Investment advisor recently crossed the $1 billion AUM mark and he explains how his clients are his best resource
Brian Kadey is more of a shepherd than a sheep; inclined to follow the path less travelled. It’s an approach that has seen his practice not only find a natural home at Canaccord Genuity Wealth Management, but also cross the $1 billion in AUM threshold.
The senior investment advisor began his career in the industry in 1987 after emigrating from South Africa. Over the years, he’s benefited from working with some of the smartest entrepreneurs in the world in sectors like mining, technology, real estate, and consumer products.
Read more: How Canaccord Genuity effect has propelled advisor growth
A central tenet of his business, which deals with about 50-60 key families, is a focus on people. As some of the best minds in their field, they are also Kadey’s best resource.
“By speaking to these people every day, going through different investment opportunities, and talking about lessons learned, we all come together to find the next best thing or best company,” he says. “We take decent positions and stay with the company until a liquidity event or until the market goes crazy and allows us to exit.
“But it’s always down to the people. And I am very fortunate that I rely on my clients a lot for information, and we work together as a group to discover value and [figure out] how to create shareholder value.”
Kadey has two primary aspects to his business – wealth creation and wealth preservation. While the latter focuses on traditional portfolio management, the wealth creation side targets companies, usually small cap around a billion dollars or smaller, with huge potential that have been mismanaged.
He explained: “We really get to understand what's driving the business and understand the CEO – how invested he or she is and whether they are aligned with shareholders.
“What creates shareholder value is capital structure and having a management team that understands when equity markets are really low, or prices are depressed, you need to raise money and raise debt. When equity prices are high or overvalued, that's when you go to the equity markets to raise equity. Not many management teams understand that.”
Kadey’s clients add value and knowledge that can be leveraged across his entire book of business. Often, if he and his team like a company, it’s founder or major shareholder, the one with the most extensive knowledge, becomes a client too.
“It's all about the people,” says Kadey. “That’s my motto – and that has kept me out of a lot of bad investments. There are a lot of bad actors, especially in the Canadian markets, and you want to avoid those companies. You want to be invested in companies with really smart, ethical people. Avoid companies with groups of investors that have acquired stock at zero or very little cost because all they're going to be doing when things turn up is sell their positions and move on.”
The foundation of Kadey’s approach is Canaccord itself. Kadey credits the “incredible” support he gets from the firm’s underwriting team, investment bankers, and researchers. Canaccord’s people and dynamism are, he says, what lured him away from Richardson Wealth in 2018 and he credits the foresight and leadership of CEO Dan Daviau and Stuart Raftus, President of Canaccord Genuity Wealth Management in Canada.
Kadey said: “It was so refreshing to find a group that had an attitude of can-do. Most other firms, if you go to them with something slightly off the normal path travelled, it's a case of ‘no, we can't do it’, and they shut your business down.”
Kadey also benefits from Canaccord’s global reach. “If I need to know something about a company in London, there's someone that I can call, or in the U.S. or Israel or Australia. It’s unparalleled in Canada, and it's no surprise that they're now top of every of every table you look at.”
