National Post (National Edition)
CIBC’s Braive leaving after 34-year ride
‘Mentored a generation (or two)’
A34-year career, all in fixed income and all with the same firm — even if that firm has had a series of different owners — is set to end next April when John Braive takes his leave from CIBC Asset Management.
“There comes a time. I have been delaying it and delaying it,” said Braive, who has been eligible to receive the Canada Pension Plan for a few years, and who, between private pursuits, will continue to be a member of the investment committee for a Toronto-area hospital.
Braive, whose time in fixed income coincided with one of the great bull markets and also with the rise of highly specialized and narrowly focused debt and equity managers, is one of the original six shareholders who bought Montrealbased Timmins Investment Management (TIM) from the Timmins family in 1987.
“We were starting to win business (mandates from institutional clients) and we wanted to be independent. That was the way to grow the business,” said Braive, who in an internal memo announcing his departure, was lauded for his “outstanding leadership, innovative product creation and (for having) mentored a generation (or two) of fixed income professionals.”
At the time, TIM had about $800 million of assets under management and Braive, along with the other five, including Jean-Guy Desjardins, now chief executive at Fiera Capital, had to get a loan from Royal Bank to help finance that estimated $20-million acquisition.
“It was certainly more than our collective net worth,” said Braive, now the asset manager’s vice-chairman and former chief executive of its institutional money management arm. (Jean Gauthier, formerly with Ontario Teachers, is the new fixed income head at CIBC.)
“We thought that we would never be able to pay it back,” he added, noting that at the time the financial services business was completely different from what it is today: in effect, the banks weren’t players in providing either brokerage or asset management services. (That changed in 1987 when the brokers, some of whom had gone public, were acquired by the banks. The banks also expanded their investment management activities when the rules were changed.)
As the new owners, the six had to contend with Black Monday (Oct. 19, 1987), the worst one-day stock market decline in history.
But before that drop, TAL had become increasingly concerned about valuations, so moved much of the equity assets to cash. When the market continued to rise, with the pile of cash in its accounts and a large bond weighting, the firm’s performance numbers were less than stellar.
“When the crash came, we went from 95th percentile to first percentile on a total return basis. We then took the cash, invested in the market and posted another top percentile performance. The money then flew in,” said Braive.
TIM then changed its name to TAL. The growth in TAL’s business — from institutional clients and from retail investors following the launch of a mutual fund arm — meant Braive did pay back that loan.
In 1994, CIBC came calling and acquired, for a reported $100 million, ownership control, but not management or board control. In 2001, CIBC bought the balance for an amount estimated at the time to be $350 million to $400 million. JeanGuy Desjardins then left.
In 2001, TAL managed about $45 billion of client assets, split about equally between institutional and retail. CIBC now has about $125 billion under management, about half of which is in fixed income.
As for the career highlights, Braive listed two: the daily intellectual challenge of analyzing markets and the “good people you meet. It’s fun.”