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The promotion of Jeffrey Orr, left, seen here on May 14, 2019, to Power Corp.'s CEO’s office is bound to be a disappointment.Chris Young/The Canadian Press

Paul Desmarais Jr. and his brother André Desmarais took over as co-chief executive officers of Power Corp. of Canada on a rainy day in 1996. The weather ended up serving as a metaphor for the direction in which they would take the corporate empire that their father had spun out of an ailing bus company.

No one could ever have expected “the boys” to match Paul Desmarais Sr.’s one-of-a-kind deal-making skills. But no one expected that the sons would deliver such dismal shareholder returns, either. Since their father effectively ceded all control to them, after a 2005 stroke, Power seems to have coasted on its past success, all while failing to get on top of the disruption facing its core financial-services business.

Paul Desmarais Sr. possessed an uncanny knack for knowing when to buy – and, more importantly, sell. The sons have never displayed the same business acumen. Power has yet to recover from its disastrous 2007 purchase of U.S.-based Putnam Investments. And many disgruntled shareholders fear it never will.

In that regard, the promotion of Jeffrey Orr to the CEO’s office is bound to be a disappointment. Many investors still blame Mr. Orr, who oversaw the Putnam deal, for that fiasco and the company’s failure to turn the situation around since. It is not clear that the announcement of a long-overdue simplification of Power’s dual-holding-company structure will be enough to assuage those calling for Mr. Orr’s head.

Those who watch the company closely expect Mr. Orr, 61, to before long cede the reins to Paul Desmarais III, 37. Mr. Orr’s appointment, hence, could be viewed as an interregnum – a temporary passing of the torch to a non-family CEO – until Paul III feels ready for the job.

Paul Desmarais III, who is said to possess his grandfather’s passion for deal-making, has been groomed to lead. Educated at Harvard, with an MBA from France’s INSEAD, he has worked on both sides of the Atlantic (he did a stint at Goldman Sachs in New York and another at Power-controlled Imerys SA in France) before returning to Montreal earlier this decade to oversee Power’s foray into fintech. He has a sharp intellect and is said to be a quick study.

He is also CEO of Sagard Holdings, an investment fund that, in June, was the lead lender on a US$175-million high-yield debt issue by Montreal-based sports manufacturer Dorel Industries, an uncharacteristic move for Power, but one that appeared to signal a taste for risk.

Known within Power as P3, Paul Desmarais III has been a steadfast defender of the company’s fintech investments, particularly Wealthsimple, a robo-adviser that has yet to yield dividends. He is executive chairman of Portag3 Ventures, which holds the Wealthsimple stake and which recently closed a $427-million financing that included a $100-million contribution from Power, with the rest coming from more than a dozen Canadian and international financial institutions. Mr. Desmarais has global ambitions for the alternative-asset investments, earlier this month setting an “ultimate goal” of raising “significant amounts of outside capital around strategies where we have an unfair advantage to win.”

If that sounded a bit cocky, it was meant to. Mr. Desmarais is not said to lack confidence. Those who have worked with him describe him as extremely curious and animated, much like his grandfather was. He is said to be willing to move Power in an entirely new direction. In contrast, his father, Paul Desmarais Jr. is known to be risk-averse and diplomatic to a fault.

Cousin Olivier Desmarais, the son of André Desmarais and his wife France Chrétien Desmarais, has followed in his father’s footsteps, gradually taking on a bigger role overseeing Power’s investments in China, while also serving as chairman of the Canada-China Business Council. He had also taken an active interest, like his father, in Power’s media assets. In 2015, however, Power sold off all of its French-language newspapers except La Presse, which it last year spun off into a non-profit trust. Olivier Desmarais has been overshadowed by his cousin and is not seen as a rival for the CEO’s job.

Paul Desmarais III and his American-born wife Mary Dailey Desmarais, a curator at the Montreal Museum of Fine Arts, have become fixtures of the city’s charity-ball circuit. It remains to be seen, however, whether Mr. Desmarais has inherited his grandfather’s passion for politics. While André Desmarais caught the political bug early on, and ended up marrying a future prime minister’s daughter, Paul Desmarais Jr. has shied away from intervening publicly on political matters. He long preferred to wield his influence discreetly as chairman of the Business Council of Canada, a post he gave up in 2016.

Paul Desmarais Sr. was the Quebec business community’s most strident federalist, who never shied away from controversy when it came to promoting national unity. He is considered by many to have been the greatest Canadian businessperson – he was certainly the most influential – of his generation. No one has filled the void he left when he died in 2013. His grandson will get his shot at filling his shoes, likely sooner rather than later.

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