Money manager and businessman Ned Goodman is seen in his Toronto office on October 20, 2010.Jennifer Roberts/The Globe and Mail
The big changes at the top of Dundee Corp.'s securities business stemmed from departing head Jonathan Goodman's desire to run his own hedge fund, which spurred a "house-cleaning" at the top of the firm.
That's according to Ned Goodman, the founder of Dundee.
Dundee has long been a big player in Canadian finance. It has owned a bank, as well as one of the largest wealth management companies in the country. It is dominated by its founding family. Mr. Goodman is chairman and owns a controlling stake. His son David is chief executive officer, having been installed in that post this summer. And until last week, his son Jonathan was a board member and chief executive officer of subsidiary Dundee Capital Markets.
Unexpectedly, Jonathan Goodman announced last week that he was resigning as head of Dundee Capital Markets and giving up his Dundee Corp. board seat, which he had held since 1996. At about the same time, at least one other senior executive in capital markets left the firm. No replacements were publicly announced until early this week, when Dundee named Mark Attanasio president of capital markets.
The changes, which came with little explanation, were a surprise to some who follow the company. GMP analyst Stephen Boland wrote in a note that he did "not expect or anticipate any changes on the board, especially from one of the Goodmans, which control the company." Mr. Boland suggested one explanation may be the company's heavier focus of late on wealth management. Jonathan Goodman's background is largely in mining and resources, while David Goodman has been heavily involved in the family's wealth management businesses over the years.
Jonathan Goodman "has decided he wants to do something else. We're totally in favour of it and we're going to help it," Ned Goodman said in an interview, adding that his son "decided he didn't like capital markets."
In the notice of his resignation, Jonathan Goodman said "I fully support management on its new initiatives which have afforded me the opportunity to pursue opportunities outside the company."
Dundee is getting back into the asset management business. The company long owned the Dynamic family of mutual funds, a huge and successful business that was eventually sold to Bank of Nova Scotia. With non-compete agreements lapsing, the company can re-enter the industry. But Jonathan Goodman preferred to try to create his fund outside Dundee, his father said.
He "wanted to do it on his own, otherwise he would get linked to us," Ned Goodman said. He downplayed any notion of a rift in the family, saying Jonathan Goodman is "still my son and his brothers love him."
"He wasn't fired," Ned Goodman continued. "When he left capital markets we did a house-cleaning in capital markets."
The focus of Dundee's capital markets business will not change, said Ned Goodman. The firm has long focused on resource sectors and real estate. It has economists who provide research to brokerage clients.
The wealth management side of Dundee now has 120 brokers, after bringing on 60 advisors earlier this year. Those brokers had originally been part of the wealth management firm Australia's Macquarie Group had been building in Canada. When Macquarie decided to get out of that business, it sold the broker network to Richardson GMP. Dundee subsequently acquired 60 brokers that Richardson GMP did not want to keep.
Mr. Boland, the analyst who follows Dundee at GMP, has suggested that Dundee may want to sell assets to raise money to keep building in wealth management. Shortly after David Goodman became CEO, Dundee raised more than $200-million by selling holdings in real estate investment trusts. Mr. Boland said in his note that he will be watching for further sales.
Ned Goodman said he does not see any pressing need to get bigger in wealth management.
"Wealth management has been expanded," he said. "We already have 120 brokers across the country. We're as big as we've ever been."