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Top Thirty Hedge Fund Managers


Date: Saturday, June 2, 2007
Author: Karen Mazurkewich, Financial Post

ERIC SPROTT

Chairman, CEO and portfolio manager, Sprott Asset Management, a mutual fund and hedge fund company

Claim to fame Considered the oracle of Canadian hedge funds. Calls himself a "stock junkie" who likes analysis and being "ahead of the curve." Early to buy uranium in 2003. Now his big bet is on the metal molybdenum. Bad move was going big into the coal industry in 2004. Good move was creating a gold fund in 2000, when values were low. Spectacular returns even in 2001/2002 downturn. For his energy fund, ROI is 35%; Sprott Opportunities Hedge Fund is 34.2%; and Sprott Hedge Fund is 29.4%. Bad couple of years for Sprott Canadian Equity Fund. About 40% of his hedge fund action comes from U.S. clients.

Assets under management $4.8-billion ($1.4-billion in hedge funds).

Bio After years on Bay Street, launched Sprott Securities brokerage firm in 1981, focusing on small- and mid-cap markets. Created Sprott Asset Management in 2000, and sold Sprott Securities to his employees.

After hours Budding art aficionado. Started his collection buying Inuit sculpture, but has amassed an eclectic mix of baubles ranging from armaments purchased in the United Kingdom to minor works by Van Gogh and Monet. Made a $10-million donation to create the Eric Sprott School of Business at Carleton University; gave another $7-million for stem cell research at Ottawa Hospital. Daughter Juliana runs his charitable foundation.

FRANK MERSCH

Vice-president and co-chief investment officer, Front Street Capital

Claim to fame Once dubbed the Wayne Gretzky of mutual fund managers, has ridden the commodities market to superstardom in the Canadian hedge fund world. In early '90s, was posting 30% returns for Altamira Equity Fund, which he managed until he stepped down in 1998. Ontario Securities Commission banned him from trading for six months after learning he lied about being the major shareholder of Dass 25 Holding Ltd., an early investor in Diamond Fields Resources. The company's shares skyrocketed when Altamira began investing in the firm, bringing great profits to early investors. Between 1999 and 2001, set up a $40-million hedge fund called Casurina Ltd. Partnership, the predecessor of Front Street. More than 15 funds in total. Rarely uses leverage.

Assets under management $3-billion ($1.6-billion devoted to hedge funds).

Bio President of special investments and vice-president, Guardian Capital Group; vice-president of investments at Morgan Trust Company of Canada. From 1987 to 1998, was a shareholder, director and vice-president of Altamira Management Ltd., where he managed many funds, most notably the Altamira Equity Fund and the New Altamira Value Fund. Formed his own hedge fund in 1999 after facing scrutiny from the OSC.

After hours Donations to University of Toronto.

VICTOR KOLOSHUK

Chairman, president and CEO, IAM Corp. (Integrated Asset Management), a publicly traded alternative asset manager and home to other fund managers

Claim to fame Successful merchant banker with a nose for talent. Helped launch O'Donnell Investment Management Corp., before setting up his own successful company. In the 1980s, juggled what was then considered a large, hostile takeover of Canada Trust by Imasco Ltd., which controls Imperial Tobacco. Was also involved in the negotiation of the sale of McLeod, Young, Weir to Scotiabank in 1987. Today, ScotiaMcLeod is the investment arm of Scotiabank. Two highprofile managers brought into the fold to create IAM were Veronika Hirsch, diva of the mutual fund world and lead portfolio manager for BluMont Capital Corp., and Greiner-Pacaud Management Associates, a real estate management firm that, until recently, was headed by Tony Pacaud. Has built his real estate management division up from $150-million six years ago. His private equity division, he admits, is a disappointment.

Assets under management $3-billion (real estate management division represents $1.4-billion, the BluMont Fund represents $800- million in assets, private debt division is $700-million).

Bio Former vice-president and director of ScotiaMcLeod between 1975 and 1988. Co-founder in 1988 of Toronto-based merchant bank Koloshuk Farrugia Corp., which became a major shareholder of IAM in 1998. IAM was created as an umbrella for different asset managers. It went public in a reverse takeover in 1999.

After hours Fishing, hunting and golf. Memberships at Rosedale Golf Club and The Toronto Golf Club. His wife is Shelly Saunders, a well-known forensic anthropologist.

DANIEL GUY

Chief investment officer and director, Salida Capital Corp.

Claim to fame One of the hottest hedge funds in Canada. Heavily invested in resources. Gained some notoriety in 2004 when the fund forced Penn West Petroleum Ltd. to convert to an income trust and more recently, pressuring Western Oil Sands to put itself on the block. Style is long and short, with a bias toward long.

Assets under management US$1.1-billion. Bio Founded Salida Capital in 2001 after seven years with Richardson Greenshields (now RBC Dominion Securities Inc.). Was a member of the merger arbitrage group at First Marathon (now National Bank Financial).

After hours Publicity shy. Corporate donations to Make-A-Wish Foundation, Princess Margaret Hospital Foundation, Bloorview Kids Rehab Foundation.

JEFF MCCORD

Founding partner and managing director, Vertex One Asset

Management Inc., a hedge fund company

Claim to fame No. 1 performing hedge fund in Canada, and one of the oldest. Has grown his fund from $30-million to more than $1-billion. Although the fund does employ short-selling and leverage, it is never leveraged more than 15%. Shies away from trading in indexes and futures.

Assets under management $1.03-billion.

Bio Former financial advisor with Canada Trust. Managed clients at M.K. Wong and Associates and HBC Wealth and Asset Management. Established Vertex One in 1997 with former colleagues at M.K. Wong.

After hours An avid skier and jogger.

SOM SEIF

Chief executive officer and director, Claymore Investments Inc., a Canadian subsidiary of Claymore Group Inc., which manages eight alternative funds

Claim to fame Raised $1-billion in three years. Named head of Claymore's international operations and owns equity in Claymore Group. First fund debuted in June, 2005; first ETF in February, 2006. Plans to increase offerings on the Toronto Stock Exchange to 15. Just 30 years old.

Assets under management $1-billion.

Bio Parents emigrated from Iran. Played for Toronto Club water polo team and still coaches the sport at the University of Toronto. Studied engineering at U of T. Joined the corporate finance department of RBC Capital Markets in 1999. Left his $500,000 salary to open Claymore's Canadian office in December, 2004. "If I didn't go, I'd be [in the banks] forever."

After hours Newly engaged to his high-school sweetheart. Avid photographer. Owns a dark grey Porsche Boxster. Donations to the University of Toronto, United Way; last year, donated about $25,000.

JAMES MCGOVERN

Managing director and chief executive officer, Arrow Hedge Partners Inc., a hedge fund company that packages hedge funds managed by other companies

Claim to fame First Canadian company to offer a fund of funds --a portfolio containing a number of single-manager hedge funds. Grew assets from$30-million in 1999. In addition to fund of funds, offers principal-protected notes and single-manager hedge funds. Strategy is long and short with modest leverage.

Assets under management $900-million.

Bio Worked for 13 years at BPI Financial Corp., a mutual fund company he co-founded that was purchased in a friendly takeover by CI Fund Management (now called CI Financial Income Fund). The company was one of the first to introduce hedge funds to the Canadian market in 1995. Past chairman of the Alternative Investment Management Association. Started Arrow Hedge partners in 1999 with $30-million.

After hours Art aficionado. Favourite artist is John Hartman. When BPI was purchased by CI in 2000, the company's artwork was part of the deal. Although he tried to buy back a Hartman triptych, it now sits in CI's boardroom. A fan of Canadian photographer Edward Burtynsky. Serves on the board of the National Ballet of Canada, funds the Fraser Institute.

TOM STANLEY

President, chief investment officer and portfolio manager, Resolute Funds Ltd.

Claim to fame Considered a maverick hedge fund manager. Best 10- year performance in North America for all funds tracked by Morningstar between 1995 and 2005. Closed his Resolute Growth Fund last year after the OSC denied his application to keep his stock holdings private (new rules forced mutual fund managers to disclose their interests every three months). Transferred all his mutual fund clients to a private hedge fund. One of the first managers to go big on uranium.

Assets under management $785-million.

Bio Investment advisor for "regular people" at Richardson Securities Inc., later a portfolio manager for Deacon Morgan McEwan Easson and its successor firms BZW Canada and Deacon Capital Corp. Started Resolute Growth Fund in 1992.

After hours Taught investing at Ryerson University, Seneca College and YMCA. Also served as a producer, host and moderator of the TV show Your Business.

PETER H. PUCCETTI

Chairman and chief investment officer, Goodwood Inc.

Claim to fame Considered a great stock picker and activist hedge fund and equities manager. Launched a proxy contest with Cenveo, a Denver-based communications service company, forcing the board of directors to name a new CEO and appoint Goodwood partner Robert Kittel to its board of directors. The company's stock rose from $8 to $24 per share. A long-short style.

Assets under management $670-million.

Bio Born in Singapore, he's the son of a philosophy professor. Studied at Dalhousie University. Hung a framed collage of the 80 rejection letters he received after graduation.

After hours Made donations to Toronto Humane Society, Toronto Sick Kids Hospital and Royal Ontario Museum. "Right now, I'm focused on the business. When I make a lot of money, I'll give it away."