PQ is back to being entirely owned by management after buying back a minority stake from US-based Focus Financial Partners. Focus initially took a stake in 2018, as part of enabling PQ founder Ian Rosmarin’s retirement. Focus also helped with PQ’s acquisition of New York-based Beekman Wealth Advisors. In the time it was a shareholder of PQ, Focus went from being private to publicly traded to private again, after a buyout by private equity shop Clayton Dubillier & Rice.
PQ Supremo Mo Lidsky said that as Focus went through some of these shifts, their interests diverged. The deal to unwind the partnership sounds laborious, involving one year of desert wandering. But now the firm is unconstrained in pursuing its ambition to be the “number 1 go-to resource for UHNW families around the world, ie. the McKinsey for wealthy families." Mo is big on management techniques: vision, transformation, town halls, etc. PQ currently consults on more than C$24B in assets for over 240 affluent families.
With their newfound freedom, PQ plans to acquire more firms and teams and invest more in technology, among other initiatives. PQ is interested in expanding its advice capabilities in philanthropy, family dynamics, coaching wealthy families and preparing the next generation. They will also shortly hire a Chief Growth Officer, a Chief Clinical Officer (to help support family relationships/dynamics) and a Chief Philanthropy Officer. PQ is incubating a venture called Konnect Better which is about family relationships (expected to be launched officially in Q2). Mo is building the firm of the future!
PQ now has a presence in Vancouver, Calgary, Montreal, New York and Miami. More expansion is planned, Mo is looking at the US West Coast and London. So he’s not afraid of competition. Mo already has an Illuminati-grade global network, as you can tell from his annual conference. The last one featured Mark Carney and two-time Super Bowl MVP Eli Manning.
The private markets opportunity
Mo is bullish on private markets (as is everyone). The firm has created a series of pooled vehicles to give their clients access to funds in all the major alternative asset classes. This helps in the case of funds that are inaccessible for direct investment (either due to very high minimums, the manager's unwillingness to take in new investors, or because tax or regulatory complexities of going direct). In addition, they now have a division called PQ Partners to facilitate direct deals and co-investments. Direct deals are a big trend, where family offices prefer investing directly in private equity deals rather than indirectly through funds. Funds are not always client friendly, they are opaque, they can keep your money captive, you surrender control. Direct deals make a lot of sense.
The key people at PQ
PQ has a bunch of new people, but the key people besides Mo are Mark Roth (Chief Risk Officer), Dijana Ebach (Chief of Staff), Jacques Clariond (Head of Global Advisory), Roy Bernhard (CTO), Alex Da Costa (Chief Investment Strategist), Nancy Marshall (Head of Family Office Services), and partners Terry Vaughan and Jamie Spinner. Jacques Clariond is the key figure who joined to lead the US business in 2023.
BTW, isn’t worshipping a specific quadrant a form of false idolatry? Probably, but in Mo’s defense, he wasn’t around when the brand was picked. It was initially the name of founder Ian Rosmarin's family office. He is still listed as Chairman Emeritus. His son Jeremy Rosmarin left the firm in 2023 and now runs Sidecar Capital Partners, which provides funding to service businesses.
Focus Financial is focused on RIAs and the mass affluent (similar to CI Financial’s US play Corient). So it wasn’t the best fit with PQ’s focus on UHNWs and flat fee pricing model. PQ’s split with Focus means it’s no longer stablemate with fellow Canadian firm Westcourt Capital. Focus has a few other holdings in Canada, including Dorchester Wealth of Montreal and Cardinal Point Wealth Management of Toronto.
I have written before about PQ. If you need a basic background on the firm, Mo explained his business on Karen Azlen's IntroCap podcast a few months ago. He described the firm’s 3 core functions as follows:
- Fractional CIO: asset allocation, portfolio construction, due diligence, manager selection, sourcing, originating, monitoring on an unbiased basis, finding best-in-class GPs and partners around the world (this is the bulk of his business)
- Fractional CFO: consolidated reporting, consolidated financials, coordination with trusted advisors, book-keeping, cash flow management and treasury function, back-office
- Outsourced family empowerment services: family meeting facilitation, family office formation, educating the next generation, family governance.