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Ira Gluskin Net Worth : $ 1.4 Million
Let’s Check out Ira Gluskin’s Updated 2021 Salary Report on Net Income given below:
Salary / Income of Ira Gluskin:
Per year: $4,00,000. Per month: $32,000. Per week: $8,000
Per day:
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$1140
$19
$0.3
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Ira Gluskin Wiki
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Ira Gluskin Net Worth, Income, Salary, Earnings, Biography
Ira Gluskin Net Worth : $ 1.4 MillionLets check out updated 2021 Ira Gluskin Net Worth Income Salary report which is given below :Ira Gluskin ‘s Salary.
Source: www.650.org
Date Published: 3/23/2021
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Ira Gluskin Net Worth (2022) – Wallmine
What is the salary of Ira Gluskin? … As the Independent Director of Tricon Capital, the total compensation of Ira Gluskin at Tricon Capital is CAD$113,000.
Source: wallmine.com
Date Published: 10/1/2022
View: 4272
Gluskin Sheff – Wikipedia
Gluskin Sheff + Associates Inc. is a Canadian independent wealth management firm that manages investment portfolios for investors, including entrepreneurs, …
Source: en.wikipedia.org
Date Published: 2/13/2022
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Gluskin Sheff + Associates Is On The Takeover Radar
Gluskin Sheff was founded on April 17th 1984 by Ira Gluskin, a former real … If you don’t pay them for what they are worth somebody will.
Source: seekingalpha.com
Date Published: 1/4/2021
View: 7414
Ira Gluskin Net Worth (2022)
Biography of Ira Gluskin
Ira Gluskin serves as the company’s independent director. Mr. Gluskin serves on the Board of Directors of European Residential Real Estate Investment Trust (TSX-V: ERE.UN) and serves on the Advisory Board of Vision Capital Corporation, Ewing Morris & Co. Investment Partners Ltd. and the University of Toronto Real Estate Advisory Committee, the University of Toronto Boundless Campaign Executive Committee, the Sinai Health System Board of Directors and Investment Committee, and the boards of directors of Canadian Jewish News, The Walrus Magazine, Capitalize for Kids and the National Theater School of Canada. Mr. Gluskin is also the past Chairman of the University of Toronto Asset Management Corporation and the past Chairman of the Investment Advisory Committee of the Jewish Foundation of Greater Toronto and currently serves on its Investment Committee. He holds a Bachelor of Commerce from the University of Toronto. In 2019 he received an honorary doctorate in law from Wilfrid Laurier University.
What is Ira Gluskin’s salary?
As an independent director of Tricon Capital, Ira Gluskin’s total compensation at Tricon Capital is $113,000. There are 13 senior executives at Tricon Capital who are paid more, with Gary Berman receiving the highest compensation of $5,159,000.
Gluskin Sheff
Canadian independent wealth management firm
Gluskin Sheff + Associates Inc. is a Canadian independent wealth management firm that manages investment portfolios for investors including entrepreneurs, professionals, family foundations, private charities and estates. The company was founded in 1984 by Ira Gluskin and Gerald Sheff.[1] The company went public in 2006 and is listed on the Toronto Stock Exchange (TSX) under the symbol “GS”. It was subsequently purchased and privatized by Onex Corporation in March 2019 for $445 million.[2]
References[ edit ]
Gluskin Sheff + Associates Is On The Takeover Radar (OTCMKTSGLUSF)
Gluskin Sheff + Associates Inc.
United States: (OTC:GLUSF)
Canada: (TSX:GS)
Note: Dollar amounts are in Canadian $ unless otherwise noted. USD-CAD 1.0514 price of 1 USD in CAD (22 Nov 2013)
Gluskin Sheff + Associates, Inc. (GS, GLUSF.PK) is a Canadian asset management company. In Canada, GS operates in the prestigious business of serving only high net worth individuals, charities and institutional investors. The wealth management business model is very simple – it’s all about helping people invest their money for a fee. GS only manages portfolios of $3 million or more and often charges new clients even more. GS is known for serving Canada’s elite, many of whom are the richest and most powerful people in Canada. The highest threshold is an average wealth per management (AUM) of $67 million per relationship. GS has built a reputation for superior customer service and high performance. As of September 30, 2013, GS had $6.3 billion in assets under management.
On November 19, 2013, GS was trading at ~$23 following second quarter 2014 results. When I started my research, the stock was trading around $18.5. The recent surge takes away some potential upside. However, my research concludes that there is still potential.
Source: Google Finance
The chart above shows GS’s share price performance since the IPO. GS peaked in 2007 before the financial crisis. The stock traded at $30.50 and GS had $5.4 billion in AUM. The performance shown in the table can be misleading. The first impression we get from looking at the chart is that GS has outperformed the TSX in Canada and the S&P in the US. However, the chart’s performance doesn’t take into account dividends and special dividends that GS pays, like the special dividend of $1.40 per share it announced last September. Due to the nature of the business, GS returns any excess cash to shareholders, and at times that amount can be quite large. When a dividend is paid, the price is usually adjusted downwards on the ex-dividend date, but for most dividends this is not observed during the ebb and flow of a normal trading day. With a larger dividend payout, like last September’s special dividend payment of $1.40 that took GS stock down from $21.50 to $20.44 (-5.1%), it will but slightly obvious. Below is an entire section devoted to GS dividends.
investment work
The main catalyst for growth is a takeover bid. Historical transactions indicate a premium of 25-30% over the market price. At the current price of ~$23, a takeover premium would range from $28.75 to $29.9. Canada’s big banks and insurance companies are aggressively competing to expand their distribution channels. In recent years, many independent companies have been bought out by larger competitors. The consolidation trend continues and Gluskin Sheff is certainly on someone’s radar. See below for more on takeover. The other key growth driver is the increase in AUM, leading to higher fees and increasing profitability. Gluskin Sheff is also known for paying a decent dividend of around 5% plus a special dividend in relation to its performance. I believe these catalysts will continue to propel the stock higher.
Short Story
Gluskin Sheff was founded on April 17, 1984 by Ira Gluskin, a former real estate analyst, and Gerald Sheff, an architect. According to their company website, Mr. Gluskin and Mr. Sheff, along with 24 individual clients, each poured $1 million into their first stock portfolio model. Each $1 million investment has since grown to nearly $20 million. This resulted in the asset management company’s focus on wealthy private clients and its philosophy that management and employees invest directly with their clients. GS now offers equity, fixed income and alternative investment strategies. David Rosenberg, a well-known personality and respected economist, joined the company in 2009 as chief economist and strategist. Before joining Gluskin Sheff, Mr. Rosenberg was Chief North American Economist at Bank of America-Merrill Lynch in New York for seven years.
Gluskin became a public company in May 2006 in a $133 million deal. On October 16, 2013, the two founders completed the sale of a majority of their shares for $122 million. As part of the deal, they relinquished control and the couple’s stake was reduced from 55% to 2%. Both have been out of management since 2009.
business description
Gluskin Sheff + Associates provides discretionary investment management services to high net worth individual clients and institutional investors. The minimum to become a customer is at least $3 million. Managers and employees hold at least 25% to 30% of the shares. The group collectively represents the company’s largest shareholders. Restricted Share Units (RSUs) are also paid as a bonus, ensuring further commitment to company performance. Management and employees invest in the same portfolios as their clients. These elements ensure that the interests of management/employees and shareholders are aligned.
GS has grown its assets under management at a good pace. According to their latest annual report, their assets under management grew by 20.7% from 1984 to June 2013.
GS manages the following funds internally:
GS+A premium income portfolio
GS+A US Premium income portfolio
GS+A Canadian equity portfolio
GS+A US equity portfolio
GS+A growth portfolio
GS+A resource portfolio
GS+A enhanced bond portfolio
The table below provides a summary of their portfolio performance.
Source: Gluskin Sheff Annual Report 2013. page 17
The GS+A Growth Portfolio Fund is Gluskin Sheff’s principal portfolio and is managed by Bill Webb. $1 million invested in the GS+A growth portfolio since inception (1984) would be $19.9 million (net of fees) over the same period versus $11.5 million for the S&P /TSX grown. The results are good and reasonable and stand the test of time. GS use a bottom-up approach based on fundamental analysis. Their approach is to look for companies with a long history of long-term growth and value creation, a proven track record, shareholder-centric management, and a stock price below their intrinsic value. Your approach sounds like the cut-paste format found in every prospectus these days. Their short-term performance has been bumpy, but over the long-term they seem to deliver above-average returns, so everything they do seems to be working.
management
Gluskin Sheff + Associates have quite a high profile list with names like David Rosenberg and Paul Beeston. I have attached a short description of the key people. It was recently announced that Gluskin and Sheff would be stepping down from the board effective December 18th.
Summary of some key people:
Mr. Ira Gluskin, now 70, left his CIO post in 2009. He is a frequent television commentator.
Mr. Gerald Sheff, now 72, stepped down as CEO in 2010 and was replaced by Jeremy Freedman, the current CEO.
Jeremy Freedman, President and CEO, is an attorney and has been with the Firm since 2000. Prior to joining GS, Mr. Freedman was a partner and senior litigation counsel at the renowned law firm of Davies Ward Phillips & Vineberg. In 2009 he took over the position on the board.
Bill Webb – CIO – Registered Portfolio Manager. CFA. Before joining Gluskin Sheff in 1995, Mr. Webb was with Bank Credit Analyst Research Group in Beijing, China, analyzing emerging securities markets in China, Taiwan and Hong Kong. He is often sought out by the media for comments and investment ideas.
David Rosenberg – Chief Economist & Strategist – Prior to joining Gluskin Sheff in Spring 2009, Mr. Rosenberg was Chief North American Economist at Bank of America-Merrill Lynch in New York for seven years, where he was consistently ranked as an Institutional Investor -All-Star Analyst Rankings. Mr. Rosenberg was the only economist recognized for his accurate economic forecasts in Fortune Magazine’s “Best and Worst of Wall Street 2011″ and was ranked the Most Accurate Forecaster for 2011 by MSNBC.
Paul Beeston – Chairman – Current CEO of the Toronto Blue Jays. Former President and COO of MLB. Serves on the boards of Loblaws and the National Baseball Hall of Fame. Member of the Order of Canada, Canada’s highest civilian decoration.
Recent Developments
September 4, 2013 – Announced a special dividend of $1.40 per share, payable September 23, 2013. Special dividends are based on first 6 months performance fees and excess cash. GS also announced that its regular quarterly dividends for fiscal 2014 would increase to $0.80 on an annual basis. Fiscal year 2014 began on July 1, 2013. I’ve devoted an entire section to dividends below.
Market-based adjustments to base salaries include a change in the maximum percentage of performance fees allocated to the bonus pool from the current 25% to 40%. The Board also approved an RSU award totaling $5 million to certain senior employees. This was done to further align the long-term interests of key employees with shareholders. If that’s the cost of keeping a good team together, then I support it. I work in the investment industry and losing great people can be very damaging, especially when your entire business is concentrated in a few key people. These key people have a high intangible value. If you don’t pay them for what they’re worth, someone will. Unlike machines, some people are irreplaceable.
The founders also announced that they are selling 6.4 million shares, eliminating the dual class structure. More details on the deal in a separate section below.
On November 7, GS announced that Sheff and Gluskin have notified the board of directors of their intention to step down from the board effective at the company’s annual and special meeting on December 18, 2013. They will be goodwill ambassadors for the firm and Mr. Gluskin will continue to manage a portfolio of assets for the firm’s clients.
GS also announced that the Board of Directors has approved a Shareholder Rights Plan and amendments to its Articles of Association. The Board intends to seek shareholder approval of the rights plan and amendments to the Articles of Association at the annual general meeting. The purpose of the rights plan is to give the board additional time, in the event of an unsolicited takeover bid, to develop and propose alternatives to the bid and to negotiate with the bidder, as well as to ensure equal treatment of shareholders in this context of a takeover and reduce pressure on shareholders to make an offer. I strongly encourage you to consult SEDAR for full documentation.
The deal
On September 25, 2013, the selling shareholders, Mr. Sheff and Mr. Gluskin, entered into a written agreement to sell their shares and relinquish control. Mr Gluskin and Mr Sheff were already under pressure to act. According to regulatory filings, their voting shares had an expiration date in mid-2016. On October 16, GS completed its secondary offering of 6.4 million shares at $19 per share for gross proceeds to the founders of approximately $122 million. The deal eliminates the multiple voting shares, leaving the company with one class of shares. Prior to the transaction, Ira and Gerald controlled 55% of the company’s multiple voting shares. Post-transaction, once the dual share structure is eliminated, they will each own 300,000 shares or 2% of the outstanding shares. Management and a significant number of employees purchased shares in the offering, which together represent GS’s largest shareholder. After the conversion, GS has approximately 29.5 million subordinate voting shares outstanding, of which management and employees own 25-30%.
“The completion of the offering and the elimination of the two-class share structure are important and exciting transitional milestones for our company. I am pleased that management and a significant number of employees have expressed their excitement about the Company’s future by purchasing shares in the offering. Collectively, this group remains the Company’s largest shareholder,” commented Jeremy Freedman, President and CEO.
Source: Preliminary prospectus, 1 October, page 8.
Another positive element is that other holders of multiple voting shares, such as CEO Jeremy Freedman and CIO Bill Webb, have been willing to convert their multiple voting shares into subordinate voting shares without compensation. This act of good faith indicates that they have GS’s interests at heart.
According to Scott Chan, an analyst at Canaccord Genuity, monetization should be a positive development for shareholders because it improves the company’s liquidity, reduces the likelihood of the company being bought out, and could attract institutional shareholders. I agree with this assessment.
Reasons for acquisitions and previous transactions
The wealth management industry in Canada is in consolidation and any deal would also extend the trend. It’s more difficult and complicated to be an independent smaller player in the industry. Smaller independent companies such as Canaccord Genuity and Richardson GMP Ltd. are struggling to turn a profit, while the big banks have recovered well from the financial crisis and are now swimming in profits. My first investment job was with an independent investment company and we were acquired by a major player. The main reason: economies of scale. Elements such as compliance, internal controls and costs continue to increase. This is a huge burden for small businesses. There is also a trust factor. Some investors don’t feel comfortable investing in a small independent investment boutique. Canada’s major banks and insurance companies are always looking for new ways to offer their products. Banks invest heavily in wealth management as they have higher margins and this helps combat slower growth in other entities. Banks also like their wealth management units because regulators don’t require a large capital cushion.
Below is a recap of some of the latest transactions in the industry, as you can see the bigger players are hungry:
As recently as September 2013, CI Financials bought 65% of Marret Asset Management. CI Financial has expressed interest in expanding its alternative investment product in the past. In 2008, Scotiabank acquired a 38 percent stake in CI Financial.
On August 1, 2013, Manulife acquired Wellington West from National Bank Financial Group, adding approximately $900 million in assets. Previously, Wellington West was acquired by the National Bank of Canada. Manulife also acquired independent Berkshire Financial Services in 2007.
In April 2013, CIBC Atlantic Trust bought Private Wealth Management from Invesco for $210 million. CIBC also took a stake in American Century Investments two years ago.
In December 2012, TD acquired Epoch Investments Partners for approximately $668 million, a 28% premium to Epoch’s closing price.
Natcan Investment Management was acquired by Fiera Capital Corp in 2012. accepted. Fiera acquired wealth management business Bel Air Investment Advisors and global wealth manager Wilkinson O’Grady. Together, both deals are valued at $156.25 million.
In 2011 Sun Life bought the remainder of Mclean Budden Ltd.
In 2010, Scotiabank acquired the independent Dundee Wealth for $2.3 billion.
In 2008, Mackenzie Investments completed the acquisition of Howson Tattersall Investment Counsel.
In 2009, independent companies GMP Capital Inc. and Richardson Partners merged to form Richardson GMP Ltd.
2008 RBC acquires Phillips, Hager & North Investment Counsel Inc.
takeover rumours
Gluskin Sheff has been the target of takeover rumors since early January 2013, when the founders put the company up for sale. With the latest deal, the founders no longer have the power to block a potential deal. Who would be interested? Without a doubt Canada’s big five banks, insurers and wealth managers. The paragraph above contains a summary of some transactions in the industry.
We know that large banks and insurance companies love wealth management units for their predictable fee-based returns and low capital requirements. Banks and insurers compete aggressively by acquiring smaller layers and expanding distribution channels. Gluskin Sheff is a nice company with a very special class of customers; a class that every bench is aggressively pursuing as their next big trophy.
In April 2013, GS confirmed that the company had invited takeover bids. Then they hold back the sale. In September, the founders sold their interest for $19 per share, leaving GS as a separate company and a Class 1 stock. This raises many unanswered questions. Was there a better offer on the table? It’s difficult to say. We also do not know whether the offer received was for just the founder’s share, a minority stake, or the entire company. We also do not know who the bidders were. Perhaps the founders didn’t like the structure of the proposed deal (e.g. earn-out, share swap). Maybe the highest bidder wasn’t the right partner. Maybe management just thinks it can get better on its own. Fiscal 2012 was a difficult year for GS, so bidders may have used it to underbid. So far everything is speculation. Today we know that GS has a stock class and that management and key employees own at least 25%.
Rising markets have pushed the value of GS’ AUM to $6.3 billion as of September 30th. This increases the likelihood that GS’s investment return will meet targets that would trigger performance fees and hence higher returns. Even the miserable 2008 leaves its 5-year track record and is replaced by an excellent 2013. These components should help them attract new funds and, as a result, increase their rating.
Financial overview
AUM
The most important metric is assets under management (AUM). In theory, higher AUM should lead to higher earnings. Companies are measured by how much AUM they have. Assets under management grew 13 percent year-on-year in the first quarter, despite volatility in global markets. One of the main highlights of GS is the return on AUM, which has grown at a CAGR of 20.7% since inception (1984), but this figure has been declining in recent years. Gluskin Sheff loves to mention this statistic, but most of that growth was before the 2006 IPO. The chart below shows AUM’s growth over the past decade.
Glusking Sheff went public in 2006 with $3.7 billion in assets under management. Assets under management are up about 70% since the IPO. It’s a positive trend, but not exactly spectacular. If GS adjusted its annual AUM growth rate for IPO year, it wouldn’t be as impressive. From the graph above, you can see that most of the growth in assets under management occurred before the IPO. Basically, don’t be fooled by a stat GS likes to carry around. Initially, much of the growth in assets under management came from new money, either from existing clients, new clients or institutions. Recently, the increase has been performance-related. GS weathered the financial crisis of 2008 (FY2009) fairly well, with assets under management down just 20%, much less than most wealth management firms. According to management, most of the decline in assets under management was due to the deterioration in capital markets, and GS had very low amortization levels. I believe this is due to the risk profile of high net worth investors and institutions who are less likely to withdraw their money in tough times. In fiscal 2009, GS announced a dividend increase and a special distribution. I suspect part of the motive for raising the dividend was to get investors to buy its shares.
As of June 30, 2013, 84% of assets under management were managed on behalf of high net worth individuals including entrepreneurs, freelancers, family foundations, private charities and wealth. The remainder of approximately $1.0 billion, or 16% of our assets under management, consists of funds managed on behalf of institutions. Below I have a table showing the distribution of AUM by relationship size. You can see that investors with net worth over $50 million account for 25% of assets under management.
Source: Annual information sheet 2013. Page 8.
Gluskin’s biggest source of new business: referrals from new customers and word of mouth. If you are a millionaire, what is your circle of friends like? Other millionaires. It makes sense. If you have a net worth of $10 million, chances are you hang out with people of the same social status. They are members of the same golf course and their children attend the same schools. Gluskin Sheff is also raising its public profile by hiring superstar economist David Rosenberg as its mascot. Mr. Rosenberg is often on television and writes columns in newspapers predicting global trends.
Income / Fees
Gluskin Sheff’s business model is simple – it’s all about helping people invest their money for a fee. GS’s revenue comes primarily from base management fees, calculated as a percentage of assets under management, and performance fees. GS only earn performance fees when they exceed pre-determined performance hurdles for their clients’ investments. Performance fees are calculated annually on 30 June and 31 December. With the recent positive performance of the market and its funds, many investors are stacking the stock hoping for a fat special dividend to be paid after December. Performance fees for the three months ended September 30, 2013 were $2.1 million compared to $1.1 million for the same quarter last year.
Earnings are fairly volatile with some great and miserable years. What I like is GS’s ability to recover after a “missing” year like FY2009 and FY2012. In FY2012, GS was hit by poor investment performance and a withdrawal of assets under management. It can be argued that it was a challenging year in which the financial markets were full of uncertainties and risks (e.g. euro debt crisis).
The latest results indicate a positive trend. Basic management fees increased to $20.3 million for the quarter from $18.5 million in the year-ago quarter as average assets under management for the quarter increased to $6.2 billion from $5.6 billion in the year-ago quarter. dollars rose. The base management fee percentage fell to 1.29% from 1.32% in the same period last year. Below I’ve included a table showing how performance fees are calculated for each portfolio. It explains the hurdles and odds and varies by model/fund.
Source: Annual information sheet 2013. Page 11.
The chart below shows Performance Fees as a percentage of Base Management Fees. You can see that they are inconsistent and very volatile from year to year.
Source: Annual information sheet 2013. Page 18.
I have further broken down the fees by segment.
Just like the table above, the chart clearly shows us that performance fees are very volatile. Performance fees are highly dependent on investment performance and will fluctuate from one extreme to the other. Since base management fees aren’t growing at a reasonable pace, it’s up to performance fees to fill the gap. It’s certainly not a trend I like. Investors like security and stability. If GS could receive more assets under management, base management performance fees would be higher and investors would not be as dependent on performance fees.
EBITDA / net income
For much of 2011 and 2012, Gluskin Sheff’s performance was mixed. When the company reported full-year earnings last fall, net income fell to $17 million from $50 million a year earlier, and assets under management declined to $5.4 billion. To keep investors interested, the company had to increase its dividend and pay a special dividend of six cents per share. The performance rebounded in 2013 with sales of $125 million and net income of $49 million.
The numbers below are consistent with the other results we’ve looked at so far, which means they’re inconsistent and unpredictable. The numbers are on the up at the moment. Basic EBITDA is often used as one of the most important valuation metrics. Analysts typically use a multiple of the NTM Base Management Fee EBITDA estimate in a sum-of-the-parts assessment.
In line with the other numbers, EPS is going up and down. The EPS are a victim of the volatile performance fee. Analysts polled by Reuters have a consensus of $1.75 for FY2014 and $1.77 for FY2015. This number was updated this month and is higher than the consensus of $1.58 for FY2014 $1.63 in the table is my own calculation. I’m making more conservative assumptions than most analysts. Sugar coating is not in my personality.
dividends
GS loves to reward its shareholders. Last September, GS announced its ninth consecutive special dividend and seventh consecutive regular dividend increase since becoming a public company. In 2013 alone, there were two special “performance” dividends, one of $0.65 in February and one of $1.40 in September. Management has previously announced that the dividend payout for fiscal 2014 will be increased from $0.70 to $0.80 annually.
GS’s ability to pay dividends depends entirely on its operations and ability to generate fees. And fees are subject to a variety of factors, including financial performance and assets under management. In accordance with the Dividend Policy, the Board of Directors reviews semi-annually the determination of a special dividend.
Above is a chart of dividends declared since the IPO. For the 2014 financial year, I only took into account the special dividend already declared in September 2013. It is very likely that another special dividend will be declared after the December results are released. That payout would come on top of an already record year for dividend payouts.
I love dividends, but more importantly, can GS keep them? Under the surface, the payout ratio appears to be sustainable. For normalization purposes, I’ve excluded fiscal 2007 and fiscal 2012 and get an average dividend payout ratio of 86%. GS is not a capital intensive company. The regular dividend is about 40% of the payout ratio. The rest relates to the special service. The payout may seem high, but it is sustainable. It’s a business model where excess money is returned to shareholders. Therefore, the regular dividend is not at risk, but the special dividend will fluctuate according to the company’s performance.
The Analysts
On November 8th, BMO Capital Markets, Canaccord Genuity, CIBC World Markets, RBC Capital and TD Securities all increased their price target. Here is a resume:
BMO Capital Markets – Market Performance – $23.00
Canaccord Genuity – Buy – $24.50
CIBC World Markets – Sektorleistung – 22,00 $
RBC Capital Markets – Übertreffen – 27,00 $
TD Securities – Halten – 24,00 $
Im Moment sind die meisten Analysten optimistisch für GS. Zielpreise und Empfehlungen ändern sich ständig. Deshalb messe ich ihren Prognosen und Kurszielen nicht zu viel Gewicht bei. Sie ändern oft ihre Meinung und konzentrieren sich auch zu sehr auf das Kurzfristige. Bereits im September hatten die meisten Analysten nach der Ankündigung des Verkaufs ein Hold-Rating für GS ausgesprochen. Um Ihnen eine Vorstellung zu geben, hatte CIBC im Jahr 2012 ein Kursziel von 14 $ für 2013. Ihre Berichte sind interessant zu lesen, aber ein Leser muss bedenken, dass ihre Forschung für institutionelle Anleger und nicht für Privatanleger bestimmt ist.
growth
Ich werde nicht anfangen, einen Geschäftsplan für GS zu schreiben, aber er kann weiter wachsen, wenn sie diesen folgenden Plan erfolgreich umsetzen können:
Starke Anlageperformance für Bestandskunden. Dies ist eindeutig die effektivste Strategie. Es ist kostengünstiger, einen Kunden zu behalten und mit ihm zusammenzuarbeiten, als einen zu akquirieren. Ein zufriedener Kunde könnte auch neue Gelder anziehen, indem er neues Geld und Empfehlungen einbringt.
Ausbau neuer Produkte. GS kann wachsen, indem es sein aktuelles Portfoliomodell erweitert. Unterschiedliche Kunden haben unterschiedliche Bedürfnisse.
Expandieren Sie in neue geografische Märkte. Laut dem Prospekt von GS aus dem Jahr 2006 stammen 70 % ihres verwalteten Vermögens von vermögenden Kunden in Ontario und Quebec. Es gibt viel Reichtum im Rest von Kanada, den GS anstreben könnte, wie zum Beispiel das ölreiche Alberta. GS könnte auch international Büros eröffnen.
Ziehen Sie mehr institutionelles Geld an. Zum 30. Juni 2013 verwaltete GS nur 1 Milliarde US-Dollar im Namen der Institution oder 16 % des verwalteten Vermögens. In der Vergangenheit hat GS nicht versucht, in diesem Segment der Branche zu konkurrieren. Mit der jüngsten positiven Performance und der neuen Einklassen-Aktionärsstruktur sind sie besser in der Lage, Mittel anzuziehen.
Entwicklung einer Plattform für vermögende Privatpersonen. Die 3-Millionen-Dollar-Mindestgrenze ist ziemlich hoch, aber es ist auch ein Zeichen von Prestige. GS hatte früher ein Minimum von 1 Million Dollar und ein Minimum von 2 Millionen Dollar. GS erzeugt ein Gefühl der Begierde. Du willst Dinge, die du nicht haben kannst. Eine Idee ist, dass GS eine Reihe von Fonds entwickelt oder eine andere Abteilung eröffnet, die sich an kleinere Anleger richtet, ähnlich wie es Jarislowsky Fraser im Jahr 2012 getan hat. Wenn dies erfolgreich ist, würde die neue Abteilung zu einem höheren verwalteten Vermögen führen.
Warum sollte GS nicht anfangen, andere Vermögensverwaltungsgesellschaften zu erwerben, anstatt das Investitionsziel zu sein? Das würde auch das verwaltete Vermögen erhöhen und potenzielle Synergien könnten verfügbar sein.
valuation
Was meiner Anlagethese einen Strich durch die Rechnung machte, war der Anstieg des Aktienkurses um 24 % seit Beginn meiner Recherchen. Die gleiche Situation passierte, als ich NagaCorp recherchierte. Der Aktienkurs schoss in den drei Wochen, in denen ich ihn recherchierte, um 16 % in die Höhe. Es sieht aus wie ein positiver Fluch. Denken Sie daran, dass hinter der aktuellen Hausse von GS die Anleger aufgrund der jüngsten positiven Ergebnisse mit der Erwartung einer großen Sonderdividendenausschüttung einsteigen. Danach könnte die Aktie nachgeben.
Allerdings basiert meine Bewertung auf einem mehrjährigen Horizont. Die meisten Analysten haben ein 12-Monats-Kursziel und Aktienanleger diskontieren wahrscheinlich mindestens die nächsten sechs Monate.
Ich habe eine andere Bewertung und Annahmen zur Verfügung gestellt. Wie oben erläutert, sind meine Zahlen etwas konservativer. Ich habe für das Geschäftsjahr 2014 einen Gewinn pro Aktie von 1,63 US-Dollar errechnet, was unter dem Konsens der Analysten von 1,75 US-Dollar pro Aktie liegt.
Mein Tisch ist nicht so beeindruckend. Der einzige Vorteil ist, wenn GS zum S&P/TSX 16x Multiple handelt, was ich bezweifle, dass dies passieren wird. Es sieht so aus, als ob der aktuelle Marktpreis von GS die Daten für dieses Geschäftsjahr vollständig diskontiert hat.
Das Szenario des Analysten ist optimistischer. Die Analysten erwarten für das Geschäftsjahr 2014 einen Gewinn pro Aktie von 1,75 USD. Bei einem KGV von 14 rechnen wir mit einer Rendite von 14,3 % einschließlich der Dividenden. Dies ist eine angemessene Rendite für die kommenden Monate.
Das obige Szenario ist das Übernahmeangebot und auch das kurzfristig lukrativste Szenario. Ein Aufschlag von 25 % bis 30 % auf den Marktpreis ist eine häufig verwendete Faustregel. Die jüngsten Transaktionen deuten darauf hin, dass sich der Trend fortsetzt.
Das obige Szenario basiert einfach auf Vergleichswerten. Sprott und Fiera haben ungefähr die gleiche Marktkapitalisierung und CI Financials ist viel größer. Sie gehören auch zu den am häufigsten genannten Vergleichswerten in Analystenberichten. Die Comps werden zu einem höheren Preis-Gewinn-Verhältnis gehandelt als GS. Dies kann durch die glanzlosen Ergebnisse von GS erklärt werden. Unter der Annahme, dass GS in den schlechtesten Jahren die Wende geschafft hat, können wir vielleicht mit einem höheren Handelsmultiplikator rechnen. Die Konkurrenten von GS haben ein durchschnittliches 17,4-faches Forward-KGV, wobei Fiera und CI Financials im niedrigen 20-fachen Bereich liegen. Ich glaube nicht, dass GS dieses Jahr dieses Niveau erreichen wird, aber wenn es das tut, könnte es eine höhere Bewertung erzielen.
Based on my valuation, the value of Gluskin Sheff is in the range of $24.6 to $29.9 per share. This represents a 7% upside to a potential 30% in case of a takeover offer. Everything in between is fair too if the market decides that GS deserves a higher valuation multiple.
positive
Outstanding long-term track record of strong investment performance.
Independence. There are not a lot of independent wealth managers in Canada. The majority of them were bought out.
Senior management and employees are the firm’s largest shareholders. Part of their bonus is paid out in RSUs. They also invest in the same portfolios as their clients. I like a company where management interest is aligned with the shareholders.
The new single class structure might attract more institutional investors.
GS loves to pay dividends and to return excess cash to their shareholders. Gluskin Sheff has raised its dividend for fiscal 2014 and paid two special dividends in 2013. I’m comfortable with this since they are not a capital intensive business.
Well positioned to continue to expand in the high net worth private client market, the fastest growing segment of the wealth management industry.
The deal: this monetization should be a positive development for shareholders because it improves the firm’s liquidity, reduces the likelihood the firm will get bought out and could attract institutional shareholders, said Scott Chan, analyst at Canaccord Genuity.
GS is in a nice market with its prestigious high net worth clientele – a highly sought after segment in the industry. GS has developed an outstanding reputation in the Canadian high net worth private client market.
Their five year performance will now exclude disastrous 2008 and add exceptional 2013. The better performance track record should help attract funds.
Wealth management is a low capital requirement business.
Numerous funds which leads to fee diversification.
History of dividend growth and special dividend pay out.
Last year, 94% of the growth in AUM is performance related. The performance crushed the market and should attract more funds.
I’m not drawing a business plan for them, but if they are desperate for growth they could open a fund for investors under $1 million.
Risks and Negatives
The biggest risk is a potential drop in AUM. Fees are derived from AUM. A collapse in AUM would lead to a collapse in revenues. GS is linked to changes in securities markets and poor investment performance.
In 2012, AUM dropped and net income fell to $17 million from $50 million a year prior.
Original founders sold a majority of their controlling stakes in September 2013. With the founders gone, can management keep the founder’s vision?
Performance fees are subject to performance hurdles that will not be met for some portfolios in the short term and vary significantly year to year due to market uncertainty and volatility.
While the rich get richer, there are only so many of them. Because of their much selected clientele, it’s harder to attract new clients. In Canada, the market for millionaires with $3 million in investments is limited. Gluskin Sheff can only have so many clients. An opportunity is to expand geographically.
Q1-2014 – AUM experienced a small net withdrawal of $11 million. The net withdrawals resulted from $84 million in net additions from high net worth clients, offset by $95 million in net withdrawals from institutional clients.
Q1-2014 -The Base Management Fee Percentage declined to 1.29% from 1.32% for the same period last year.
Loss of key employees. Intellectual capital is extremely important. Any loss of management, or investment professionals could lead to loss of clients and decline in revenues. To retain key employees, GS has implemented an employee stock ownership plan (ESOP), and Restricted Share Units (RSU) and discontinued annual grant of stock options.
Performance fees allocated to the bonus pool is up to 40% from previous 25%. This means less money for the shareholders. Performance fees were responsible for 36% of the income last year. The fees are now believed to be in line with market rates. Changes were effective July 1, 2013. Performance fees are earned when GS exceeds pre-specified rates of return. As I mentioned earlier, if this is the cost to keep a good team together and to keep performance up, then I am in favor. The compensation is set and reviewed by the Compensation, Nominating, and Governance Committee of the Board. For more information, I invite you to read Gluskin Sheff: New Single Share Class Improves Upside Leverage By Safety In Value.
Only 6% of the AUM growth in the recent year is from new money. The rest is performance related. There are many ways to read this. First, because of the type of clientele, it’s harder to attract capital. On the other hand, a good performance should facilitate them attracting new money.
Catalysts
The recent rise in the stock price from $18 to $24 really took some upside away from my investment thesis. It’s possible the recent bull ride is temporary until the next special dividend payout. A lot of people have jumped on the bandwagon after the November 8th results. Clearly the main catalyst is a takeover offer from a big bank or insurer. Past transactions suggest that a 25%-30% premium is common. We know that GS has an open mind because they entertained offers earlier this year. We also know that there’s a wave of industry consolidation in the Canadian asset management industry. Higher costs and regulations make it more difficult to operate as an independent. The truth is it’s much more cost effective to be part of a big bank with other units to support you. Another important catalyst is increasing their AUM. With a limited supply of multi-millionaires, GS needs to tap more institutional money. Institution only makes up 16% of their total AUM. Their latest positive results and the new single class structure are two factors that might attract new funds to manage. As markets continue to improve, market appreciation is likely to further boost AUM. GS is also well positioned to continue to expand in the high net worth private client market, the fastest growing segment of the wealth management industry.
Conclusion
There’s two ways to play this investment. You can have $3 million and invest along them or you can buy the stock and hold it for a long time.
Based on my valuation, the value of Gluskin Sheff is in the range of $24.6 to $29.9 per share. This represents a 7% upside to a potential 30% in case of a takeover offer. Everything in between is fair too if GS keeps up their special dividend payout and the market decides higher valuation multiple is warranted.
At this moment, you might be pondering whether GS is investment worthy. GS’s past performance is not really that impressive and lags behind the TSX and S&P500. A lot of my thesis depends on a potential takeover offer. Therefore you need to be aware that there’s a certain level of speculation in my investment thesis. The recent industry consolidation suggests a 25% to 30% premium over the open market price. By applying the 25% rule of thumb to an average price of $23, GS would have a market cap of approximately $850 million, or $28.80 per share. GS could fetch such a premium because of the exclusive nice clientele that GS caters to. A big bank would love to have this cream of the crop portfolio of clients and bragging rights. If there’s no offer on the table, I believe that you could still have modest return if management succeeds to increase AUM and keeps delivering on the special dividends. The average annual dividend yield is approximately 5% and could realize more with the special dividend. A combination of potential modest growth, dividend and special dividend payout would result in a reasonable 5%-10% annual return. One of GS’s key principles is aligning the interest of management with the shareholders by investing a portion of their net worth along with the shareholders and clients. The recent structural changes and performance suggest that GS has turned the corner and is ready to deliver higher returns to shareholders.
Disclosure: I am long OTC:GLUSF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: As with all of my articles the opinions are my own. You should do your homework and make your own best judgments about the company. (I know that this resembles the boilerplate disclosure that you see in every email that you get from your broker but I really mean this and I am not saying it to avoid getting sued.)
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