Farmer emerges to join EdgePoint

Patrick Farmer, the former chief investment officer of AIM Trimark Investments, has re-emerged as partner and chief operating officer for EdgePoint Capital Partners. Farmer will essentially run the company’s operations, while fellow partners Tye Bousada and Geoff MacDonald manage money.

Farmer is the third high-profile name to depart AIM Trimark in the last year to join EdgePoint. Star managers MacDonald and Bousada had also departed the firm in the last 12 months. In addition, the company has financial backing from Robert Krembil, one of the co-founders and the original chief investment officer of Trimark.

Farmer says his admiration for all three men factored heavily in his decision to join up.

“I resigned in June and my non-compete [agreement] ended in October. Over the course of those 10 months I had the opportunity to talk with several leaders at different companies both big and small. There have been a variety of opportunities that have been presented,” he says. “EdgePoint is, I can say, the most exciting opportunity. The key reason it is exciting is because I have worked with Tye and Geoff for seven years as CIO. I know how capable they are of managing money.”

Farmer adds that having Bob Krembil on board was the “icing on the cake.”

“I have known Bob since 1993 when he hired me at Trimark. He is a great visionary with super-high integrity. Given the opportunity to work with him rather than compete against him — I’d choose to work with him any day,” Farmers says.

EdgePoint cannot disclose what exactly they are planning to offer product-wise, but Farmer and Bousada say the company is hoping to have a product available for the retail space in the fall. They also stress that EdgePoint’s target business will be financial advisors.

“I’m going to make sure the t’s are crossed and the i’s are dotted while Geoff and Tye manage the money. It is our expectation by fall we would have a product in the retail space that will be sold through advisors,” he says. “Being the first time I’ve been associated with a start-up company, I realize how many other things have to get done.” To start, he plans to be heavily involved in evaluating policies, procedures and trading systems, as well as meeting clients and cultivating relationships.”

The firm of former high-profile Trimark people has led some to question whether EdgePoint is simply a new version of the old company.

Farmer rejects that characterization. He points to the business cards at EdgePoint, which say “owned and operated by investors.” He won’t be running any money himself, but Farmer has an investment background as well. From 1993 to 2000 he ran the fixed income department at AIM Trimark before moving into the CIO role.

“This is EdgePoint, but I guess [Trimark] is something we have in common. The other thing we have in common is a belief that an investment-centric organization in the fund management business is something that is needed. It’s our expectation that we are going to be successful at managing people’s money and helping it grow — we are going to earn that reputation on the back of EdgePoint, not on the back of Trimark,” he says.

Independent fund analyst Dan Hallett, president of Dan Hallett and Associates, has been impressed thus far with the way EdgePoint has gone about setting up shop, despite the fact they don’t have any official fund offerings on the table.

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“They know how to manage money, obviously. I think they are doing it the right way by bringing in somebody who is really focused on operations and getting somebody like Farmer to do it,” he says. “Trying to manage money and then try to oversee the operation side is not sustainable.”

Hallett can’t recall immediately the last time a retail startup had this much pre-hype, but he believe the names and track records of the players merit the attention.

“Launching a firm like this is never easy and I think they are not blind to that fact. The markets are difficult and the competitive environment is quite tough. It’s never going to be just a downhill ride, but at the same time they have a lot going for them because each of them is a recognizable name in the advisory community,” he says.

Hallett says there may be a bit of an initial challenge, though, in differentiating themselves from Trimark.

“Not a lot of firms really manage money with that [Trimark] philosophy. At the same time, you’re going to have people who manage money with the same general philosophy. Investment success will be the barometer by which people will decide who’s better. It’s not unusual for the returns of similarly managed funds to sort of flip-flop back and forth,” he says.

Filed by Mark Noble, Advisor.ca, mark.noble@advisor.rogers.com

(04/23/08)

Mark Noble