blessing worked as a portfolio manager at Phillips Hager & North, acquired by RBC in 2008.)
Chief executive of RBC Wealth Management Canada David Agnew told The Globe and Mail that the bank has six portfolio managers joining RBC Dominion Securities and one joining RBC PH&N Investment Counsel.
“This transition will continue to unfold over the coming months and we remain focused on partnering with Gluskin Sheff as we welcome clients and the other advisors who have expressed their intention to join Dominion Securities,” Mr. Agnew said in an e-mail.
But Mr. Mandowsky said the agreement made last spring between Onex and RBC caught him, and some of his colleagues and clients, by “surprise.”
“Right from day one, I told my clients that I would take the time I needed to look at opportunities, research the competition and ultimately do what I thought was going to be in their best interest,” Mr. Mandowsky said in an interview with The Globe. “As well, in feedback from a lot of my clients, I knew there was still a lot of demand and excitement for them to stay with an independent firm.”
Mr. Mandowsky was approached by several Bay Street competitors, but he says the option to join with an employee-owned independent wealth manager drew him to Nicola Wealth. As well, the access to a broader product shelf of alternative products and advanced financial planning.
“With the winding down of Gluskin Sheff’s client-facing business, Nicola Wealth’s opportunity to become a major force in the Ontario market for high-end wealth management for affluent families has become even greater.”
Nicola Wealth will also allow his clients to continue to hold Gluskin Sheff investments in their portfolio, a product that will continue to be manufactured by Onex directly.
Nicola Wealth is a privately owned fund manager, focused on serving high-net-worth individuals, with approximately $14-billion in client assets. Founder and CEO John Nicola launched the business in 1994 with $80-million in assets.
The company’s expansion strategy includes acquiring niche wealth management businesses. Last year, it bought institutional real estate asset manager Blackwood Partners and Levine Financial Group, which specializes in insurance for physicians. In 2004, Nicola Wealth purchased Watersteet Wealth Management and its founder, David Sung, is now the company’s president.
In April, Nicola Wealth welcomed John Montalbano to its board of directors. He is the former CEO of RBC Global Asset Management.
Over the past three years, Ms. Skipp has been aggressively recruiting new advisers and support staff, particularly in Ontario, which had a smaller office of just seven employees in 2020. The company now has almost 500 employees, with Ontario now up to 80 individuals, including the new Gluskin Sheff hires.
Former real estate analyst (and widely followed financial writer) Ira Gluskin and one-time architect Gerry Sheff founded the firm that bears their names in 1984, building a strong following among wealthy families and institutional investors. The founders took the firm public in 2006, and subsequently sold their stakes.
In 2019, Onex acquired Gluskin Sheff as part of a strategy to add additional asset management products – traditional stock and bond funds – to its private equity and credit offerings. Onex also planned to use its sales staff to distribute PE and credit funds.
Last March, four senior Gluskin Sheff executives told Onex they planned to jump to Royal Bank’s wealth management platform. The potential defections prompted Onex to sign a fund distribution agreement with RBC and wind down the division. In its most recent financial results, Onex took a US$171-million non-cash writedown on its investment in Gluskin Sheff, along with a US$20-million cash restructuring charge.
Andrew Willis
Clare O’Hara