Member Profile | White Haven Securities
By: Tommy Baltzis, CEO, White Haven Securities
WhiteHaven Securities is currently licensed in Quebec as a portfolio manager, an exempt market dealer, a mutual fund dealer and an insurance agency. We are currently expanding our operations and are now licensed as an exempt market dealer in Ontario. We aim to be a fully licensed financial firm, through which we will offer all our services in every province.
Getting to know our clients is not only a regulatory necessity for us, but it is the foundation upon which we build our investment strategy.
Today, many pension plans, endowment funds, foundations and high net-worth individuals allocate money to alternative investments in proportions that are comparable to traditional asset classes (stocks and bonds). The potential risk/diversification benefits of alternative investments with traditional asset classes and the possibility of enhancing returns, have a broad appeal across the various investor types.
Over the years, certain alternative investment classes have generated higher absolute returns with lower volatility. The result is superior risk adjusted returns over public markets, often by a material margin. Investors are beginning to realize that they are not being properly compensated for the volatility of public markets and it seems that the alternative market is what they are seeking. In addition, traditional asset classes are beginning to show stronger correlation, i.e. less diversification to portfolios, and therefore alternative investments are becoming more popular due to their lower correlation with traditional asset classes.
The alternative investment world is gaining much traction in Canada and more and more people are starting to inquire and educate themselves on what kind of alternative investments make sense to have in their portfolios.
So why are many individual investors reluctant to venture into the alternative investment world? Limiting factors are education, illiquidity and time horizons. For these main reasons typically, individual investors have very little alternative investments in their portfolios compared to institutional investors or high-net worth individuals.
Unfortunately, another factor that affects the alternative investment market is that they are all automatically categorized as ‘high risk.’ There are many circumstances where we would consider an established exempt issuer to be more suitable for a clients risk profile over some mutual funds labeled medium risk but cannot recommend them as such.
The Quebec Market
In Quebec, the biggest challenge (and opportunity) that we face is that the market lacks the experience in the Exempt Market space compared to the advancements in the western Canada or Ontario. WhiteHaven wants to educate and promote the Exempt Market through its EMD in the following manner:
- Having qualified Exempt Market dealing representatives who understand the products and can give out informed advice to their clients. This in turn, creates a more educated client as well.
- Through our Corporate Finance division, educate and promote the Exempt Market as a viable solution to private, small to medium size businesses that would like to raise money for their projects. We only have a handful of Quebec based EMD issuers simply because issuers are not aware of alternative financing options available (in which some cases can be RRSP eligible).
A Focus on Our Services
WhiteHaven – as a licensed exempt market dealer (EMD):
Like any other EMD in Canada, we act as the dealer for any securities, that are prospectus exempt, provided they are sold to clients who qualify for the purchase of those exempt securities.
In addition, WhiteHaven may request to sit on the Board of Directors of an issuer as an independent party, in order to have some oversight of the operations of the issuer.
WhiteHaven – as a licensed Portfolio manager (PM):
WhiteHaven provides discretionary portfolio management services to individuals, family trusts, and institutions. Individualized portfolios are tailored to each client’s unique needs with the goal of educating clients on alternative investments and the exempt market world. We believe all clients should have an allocation to alternative investments. In addition, WhiteHaven has custodian agreements with many large financial institutions.
For dealing representatives (DRs) that are part of WhiteHaven, the PM offers to review all clients’ financial needs and goals with the DR. Our platform allows clients to have all their assets with WhiteHaven, ranging from exempt products to mutual funds to portfolio management and segregated funds. At WhiteHaven, a DR is not only the exempt market representative, but also the client relationship manager, which will allow the DR to have multiple revenue streams of income.
WhiteHaven has looked at many providers for the back-office and has partnered with one provider that allows both advisors and clients to access the WhiteHaven portal and visualize their portfolios with one simple login. Clients have access to all of their holdings through the multiple modules of the system and are able to visualize their exempt market portfolio, investments under portfolio management, mutual funds and even personal insurance policies. We strongly believe that advisors and more importantly, clients, should not be dependent on an excel spreadsheet for the accuracy and transparency of their investments.
Coming soon for Portfolio Management
WhiteHaven is in the process of becoming an investment fund manager with the goal of creating the WhiteHaven alternative investment fund. By creating this fund, we are looking at issuers to provide us with a corporate class of their security for portfolio management.