New colour comes to Bay Street

Burgundy’s growth. I was there for 13 years and chief executive for the past five. We built a great team, provided global equity expertise and delivered industry-leading returns,” said Jesudian, noting about one-third of its clients are outside Canada — a rare achievement for an entity that’s grown organically.

Jesudian said he left Burgundy because “it was time for a change. I learned a lot and that will serve me well with our new firm. And it’s always been my dream to have my own firm.”

Crimson, which is home to four other investment professionals, is, at least the second firm formed by people who worked at Burgundy. Earlier, Jonathan Bloomberg and Sanjay Sen left and formed BloombergSen, which has about $1.9 billion under management.

Crimson’s first fund will be a North American small cap, a market sector that offers opportunities because sell-side analysts rarely cover it and because it’s outside the purview of ETFs. But more important “it’s an asset class that rewards patient investors.”

Crimson has also named a seven-person advisory board that includes two highly regarded industry veterans: Tony Gage, former chief executive of Vancouver-based Phillips, Hager & North, a firm acquired by RBC Investment Management; and Tony Hamblin, founder of Hamblin Watsa Investment Counsel (Prem Watsa is the other founder), which “provides investment management services exclusively to the insurance and reinsurance subsidiaries” of the Fairfax Financial Group.

Crimson has a $1 million minimum investment. It also charges an annual base management fee of 1.5 per cent and a 15 per cent performance fee that kicks in once investors have received a certain return.

The plan is to attract clients who “understand our long-term view, our rigorous independent research and our contrarian nature.” In time other specialty funds and “capacity constrained” funds (ones that will close once a certain asset level has been reached) will be added.

As for Crimson’s investment style, Jesudian said it will buy “great” companies that can compound their earnings over time at an entry cost of 70 cents on the dollar.