The Canadian alternative investment industry is growing smartly as new chair arrives.
The Alternative Investment Management Association announced its new board for 2014-2016 this week. In an interview with WP, James Burron, the chief operating officer of AIMA, took time to describe the solid growth the trade group has enjoyed over the past couple years.
AIMA Canada formed in March 2003 to act as the voice of the alternative investment industry in Canada. The organization is a National Group of the AIMA head office located in London, UK which was founded in 1990. Today, the parent organization boasts over 1,400 corporate members in 50 countries. Here in Canada, “the organization has really grown over the last couple years,” says Burron.
He has a point. The number of members in the Canadian chapter has ballooned from just 66 in 2011 to 116 today. Manager members have 50% of the estimated industry AUM of $32 billion. “Eight managers now have over $1 billion,” says Burron. Most of the members are hedge funds. But there are many more mainstream members now.Most of the members are hedge funds. But there are also service provider members such as prime brokers, law and accounting firms and institutional investors (the complete list can be found on their website, found here) The organization has active regional committees in Montreal, Vancouver, and Calgary. The Québec Committee is about 5 years old and the ones out west were constituted about 3 years ago.
As a trade organization, the group is involved in promoting the industry. This year it will hold 35 events as a way of connecting members, working on policy and promoting the industry. AIMA hosts events at schools in a bid to attract top students to the industry. But members will also travel to London, Dubai and Geneva to give presentations to global investors, and “show people we have a hedge fund industry in Canada.”
Some members are also taking trips to China this year as the Canadian hedge fund industry draws in foreign money. Interestingly, “Of the top ten funds in Canada probably half of the money invested is from offshore,” says Burron. Wealthy global elites, European endowment funds, middle-easterners, are looking around the world for interesting strategies. Some of that money is landing here in Canada.
Typically the average hedge fund in Canada is small in terms of personal. The funds are almost cottage industries. “Most are small shops…5, 7, 9 people,” says Burron. Some of the more capacity constrained strategies can only operate with a relatively small book of a few hundred million dollars. “Not all strategies can ramp up,” he says. Too much money and the arbitrage opportunities disappear in the various arcane, niche markets the funds work in.
The strategies employed by the funds are much more diverse today. Before 2008 hedge funds in Canada were typically long-short, energy-based funds. Today, funds focus on managed futures, multi-strategy approaches, mortgage-based and asset backed strategies, private debt, healthcare and activist strategies (though not rabid U.S.-style activism… “These are Canadian activist funds,” says Burron). Other funds are event-driven or merger-based. Others trade volatility, North American futures and credit options. “Some are providing returns with just 4-7% volatility,” he says.
The industry is still relatively small. “Most probably known someone through someone else." Over the next couple of years the OSC and CSA seem set to allow retail-marketed hedge funds, so the growth is expected to continue. The elder of the board of AIMA today is Andrew Doman. Michael Burns succeeds Gary Ostoich as chair. Ostoich, a founding member of AIMA Canada, has been chair since 2009.
AIMA Canada formed in March 2003 to act as the voice of the alternative investment industry in Canada. The organization is a National Group of the AIMA head office located in London, UK which was founded in 1990. Today, the parent organization boasts over 1,400 corporate members in 50 countries. Here in Canada, “the organization has really grown over the last couple years,” says Burron.
He has a point. The number of members in the Canadian chapter has ballooned from just 66 in 2011 to 116 today. Manager members have 50% of the estimated industry AUM of $32 billion. “Eight managers now have over $1 billion,” says Burron. Most of the members are hedge funds. But there are many more mainstream members now.Most of the members are hedge funds. But there are also service provider members such as prime brokers, law and accounting firms and institutional investors (the complete list can be found on their website, found here) The organization has active regional committees in Montreal, Vancouver, and Calgary. The Québec Committee is about 5 years old and the ones out west were constituted about 3 years ago.
As a trade organization, the group is involved in promoting the industry. This year it will hold 35 events as a way of connecting members, working on policy and promoting the industry. AIMA hosts events at schools in a bid to attract top students to the industry. But members will also travel to London, Dubai and Geneva to give presentations to global investors, and “show people we have a hedge fund industry in Canada.”
Some members are also taking trips to China this year as the Canadian hedge fund industry draws in foreign money. Interestingly, “Of the top ten funds in Canada probably half of the money invested is from offshore,” says Burron. Wealthy global elites, European endowment funds, middle-easterners, are looking around the world for interesting strategies. Some of that money is landing here in Canada.
Typically the average hedge fund in Canada is small in terms of personal. The funds are almost cottage industries. “Most are small shops…5, 7, 9 people,” says Burron. Some of the more capacity constrained strategies can only operate with a relatively small book of a few hundred million dollars. “Not all strategies can ramp up,” he says. Too much money and the arbitrage opportunities disappear in the various arcane, niche markets the funds work in.
The strategies employed by the funds are much more diverse today. Before 2008 hedge funds in Canada were typically long-short, energy-based funds. Today, funds focus on managed futures, multi-strategy approaches, mortgage-based and asset backed strategies, private debt, healthcare and activist strategies (though not rabid U.S.-style activism… “These are Canadian activist funds,” says Burron). Other funds are event-driven or merger-based. Others trade volatility, North American futures and credit options. “Some are providing returns with just 4-7% volatility,” he says.
The industry is still relatively small. “Most probably known someone through someone else." Over the next couple of years the OSC and CSA seem set to allow retail-marketed hedge funds, so the growth is expected to continue. The elder of the board of AIMA today is Andrew Doman. Michael Burns succeeds Gary Ostoich as chair. Ostoich, a founding member of AIMA Canada, has been chair since 2009.
The new AIMA Canada board, effective September 1, 2014:
Chair: Michael Burns, Partner, Borden Ladner Gervais LLP
Deputy Chair: Paul Patterson, Vice President, Private Investment, Integrated Asset Management (IAM) Group
Legal Counsel: Tim Baron, Partner, Davies Ward Phillips and Vineberg LLP
Treasurer: Derek Hatoum, Partner, PricewaterhouseCoopers LLP
Additional Board Members:
Claude Perron, Chairman, Crystalline Management Inc.
Claire Van Wyk, Manager, Sales Support, Advisor Channel Sales, RBC Global Asset Management
James Burron, Chief Operating Officer, AIMA Canada
Michael Burns and Paul Patterson will also act as Directors of AIMA Canada for a term of two years.
Chair: Michael Burns, Partner, Borden Ladner Gervais LLP
Deputy Chair: Paul Patterson, Vice President, Private Investment, Integrated Asset Management (IAM) Group
Legal Counsel: Tim Baron, Partner, Davies Ward Phillips and Vineberg LLP
Treasurer: Derek Hatoum, Partner, PricewaterhouseCoopers LLP
Additional Board Members:
Claude Perron, Chairman, Crystalline Management Inc.
Claire Van Wyk, Manager, Sales Support, Advisor Channel Sales, RBC Global Asset Management
James Burron, Chief Operating Officer, AIMA Canada
Michael Burns and Paul Patterson will also act as Directors of AIMA Canada for a term of two years.
