A new colour comes to Bay Street
At the age of 46 and after more than two decades in the investment management business, Ken Jesudian has, along with a former colleague, formed his own firm to cater to high net worth individuals.
Jesudian, who until about 15 months back was chief executive of Burgundy Asset Management, one of the great success stories in Canadian wealth management, has teamed up with Anthony Ferrari to take advantage of the opportunities and circumstances to create Crimson Asset Management.
After experiencing the Asian financial crisis (1997), the technology bubble (2000) and the global financial crisis (2008), Jesudian said he is in a unique position. He is the right age with lots of runway to develop a firm; he is young enough to embrace the technology that’s available and become the “trusted adviser for the 45 year olds who want someone for the next 20-25 years.”
The firm’s focus, unlike Burgundy, will solely be on individuals. “We can manage their interests first,” Jesudian said, noting that because of the different interests and objectives it can be “tricky” managing assets for both individual and institutional clients.
The timing is also right because of industry consolidation, notably Bank of Nova Scotia’s recent purchase of Jarislowsky Fraser and Fiera Capital’s acquisition of CGOV Asset Management. There is room for a money manager “committed to remaining independent.”
As for the name, Crimson is his “favorite color and has long-term roots to royalty,” Jesudian said. And it’s the same shade of red as Burgundy, a firm that was a large part of his professional life.
“I am proud to be part of Burgundy’s growth. I was there for 13 years and chief executive for the past five. We built a great team, provided global equity expertise and delivered industry-leading returns ” Jesudian said, noting about one-third of its clients are outside Canada — a rare achievement for an entity that’s grown organically.
Jesudian said he left Burgundy because “it was time for a change. I learned a lot and that will serve me well with our new firm. And it’s always been my dream to have own firm.”
Crimson, which is home to four other investment professionals, is, at least the second firm formed by people who worked at Burgundy. Earlier, Jonathan Bloomberg and Sanjay Sen left and formed BloombergSen, which has about $1.9 billion under management.
Crimson’s first fund will be a North American small cap, a market sector that offers opportunities because sell-side analysts rarely cover it and it’s outside the purview of ETFs. But more importantly “it’s an asset class that rewards patient investors.”
Crimson has also named a seven-person advisory board that includes two highly regarded industry veterans: Tony Gage, former chief executive of Vancouver-based Phillips, Hager & North, a firm acquired by RBC Investment Management; and Tony Hamblin, founder of Hamblin Watsa Investment Counsel (Prem Watsa is the other founder), which “provides investment management services exclusively to the insurance and reinsurance subsidiaries” of the Fairfax Financial Group.
Crimson has a $1 million minimum investment. It also charges an annual base management fee of 1.5 per cent and a 15 per cent performance fee that kicks in once investors have received a certain return.
The plan is to attract clients who “understand our long-term view, our rigorous independent research and our contrarian nature.” In time other specialty funds and “capacity constrained” funds (ones that will close once a certain asset level has been reached) will be added.
As for Crimson’s investment style, Jesudian said it will buy “great” companies that can compound their earnings over time at an entry cost of 70 cents on the dollar.
Financial Post