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Unearthing Alternative Treasures to Offer Optimal Diversification

Both her strong entrepreneurial drive and her desire to offer investors high-quality alternative products led Geneviève Blouin to launch the portfolio management firm Altervest in 2010.

Indeed, having first worked for major financial institutions in Montreal, including the CDPQ, the president of Altervest explains she realized there was a lack of quality in the asset class that is today at the center of her company. “I noticed there were very few interesting alternative products on the market. I also felt that derivatives were either misused or under-used. “

At that moment, Altervest’s mission and direction became clear to her: be the reference in terms of alternative investments’ integration into portfolios in order to improve their diversification, while applying prudent risk management and succeeding in obtaining maximum returns for investors at the same time.

Geneviève Blouin, CFA,CMT
President and Founder
Private Wealth & High Octane Fund

“As an entrepreneur, I thrive on challenges. What motivates me about being an independent manager is also having the flexibility to find products that are truly adapted to the client’s needs, even if they are complex. ” To illustrate what she considers to be her and her team’s role, Ms. Blouin gives the image of adventurers who explore the jungle inside out in search of unique treasures.

“It’s a long-term project. First, you have to clear the uncleared paths to find numerous managers and then meticulously study their prospectus. This sorting process essentially allows us to find managers who know how to efficiently manage risk. I don’t mind going for funds with lower performance if I see that their managers have preserved capital better than the competition during periods of major market corrections because these funds are the ones that will outperform over the long run.”

She believes that Altervest’s approach to managing its clients’ capital is characterized by innovative, disciplined, and conservative risk management, which is no small feat when it comes to alternative investments.

Winning Strategies During Tumultuous Times

Altervest focuses primarily on private wealth management, but also builds its own strategies through mandates it is entrusted with; these internal strategies helping to balance certain portfolios. Faced with market instability during a global pandemic, Geneviève Blouin considers the rigorous methods employed by her firm to be of the utmost importance. Among other things, she mentions the enviable performance of Altervest’s North American Focused Opportunity strategy. During the third quarter, the portfolio generated a return of 10.8%, well ahead of its benchmark index, composed equally of the S&P/TSX60 and the S&P500, which returned 5.6%.

“The good performance was due in part to an allocation to technology companies that do business online and strong companies that are pandemic-proof, such as Five Below (discount detail), Park Lawn (cemetery), and Check Point (cybersecurity),” says Altervest’s president.

She also indicates that the major market disruptions caused by the international spread of the coronavirus also presented a great opportunity for her team to verify whether external managers to whom they entrusted assets were indeed equipped to confront storms. Ms. Blouin recalls Warren Buffet’s famous quote: “Only when the tide goes out, do you discover who’s been swimming without a bathing suit.” Like the famous American investor, she considers difficult times as useful stress tests and has recently made good use of recent market corrections to separate the wheat from the chaff among her selection of fund managers.

Believe in the Strength of Local Managers

Geneviève Blouin, who is also the founder and Chair of the Board of Directors of the Council of Emerging Managers (EMB), argues that the position of smaller independent managers is enviable compared to that of large institutions when it comes to innovating and designing unique strategies for investors. “We have much more flexibility and fewer restrictions. This allows us to develop our expertise to the full,” says the derivatives specialist. She, herself, does not hesitate to rely on local emerging managers to manage part of her clients’ assets.

Also, Ms. Blouin believes that encouraging the proliferation of local managers in the Canadian and Quebec financial ecosystem is essential to ensure its dynamism and diversification. “This is not to say that small managers are better than large institutions, but rather to recognize their contribution to the evolution of the financial sector, notably through the contribution of new ideas, the creation of new products, and the development of technology. “

Towards a Responsible Future

With a desire to offer innovative products that meet the changing needs of investors, Altervest’s President and her team are currently working on a Canadian ESG Equity strategy that they wish to launch in January 2021. “I am a strong believer in the importance of being socially responsible and in the saying “Buying is Voting”. We are also noticing an increasing concern for the environment among our clients and we want to enable them to integrate their values into their investment strategy,” says Ms. Blouin.

She is convinced that this new product, which she particularly values, would also have a place in the portfolios of institutional investors. In fact, Altervest has already initiated discussions with the Quebec Emerging Managers Program (QEMP) to open up communication channels with them. “Just like the EMB, the QEMP helps us emerging managers carve out a place for ourselves in Quebec’s financial ecosystem because although we offer exceptional and innovative products, the challenge for a growing emerging manager is always to gain visibility,” says Geneviève Blouin.

To know more about Altervest

Altervest member’s file.

Allard, Allard & Associés: Leveraging the Science of Investment for Each Client

Launched in 1995, Allard, Allard & associés is pleased to take part in this series of portfolio managers’ profiles, an initiative from the Emerging Managers Board (EMB). “Promoting local expertise in this manner helps build a strong industry in Montréal and retain great young professionals who have attended our own excellent universities,” comments Caroline Allard, Vice-President at Allard, Allard & associés.

“It’s an amazing idea, and I believe our geographical and philosophical position as Quebecers gives us a greater openness to the world than that of our American neighbours, in addition to the cosmopolitan environment that is Montréal, so it is a location of choice for portfolio management,” adds Alexandre Legault, Vice-President, Allard, Allard & associés. He also points out that as Montréal is one of the cities with the highest rates of Chartered Financial Analysts (CFA) per capita, many of these professionals tend to move to Ontario, the United States or London, to thrive in their field. “Turning to local firms for asset management services is therefore essential to retaining talent, which of course benefits us all.”

CAROLINE ALLARD, CFA (since 2002)
Vice-president
Portfolio Manager

Investment: A Passion That Runs in the Family

Having had much success as a Tax Partner at KPMG, Jean-Pierre Allard decided to retire at the age of 50 to pursue his passion, purchasing securities on the stock markets. He was managing his own investments, and with a Warren Buffet-inspired approach, started doing so for impressed family members and colleagues who quickly requested his services.

Mr. Allard’s son, Louis, then an engineer at Createch, had completed an MBA Finance when his entrepreneurship led him to join his father and start up Allard, Allard & associés. “By word of mouth, satisfied clients shared their positive experience, and today the firm has over half a billion dollars in assets under management,” Mr. Legault recounts. The team consists of four portfolio managers, Ms. Allard, Louis Allard, Andrew Kost and Mr. Legault. In 2002, Caroline Allard joined the firm, with a bachelor’s degree in business administration and her CFA certification to enhance the team’s skill set. With his own CFA designation, an MBA and a passion for finance, Mr. Legault became a member of the firm in 2012.

The Allard family has truly always had a keen interest in investment. Benjamin Graham’s The Intelligent Investor, a reference when it comes to the value-style approach to investment, acted as a catalyst for the founder of Allard, Allard & associés. “When I was very little, my father was constantly looking at financial ratings, he was always talking about it, it was a daily topic at the table for us,” Ms. Allard recalls. “So, much like Obélix, I think Caroline and Louis ‘fell into it’ when they were kids,” Mr. Legault explains. « You know how some families discuss politics, others hockey or religion?,” he asks. “The first times I had lunch with the Allards, the conversation was obviously about firms that had recently announced excellent financial results.”

The Allard, Allard Edge

ALEXANDRE LEGAULT, MBA, CFA (since 2012)
Vice-president
Portfolio Manager

While Allard, Allard & associés has always managed Canadian shares, the 2008 credit crisis provided great opportunities south of the border, so the firm has also been managing global shares for 12 years now. As well, although its client base is still mostly comprised of private organizations, being selected by the Quebec Emerging Manager Program (QEMP) in 2016 served as a seal of approval, allowing the firm to expand in the institutional segment. Innocap and QEMP also helped the firm improve its documenting of procedures, particularly as regards compliance. And, by signing the Principles for Responsible Investment (PRI), Allard, Allard & Associés incorporated environmental, social and governance (ESG) considerations into their securities analysis, which is helpful from a risk management point of view, in addition to addressing the concerns of its clientèle.

This clientèle consisting of private clients, foundations and retirement plans benefits from efficient, tailored, long-term solutions designed with a factual approach based on the financial analysis of companies. “We invest at a good price in profitable, financially healthy companies which generate strong cash flow, and that’s what has driven value for our clients for 25 years now,” says Mr. Legault. “As well, clients may discuss their portfolio with the firm experts and decision makers directly, rather than with representatives,” he explains. “Our outstanding team that combines experience, talent and key professional designations is certainly a major differentiating factor for Allard, Allard & associés,” Ms. Allard notes.

Competing With Major Players

The competition from large banks and insurance companies is getting more intense for Allard, Allard & associés. Because they have a strong sales force and they know how to identify all business opportunities with their clients, these companies effectively leverage asset management services. Investment firms in other provinces are also competitors when it comes to large-scale institutional mandates.

Why do investors often turn to large companies for their asset management needs? “There are fewer independent firms now, and I think investors feel more secure when investing with larger firms,” Mr. Legault explains.

Another source of competition is the choice of certain investors to purchase an index directly from an exchange-traded fund (ETF), small firms thus under pressure to reduce their fees when the scale of their operations does not necessarily allow it.

“The passive and quasi-passive management phenomenon, where many investors purchase everything on the market without really thinking, is a differenciating factor for us, giving us an opportunity to position and promote ourselves as actual asset investors,” says Mr. Legault.

Investing in the Future

Today, with more than $650 million assets under management, its mutual investment funds, a dozen employees and the structure to support it, Allard, Allard & associés can continue its growth while maintaining a flawless service for its existing clientèle. “It’s essential for us to have the means to provide the same first-rate service to our current and new clients, throughout our company’s development,” Ms. Allard states.

With an ambition to become a key element of the portfolio management landscape, the firm plans to go beyond word of mouth, increasing their recognition in the industry. “Over the next few years, we aim to reach a $billion in assets under management,” Mr. Legault adds.

Find more information on the website.

Allard, Allard & associés member’s file.

Rivemont: when passion pays off

In 2010, Martin Lalonde launched his portfolio management firm, Rivemont, after spending a few years at a Canadian mergers & acquisitions firm, where he perfected his negotiating skills. Considering both real estate investments and stock exchange transactions, Mr. Lalonde chose the stock market. “If I didn’t have any clients, I would still be doing this, it’s as much a hobby as it is a business, so I get the finest of all worlds,” says Rivemont’s President.

Martin Lalonde, MBA, CFA
President and Portfolio Manager

The beginning of the millennium presented great opportunities for this talented asset manager, who successfully took advantage of the technology downturn and recession of 2008-2009 by leveraging short sale. As he was already providing asset management services to members of his family, Mr. Lalonde quickly grew his client base and initiated the registration process with Autorité des marchés financiers at the end of the year 2009, to establish Rivemont. The firm having completed a first year of operation with approximately $1.5 million in assets under management, Rivemont’s excellent performance has helped the company build a strong reputation and today it manages nearly $65 million.

Rivemont’s assets for outstanding portfolio management

The team at Rivemont offers an active, hands-on approach, never hesitating to conduct their stock trades based on events within the market. “For example, when the pandemic started, we sold shares in an effort to help our investors avoid losses, and we bought some back when the market went up again,” highlights Mr. Lalonde. In particular, Rivemont sold securities from cyclical companies such as airlines.

Furthermore, the firm looks at market conditions and thriving industries to make acquisitions in each of the most prosperous sectors. “Rather than taking an approach focused on value or growth as some of our competitors would, we opt for a top-down analysis, so there have been  moments in our history when we’ve had a large number of value-oriented companies since they were the ones being rewarded by the market, and other times when we have more growth-oriented companies because they’re the thriving ones,” Mr. Lalonde explains.

As well, Rivemont adds colour to its portfolio by offering various flagship products for several different niches. In addition to its traditional strategies for private management, the firm manages three alternative funds, the Rivemont Crypto Fund, the Rivemont MicroCap Fund, and the Rivemont Alpha Fund. The Alpha Fund’s strategy includes the use of short sale to leverage all types of markets. A risky product with high yield potential, the MicroCap Fund consists of investments in very small companies, for example those that are about to enter the financial markets. As for the Crypto Fund, it remains the only actively managed cryptocurrency fund available to advisors in Canada. “Our offering is very different, helping our clients reach a potentially higher return,” says Mr. Lalonde.

The pandemic challenge and the outlook for the future

Constraints related to the current crisis obviously have an impact on business development for Rivemont. “It’s not easy to suggest a lunch meeting with a client to have a chat in person about their needs, we’ve suspended travel, and many projects have been put on hold,” says Mr. Lalonde. However, fortunately the firm had saved all its accounting files on a cloud before the pandemic, and all employees already use docking stations and laptop computers. The company had also previously set up Docusign for electronic signatures. All this has helped the firm adapt to this unprecedented situation.

As for the future, Rivemont has many goals, though the team has not yet made a strategic plan to establish priorities. The firm is likely to become more and more multidisciplinary and to provide more services related to portfolio management. “Our clients are growing and their needs are evolving, so a decision must be made as to which approach to take: focus on portfolio management with our alternative products and our current funds, and partner with other advisors for the distribution of our products, or also develop a related services offering,” Mr. Lalonde explains. One thing is for sure, Rivemont maintains its healthy growth year after year, and the trend continues: “Perhaps someday we will no longer be emerging… ,” says the firm’s President as he thinks about what’s next for Rivemont.

Why choose a local emerging manager?

Among the various benefits offered by local emerging managers to their clients, return is what first comes to mind for Martin Lalonde. “Return will be differentiated from the index and the client will therefore not pay for a product that is practically a commodity,” he says. Moreover, the customer relationship is very interesting, as the client works closely with decision makers. “Many people love the fact that they have a direct contact with a financial expert,” Mr. Lalonde points out. Emerging managers also help create a local infrastructure or service. “The world of finance is rather profitable and its professionals are educated, so I feel it’s important to develop and protect this fibre, this knowledge, here in Québec,” he adds.

To know more about Rivemont.

Rivemont is a EMB member, here its datasheet.

Our talented Managers!

The Emerging Managers Board (EMB) has for mission to promote and contribute to the growth of Canadian emerging managers by highlighting to asset allocators the benefits of investing with local emerging managers.

The CGE submit to its members a pilot project designed to support and pursue this mission. 

Through an article of approximately 1,000 words, written by a journalist and translated into both languages, the project’s objective is to discover the history and DNA of the firm, its leaders/founders, its products and services offered, its progress and future ambitions, etc.

Supported by some agreements already concluded, these articles will be published through a network of several content distributors and will offer great visibility to investors and asset allocators. We believe that this pilot project will provide a unique opportunity for participating firms to make themselves known and showcase their expertise. More broadly, the project is part of a strategy to promote the successes of our local managers.

For more informations:

Violaine Trudeau, 514-231-1499

info@emergingmanagers.ca