The only time that new kings are born is when there’s chaos. If everything’s hunky dory, the new kids never get a shot. - Admiral Ng
PI Financial has announced a definitive agreement to be acquired by Vancouver firm RCM Capital Management (aka RC Morris). RCM is buying in partnership with large US private equity firm H.I.G. Capital, which manages some $32 billion. In contrast to Gary’s well-known $100m purchase price, the sale price was not disclosed.
Gary had only acquired PI about 18 months ago and made a big deal about how he’s able to take a long-term view as a thirty-something vs the average brokerage owner in his late sixties. Gary had said shortly after buying PI that he wanted to be at $50b in assets within 3 years. He also claimed to be “very well-capitalized” and “looking at four more acquisitions”. So the sale is an abrupt course change for Admiral Ng. Industry observers had said paying $100m for PI was rich. Apparently, the going price was much lower before Gary swooped in.
The press release calls the sale an “ownership transition” and quotes all the key players, except Gary Ng. It also says the same executive leadership will continue to manage the company, which would also appear to exclude Gary Ng, since he’s currently listed as a “Director”. He had previously been identified as an “Executive Chairman”. His current registration category with IIROC is as a “non-industry director”, ie someone who isn’t employed by a broker dealer.
Don Metcalfe, a Gary loyalist, who had followed him from the Union Securities days and was an Executive Vice-Chairman at PI, left in February to become CEO of Gary’s holding company. Gary also owns 97% of Montreal-based Rothenberg Capital Management (another IIROC registrant) and 50% of Toronto lender Bridging Finance.
They don’t have that type of runway. I have a runway of 40 years. -Admiral Ng
In the end, King Gary’s reign as owner of PI will have lasted less than 2 years. The new king is Christopher Morris, founder of RC Morris. RCM was founded as an accounting firm but morphed into an investment firm when it started lending to some of its corporate clients. They invest in both debt and equity and specialize in situations with “perceived risk, complexity, management or board issues…”. They’re not afraid of a scrap if I judge by their website theme of bandaged hands.
Much remains to be written about Admiral Ng. For instance, is he as good at golf as he claims? Despite his thundering insight that “It’s all about the putting”, there are some skeptics. I am told he’s generous to friends. If I had played my cards right, I’d probably have a nice watch by now.
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