Dynamic Duo
It takes a certain amount of nerve to cold-call one of Warren Buffet’s deputies at Berkshire Hathaway, the U.S. holding company worth in excess of $310 billion. “The hardest thing can be getting past the gate-keepers,” explains Jeff Gallant, BCom’11. “But once you get through, the VIP on the other end of the phone is just a person like everyone else.”
The star investment manager listened to Jeff’s pitch: an invitation to speak at the inaugural Capitalize for Kids (C4K) Investors Conference in Toronto in October. Its audience: 400+ Canadian money managers. Its line-up of speakers: some of North America’s most successful money managers, including billionaires Lee Ainslie of Maverick Capital and Larrry Robbins of Glenview Capital. The beneficiaries of its targeted $1-million net proceeds: current and future patients of the Centre for Brain and Mental Health at Toronto’s Hospital for Sick Children (SickKids).
Though unable to attend, he was so impressed with the initiative that he made an anonymous gift of $25,000 to the hospital. Cold calls made to other heavy hitters by Jeff and by Kyle MacDonald, a fellow classmate and C4K co-founder, usually prompted one of two responses: an enthusiastic ‘yes’, or a supportive ‘no’, often accompanied by a hefty cheque for their good cause.
Members of the SickKids Foundation Board, as well as the other big names in finance they approached to speak or join the Capitalize for Kids Board, likely had the same reaction to the two 25-year-olds and their audacious proposal: “Who are these guys?”
Jeff and Kyle have been friends since their first year as classmates in the Queen’s Commerce program. They shared an interest in finance, both aspiring to careers in the field after graduation. Both succeeded in landing jobs on Bay Street — Jeff as an Analyst at Alignvest, a leading international alternative investment management firm on Bay Street; Kyle as an Investment Analyst at Veritas Investment Research, Canada’s largest independent equity research firm. Both are high achievers. Kyle made the UFE National Honour Roll based on his exam results for the CA designation. Jeff received Queen’s prestigious ‘One to Watch’ award in 2013 in recognition of his contributions to his field of finance and his status as a role model for other young alumni. In 2012, he was selected to be a member of the Global Shapers community established by the World Economic Forum (WEF), which recognizes young individuals with great potential for future leadership. Several other QSB alumni are pivotal members of the Capitalize for Kids executive, including Michael Barry and Andrew Colantonio (both BCom’11).
Soon after arriving in Toronto, the friends looked for opportunities to get involved in the community by attending several charity events geared towards young professionals. They were encouraged in this by their supportive mentors, Greg Cochrane, MBA’74, and J. R. Kingsley Ward, BA’87, among many others.
Over drinks one evening, the friends reviewed their options in choosing a good cause upon which to focus their energies. “We found that a lot of people our age are planning to wait until they’re older and more established before getting involved in the community,” Jeff says. “We wanted to flip that model on its head and do something that would have a real impact. In order to have it grow to the scale we wanted, we realized we had to start now.”
Jeff and Kyle decided to get involved at Toronto’s SickKids hospital. They became regular volunteers and members of the SickKids Innovators program, which enables contributors to attend regular events, get to know the Hospital’s priorities and accomplishments, and pool their donations (a minimum of $10,000 over two years) to help fund priority projects chosen by the Innovators themselves. Jeff also had a personal connection to SickKids, as a research subject and eye surgery patient several years before.
After participating in hospital tours, hearing stories from doctors and patients’ families, and getting to know the Foundation’s senior management team, the pair was inspired to do more. Jeff explains, “There was a pretty big incentive for us to combine our interests in finance and child health to come up with an initiative that would act as a permanent and growing source of capital for the hospital.”
Jeff and Kyle looked for a need that wasn’t being fulfilled in Toronto’s finance community. They were aware of a number of investor conferences in the U.S. that bring together top money managers to share their insights with investment professionals. “Toronto is one of the largest financial districts in the world,” says Kyle. “It came as a surprise to us that there wasn’t a conference like this being offered here. We decided we could bring North America’s most prominent money managers to Toronto and have the proceeds support SickKids, rather than seeing a business step in to fill the void.”
The timing couldn’t have been better, Kyle says. “Over the last year and a half, we’d seen activist hedge fund managers coming to Canada, both to source capital and to pursue activist campaigns.” These investors would welcome the opportunity to get in front of Canada’s top money managers, including big capital allocators like pension funds. In turn, conference attendees would have access to some of the top U.S. investors whose strategies are generating impressive returns for their clients.
The first hurdle was to convince the SickKids Foundation that the idea was worth backing and that Jeff and Kyle could pull it off, despite their youth. They reached out to their mentors and contacts to test the idea before presenting it to the Foundation’s board. After a lengthy discussion regarding risk mitigation, the foundation’s management approved the proposal and gave its support.
Kyle and Jeff toast Brenda Cunnington, Senior Equity Trading Account Manager at the TSX, on April 15 when Capitalize for Kids executives, board members and SickKids Foundation representatives rang the bell to kick off the trading day.Jeff and Kyle went into top gear, accessing the networks of their mentors to line up the participation of Canada’s business elite. Some supporters, including Tory’s, one of Canada’s leading law firms, offered in-kind services, in Tory’s case pro bono legal services. Others agreed to sit on the C4K board, including mentors Greg Cochrane and J. R. Kingsley Ward, Managing Partners at VRG Capital; Ted Goldthorpe, BCom’99, President of Apollo Investment Group; Paul Hand, BA’69, MBA’73, Managing Director, RBC Capital Markets; Mike Durland, PhD’91, Group Head and CEO, Scotiabank Global Banking and Markets; Kevin Crull, President of Bell Media; and former Finance Minister Michael Wilson, currently Chairman of Barclays Capital Canada.
“I’m not the only member of the board impressed by Jeff and Kyle’s drive and initiative,” says Greg Cochrane. “They’re starting out their careers in a tough business that’s driven by the bottom line. Yet they’ve managed to carve out the time to champion a really great cause.”
They’re well on their way to bringing that cause to the attention of a much wider audience. They’ve enlisted Institutional Ambassadors in the large investment banks and Industry Champions at almost every major North American financial firm to drum up financial support for Capitalize for Kids. Media partners Bloomberg, BNN, and SumZero, an online community for investment professionals, have committed to support the initiative.
More than just a conference, Capitalize for Kids offers opportunities for both finance professionals and those outside the industry. For the finance-minded, there’s the ability to access an online research platform that features investment ideas from independent research partners such as Horizon Kinetics, Veritas Investment Research and SumZero. There’s also an ‘Intelligent Investing Challenge’: a contest for institutional investment professionals that is designed to elicit investment ideas to be disseminated to C4K members throughout the year. The best ideas will be awarded prizes up to $25,000, with winners able to direct the proceeds back to the hospital for the purchase of specific items, such as IV pumps or a wheelchair. For those outside the finance industry, the Support a Smile campaign on the C4K website enables donors to allocate amounts from $15, for scrapbooking supplies for a young patient, to $50,000, for the purchase of MRI equipment.
Jeff and Kyle dressed up as superheroes to deliver candy to patients at SickKids on Halloween in 2013. Their antics were a hit with the children, family visitors and staff alike that day. The superhero costumes were a fitting, if subconscious choice. The vision of Capitalize for Kids is: “Creating a world where investment professionals do well by doing good.” It sounds like a something Iron Man himself might say.