Weinberg’s new shop targets ultra-HNW

Three and a half years after selling Assante Corp., Marty Weinberg is back at the helm of a financial services company in Canada.

The Winnipeg-based entrepreneur has launched Pavilion Investment House, a firm targeting “ultra” high-net-worth clients across the country. It is also the parent to a pair of entities of which Weinberg is a major shareholder and driving force — Canterbury Park Capital, an 18-month-old private equity fund, and Harrow Partners, a high-end investment boutique.

Weinberg, the CEO and majority shareholder of Pavilion, says he decided to bring the two companies together because investors in each were asking about the services available at the other.

“It was an efficient way to deliver the portfolio to the client,” he says.

Weinberg says Harrow clients — who have an average account size of “several million dollars” — will have a core investment portfolio in traditional vehicles, such as stocks, bonds and REITs, plus a 10 to 20 per cent allocation in alternative products, such as private equity, hedge funds, mezzanine debt and structured products.

Each of the alternative products, some of which will be produced in-house, will also accept capital from outside investors, including institutions and other high-net-worth individuals.

Weinberg says Harrow Partners and Canterbury Park will continue to operate as they have in the past while Pavilion will execute on its plan to acquire or build additional subsidiaries focused on alternative products. He says, for example, that Pavilion could do another “five or six Canterbury Parks.”

Weinberg has kept a relatively low profile since selling Assante Corp., a company he built from scratch into a national distributor and mutual fund manufacturer, to CI Fund Management for $846 million in August 2003.

Perhaps not surprisingly for a man who oversaw nearly 20 strategic acquisitions at Assante, the expansion of Harrow has already begun. (Harrow Partners was rebranded a year ago. It was previously known as the Canadian operations of Loring Ward International.) Armand Kessous, a Montreal-based advisor, and his team recently opened an office in that city. Weinberg says he wants to keep building the Winnipeg location as well as open “a couple” of branches in Western Canada and one in Toronto. Unlike at Assante, however, he doesn’t want to recruit a small army of salespeople.

“We’re looking to have 10 to 20 advisors, max,” he says. “The way we’re growing the business and aggressively recruiting and maintaining clients is a unique approach to the market. We don’t need a sales force per se to make this really work. I think this is a first for Canada. I think that access to these alternative products in combination with the core assets is a great model for investment and a great model as a business,” he says.

Weinberg says Pavilion, which has about $900 million in assets and committed assets, has its roots in the CI deal. When he and the other principals at Assante sold their stock, they started looking for a way to invest their own money and that of some of their key clients. But after canvassing Canada and the U.S. for providers, they couldn’t find anything that met their needs.

“So we decided to create it for ourselves. If you build it, they will come, and before we knew it, we had a lot of interest, asking us if we would take on new business,” he says.

Dan Hallett, president of Windsor-based Dan Hallett & Associates, says while not everything Weinberg touches turns to gold, he is certainly a “major player” on the financial services scene.

“High-net-worth investors are keen to participate in alternative investments like venture capital and hedge fund–type products. Weinberg has a knack for tapping into high-growth segments. He’s certainly had a big hand in changing the advisory landscape in Canada,” he says.

Canterbury Park was launched in the fall of 2005 by Weinberg, Leonard Asper, CEO of CanWest Global Communications, Asper’s brother David, executive vice-president of CanWest, and Bob Silver, president of Western Glove Works, a Winnipeg-based jean manufacturer.

After raising $171 million, it made its first investment last month with a $23-million infusion into B.C.-based pharmacy company Paragon Pharmacies Ltd.

“Canterbury will continue to deploy capital in what we believe to be intelligent and good deals for the limited partners. There will be a series of acquisitions, transactions and growth on the Canterbury side. We expect to grow Harrow by adding on a number of key products and opening offices in key centres across the country,” he says.

Weinberg says his non-compete agreement with CI expired last year, but he never intended to compete in the retail marketplace again. He says there’s no telling what’s in store in the future.

“Our success in the past has been being able to recognize opportunities, grab them and make them work in a business environment. I wouldn’t preclude anything,” he says.

Renée Alexander is a Winnipeg-based freelance writer

(02/26/07)