In 2018, a 34-year-old Gary Ng paid $100m cash to acquire brokerage PI Financial. I feel really silly that I wrote 10 Wealthsimple stories in the past few months while neglecting the Gary Ng story. Vancouver-based PI was founded by Max Meier and John Eymann in 1982 and had $4.5b in AUM at the time of sale. PI wasn't Gary's first or last acquisition. He plans to consolidate the independent investment management space in Canada. Gary calls himself the Admiral of the fleet of financial firms he’s building. I am very respectful of personal branding, so I will call him Admiral Ng from now on.
Like Gerry Schwartz and Bruce Flatt, Admiral Ng was born in Winnipeg and is a graduate of the University of Manitoba. Admiral Ng started from the bottom - his father was a mechanic, his mother was a secretary and Winnipeg is landlocked. He made his first million at age 18, working as a coder for Redknee during the dotcom bubble. He invested the proceeds into a Chinese contract manufacturer that was sold in 2007 to Industrial Bank of China, giving him a $150 million windfall. Then he tried golf, playing up to 36 holes a day, driving his score down to 77. Then he got bored of golf and picked up commodities trading at the suggestion of a friend. He started as a retail futures broker with Union Securities. He traded everything from pork bellies, to canola to bonds, to stocks and options. Admiral Ng still remembers the date he started - Feb 2nd, 2008 - because it's the day his hamster died. Shortly thereafter, during the crisis, he made tens of millions for his clients and himself shorting the S&P 500 index "in a very, very heavy way".
"We rode it all the way down. You never get to the dead-nuts bottom but we got pretty close, then we rode it all the way back up for the last ten years"
Sounds like a can’t-miss strategy! In 2012, PI Financial acquired Union Securities. PI was very interested in retaining Gary, as he was a top producer, but he preferred to go on his own. He formed brokerage Chippingham Financial by absorbing a small Toronto-based broker. But he found building a firm one advisor at a time too slow and so he moved on to acquisitions at a bigger scale.
Admiral Ng says the average age of owners of non-bank owned investment dealers is 69 which puts him in a unique position to provide succession plans and a long-term vision. He doesn't strike me as a slash-and-burn roll-up guy. His main thing is that each customer gets a bespoke plan. The ol' bespoke plan! I like people who just want to make money. He's also not obsessed with technology, he still believes in the human-heavy model. His sweet spot for acquisitions is firms with $2 billion to $5 billion under management, but he’s also looking at bigger companies with as much as $15 billion in assets. Admiral Ng has said: “I’m a friendly guy. I am not a conqueror. I am very well-capitalized, and that’s the beauty of it.”
I am intrigued by his M.O. For example, his PI deal apparently just took a couple of hours to conclude, without any negotiation. "I told them I did not want to negotiate. I asked for a no-dicker sticker number... a fair valuation, a number they were happy with". His role now is as Executive Chairman of PI Financial, the firm has a CEO from within the ranks. Gary is still a broker managing a book of business. His burgeoning empire now has a presence from coast-to-coast.
This post was put together with information from various articles written by normojournos. I only mention that so you know who to blame if anything I wrote is wrong. I was not able to contact Admiral Ng. This leaves me with no choice but to draw adverse inferences and issue an RFK (a Request for Kompromat).
On the experience of making millions from the 2008 crisis, Admiral Ng has said: “The only time that new kings are born is when there’s chaos. If everything’s hunky dory, the new kids never get a shot.” Leave that with me, if we ever encounter chaos, I will do a follow-up.