This is not by way of kompromat or schadenfreude, just an interesting situation in the markets. Though it’s always useful to remember that just because someone is successful doesn’t mean they’re infallible. Ed Sonshine - the founder and Non-Executive Chairman of REIT RioCan - is dutifully carrying on as Chairman of troubled lender Chesswood Group. Shares of publicly traded Chesswood started the year around $8.00. It’s now $0.90. The company has had to restate financials, take write-downs and the stock is currently halted. Chesswood is a commercial equipment finance lender focused on small and medium-sized businesses. Ed Sonshine owns 10% (about 2m shares). From the peak, his stake has crumbled by about $28m. In contrast, his current holdings of RioCan amount to about $12m.
Sonshine's main claim to fame is as the founder of RioCan, one of the first REITs in Canada, now managing billions in shopping centres and other real estate. But he was also a co-founder of Chesswood, going all the way back to 1998. He left the board in 2012, but rejoined in 2020 and was appointed Chairman. At the same time, a whippersnapper by the name of Ryan Marr was appointed CEO. Ryan Marr had been a portfolio manager at Gluskin Sheff and then joined Waypoint Investment Partners. (Former Gluskin Sheff star Bill Webb founded Waypoint.) Waypoint accumulated a position in Chesswood and somehow Ryan Marr talked himself into the CEO post. Chesswood even acquired Waypoint as part of a plan to launch credit funds. Bill Webb passed away in 2023 from prostate cancer at age 59.
Ryan Marr was around age 32 when he was named CEO of Chesswood. He had no experience in lending. He’s a pure creature of the markets and a CIM, which is like a CFA-lite. Chesswood’s loan origination volume is a bit above $1B - it’s not insignificant. You are probably wondering: was an undercurrent of homo-eroticism a factor in naming such a strapping young man CEO? Wow, you really do read all the crap I write! Anyways, I refuse to answer, I am trying to be more presidential. You will just have to wait and see if this case study makes it into my full paper on the topic. The title will be: The mentor-protégé relationship in business and the risks of homo-erotically-induced misjudgments. You are so lucky to have access to the mind of a modern-day Freud like me.
Here’s Ed Sonshine.
He keeps his keyboard in a drawer.
How material is Chesswood's debacle to Sonshine's net worth? Harley Finkelstein, Shopify’s President interviewed Sonshine on his podcast Big Shot, which is dedicated to Jewish entrepreneurship.
In his 40s, after 15 years of practice as a leading lawyer, Sonshine still had, per his telling, a negative net worth. But then he switched to real estate. He has been involved in Toronto real estate since the early 90s. RioCan has gone from an asset base of around $80m to a market value of around $6B. How much do you figure Ed Sonshine is worth? $800m? $7B? $36 trillion? What if I told you that he's unlikely to have even crossed the critical $100m mark? [According to the UN Human Development Index, $100m is the absolute minimum net worth needed to be considered a real baller.] His current holdings in RioCan are worth around $12m. His family foundation has about $3m in assets. Notable publicized gifts have included $3m to the UJA Federation of Greater Toronto and $1m to Ryerson’s law school.
I have asked around for how much Sonshine might be worth and I got figures as low as $30m. Wow, wealth inequality is real, I am going to vote for Jagmeet. The way to reconcile this story is that RioCan is a fund that Ed Sonshine found and started managing. He didn’t have a lot of his own money to buy into the fund. From IPO in 1994 to 2013, RioCan achieved annual returns of 16%. Since then, it has stalled. But credit where credit is due, Sonshine hasn’t exploited RioCan’s large asset base for his personal enrichment. Unlike many REITs, RioCan internalized its management very early on against a relatively paltry $5m payment.
Between 2008 and 2017, Sonshine was also a director of an even bigger lender than Chesswood, RBC. He took great pride in that because this was the bank that his father went to each year for financing as a small-time homebuilder. Sonshine is also involved as Chairman of Awz Ventures. That's a security and intelligence focused investment firm with strong ties to the Israeli military and defense establishment that also counts Stephen Harper as an advisor.
Ed Sonshine has many awards and accolades, but I don't think anything can compare to him being named Jew of the Week for the week of December 27th, 2013 on JewOfTheWeek.net. This is a far cry from his humble start in life in a German displacement camp, born to Holocaust survivors.
For 6 months out of university, Ed Sonshine was a criminal defense lawyer. He switched to corporate law because he didn’t enjoy hanging out with “delinquents.” He then practiced corporate law for 15 years, becoming a partner at Fogler, Rubinoff.
He’s proud of his “King’s Counsel”, an honour given to elite lawyers.
He still kept his law license when he started RioCan, but that license has since been suspended, probably because he forgot to fill some form or pay his annual dues. The annual fee is about $2,200. I’ll chip in $200, can any of you help with the remainder?
Let's end on a positive note. I have learned that the Establishment competes on the basis of the achievements of their offspring. On that front, Ed has one daughter, Jodi, who is a doctor, and two sons. Jonathan Sonshine is a Vice President of Tenant Experience at RioCan. Daniel Sonshine is a partner at Brent Belzberg’s private equity shop Torquest. Daniel has a degree in economics from Harvard and graduated as a Gold Medalist from the JD/MBA program at Uof T. Mom Fran Sonshine must be very proud.