Happy Sunday morning all. With Harv continuing to provide great market insight – I thought we would shift gears a little this week. Just over two years ago my family and I made the decision that I would join the team at Grayhawk. In my 20 years experience in the finance world, I have had the opportunity to touch much of the value chain with respect to the investment process, from dollar earned to dollar invested. The uniqueness of Grayhawk’s independent open architecture investment model combined with a focus on creating deep relationships with client families stood out in the Canadian landscape. This is how I got here…
After graduating university in the early 2000’s it was always my goal to end up in the finance industry – the only question was to which of the silos I would end up in. As fate would have it, I landed a junior role in equity research on the sell-side, which would be my home for the first part of my career, ultimately spending about 15 years in the space. The bulk of that time was spent as a Research Analyst in the energy sector. The main responsibilities in this role included doing deep dives on covered companies, building forecast models and using this research to make investment recommendations on these companies to institutional clients of the firm. Interestingly, these clients were mutual funds, hedge funds and the like that made stock specific investments on behalf of their clients. What’s instructive, is that these are the types of managers that Grayhawk evaluates on behalf of our clients, looking to choose best in class for the specific needs of our client portfolios. Having sat across the table from these portfolio managers, pitching them my best ideas, I learned that there is differentiation between managers, with many being great at some things, while others great in different areas of focus. This experience was a key learning in my journey that landed me at Grayhawk.
Fast forward to 2016, we were in the depths of the energy trough as commodity priced dipped and interest in the energy sector waned. It became time for me to move on from my sell-side role and find my next career. It’s important to note here that my Dad’s 40+ year career was also in finance. The vast majority in the wealth management space, starting at a small independent, experiencing the consolidation years in the 80’s and 90’s and ultimately ending up as a branch manager for two of the big 5 Canadian banks. What I learned here was that I was interested in pursuing a career in wealth management, but it was unlikely that the big bank route was a fit for me.
With that in mind, I started the next phase of my career at one of Canada’s leading independent wealth management firms. The experience was fantastic, and what stuck with me early was that building a trusting relationship with the client was almost as important as providing sage investment advice. What also stood out was that while the majority of the private client portfolios were built using multiple asset classes from one manager, institutional clients of the firm (pensions foundations, etc.), representing ~85% of the AUM, were more likely to select one or two asset classes from the one manager, rounding our their well diversified portfolios with investments at other firms.
As Harv often states from his experience working at one of the leading Pension plans in Canada, Canadian pensions are global leaders in building well diversified investment portfolios – but after that portfolio management in Canada seems to take a back seat, creating a gap and making it more difficult for individual investors to access the expertise that we have in this country.
Enter Grayhawk – a fully open architecture investment platform, where we look to build pension like portfolios selecting best in class managers and bringing those opportunities to client families giving them access to well diversified, well thought out investments. I believe that we are filling that gap and that was one of the key reasons I joined the team.
Not to be lost in this, was my learning on the importance of building a strong relationship with clients, which are built on a foundation of trust. This is not only a fundamental part of the value prop at Grayhawk, but we also look to take it a step further – ensuring that we build these relationships with not only the wealth creator, but also their spouses, children and any other members of the family that are to be involved. Understanding the goals, wants, needs and fears of our clients is core to building the right experience for the family. While wealth is the numbers behind the dollars and cents, it is also emotional. This focus was a key characteristic of improving the wealth management experience for clients.
Grayhawk takes an institutional approach to asset allocation but adds the relationship aspect of wealth management. Using an OCIO model but with a deep understanding of the family or institutions needs and values, rather than an asset management like relationship. Though not always apparent at the beginning, it is often the questions that arise from the relational aspects of wealth that help drive portfolio construction. This leads one to ask, what questions should clients be asking themselves and that of their family to achieve the desired outcome.
It is the culmination of my experience with many of the stages of the investment journey that lead me to Grayhawk. It is this foundation that we look to build on as we take the firm into the future. While not a deep dive on an investment theme this week, it is an important reminder of how many of us got here. Perhaps next time, I will put on that analyst hat again. Until then, wishing all a prosperous end to summer and start to fall.
Best,
Dave
David Beddis, CFA
Head of Western Canada and Portfolio Manager
About Grayhawk
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