Tag Archives: EMB

Macroeconomics and Diversity in Human Capital at Mount Murray Investment

As part of his extensive experience with various prominent companies, Vincent Dostie served as Vice-President of Investments for a multi-family firm. There, he hired portfolio managers, led business development and oversaw asset allocation for some forty wealthy Québec families. He remained interested in investment analytics and decision-making, so his flagship project was to establish an independent asset management firm. The first few team meetings of this Montreal startup, which was incorporated in 2016, took place on Mount Murray, one of Mount Royal’s three hills.

Vincent founded Mount Murray Investment with two former colleagues from Caisse de dépôt et placement du Québec (CDPQ). “It takes a great deal of courage to start your own business independently, and my previous opportunities working at investment startups were extremely rewarding, helping me in progressively reaching this important decision,” the firm’s CEO and Co-Chief Investment Officer (CIO) mentions. 

Vincent Dostie
CEO and Co-CIO

The intellectual challenge in investment was a key factor for Vincent when choosing his field of expertise. The fast-paced markets, analytical work and limitless research involved, as well as the joy of implementing one’s ideas, are all aspects that prompted him to pursue a career in this industry. “You get hooked once you’ve worked at CDPQ, where you have access to all the resources in the world to stay ahead in the global investor market,” he points out. “You see it when you speak to new graduates, how this line of work actually makes people dream, as you can truly surpass yourself if you’re really well organized and you work efficiently.”

A Higher Viewpoint

While he was working with startups, Vincent thought about investing further in emerging markets, which is still a key strategy for Mount Murray Investment today. “Keith Porter, the company’s Co-CIO, was in charge of a large CDPQ team that was focused on investing in these markets,” Vincent relates. “It’s a rather rare expertise in Montréal and it’s great for investors to be able to seek advice directly from a seasoned local manager, to explain what emerging markets are exactly,” he says. “As well, for an asset manager who invests significant amounts of money for clients, it’s always helpful to get a sense of the character of the people you invest with, and this is easier to do when you’re dealing with a local firm.”

A highly inclusive organizational culture is another one of Mount Murray Investment’s assets. To build a team with a wide range of skills, the firm pays special attention to applicant selection and employees’ engagement in internal discussions. “Everyone has their place, whatever their level of experience, and I would say we have a modern vision when it comes to investment,”  Vincent states.

The firm aims the structured integration of large amounts of data to its macroeconomic analysis, based on a top down approach, in addition to the fundamental research conducted by its team of analysts and managers about portfolio companies. “Emerging markets are seen in many different countries worldwide, and we feel value may be added through a strong macroeconomic structure to help pinpoint certain regions that may be more promising at times,” Mount Murray Investment’s CEO remarks.

Also, as an emerging portfolio management firm, the company naturally has an innovative outlook because it’s currently developing its own methods and processes, as well as its team. “Many studies have shown that emerging portfolio managers generate better returns than those with more established assets,” Vincent reports.

In keeping with a style that is firmly rooted in today’s reality, Mount Murray Investment addresses the new American President’s focus on the climate crisis in the firm’s latest newsletter. “We would like to think 2020 was the year of the ultimate recognition of ESG priorities. This new emphasis will benefit various sectors of our portfolios.”

Peaks in Value for the Client

Along with competitors of the industry, the firm must face the downward pressure on asset management costs. “This is partly caused by passive investments, i.e. Exchange Traded Funds (ETFs),” Vincent observes. Since the company specializes in emerging markets and targets the addition of significant value compared to its core index, assessing risks and adopting a long-term perspective, it can justify its current fees. “In fact, you should ask yourself if during an entire stock market cycle, your clients’ returns minus your expenses are higher than those of the market, because if that’s not the case, they should have of course simply opted for an ETF,” the firm’s CEO concludes.

Acquiring a critical mass of assets under management for cash flow is evidently another one of the challenges faced by new investment firms such as Mount Murray Investment, and this firm places a lot of value on the quest for talent as well. “Because we have a small, specialized team, and each member of this team plays a major role, it is essential we find people with the right, complementary skill sets, and design an excellent onboarding and long-term training program,” Vincent explains. “In terms of raw talent, we are so lucky in Montréal, there are professionals with diverse skills and backgrounds, from good universities, and we’re able to hire people from countries where we invest, which is really interesting.”

One of Mount Murray Investment’s growth objectives is the optimization of its analytical systems in order to track a growing number of data, as efficiently as possible and in real time. The firm also wants to set up international research teams, while maintaining a vibrant central team in Montréal. All this to continue to provide clients with the best returns possible.

Mount Murray Investment’s member’s file.

To know more about the firm.

Webinaire «Montréal peut-elle devenir un centre d’excellence en IA/ML en finance et gestion d’actifs?»

Contexte et Vision
Montréal est reconnue mondialement pour son écosystème d’intelligence artificielle (IA), mais, la plupart des projets de recherche et applications sont orientés vers des secteurs non financiers. Il y a donc une lacune – «a missing link» que le projet FIAM (Forum d’Investissement Alternatifs de Montréal) vise à combler.

Ce premier webinaire d’une série d’événements organisés par FIAM avec ses partenaires, vise à recueillir commentaires et suggestions de gestionnaires de portefeuille, de chercheurs, scientistes de données, d’entrepreneurs, d’étudiants, de fintech, de dirigeants de fonds de pension, et autres parties prenantes, sur l’importance de combler ce vide. Ce qui permettrait de contribuer à la vision de FIAM de faire de Montréal un Centre d’Excellence reconnu au niveau Canadien et à l’international grâce à des affiliations / partenariats avec des organismes, universités, Instituts qui œuvrent dans le même espace.

Programme
Partie 1 :  tour de table – chacun panéliste présente comment la science des données (AI / ML) entre dans leur stratégie, processus de gestion et/ou projets – défis, succès et déception
Partie 2 : Échange type “brainstorming” sur le thème central, Est-ce important de combler ce vide? Que faire? Les Fintech ont-ils un rôle à jouer? Avons-nous le bassin de talents nécessaire? Quels devraient être les intervenants clés? Importance du maillage avec les universités etc…
Conférenciers
– Claude Perron, Président Émérite, Gestion Cristallin et fondateur de FIAM
– Carl Dussault, PDG et fondateur, Evovest
– Jérémie Desgagné-Bouchard, Associé et Directeur scientifique, Evovest
– Karl Gauvin, Consultant en Gestion d’Actifs
– Christian Felx, Directeur, Recherche et Investissement Responsable, Desjardins
– Jean-Marc Patenaude, Président et VP Technologie, Laplace Insights

Modérateur 
– Michael Albo, PDG et fondateur, Data Science Institute

Global Alpha Asset Management : Mastering the Art of Small-Cap Selection

The Global Alpha Asset Management team alone has a combined experience of over 60 years in the small-cap sector. It is by focusing exclusively on its expertise and deepening it meticulously that the Quebec-based firm has enjoyed great success, particularly in the North American institutional market.

David Savignac, CFA
Portfolio Manager

From the moment they joined forces to create Global Alpha in 2008, Natcan’s two former colleagues, Robert Beauregard, Chief Investment Officer, and David Savignac, Chief Operating Officer, had a game plan that remains essentially the same to this day: keep their focus on small-cap companies. In other words, its managers are entirely dedicated to what they do best, which is building global and international small-cap equity portfolios. They also called upon Qing Ji, an analyst of the Montreal financial community that they knew well, to join their project as a portfolio manager since they were convinced that her profile was perfectly in line with their vision.

In addition to building on their shared knowledge of small-cap investing, these managers also realized that the same passion was fuelling their career ambitions. “We all had entrepreneurial spirits. I come from a family of entrepreneurs. I’ve been involved, in real estate and the business world in general, including renovation centres. Today, we are eleven employees at Global Alpha and each of us has industry experience. Our background allows us to better connect and dialogue with the leaders of the companies we meet,” explains David Savignac.

Successful Findings

Global Alpha presents itself as an investment firm that conducts independent fundamental research to identify attractive investment opportunities in companies whose growth is unrecognized by the marketplace. “Research and analysis on smaller companies are often limited or not widely communicated, leading to the mispricing of such companies’ securities,” the group says on its website.

Specifically, this market inefficiency creates an opportunity for managers interested in small-caps to uncover companies with unrecognized potential growth for their clients’ portfolios.

To do so, the Global Alpha team conducts diligent and comprehensive research across a broad investment universe that includes all companies with market capitalizations between US$100 million and US$5 billion. The managers take the time to travel to each region and visit companies that present investment opportunities that they believe are attractive.

“That’s what motivates me to do what I do – to look for promising new companies. Meeting entrepreneurs is extremely interesting. Plus, it’s never boring work because you have to constantly learn about companies and stay on top of the latest trends in different sectors. It’s very rewarding!”, shares Mr. Savignac, who has travelled throughout Europe and Asia on numerous occasions in search of rare gems that would contribute to the investment strategies offered by Global Alpha.

A Thematic Approach

Moreover, Global Alpha examines the valuation of a security according to an investment thematic and not simply based on a bottom-up approach. For example, its managers consider a solid company that benefits from positive long-term trends, such as environmental preservation, to be an excellent investment.

David Savignac gives the example of Tomra, a company that Global Alpha held for a long time in its portfolios before selling it because it had become too large to be considered a small-cap. Tomra is an international company of Norwegian origin specialising in machines equipped with sensors to collect and sort waste in order to reduce waste.

“Tomra owns 75% of the reverse vending machines market. These machines, among other things, allow people to recycle aluminum cans, glass and plastic bottles, while receiving change in exchange for their deposits. With 82,000 machines installed around the world, Tomra has collected more than 35 million empty bottles,” he reports.

In addition to having a positive impact on the planet, the company has experienced significant growth during the years that Global Alpha has held its stock. In fiscal year 2017, Tomra reported sales of US$900 million and an EBIDTA of US$177 million. As of December 2019, the company’s annual growth was 10.5% over the previous three years.

Propelled by Its Structure

Global Alpha’s strategy as an emerging investment firm has also been to establish a structure that allows its managers to focus exclusively on building the best global and international small-cap portfolios for their clients.

Global Alpha is, therefore, part of the Connor, Clark & Lunn Financial Group, which supports the firm in non-investment management tasks such as sales, marketing, compliance, and information technology. “We knew from the start that we were going to target the institutional market and that’s why we created this structure which is very appealing to large American clients,” says Savignac.

Global Alpha, which initially won a first institutional mandate of approximately C$7 million, now manages close to C$5 billion and 65% of its assets come from its U.S. clients. It is the programs for emerging U.S. managers that have allowed the firm to take off because it is through one of them that the investment firm was able to acquire its first significant U.S. institutional mandate in 2013. “The performance of our strategies already spoke for itself, but getting such a mandate for a US state showed our seriousness to other potential clients of the same type,” says the portfolio manager of Global Alpha.

The firm strongly believes in the importance of such programs to support emerging managers and is also committed to similar Quebec initiatives such as the Emerging Managers’ Board (EMB) and the Quebec Emerging Manager Program (QEMP).

“There certainly is a strong interest for local investment in Quebec. Many investors are increasingly aware of the importance of encouraging local emerging managers. For example, they understand that in a city like Montreal, entrusting their assets to local firms generates economic benefits throughout the ecosystem since these firms, themselves, hire numerous professionals in their area (translators, lawyers, notaries, etc.).

For more information regarding the firm.

To see the member’s file.