Who is the real Ian Bandeen? It's a fair question to ask of the restless boss of junior stock exchange CNQ and its electronic trading platform, Pure Trading. He's a pioneer in two investment fields - securitization and alternative stock trading. He has already retired once (at 39) and come back, but his true passions are a certain Liverpool rock 'n' roller and digging in the desert. The son of a business power couple, Bob and Mona Bandeen, he talks of his intellectually questing career:
Why is it you have two law
degrees and yet never
practised law?
I realized early that, for my generation, a law degree represented what a university degree represented for my parents' generation. It was like having a good liberal arts education.
I also learned the legal system was a pyramid and if you were a flippant insubordinate junior by nature - which I was - you would be very unlikely to succeed within that tight construct.
What did you accomplish in the investment business?
I started out as a junior bond trader, and became one of the people who pioneered the mortgage-backed securities market in Canada. At Burns Fry, we built the No. 1 asset-backed securities team, by far. We were bought by Bank of Montreal, and the bank's CEO Matt Barrett became instrumental to our growth.
I like people who produce - I don't like politicians. I divide the world into those two groups. Barrett was a producer and he gave us the freedom to run and we built the biggest operation for mortgages, asset-backed securities and asset-backed commercial paper.
So why did you leave in 1999?
Matt had gone, the climate was different. For someone who favours producers over politicians, it was not necessarily going to be an ideal place ... the next level of advancement would have been to privatize the business, take it outside the bank - with the bank remaining a major shareholder - and try to grow it. That did not fit with BMO's management principles, which then believed you were an employee, not an entrepreneur in the old investment banking way.
You also got involved in the Toronto International film
festival. Do you like movies?
I love them. Movies were my minor in university when I did honours economics. My favourite movie is, without a doubt, Jean-Luc Godard's Weekend. It challenges your brain, and I like brain candy.
How else do you indulge that taste?
I like to read a lot - in the last couple of years, predominantly non-fiction.
I've been reading Troublesome Young Men, the story of the British Tory rebels responsible for bringing down Chamberlain and letting Churchill have the ascension. I'm two-thirds of the way through The Private Life of Chairman Mao, which is compelling.
How did you get into the
exchange business?
I did my retirement phase, when I was involved in philanthropy and angel investing. I had a lawyer friend who was on top of a lot of the changes in the securities landscape. He said, 'Why don't we create a really solid trading vehicle designed for emerging companies?' That was the genesis behind CNQ.
But no one will ever grow rich creating a junior stock market in this country, particularly when you have a behemoth ahead of you, as well as a group of people in the capital markets that are fundamentally conservative.
We had created the first full new stock exchange in Canada in over 70 years. Then, a number of folks told us there is a crying need for alternative trading platforms. Hence, the birth of Pure Trading, Canada's first ECN [an electronic communications network for trading.]/p>
At 48, you could do this for a while.
Let's wait and see.
The reality is there may be people who are better to run this thing and I don't want to be guilty of having sticky fingers.
How much of CNQ do you own?
Not as much as I'd like, but enough to make it an interesting proposition. Realistically, it's a wonderful operating environment, everything's sexy, every day seems be a new challenge. There is a little bit of ongoing crisis management but in a positive way.
Inevitably there will be the issue of where we fit strategically in global consolidation. That is why I hedge my bets on how long I will be here running it. You never know.
I have to do what's right for employees and shareholders.
Is there anything you still want to do in life?
As soon as I have sufficient funds to provide for my family, come hell or high water, I will immediately be pursuing my main interests - anthropology and archeology.
If I'd been able to successfully privatize my securitization business, this interview would be conducted at some site in a jungle or desert.
So you're a would-be
anthropologist and your
favourite movie is an
anarchist's dream?
You didn't ask who my hero in life is. It's John Lennon, by far. He had the self-confidence to realize his own foibles and overcome them, and to lead a generation through massive change and growth. He had a very positive message.
Do you go around humming Imagine?
Imagine was the wedding song for my wife and me.
Have you helped in dealing with the current crisis in asset-backed commercial paper?
I was known as the godfather of securitization. So in August, I had the majority of senior people, including a number of bank CEOs, approach me, describe in detail their situation, and ask for assistance.
That's one of the things you have to do. It is a nation-building kind of thing.
Ian Bandeen
Title: Vice-chairman and CEO,
Canadian Trading and Quotation System Inc. (CNQ), Toronto
Born: Montreal, 1959
Education: BA, honours economics, Queen's University
LLB and a bachelor of civil law, McGill University.
Admitted to Ontario bar in 1987
Career highlights:
First investment job: Bond trader at McLeod Young Weir
Rose to managing director & global head of securitization and structured finance, Nesbitt Burns
1999: Retired from Nesbitt.
1996-2005: Director at the Robarts Research Institute, London, Ont.
2003: Founded CNQ as junior stock exchange
2007: Formed Pure Trading as a fully electronic equity market.