BACK TO PUR FOR INDIVIDUALS

Mark S. Yamada, President & CEO - PUR Investing Inc.

Mark S. Yamada . President & CEO

E.  myamada@purinvesting.com
P . 416 637-3576


"I believe that everyone has untapped potential. Unlocking that potential can be as simple as having a door opened. Coupled with confidence and conviction, anonymous acts of kindness, generosity and courage can lead to profound change."

In 1941, my father was an art student working in a photographic studio near Main and Powell Streets in downtown Vancouver. A mother and her young daughter from south-western Ontario had their portraits taken on their way to a summer vacation in California. When they returned a few months later, the young girl pointed to a small terracotta bust in the window of the studio and declared, "Mommy! That looks just like me!" Her mother asked who had done the sculpture. My father apologized, explaining that he was a student and thought the little girl would make a good subject. He hoped it was alright. The mother liked the piece and asked to purchase it. "I couldn't sell it to you because I'm just a student. But I will give it to you" responded my father. The mother was delighted and, after several offers of payment were refused, she left with the sculpture in hand.


Acts of Courage
When Japan attacked Pearl Harbor on December 7, 1941, the lives of 23,000 Japanese Canadians residing along Canada's west coast would change forever. Although three quarters were naturalized or Canadian-born citizens, their possessions would be confiscated or liquidated for pennies on the dollar. By the summer of 1942 most were ordered to assemble on the grounds of the Pacific National Exhibition with one suitcase of personal items to await transportation to internment camps in the interior. My father and other young men were clearing horse stalls to temporarily accommodate families when an RCMP officer summoned him to their headquarters. Japanese Canadians were under a "sundown" curfew that my father had broken to run across the street to get candy for some children who were helping out with the chores. He figured he was in for big trouble.

When he reported at headquarters he was ushered upstairs. A lawyer met him and asked if he would consider attending the Ontario College of Art (OCA) in Toronto rather than go to a detention camp. He would have to prove that he had sufficient funds to support himself. Fortunately, he did. The lawyer handed him a fully paid train ticket to Toronto. The lawyer, a Member of Parliament, had made all legal arrangements for the transfer, contacted the OCA, and had paid for the ticket personally. The lawyer was the little girl's father.

The opportunity to escape the camps was not squandered. My father came to Toronto and when no one would hire him, was given a chance to work by a local photographer, Mr. Nathan Gittelmacher. He met and received guidance from Yousuf Karsh and Walt Disney, among others. He operated a successful portrait studio until his retirement and lived the rest of his life creating art in various media. Thanks to the kindness, generosity and courage of many people along his journey, my father's potential was realized.


Taking Chances On People
I was a freshman at the University of Toronto when Manulife took a chance and hired me as a summer student on their U.S. equity desk. They were looking for a third year student. Having studied the stock market for years, I knew some industry jargon and talked myself into the position. It helped that I held a part time job at a stockbrokerage firm (Merrill Lynch) while attending school. The truth is that I would have worked at Manulife for free just to observe institutional money management first hand.

In the 1970s, Manulife was among the most forward-thinking insurance companies in North America. It may still be. It had the most progressive investment department without question. New ideas (real estate, futures, asset liability matching) were encouraged. I had the chance to introduce exchange-traded options as hedging vehicles for Canadian insurance companies (it took five years and required a change to federal insurance legislation). Manulife took another chance by appointing me to head up the U.S. Equities Desk at the age of 26. We managed $1 billion at the time. I was keen to make progressive changes and often impatient to get things done. Senior management shook up the traditionally staid insurance industry with bold action. I learned a great deal from this experience but the most valuable lesson was the power of people. I had the chance to hire and direct teams of professionals for the first time and discovered the potential of focused and coordinated action.  

After fourteen years with Manulife, I was lured to a different part of the investment world. A hedge fund engaged primarily in risk arbitrage provided an education that money could not buy. I had the chance to learn not only about limited partnerships and high net worth investing, but also how high stakes corporate mergers and acquisitions really get done.
 
I joined BGH Central Investment Management after the hedge fund company was sold to Central Capital over lunch one day (that's another story!). Here, as President and CEO, I learned about the Canadian pension and mutual fund businesses. I was also introduced to "passive" or index management and learned how this emerging approach could benefit major pension plans. The firm's index funds, some of the first in Canada, became part of TD Asset Management's fund family and helped establish that firm as a leading supplier of indexed products in Canada.
    
I thought that my experience had tempered my impatience to get things done when I accepted the job as President of Sun Life's Investment Management Company. However, while Manulife had a progressive tone from the top, Sun Life's investment approach was steeped in tradition and conservatism. Not bad qualities for a Canadian financial institution, but change would be needed to compete in a global market. I am proud to have moved the counselling subsidiary into a more independent philosophical space preparing it to better vie for pension and retail investing mandates.


The Secret Is Not To Manage
Importantly, I continued learning how to manage people. What I have learned is that the secret is not to manage, but to identify extremely bright highly-motivated people who have a persistent intellectual curiosity, and can direct their energies collaboratively towards a common goal.     

When Guardian Capital approached me to develop a private client operation to compliment their already strong institutional money management capability, I was excited because it was an opportunity to build something from scratch. The learning curve was steep but the firm advanced quickly by observing the competition. The competition was (and remains) Canada's major banks.

By studying the banks' approach to wealthy investors, and by doing exactly the opposite, we were able to build assets to almost $800 million in a relatively short period of time. Building a high net worth organization without a distribution network (like branches) required resourcefulness. Hiring only experienced managers (the banks were letting them go), and providing straightforward reporting that was reliable were things that clients wanted most (and banks were not providing). We developed a factor-based investment platform that armed managers with quantitative tools to make better informed decisions. The idea of managing portfolios on a risk equivalent basis rather than using the conventional method of model portfolios with identical holdings, gave the firm an advantage in addressing after tax returns (something competitors still dream about today).


Empowering Individual Investors
At the same time, I observed that retail investors in Canada had few options and fewer advocates. Major financial institutions were, and continue to use high fees to feast off them (the highest fees in the world according to one academic study*). In trying to lower client expenses (to maximize returns) the idea of offering customized portfolios using a new kind of investment vehicle arose. The vehicle was the exchange traded fund (ETF).

The project started as a part-time experiment for a small group of us. It was a "first on the planet" project. The team was enthusiastic and committed. In the investment business, rarely does one have the opportunity to witness a potentially revolutionary concept.

Because it took the first mutual fund many years to gain traction, we were cautious not to commit to the ETF-based portfolio project aggressively. The scrapheap of history is littered with great "first" concepts. After years of witnessing a vacuum of meaningful product or service improvements for individual investors, I decided to establish PUR Investing Inc.
 

The Perfect Storm
My experience as an investor, analyst, portfolio manager, and manager of portfolio management teams has led to PUR Investing. The convergence of technology, telecommunications, discount brokerage and new financial instruments has created the "perfect storm" for a major breakthrough benefiting individual investors.

While financial institutions aggressively pursue clients with over $1 million to invest, the mass affluent client ($100,000 to $1 million) remains a spectator and victim. Many high net worth clients are also poorly served.

Creating truly different products and services by combining elements of new vehicles with new technologies is challenging but rewarding. When the possibility exists to revolutionize the way an industry does business, it is compelling.

The PUR Team have outstanding skills in software development, administration, quantitative and fundamental investment management, and portfolio engineering. Moreover, they all have tremendous creativity and work collaboratively and effectively as a team.

We believe we can help individual investors maximize their investment potential by providing powerful solutions at a competitive price. We believe that this would be the best way to fulfill our own potential and to repay all those who have opened doors for us along the way.


* Mutual Funds Fees Around the World

LIFE B4 PUR


Guardian Capital Advisors LP


Sun Life Investment Management Company Inc.


BGH Central Investment Management


Sarlos & Associates


Manulife Financial