'We think Canadians should have exposure to China in their portfolios,' says Mackenzie Investments CEO Luke Gould.CHINA DAILY/Reuters
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The markets have been pretty bumpy since Luke Gould took over as president and chief executive officer at Mackenzie Investments six months ago. Still, Mr. Gould says his transition into the role has been a smooth one.
Mr. Gould, the former chief financial officer at Mackenzie’s parent, IGM Financial Inc., describes his role as “continuity momentum” after taking over the top job from Barry McInerney on July 1.
Globe Advisor editor Pablo Fuchs spoke with Mr. Gould in a LinkedIn Live webinar to discuss how he’s leading the firm through the current bear market and the opportunities he sees for advisors and investors in the year ahead. Here is an edited version of that conversation.
Has Mackenzie’s business or investment approach changed in light of the current market environment?
We have a broad roster of capabilities. In this environment, we’re focused on things that help with income, inflation-resilience [and] diversification. The only thing that pivots is our emphasis on ensuring we have [investments] that are relevant for advisors and Canadians.
The firm has been quite active in making acquisitions over the past couple of years. Are there more deals on the horizon?
We’re always looking to add capabilities that we think are relevant through acquisitions, recruiting talent and strategic partnerships. We’ve closed several gaps in recent years, for example with the acquisition of Northleaf Capital Partners, to add more private capabilities. We also wanted to bolster our capabilities in [socially responsible investing] and acquired Greenchip Financial. And last year, we acquired the 13.9 per cent of China Asset Management Co. Ltd. from our parent company [Power Corp.] that we didn’t own, bringing our stake to just under 30 per cent. That gives us capabilities we believe will provide us advantages over the long term. So, we’ve added a lot. Right now, we’re focused on realizing the potential of those offerings. We’re not seeing any clear and evident gaps at the moment.
What impact has the Northleaf acquisition had on the business in terms of inflow and performance?
Since we acquired Northleaf, we’ve seen the assets [under management in that unit] grow from $15-billion to $23-billion. The first thing we did was populate managed solutions with private equity, private credit [and] infrastructure. Then, we embarked on creating products that democratize private investing for retail investors. We’ve launched a suite of four funds at Mackenzie – two private credit funds, a private equity fund and an infrastructure fund. We’ve been working on getting them on dealer platforms and educating advisors as they build portfolios using private asset classes. We’ve also raised just less than $50-million of third-party money.
[The strategy] has delivered on the promise of greater risk-adjusted performance. We have a few other products in the pipeline that we’ll continue to bring to retail investors, more diversifiers.
ESG has long been a priority at Mackenzie and has gone more mainstream in recent years. There are now an overwhelming number of products on the market and growing concerns about greenwashing. How can firms like yours help advisors and investors sift through the noise?
We believe we have a responsibility to invest money responsibly. That includes making sure ESG is integrated into our investment solutions. We believe that we should know what we’re investing in and be active owners, engaging with companies on how they run their businesses. It comes down to being very clear in disclosures on what you’ve set out to do, what your process is, and then adhering to it and demonstrating how you’re adhering to it.
Globe Advisor editor Pablo Fuchs speaks with Luke Gould, president and chief executive officer of Mackenzie Investments, about how he’s leading the firm through the current bear market, and the opportunities he sees for advisors and investors in the year ahead.
The Globe and Mail
Given your investment in China Asset Management, where do you see potential in the Chinese market in the coming years?
The retirement market in China is growing very quickly. China’s investment management industry is still in its infancy, with assets growing by about 25 per cent a year. China is too big to ignore. It’s the world’s second-largest economy and has the second-largest stock market and bond market. China is also Canada’s second-largest trading partner, and the trade is growing. We think Canadians should have exposure to China in their portfolios.
Finally, what are some of your priorities in this role?
I have three priorities, the first of which is winning Canadian retail. We want to be the solutions provider of choice for Canadian advisors. That’s our focus. That’s why we’re here. Number two is to build meaningful strategic partnerships, leveraging our strengths. We have these anchor clients with IG Wealth Management, Canada Life Assurance Co., Primerica Inc. and Laurentian Bank of Canada. We’re very good at strategic partnerships and believe our capabilities expand beyond Canada’s border. The third is to expand our distribution reach in under-penetrated channels. After almost 60 years in business, we have a very small institutional business. Group is another place that we’re under-penetrated. So, those are places we’re going to be focused on.
The entire interview can be found here.
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