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How an activist investor shook up a Canadian brand Add to ...

Boland quickly embraced new trading technology, writing his own investment computer models by the time he graduated. His skills landed him a place on the most profitable trading desk on Bay Street: RBC Dominion Securities Inc. hired him in 1991 and placed him alongside Roland Keiper, the sharpest eye on the Street for undervalued or overpriced securities. Specializing in junk bonds and arbitrage trades, the small team racked up massive profits for RBC and pocketed millions of dollars for themselves by shorting stocks or spotting undervalued securities. Big wins included bets against Royal Trustco Ltd. and Newcourt Credit Group Inc. before the financial giants toppled.

Boland specialized in distressed debt, a grim and emotionally charged corner of the capital markets where corporate bonds and debentures are sold at deep discounts. While other investors thumped tables to get concessions on troubled bonds, Boland remained coolly focused on solutions. “He is completely able to divorce his emotions from investments. I’ve never seen anyone like him, who can keep his ego out of the investment process,” says Jim Doak, a portfolio manager who worked alongside Boland in the late 1990s.

Boland’s success attracted imitators, meaning the “pretty easy money” he had been making became more elusive. Casting about for new ways to profit from troubled companies, Boland wanted to use RBC’s investment clout to push for management and strategic fixes at struggling companies. But there was a problem with that sort of aggressiveness: RBC’s shared bloodlines with the Canadian establishment. Boards were populated by RBC clients; if Boland got tough, he’d soon tread on the wrong toes. “I was very constrained at RBC,” he says—a characteristic understatement.

In 1998, Boland left the cavernous trading floor at RBC Securities to set up a one-man desk at Enterprise Capital, an investment boutique founded by Jim Doak and Jim MacDonald, former Scotia Capital investment stars. At Enterprise, Boland effectively ran his own fund for his core client, Greenwich, Connecticut-based Paloma Partners LLC.

Leaving RBC meant Boland had more freedom to push for change at ailing companies. It also gave him more flexibility and money to feed his thrill-seeking side. “Greg did not have the same Germanic call of duty as the rest of the Street,” says Doak, who marvelled at Boland’s “James Bond lifestyle” of arriving late at the office and disappearing for long stretches in search of adventure.

Boland’s idea of relaxing is defying death. He clambers up knife-sharp rock peaks with bare hands, heli-skis down avalanche-prone mountains, loops through the skies in aerobatic airplane manoeuvres and wind-surfs swells in Hawaii. Boland says the duress of extreme sports fortifies his trademark confidence. He calls this the “calm loop”; the more you believe you can do it, the greater the chances you can. Or, to put it the other way, “If you are perched on a steep mountain in Alaska and think about falling, you will.”

Boland can get away with his James Bond act because most of his investments are long-term plays that seldom require minute-by-minute attention. Still, he ensures he is a phone call away with satellite-linked communication devices he packs for every trip. Several years ago, Boland was nearing the Sun Gate of Machu Picchu after a daylong trek up the Andes, when his phone began ringing. While his companions toured the magnificent Incan ruins, he discussed investments over the shoe-box-sized device.

Shortly after setting up his own desk, Boland cemented his reputation as a daring investor by making a bet that many initially dismissed as lunacy. TVX Gold Inc. was heading for the abyss in the late 1990s after its mining project in Greece was shuttered. Boland snapped up a large stake in TVX bonds that were trading at a 60% discount. What he saw that others missed was TVX’s portfolio of gold-mining options, which protected TVX if the price of gold fell and would yield huge profits if prices recovered. After gold prices levitated in 2001, Kinross Gold Corp. bought the bankrupt company. Boland quadrupled his money.

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