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the lunch

Newton Glassman, a private man in the stressful world of private equity Add to ...

Newton Glassman has spent the past 11 years running hard to build what has become Canada’s second-largest private equity firm.

Now he’s starting to think about slowing down, at least a bit. It’s not just because of the injured leg that has him thumping toward a booth at the Chase, Toronto’s hottest financial district restaurant, with a cane and a walking boot to protect an ankle injured in a water-skiing accident. He is spending more time pondering charity and life outside work.

Mr. Glassman’s firm, Catalyst Capital Group Inc., now runs $4-billion of assets that it mostly puts to work in messy distressed situations, trying to take control of struggling companies and turn them around. At the moment, Catalyst is probably most visible in the wireless wars, fighting a running battle with other creditors of bankrupt wireless provider Mobilicity and seeking to be a player in creating a new cellphone service provider to compete with the likes of BCE Inc. and Telus Corp.

It also played a role in the restructurings at CanWest Global Communications Corp., where it made a huge return, and Stelco Inc. Its portfolio includes everything from casinos to restaurants to a biotechnology company.

Investing in distressed debt is a gritty, confrontational business. Mr. Glassman's firm typically buys bonds issued by a troubled company, spending countless hours searching for the securities that will provide the most influence, then tries to gain control when the company is restructured. The goal is to buy in cheap, seize power if necessary, fix the business and reap the rewards. It can be a rough job, because there is rarely enough money to go around and someone usually loses out.

Faceoffs over failing companies have earned Mr. Glassman a reputation as a pit bull negotiator. He acknowledges that he is the last to shy away from a scrap, and that’s why he is suited to do what he does.

“You have to be unaffected by conflict to be decent at distressed because it’s a highly adversarial process,” he says. “You have to have extraordinary commitment to your view, both ethically and professionally, because you are dealing with desperate people and desperate people try desperate things. You have to have a commitment to your sense of what is right and wrong. And you can’t waver from it.”

Yet, his reputation is a bit hard to square with the soft-spoken man who has a touch of the cherub in him even at 49, who is reclining to prop his bum leg up on the banquette, keen to talk about his love of kids and sports and the fact that he is a “water baby.” He’s attired in a charcoal suit, a white and black checked shirt and a black tie, with a slim Patek Philippe timepiece on his wrist. His black eyeglasses frame a youthful face with rounded contours.

Speaking of faces, Mr. Glassman’s is not well known to very many. He has a standing no-pictures policy – declining even to provide a photo from which The Globe and Mail’s artist could create a rendering. That guy up in the drawing above, he’s just a generic business type.

However, the low-profile act can’t last forever, not when he has created a firm that some back-of-the-envelope calculations show could be worth something like $1-billion, and that plays in some of the more interesting deals in Canada.

Mr. Glassman is also looking at ways to give away most of his money, and his name is starting to pop up in recognition of that. For example, the neonatal intensive care unit [NICU] at Toronto’s Sunnybrook Health Sciences Centre now bears his name.

After settling on a fresh mozzarella salad for an appetizer and albacore tuna for the main, Mr. Glassman begins to explain how he went from studying law to the world of private equity.

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