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ETF champion Som Seif is neither down nor out

Som Seif, former CEO of Claymore Investments Inc., which is now part of BlackRock Inc.

Jalani Morgan

At the age of 36, Som Seif is already a revolutionary force in the Canadian investment business. In just seven years, he launched an innovative fund management company, built it into a household name and then left at the top of his game. Seif stepped down as CEO of Claymore Investments in April, after his U.S. financial backer, Guggenheim Partners, sold the company to giant BlackRock Inc. So what will he do for an encore? His dream is to create a new firm as game-changing as Claymore, which helped pioneer exchange traded funds (ETFs) in Canada as a low-fee alternative to conventional mutual funds.

Why are you doing this interview from Thailand?

After leaving Claymore in the spring, I did some work for the Ontario Securities Commission, consulting on a range of topics. Then I left for a three-month break with my wife and two young daughters. We went to Italy, then to Southeast Asia, including Thailand, Laos, Cambodia and Vietnam. We'll spend the last month in Nova Scotia, just hanging around. We'll come back to Toronto in September and start thinking about what's next.

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And what will that be?

I look at financial services as a very inefficient industry and continue to believe there is a need for positive social utility. The industry has to change. It focuses on siphoning fees for itself instead of making money for clients. I want to do something for the end customer. I'm still at the stage where I'm a for-profit player, but I want to prove you can make a for-profit business work for the client, too.

What do you want to build?

Probably another investment management business that focuses on low-cost offerings, but I want to do it across multiple product areas.

Is the Canadian investment world quaking at the thought of your return?

I wouldn't say so. There is a lot of complacency and it takes a lot to change things. At Claymore, we made a positive dent, but it was a small dent. In seven years, we raised $8 billion, but the industry has $1 trillion in investment funds. I don't think the big investment companies or banks are thinking about what Som Seif will do next, but I hope they will learn from it. I want to build a business that shows you can cut through the noise and deliver great products without charging big fees.

Can you change the industry?

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I think we can. The sale of Claymore was a specific situation—it was the right time for our partners to sell. I would have liked to build Claymore into the next great asset management company. I'm still hungry to leave my true legacy. I want to look back on my career and say I had a big impact.

So does that mean doing something bigger than Claymore?

That's a tough question. Whenever you do something and leave it, you ask what you can do next. The first reaction is: It has to be bigger. In reality, that's the worst thing to say. If you don't do something bigger, you feel you have failed. Michael Jackson lived his life trying to outdo Thriller. He did that album in his early 20s and he was miserable for the rest of his life. He produced phenomenal music after Thriller, but he was never happy. As for me, as long as I'm doing positive things for the industry, I will be happy.

Why couldn't you have done that with BlackRock?

We worked hard to figure out if it made sense for me to stay and build. We had very common philosophies, but it wasn't the right thing for me, or for them. Also, I made a pact with myself long ago that I would never run a Canadian subsidiary for a large global enterprise. And I really missed the start-up phase and wanted to go back to that feeling.

Do you have any high-fee conventional mutual funds in your own portfolio?

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No, my portfolio is pretty much all ETFs. I eat my own lunch. I bought Claymore ETFs through and through. There is also a sprinkling of single stocks, though—I own RIM, for example.

So you are not flawless in your personal investing?

I made many, many investing mistakes. I started in the industry in 1999, during the tech bubble, and I invested aggressively in single stocks. I stuck at it, and I was fortunate to go through the bubble at an age when I didn't have meaningful money to lose. I learned not to think too much about investing, and to diversify and stay long-term.

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