Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

When Ted Garrard took over as chief executive officer of Toronto's Hospital for Sick Children Foundation last year, donations were down, investments had sagged and there was a public outcry over the $2.7-million paid to the former CEO.

Some wondered whether the foundation, one of the largest charities in Canada, would recover.

It looks now like those fears were misplaced.

Story continues below advertisement

According to recently released annual filings, donations have held steady at $88-million, costs are down 20 per cent and executive pay has been curtailed.

Even more stunning, the foundation's investment portfolio generated a 41-per-cent return for the year ended March 31, 2010. That helped boost overall assets, which includes other holdings, to a record $670.2-million at year end.

"I think we've made very significant progress," said Mr. Garrard, a former economist and long-time university fundraiser. "We still have room to get better on a number of different fronts but I would say that we're feeling very optimistic."

Mr. Garrard credits much of the success to Prem Watsa, chairman and CEO of Fairfax Mr. Watsa is famed for contrarian market calls and he has been using that same approach as a volunteer at the foundation, where he has overseen investments for 15 years. "This comes naturally for me," Mr. Watsa said in an interview.

Mr. Watsa said his investment strategy at the foundation has been fairly simple: Keep the asset mix relatively steady and look for value.

When he started at the foundation in 1995, 80 per cent of its then-$148.2-million portfolio was invested in equities. Mr. Watsa brought that percentage down slightly over the years and, in 2007, slashed it to 35 per cent, convinced the markets had peaked. Most of the remainder went into government bonds.

Mr. Garrard said there were those who thought the move "was crazy" but he stuck with the plan. As a result, the foundation's portfolio survived largely intact when markets tanked in 2008. By 2009, Mr. Watsa had piled back into equities, taking the percentage up to 75 per cent and putting much of the remainder into corporate bonds. With markets recovering, he has pulled back to a 50-50 weighting.

Story continues below advertisement

The strategy has made SickKids Foundation among the best-performing foundations in North America in terms of financial returns. Most were lucky to earn 20 per cent last year and many had to reduce their grants because of the recession. SickKids Foundation kept up its granting. Further, its investment portfolio hit $659-million as of March 31 and has topped $680-million today. "We are on our way to $1-billion," Mr. Watsa said.

The strong returns have an impact beyond just bolstering the size of the portfolio. The organization supports research and medical programs at Toronto's Hospital for Sick Children and, by law, foundations must pay out at least 4.5 per cent of their assets annually. Mr. Garrard said last year's strong investment performance will increase grants to the hospital by about $3-million this year, to $30-million.

Mr. Garrard added that the foundation is so eager to keep Mr. Watsa, it has exempted him from the normal term limits for board members. "Prem is really unique," he said.

Mr. Watsa said he's pleased to stick around and credits others on the investment committee, including Irwin Rotenberg, president of Lissom Investment Management. "I'll stay as long as they want me," he added.

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies