Hedge funds

Greg Boland is probably a nice guy. At least, I really hope so

OPM 3 min read

What possessed me, a newbie blogger, to start a campaign to elicit the performance history of Greg Boland, one of the most powerful men in Canadian finance? At this point, I would settle for just knowing how big his RRSP is and on behalf of the Globe, what his favourite breakfast cereal is. I really hope Boland will prove merciful. There are indications that he's a really nice guy (except if you sue him).

One such indication is that he has had long-standing partners. His three partners, prop trader Peter Fraser, Onex man Thomas Dea and Amaranth refugee Anthony Griffin have been with West Face since founding in 2006. Incidentally, Boland arch-nemesis Newton Glassman also has a long-standing partner since founding. Could it be that behind all the activism and legal hostilities, both Boland and Glassman are total nice guys?

West Face did have one noteworthy departure recently: the head of investor relations, Claude Robillard left in May 2019, having been there since 2013. What I would give to be able to waterboard him just a few minutes. Just kidding.

Many years ago, I was researching a company called Saskatchewan Wheat Pool. As I was struggling to understand the world of grain elevators, I asked the Investor Relations lady there if she could refer me to someone smart I could talk to. The name she gave me was Greg Boland, then working at Enterprise Capital. He was kind enough to take my call and share his insights on SaskPool. The company, which had been on the verge of bankruptcy, was eventually recapitalized with Boland's help and turned into a phenomenal winner (you might know it better as Viterra).

So that's another indication that he's a nice guy. To thank him, I sent him the idea of buying BCE Emergis. He replied with another stock tip, these were his words:

Have you looked at St Laurence cement? 13x earnings and its 44% shareholder Holcim just raised 1.5 billion for acquisitions. They also just bought out the minority of their Mexican partially owned sub. Nothing built in for takeout potential. HOLN up 75% in Canadian dollars in 12 months.

I thought this might be an interesting window into how he thinks. His prediction did come true, eventually: in 2007, three years after his call, St-Lawrence Cement got taken over at $36.50 by Holcim, resulting in about an 18% annualized return. Now, I know you're not supposed to look a gift horse in the mouth, but in those years, I was compounding at over 40% annual, so St-Lawrence was a relative drag on my portfolio. Thanks for nothing Boland. My pick, BCE Emergis, also got acquired about 3 years later. It was also a slow-mover, but delivered returns of about 19% annual, while being less risky because the bulk of its market cap was justified by cash on hand. By Derek DeCloet’s dog-eat-dog logic, this makes ME the smartest guy on Bay Street. But I’m not competitive like that.

Later on, Greg Boland appears to have forgotten our SaskPool interaction because, in 2006, he told his bestie DeCloet about his coup: "[SaskPool] was completely off the radar screen. I honestly think we were the only guys paying attention to it who wasn't a bondholder."

Err, hello??? What about me? I had like $30k riding on Sask Pool. In those days, that was like a mid-size Toronto hedge fund. Might still be the case today.

I didn't keep in touch with Boland, and given some of the crazy stuff that have happened to him (former Israeli spies working as private investigators targeting his firm and anonymous online defamatory posts), I can understand that he guards his privacy even more than usual. I see, so when I could support his stocks with my SEVERAL thousand dollar portfolio, he's happy to talk his book, but now that I am an anonymous blogger, suddenly he doesn’t talk to randos? I feel used.

As long as I am mentioning my tenuous connections to people, I should mention that time I talked to media personality and Boland confidante, Derek DeCloet. This was during the late 90s dotcom bubble days, when discount brokerage was just taking off in Canada.  Derek DeCloet put out word that he was looking to interview clients about brokers and I volunteered. I gave him mildly negative feedback about my bank's discount brokerage service.  A bit later, his fact-checker called me to make sure my quotes had been accurately recorded.  But by then, I was having second thoughts, so I told the fact-checking lady: I don't know if I should be criticizing something as powerful as a bank in public. But she reassured me by saying something like “In this country, you can speak truth to power and nothing will happen to you.” I was young, impressionable and a newcomer to this country. Ever since, I have not been shy about speaking my mind. If you’re not happy, you know who to blame. Derek DeCloet.

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