From truck driver to deal maker

Bill Holland knew exactly what he wanted when he went looking for his first real job, near the beginning of the 1980s bull market.

The son of a university professor, he had little desire for a career in academia. His preferred destination was Bay Street, so he tried to find work as a stockbroker -- and failed.

"I knew nobody in downtown Toronto. I was working as a pop truck driver for 7Up at the time," he says. "It turned out to be a very difficult job search.

"I'm not even sure I knew what stockbrokers really did. It just seemed like a great profession . . . [whose practitioners]seemed to live quite well."

Nearly 20 years later, Mr. Holland has amassed a personal fortune that makes the Street's most lavishly paid brokers look like paupers. And he is the talk of downtown Toronto, thanks to last week's flurry of deal making that will transform CI Fund Management Inc. into the country's No. 2 fund manager.

CI said last week that it will spend about $1-billion in cash and stock to make three acquisitions. The biggest of the deals, the $846-million purchase of Assante Corp.'s Canadian operations, will make CI a force in the financial planning business. CI is also spending $116-million to acquire fund manager Synergy Asset Management Inc. and $32-million for Skylon Capital Corp., which sells labour-sponsored and structured products to retail investors.

If they're approved by shareholders, CI will have completed five acquisitions in five years.

The shopping spree was driven by Mr. Holland's view that only the large will make it through the coming crunch in the mutual fund business.

"What this industry has is too many players, and too little capacity for each company in it," says Mr. Holland, who has been CI's chief executive officer since 1999. "I look at it and say, 'This is a business that has matured to a point where the biggest companies are going to win.' They've got to be well capitalized, well branded and sell better."

It was a very different-looking business that he walked into in the mid-1980s, when he finally found his entrée into the financial industry as a customer service representative for Mackenzie Financial.

Back then, the fund industry was on the cusp of breakneck growth. In 1985, there were about 150 mutual funds in Canada with about $10-billion under management. When the industry peaked in 2001, there were nearly 2,000 funds with $426-billion.

"That was probably the best fortune you could have . . . to stumble into that business in 1985," he says. He quickly moved to Mackenzie's marketing department where he learned the business from legendary fund executive Jim O'Donnell.

But working as a peon for one of the industry's dominant companies didn't hold the same appeal as building one. In 1989, Mr. Holland joined CI, then a small private firm known as Universal Savings Fund Management Ltd., for the chance to "have a real impact on a company."

The following year, he borrowed $150,000 from the bank and bought a 15-per-cent stake in the company. The interest rate on the loan: 13 per cent.

"I lived incredibly modestly," he recalls. "I made $75,000 a year, plus if [the company]made money you got a bonus. But if you owe $150,000 at 13 per cent, you start looking at it and you go, 'Wow, [the payments]are half your take-home pay.' It was a real struggle for a while."

It was the best investment he could have made. CI went public in 1994 and has been one of the best-performing companies on the Toronto Stock Exchange, rising at an annual compounded rate of 28 per cent. Part of that rise is simply good fortune and, until 2000, bullish markets. But the company has also earned a reputation for being scrupulous about watching expenses. CI is 10 times as large as it was when it went public, but has increased its staff by only one-third, to 500 employees, Mr. Holland says.

That will change dramatically when CI swallows Assante, whose financial planning unit has historically been a high-cost, low-margin business. No matter, says Mr. Holland -- it was a necessary deal. Financial planners are some of a fund company's most important customers, yet many planning firms consistently lose money and are running out of cash. He said he thinks they'll all have to be owned by larger financial companies.

It's a big bet, but he has made big bets before and won. From his initial $150,000, and by buying more shares, Mr. Holland's stake in CI is now worth about $180-million, which is not bad for a guy who used to drive a pop truck.