Whiz kid saw opportunities in the chaos
Financial services entrepreneur buys Vancouver brokerage for $101M
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Hey there, time traveller!
This article was published 06/12/2018 (1399 days ago), so information in it may no longer be current.
If you asked people in the know which Winnipeggers are wealthy enough to be able to write a cheque for $100 million today, the name Gary Ng would probably not be top of mind.
But last week, the 34-year-old Lindenwoods resident and financial services entrepreneur paid $101 million cash for Vancouver-based PI Financial Corp., a national full-service brokerage with 300 staff managing about $4.5 billion in assets.
Ng is not a well-known character in Winnipeg, and the small national firm he operates called Chippingham Financial Group has stayed out of the limelight in an industry that includes some big personalities.
But the charming, confident son of Hong Kong immigrants makes no excuses for his success and scoffs at those who suggest it came overnight.
“I didn’t come from money. I’ve worked very hard for a long time and have taken substantial risks,” he said. “But I’m still the same guy. I’ve just got a nicer watch now.”
Ng may or may not have been on radar screens as an up-and-comer, but senior management at PI Financial was aware of him, having briefly connected six years ago when PI Financial acquired Union Securities, the firm Ng started his career with as a futures trader in the Union Securities offices in Winnipeg in 2008.
It might not be self-evident, but the timing of the start of his career was auspicious. The slightly quirky Ng remembers his starting date — Feb. 2, 2008 — because it was the day his hamster died. But it was also one month before the TSX peaked at 14,714 before starting a precipitous slide into what became the Great Recession.
But Ng made his first significant financial stake in those ensuing months, making “tens and tens of millions of dollars” for himself and his clients shorting the S&P 500 index “in a very, very heavy way” in its slide to the bottom in 2008-09.
“I am a strong believer that if everything is hunky-dory, then it’s very hard for a new player to come in. The old kings will continue to rule,” he said. “But when there is chaos, that’s an opportunity.”
And Ng did take advantage of the situation.
“We rode it all the way down. You never get to the dead-nuts bottom but we got pretty close, then we rode it all the way back up for the last eight years,” he said.
In 2012, when PI acquired Union, Ng was the top trader, and senior management flew to Winnipeg to offer Ng a big signing bonus to stay on with PI.
“They didn’t really know who I was, they just knew I was the top trader,” Ng said. “I smiled and said I really appreciated them coming all the way out to buy me lunch. I told them I was going to buy my own firm, but that we should stay in touch.”
Six years later, Ng was the one buying PI in a deal that he said took just a couple of hours to conclude. The way Ng tells it, there really wasn’t any negotiation at all.
“I told them I did not want to negotiate. I asked for a no-dicker sticker number… a fair valuation, a number they were happy with,” he said.
During the years between his departure from Union and his acquisition of PI Financial, Ng started Chippingham Financial Group in a small Toronto office with his partner, Sepoy Wong, another Winnipegger. They built it into a small full-service brokerage business with five offices across the country — including one in Winnipeg with a staff of eight people.
But the efforts to recruit brokers to grow Chippingham proved time-consuming. Earlier this year, Ng acquired Rothenberg Capital Managament, a long-standing Montreal financial planning business.
Through it all, Ng and his wife have maintained a Winnipeg residence, but he’s now going to have to spend more time in Vancouver, where PI Is based.
“My wife and I are looking at places now,” he said. “But I have lived in Winnipeg all my life. It’s my mailing address. My mom and dad are still here. (His father is a retired mechanic and mother a retired MTS secretary.) I’m a very proud Winnipegger. I have worked all over the world — in Hong Kong, Singapore, London, Germany — but I always come back to Winnipeg.”
There were some raised eyebrows in the industry that perhaps Ng is paying too much for PI Financial, but after the past six years growing one dealer at a time, it gives him instant scale and a platform for future growth.
It is an industry truism that every market that goes up will come down at some point, but it’s not something Ng is too concerned about with the timing of his PI acquisition. Among other things, he believes his relative youth gives him that much more ability to have the patience to operate in whatever cycle the markets present.
“The average age of my peers is about 68 years old. If they are sitting at their desk in Toronto or Calgary or Vancouver thinking the market is looking kind of ‘toppy,’ they might wonder if they really want to ride it down and back up for another supercycle,” he said. “They don’t have that type of runway. I have a runway of 40 years.”
Ng says he plans to do more deals and grow out the PI Financial platform with more brokers and dealers across the country.
“I’m a friendly guy,” he said. “I am not a conqueror. I am here as their succession plan.”
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.