Dundee Capital Markets Inc. has snatched one of Canaccord's most senior traders, as it prepares to go it alone as a standalone independent brokerage.
Paul Kilfoy, a managing director in sales and trading with Canaccord, who covered financials, tendered his resignation on Friday. Dan Daviau, chief executive officer of Canaccord, confirmed in an e-mail to The Globe and Mail that Mr. Kilfoy is leaving the firm. He had worked at Canaccord since 2005.
Canada's largest publicly-traded independent brokerage by market capitalization and head count, has lost a number of key capital markets employees over the past few months. In June, Canaccord lost three bankers, including Justin Bosa and Sanjiv Samant, two of the firm's top producers.
Dundee, meantime, has spent much of 2016 staffing up, as it prepares to be spun out from its parent company, Dundee Corp., in a management takeover. The transaction, which was first reported by The Globe earlier this year, is expected to be completed by the end of the year.
In the past few months, Dundee has hired a string of analysts including Steve Theriault, formerly with Merrill Lynch Canada, Phil Skolnick, a top-ranked Canaccord Genuity Group analyst until 2014, who had spent the past few years on the buy side, Tal Woolley, previously a consumer products analyst with CIBC World Markets Inc. and Daniel Pearlstein, a specialty pharma and special situations analyst, formerly with boutique dealer M Partners.
The sales and trading desk at the newly revamped Dundee is starting to look a lot like the old Genuity Capital Markets team. Heading up the squad are Genuity co-founders John Esteireiro and David Morrison, who left Canaccord Genuity in 2013.
Also on board are Nick Katsiyianis, based in Boston, who worked alongside Mr. Morrison and Mr. Esteireiro back in the day at CIBC World Markets Inc. and then Genuity. Patrick McBride, is head of sales and also worked at Genuity. Michelle Goh, director, institutional sales, joined Dundee in November 2015, and was formerly with Canaccord Genuity. She worked with Mr. Morrison and Mr. Esteireiro during their tenure at the firm.
It has not all been tailwinds for Dundee this year. While many of the people moves have been incoming, a few have been outgoing. Recently, Myles Wesetvik, who had been with Dundee since 2012, left to join rival broker Desjardins Securities in a senior institutional equity trading role. Desjardins has picked off a number of Dundee's staff over the past 18 months.
New partners at Dundee are being asked to kick in cash for equity. In a dicey environment for the indie brokerage industry, a return on investment is far from guaranteed. On a revenue basis, Dundee is a minnow in comparison to companies like Canaccord and GMP Capital, and can't compete on scale. It generated $10.1-million in revenue in the first quarter of this year, down 7 per cent in comparison to the same quarter in 2015.
Dundee has also consistently lost money. The brokerage lost just over $1-million in the first quarter, which was actually much improved in comparison to the almost $2.5-million loss, in the comparable quarter in 2015.