More on IMCO and Maple Eight's Dirty Little Governance Secrets

Last week, I discussed IMCO's private equity deployment and big governance problem, noting this at the end:

Now, IMCO and Craig Ferguson. 

He's doing his job and a good job and he's right:

"Our program is designed to continue to grow with a focus on investing consistently across vintage years' of private equity while seeking attractive risk-adjusted returns, investing alongside our best-in-class partners with deep sector expertise."

You need to diversify by sector, geography, vintage year and co-invest alongside world-class partners to reduce fee drag in good and especially bad times.

Every major pension fund in Canada has roughly the same approach (OMERS is a bit more unique doing more direct deals on its own in recession proof industries).

They invest in "best-in-class" PE funds all over the world and co-invest to reduce fee drag.

Craig Ferguson even gave an exclusive interview to Buyouts on how rocky fundraising may help normalize PE model. 

A note to IMCO's communications, when you agree to these exclusive interviews, make sure you provide a link on your website where your clients and the public can read it for free (like OTPP does).

It's insane how these industry publications get away from charging ridiculously high subscription fees for content that should be free to pension fund clients and the public.

What else? A few months ago, I learned that the investment in Peloton Capital Management was not Craig Ferguson's decision but came straight from the top.

I covered Peloton's differentiated approach back in 2019 when I was working in the Advisory group at KPMG (don't get me started on that short stint, I knew Compliance would kill that gig) and think highly of the founders Steve Faraone, Mike Murray (both formerly at OTPP) and Stephen Smith, the billionaire businessman who backed their seed fund up (my boss at KPMG, a nice guy, "suggested" I cover PCM on my blog, so I did and that comment zipped through Compliance, shocker!).

It's a solid fund, they're doing well and have recently announced the first close of PCM’s second fund (PCM Fund II) with C$425M in aggregate commitments. 

But there's no way you can tell me that IMCO didn't have better options to invest in than PCM!

It helps when Stephen Smith can make one phone call to Ed Clark (Bert Clark's father) or a former OTPP CEO and get an allocation from IMCO.

"Who cares Leo, good for them, they got the allocation and have to perform like other PE funds or else they're toast!"

Absolutely true, but I am a stickler for unflinching, comprehensive transparency and top governance, and if I went to IMCO's Chair Brian Gibson and Bob Bertram (two highly regarded veterans of the pension industry) and told them exactly what I'm saying here, namely, it wasn't Craig Ferguson's decision to invest in Peloton Capital Management, they'd have "no comment".

But I would ask IMCO's Board to look into these allegations and take them extremely seriously.

Again, this may turn out to be a great long-term investment and a great long-term relationship, but that's not the point. It pisses me off when billionaires use their clout to get favors from public pension funds.

I don't know Stephen Smith from a hole in the wall, have no interest in meeting him, but if he was in front of me right now, I'd tell him straight out: "You might be a highly regarded and successful billionaire but don't ever use your clout to gain favors from public pension funds."

And let me be crystal clear, it wasn't Craig Ferguson who shared this with me, it was someone else who has nothing to do with IMCO.

Something about that PCM allocation doesn't smell right to me and the truth should come out (those guys never contributed a dime to my blog but that has nothing to do with the truth).

As George Carlin once stated: "It's a Big Club, you and I aren't part of the Big Club."

I also added an important update to that comment stating the following:

I completely forgot to mention that IMCO's former head of Infrastructure, Tim Formuziewich, who joined the organization in 2019 to lead IMCO’s infrastructure investments and was featured in this IPE Real Assets article on grand designs for battery storage, left last year to join Squared Capital as a Managing Director.

Squared Capital is a leading global infrastructure investment manager which closed its ISQ Global Infrastructure Fund III at the $15 billion legal cap last April, exceeding an initial target of $12 billion.

The problem? Tim Formuziewich directed hundreds of millions in Squared Capital when he was in charge of Infrastructure at IMCO and then crossed over to become a Managing Director there.

Tim is an excellent infrastructure investor but that should have never been allowed, part of governance 101 and reminds me of my time at PSP when André Collin joined Lone Star Funds after investing billions in that fund (just literally joined after collecting his $2 million bonus at PSP and nobody said a word!).

Let me be blunt: IMCO has a big governance problem. Their governance has more holes than Swiss cheese and it stinks, really stinks!

I reached out yesterday to IMCO's Chair Brian Gibson privately on LinkedIn to discuss these matters and asked him to call me. So far, CRICKETS!! (Brian did reach out Friday morning and we exchanged messages on LinkedIn, which I will keep private).

Now, Brian Gibson did reach out to me and was nice enough to give me his personal cell for people who contacted me to contact him to discuss. I did tell them about this and they told me they will decline to contact him (no kidding).

This week, I got some more people reaching out, telling me IMCO's governance is a lot worse than I think.

One person called me and said this: 

"Bert Clark's father, Ed Clark, former CEO of TD Bank and strong Liberal supporter, was the most senior financial advisor to former Ontario Premier Kathleen Wynne, he helped Bert get the job of President and CEO at Infrastructure Ontario and then the top job at IMCO. They didn't even have a competition for the top job at IMCO, it was given to Bert who had no experience working at a pension fund."

I (somewhat curtly) replied: "And? The whole world knows this! Tell me something I don't know!"

They went on:

"Well, what you don't know is that Ed Clark not only handed his son the top job at IMCO, he ensured that the governance was set up in a way so that Bert Clark can never be touched. It's a staggered Board so Premier Doug Ford cannot get rid of Bert Clark without removing all Liberal appointed Board members one by one and that can take another 6 years! Also, one board member, Vincenza Sera, was handpicked by Ed Clark to Chair IMCO's Nominating & Governance Committee. She has been there from the start and in my experience runs interference for Bert and tries to ensure that anyone appointed to the Board is supportive of him. The same goes for Eric Tripp, he too sits on IMCO's Nominating & Governance Committee and makes sure Board members are supportive of Bert."

They continued:

"At IMCO, the entire senior management team, except for the CEO, has been replaced over the past four years. And the CEO has attracted only one new client - a key part of his mandate. How does he survive if none of the original people he hired have stayed and he hasn’t attracted new clients? The answer is he’s protected by Vincenza Sera, Head of Governance and Eric Tripp. They both block and tackle for him."

They added:

"They both are puppets in my view but difficult to replace given they are appointed by other organizations and board member’s terms are staggered. You should try to speak to Chair Brian Gibson or the former CIO, CRO, COO or head of private markets—all gone. Bet Gibson’s frustrated by now. Entire senior management team has turned over in last few years; and the organization has failed to aggregate meaningful assets (it’s raison d’etre). It’s a bust. But CEO with no asset management experience keeps his job and pulls down an excessive pay package. And the Head of Governance and Nominating committee does nothing but defend him.

Ms Sera is a director and Chair of the Nominating and Governance Committee of Investment Management Corporation of Ontario. She served on the Board of the Ontario Pension Board for 13 years, including nine as Chair of the Board. 9 years as chair of OPB…clearly a poster child for good governance."

More concerning, they said: "There is quite a bit of tension on that Board and it's always between Ms. Siera and Mr. Tripp and Brian Gibson and others."

Well, that caught my attention, so I looked up who Vincenza Siera and Eric Tripp are and sure enough, they are both key board members of IMCO's Nominating & Governance Committee and Ms. Siera has been there from the beginning of IMCO in 2017:

Now, I don't know if this person has a personal beef with these two IMCO board members but they do raise a good governance point, namely: How are IMCO Board members appointed? By whom and for how long?

I personally think no board member anywhere should be allowed more than two consecutive three or four year terms. I want to see an independent panel appointing them not the Premier's office.

I am so sick and tired of political nonsense, it makes me sick to my stomach and reminds me of Greece, my ancestral home.

When my father left Crete over 60 years ago to do his internship in psychiatry in Chicago, he worked his tail off there. He decided to move to Montreal because he liked the research centers here and married my mom, had three children, lived in a modest apartment on l'Acadie in Park Extension, saved his money to put down 25% to buy a house in Town of Mount-Royal in the early 1970s.

Like many immigrants of his generation, nothing was given to him, they had to experience racism from Anglo Quebecers who ruled Quebec back then and it wasn't always easy.

But my father like so many others persevered, worked 50 years at the Allan Memorial Institute and retired last year. My younger brother wisely followed his steps and is a very busy practicing psychiatrist, affiliated with the Neuro.

My older sister received her law degree from University of Montreal, then a Masters in Air & Space Law from McGill and decided to move to Greece to work at the Canadian embassy in Athens and then move to Crete where she teaches and is married with one boy.

I remember asking my father why he sent his three kids to French private school (me at Collège Notre-Dame, my brother at Brébeuf where he had Justin Trudeau as a classmate and my sister at Villa Ste-Marceline).

My father told us: "As long as you live in Quebec, I want you to learn the language, history and culture properly and respect them. Consider yourselves fortunate to have this opportunity."

I also remember one day coming back from high school after taking the bus, my dad had come home late around 8 p.m., finished eating supper, and I approached him: "Dad, most of my classmates are driving now, they have cars, one of them, Sebastien who you know, even drives his dad's 911 Porsche to school."

My dad asked me to go get my brother, so I did, all excited.

He then made me say what I said to him and then looked at us: "As long as you're living under this roof, your mother and I will provide you with free food, clothes, and we will pay for your education as long as you do well. And a bus pass, that's it that's all!"

Okay, that was the end of that! No Porsche 911 for me, not even a Pinto or beaten up Chevrolet!😁

Where am I going with this? Some of us don't have Ed Clark or Stephen Smith as a father, all we have are our values and education and that's it.

My father (and mother) carried me through hard times when I was diagnosed with MS (1997) and when I was wrongfully terminated from PSP (2006). I owe him more than I can possibly describe here and so do all of you who read this blog for free.

Now, it's my turn to take care of him, which I do diligently and without hesitation and with great joy.

Anyone who has met my father says nothing but good things about him and he will tell you his faith sustained him in good and bad times.

He also told me a long time ago: "Are you sure you want to go in the finance industry? One of my former patients was a big bond trader in the 80s, kept referring to his wife as 'the bitch' and kept saying 'doc, in my business, you're only as good as your last trade, they don't give a shit about you'."

Yup, I chose the world of finance because I studied economics and math at McGill and did all my pre-med courses and philosophy with Charles Taylor as electives."

I was basically a masochist which is how I ended up here.

Why am I sharing all this personal stuff with you?

Because I have (more like had) tremendous respect for Ed Clark, he was a great CEO, he was the only big bank CEO with the brains and fortitude to stay away from asset-backed commercial paper (ABCP). He didn't buy or sell this garbage when all this peers were making money hand over fist doing so (actually TD had no exposure to ABCP but it did sell it).

But if these allegations are true, Ed Clark did a great disservice to his son and I will tell him so in his face if I ever meet the man.

Bert Clark isn't a bad guy, he's actually nice when you talk to him, he's pretty bright, understands the macro and foundations of pension investing, but the truth is he got this job because of his father and he has made a lot of "rookie" mistakes and has managed to survive somehow.

I do not wish Bert any harm in writing this, it's kind of difficult being "the son of Ed Clark" because people always look at you like "what the hell have you done by yourself?" and "you'll never be as successful as your father." 

I'm sure Justin Trudeau feels the same way (for good reason).

But Bert is able to forge his own path and he has to learn to stop micromanaging people at IMCO and respect governance above all.

That means when Stephen Smith tells Jim Leech to call you and tell you to look at Peloton Capital Management, you do NOT go to your private equity guy and say "have a look at these guys, I heard they're really good." (a source I trust told me this is exactly what happened)

That is just wrong, wrong, WRONG!!!!

And it's not just Bert Clark and IMCO, there are real governance issues at all of Canada's large pension funds that infuriate me.

"Canadian model, we are the poster children of good governance"

This is total and utter nonsense and I'm fed up of it.

The dirty little secret at Canada's large pension funds is there are quite a few governance lapses and they gloss over them to protect their brand and reputations, but we all know what I'm talking about.

From Mark Wiseman going to BlackRock, to Andre Bourbonnais joining him there, to Andre Collin joining Lone Star, to Mark Jenkins and Macky Tall joining Carlyle, to Steve Faraone and Mike Murray leaving OTPP to form Peloton with Stephen Smith as their anchor investor, to PSP/BCI helping to seed Searchlight Capital and Erol Uzumeri, another OTPP alumni, to Henri-Paul Rousseau, Christian Pestre and Luc Verville landing at Power Corp, AIMCo, and Fondaction after the 2008 ABCP blow-up, and on and on and on.

There is so much nonsense going on at Canada's large pension funds, it literally make me sick to my stomach.

[Note: In the US, a pension investment manager can’t work at a fund they invest with for a minimum period of three years after they leave that pension fund. Governance 101!!!] 

What else irks me? How OTPP interviewed me and two other highly qualified candidates for the position of Senior Managing Director, External Managers Group and we all got the same email today from June Melton of HR at (almost) the same time, stating the exact same generic message: "At this time, although we remain very impressed by your experience, we have opted to progress with alternative candidates at this time."

I've got nothing against June Melton or Gillian Brown, Head of Capital Markets at OTPP who is super smart and easily one of the best people to succeed Ziad Hindo in CIO position when he walks away.

I really enjoyed my discussion with Gillian but I'm also wondering why they ran an external search for this position when they clearly had someone internal in mind.

Back in 2002, when at CDPQ, I listened to Ron Mock's sermon on how OTPP invests in hedge funds ("beta is cheap" speech) and while Ron impressed me, the way he invested in hedge funds did not impress me at all.

Truth be told, Ron Mock loves listening to Ron Mock and he blew a lot of "cutting edge" smoke up my behind and thought I fell for it (he invested in 135 hedge funds to “manage” operational risk, which is ridiculous, and lots of market neutral/ quant funds which is why that portfolio blew up in 2008).

And here is another truth: while Ron Mock was an "ok" CEO (nothing great), he made a HUGE blunder not keeping Neil Petroff as CIO and bringing in Graven Larsen to replace him. HUGE! It ended up costing him his job and Jo Taylor is a much better leader but has made some mistakes too, like bringing in Karen Frank to run Equities (she's finally gone!!).

And since I'm on a roll, let it be known that Gordon Fyfe didn't exactly resign from PSP to go back to BC and nor did Andre Bourbonnais. They were both under pressure and left before the axe fell, Gordon for testing the "compensation limits" (see table below) and Bourbonnais because he ran PSP like his personal fiefdom, creating a lot of needless chaos and anxiety there. Neil Cunningham was brought in to settle things down but Neil lacked vision which was why he was also asked to step down.

Capiche? There is no CEO who resigns or leaves on their own, they are forced to resign or pressured to leave, end of story.

Kevin Uebelein and Dale MacMaster, AIMCo's former CEO and CIO, didn't "resign", they were asked to leave after AIMCo's vol blowup in 2020.

Leo de Bever didn't resign from AIMCo, he was bumped out because someone wanted him out (the problem with Leo is he thinks he's the smartest guy in the room, which he usually is, and he said the same thing to me about Brian Gibson).

Kevin Uebelein was a nice guy but had no business whatsoever running AIMCo and I still maintain Dale MacMaster was a great CIO but that he rightly took the fall for that vol blowup, they both did.

But don't feel bad for them, they both walked away with millions in compensation, all part of a severance package Mark Wiseman, AIMCo's Chair, calls "industry standard" (euphemism for pay to shut people up).

And I've even got a (small) beef with Jim Keohane, HOOPP's former CEO who is now a director at AIMCo and Trans-Canada Capital, who sent me this last year when I wrote about CPP Investments' out of control compensation:

I wanted to comment on the issue of pay at the large Canadian Pension Plans. These are my own personal views.

The Canadian pension model has been successful largely because it is built on a strong foundation of good, independent governance which allows the funds to operate like a business and act in the best interest of the plan members. The ability to pay market wages to attract high quality investment management professionals is the key to being able to manage the funds using an internal management team.

Internal management is very much in the best interest of members because it affords the lowest cost of implementation and enables a much wider scope of investment opportunities and among other benefits, allows for much more effective risk management.

The alternative is to outsource the investment management function which is what we observe with many of the large US state pension plans. The principal reason why the US state plans use outsourcing is because their governance models are fraught with political interference which makes it almost impossible for them to pay market wages to internal portfolio managers. So instead, they write much larger cheques to outside managers to run the money.  The overall implementation cost, which is what a business should be focused on, is much, much higher.

It is also important to understand that market forces - the supply and demand for portfolio managers, is what sets the wages that the Canadian pension funds pay.  They don’t just decide to pay higher wages. They pay what they need to pay to attract the talent they need to produce the good results they have produced over the past couple of decades. There is a very high demand for investment professionals who have shown an ability to outperform markets. Investment organizations globally are willing to pay very high compensation to these individuals.

There is a strong governance processes and oversight around compensation at all of the large Canadian pension plans. Third party experts are used by all Canadian pension plan boards to ensure that the compensation methodologies and the quantum of pay is in line with market practice.

Canadian pension funds have produced some of the best returns globally over the past couple of decades. The ability to pay market compensation levels in order to attract and retain the talent needed to manage their funds internally has been a cornerstone of this success.  

Tampering with the very successful governance model of the Canadian pension plans would be a huge mistake.

Jim, between you and me, I don't buy this crap of "supply and demand for investment talent." I know for a fact that top people I recommend to pensions are routinely shunned and they are top of the top!

I also know for a fact if anyone at Canada's venerable Maple Eight had to trade to survive and write a daily blog like I do, they would NEVER survive on their own, NEVER!!

Not Jim Keohane, not David Long (two people who know how to make money in all market environments) certainly not Gordon Fyfe or Derek Murphy who he hired to head Private Equity at PSP when I was there.

Derek Muphy, "Murph", had the personality, charm and charisma of an old wet rag, kept complaining incessantly to me about his compensation at PSP: "They better pay me big bucks or I'm walking"

And he was extremely well compensated before leaving PSP (as was Gordon, much better than what he is getting at BCI; from fiscal 2014 Annual Report):

I always felt like telling him: "So walk Murph, show us what you've got!" 

I'd love to see him, Gordon and Andre Collin in my world, they would all die!! (none of you know what real brutal capitalism is)

And so would most of you reading this, including Bert Clark, Ed Clark and Stephen Smith.

These people do not know what pain and suffering is all about (some do because they came from modest backgrounds), what it means to fight for your health and every basis point to put food on the table, they live in an alternate BS universe.

So please spare me already with how great the governance is at Canada's Maple Eight, Nine, Ten, Eleven, there are so many holes in there, I wouldn't know where to begin!

What else is BS? The benchmarks Canada's Maple Eight use to ensure they get millions in compensation every year. They are designed in a way to ensure maximum revenues no matter how bad markets get and while compensation can get hit in a really bad year, it's exceedingly rare that Canada's pension elites suffer two or three years of declining compensation (it has never happened, ever, and will not by design).

Moreover, the same person who got me started on all this also told me CPP Investments invested in Radical Ventures and Ed Clark is one of the partners: "You might also ask yourself how these guys get CPPIB as one of their largest LPs despite having zero track record.  Until you look at the partners…iconic technology investors :)"

This person also warned me: "Leo, Ed Clark and Stephen Smith are very powerful people, I do not want my name out there as they can harm my business."

I told them I’m not afraid of them.

Alright then, let me wrap it up there as my sciatica is killing me again (three goddamn weeks in a row!) and I feel like killing myself because the pain is unbearable (I'm sure a lot of people reading this wish I went through with it but rest assured, Mr Pension Pulse is A LOT tougher than you think and MS and sciatica will not set him back!).

Below, The Empire Club of Canada Presents: Ed Clark, Group President and CEO, TD Bank Group: Final Major address as TD's CEO. 

Mr. Clark, whenever you and Stephen Smith come to Montreal, please email me and I'd be glad to meet up with you for lunch at Milos (on your tab) and will tell both of you the good, bad and downright ugly of Canada's pension governance model. Just don't bring your lawyers to that meeting.

And one of my favorite skits from the late great George Carlin, so apt for this post because BS is the glue that binds the great Maple Eight pension governance model together!

Update: Jim Keohane, HOOPP's former CEO who is now a director at AIMCo and Trans-Canada Capital, reached out to me after reading this post. He initially took my comments as a personal attack so I edited it to clarify as I have a lot of respect for him.

In fact, the reason I expressly used Jim Keohane and David Long, former CIO of HOOPP, as an example is because I know they know markets and how to put on big trades, but trading for a living is extremely stressful, especially when you have health problems.

This is why I wouldn't wish my circumstances on anyone with health issues and why we need to bolster defined benefit plans and provide them to all Canadians (Jim and I agree on this).

On compensation and governance, Jim sent me this from Thailand where he's vacationing with his wife (and is really enjoying it):

There is no doubt that the compensation levels at Canadian pension plans is high. The alternative is to outsource and the cost of that is considerably higher.

No governance model is perfect.  One can always find issues in any model.  When I look around the world at alternative models the Canadian model stacks up pretty well.

I would also point out that the governance structure at the various Canadian plans is not homogeneous. There are good  elements at each fund and others that could be improved.

On governance, I totally agree, it's not homogeneous and there are improvements that can be made everywhere (need to post a constructive post on this).

On compensation, he's right, if you outsource everything, it's A LOT more costly but even he admits compensation at Canada's Maple Eight is high and cleverly sidesteps my point on benchmarks being designed to "maximize revenues of top pension executives":

What else is BS? The benchmarks Canada's Maple Eight use to ensure they get millions in compensation every year. They are designed in a way to ensure maximum revenues no matter how bad markets get and while compensation can get hit in a really bad year, it's exceedingly rare that Canada's pension elites suffer two or three years of declining compensation (it has never happened, ever, and will not by design).

Another astute reader of my blog shared this with me:

I think the pension industry in Canada had a good run, but the cultures and people now are not the same as that that created the successes. The firms were never well governed, it is simply that people with more fiduciary attitudes and a sense of public service mission didn't need much governance to do the jobs well. 

Now that the capital pools are so large, inevitably the greedy and opportunistic crowd want in on the action and influence. The governance required to deal with this will just stunt the risk taking and innovation. I don't think there is any going back, but it certainly does cause me pause in advocating further scale and influence of pension pools generally.

Indeed, I expect we will see returns mean revert for the main Canadian plans over the next decade.  

The solution is quite straightforward. Cap the sizes and break up the plans into smaller entities, many are beyond optimal scale, and diversify the Boards and management teams.  We have too many eggs in these massive baskets for the public interests to be served. Let some run internal teams, others run external ones, and let a broader set of people seek niches that the large pools can't justify. This would also likely cause some added investment in Canada, where most things are subscale for the pension giants.  And if there are any improprieties, as least we contain the impacts to smaller amounts of capital under management.

At the extreme, the large pools are slowly merging into a collaborating fascist model and are now nearly fully co-opted by the political and banking class. ESG is an example of how this toxic co-option results a fundamental breach of the fiduciary role of pension management. But that's another discussion.

Indeed, another discussion altogether, I thank this person for their insights.

Lastly, my father used to remind me of Lord Acton's quote on power: “Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority; still more when you superadd the tendency of the certainty of corruption by authority.” Think about it.

And one more quote for Murph wherever you are. It's from Henry Miller, my favorite author who once noted: "I have no money,  no resources, no hopes, I am the happiest man alive." 


Let Murph and others looking to score big bucks at Canada's large pensions ponder over that one.😁

Update #2: Jim Leech, the former President and CEO of OTPP, emailed me demanding a retraction:

I was appalled to see your egregious claims in two separate blogs that I contacted Ed Clark to ask him to influence his son to cause IMCO to make an investment.

For you to make such a claim is outrageous. I would have thought that manufacturing and spreading such falsehoods through your Pension Pulse was beneath you.

I would ask that you print a prominent retraction of this falsehood.

Completely untrue

You are trafficking in conspiracy theories.

Now, I do not have anything against Jim but my sources all confirmed this is exactly how it went down.

One of them told me to ask Jim Leech if his wife was until recently working at Brent Belzberg's TorQuest which the other Canadian private equity fund IMCO invested in, acquiring VersaCold Logistics Services, one of Canada’s leading cold storage warehousing and food logistics companies, back in 2020 from KingSett Capital and Ivanhoe Cambridge.

Now, TorQuest has been around far longer than Peloton Capital Management, but I asked Jim Leech if his wife worked there and he did not reply ("total crickets" just like IMCO).

[Note: Jim emailed me to tell me his wife didn't work at TorQuest but my sources say she did. I replied to him: "Where is IMCO on all this? Brian Gibson can easily reach out to me!"]

Another source told me: "Jim Leech wasn't the greatest CEO at OTPP, better than Ron Mock, but Jim is very much about his legacy and he cares deeply about what people think of him and his good standing in the community."

Well, we all do but I find it strange that several sources which I will never give up told me he was the one that made the phone call to Bert Clark (not Ed Clark) to "have a look at Peloton Capital Management, I know them and they're really good." 

Bert then made the mistake of going to his PE guy to say "have a look at these guys, heard they're really good."

Again, I have nothing personal against Jim Leech or Bert Clark, just stating what several sources that I trust told me.

Another current CEO who contacted me was Gordon Fyfe in an email he titled "Your tirade!":

Hey Leo, I wish you would have told me I was forced out at PSP. I would have demanded PSP pay me both my contractual severance and all my deferred compensation, neither of which was paid as is shown in the FY ‘15 PSP Annual Report.
I hope your comments on the others are based more in fact than this one on me. It’s hard to digest a critical comment when it’s true. When it’s false, you just lose support and credibility.
Hope you feel better soon.

Gordon copied David Morhart, Executive VP, Corporate Investor Relations at BCI as well as Derek Murphy ("MURPH!!") on that email.

First, I feel better, spent 2 hours yesterday doing physio at Rockland MD, but when I went to see the assistant of Dr. Andre Roy at the physiatry clinic next door, she told me he has a two month waiting list before he can do shots to treat my sciatic pain, which bummed me out.

Next, I was glad Gordon gave me Murph's email and David's as I added them to my D list. The last time I saw Murph was from far at Baton Rouge on Decarie having lunch with his new partner and her kids. He lost all his hair so is really bald now and he looked happy as a clam! (great ribs and steaks at Baton Rouge)

In response to Gordon's email, I embedded the compensation table from PSP's F2014 Annual Report above where you can see he was pulling in $4-$5 million in total compensation and then left to go to BCI where he was pulling in half of that and still isn't anywhere near that level of compensation.

My sources tell me both Gordon Fyfe and Andre Bourbonnais left because they were getting pressured by one or two powerful board members and felt the axe was coming.

Now, to be fair to Gordon, he always stated he did want to go back to Victoria and work at the pension fund there and one of my sources told me he was told he wanted to do this for "philanthropic reasons," which made me chuckle as when it comes to his personal net wealth, Gordon doesn't screw around and do anything for "philanthropic reasons" (neither would I or any sane person).

Yes, he went back to Victoria, close his family and parents before they died but his wife is a Quebecer and her parents who also both died recently are from here.

That brings me to my last point, and I am only going to say this once, and I want you all to perk up your ears here.

I have nothing against Gordon Fyfe, nothing, I even called him last summer when I was feeling down and anxious and listened to his advice about starting a "Pension Pulse conference" which I don't want to do because I loathe conferences and would grill people and they'll never want to come back again.

Gordon and I were very close at PSP, especially when I first got there. He lived two blocks away from me, would often give me lifts around 6:30 - 7 p.m. in his black Audi A8 sedan which he bought used from Jean-Guy Desjardins and would talk about his four kids and wife and we talked shop as we listened to CHOM FM.

When I was wrongfully terminated from PSP in October 2006, my lawyer, Denise Workun who was a top labor lawyer at Nelligan Law in Ottawa specializing in human rights cases (retired now), told me flat out: "You have a clear cut case of human rights abuse, your performance records are exemplary and they clearly wrongfully terminated you knowing you have multiple sclerosis."

But she added: "Leo, these cases can take a couple of years, it will be tough on you --physically, mentally and financially -- if you go through this. Either way, you will never get a job in the financial services industry and you will not get long-term disability which is the minimum they owe you."

Initially, I wanted to sue the hell out of them, but after speaking with my dad, he told me: "Forget them, I got you, move on, it isn't worth it."

So I did, I moved on, and Gordon Fyfe thanked me later for not suing them (he too knew I had a great case). 

In the summer of 2007, I was hired by Treasury Board's pension unit to conduct a study on the governance of the federal public service pension plan, which looked at key elements of governance including communications, funding, oversight and investment management.

I told the lady who hired me: "That last part includes PSP Investments, they're not going to be too happy about that."

She replied: "Don't worry about PSP, focus on delivering a detailed report."

Needing a job, I did, I focused on delivering the mandate.

One evening, I was invited to a friend's house for dinner, went down the street and drove by Gordon's house and he was in front mowing his lawn (he loved walking with his wife and mowing his lawn to de-stress), so I slowed the car and waved at him. He told me to stop.

I was in the car, pulled down passenger side window, and he leaned over to talk to me.

"I heard you're working for Treasury Board, writing some report for them."

I replied: "Yes I am, it's a report on governance and one chapter is on asset management which includes PSP."

Gordon: "You shouldn't be doing this, I'm going to make sure they find someone else."

Me: "Well, you guys didn't make my life easy, paid me peanuts in severance and I need the money. And we are talking peanuts here, $25,000 contract to write this report."

Gordon told me to have a nice time at dinner but I can tell he was stressed as all hell.

I was a pro at reading him and even knew I was toast after we met for breakfast in September 2006 in TMR where we lived (at center of town at Dupond & Dupond) and presented my findings on the issuance of CDO-squared and cubed and told him flat out: "This is big, something is going to break and we are way too exposed in credit."

At that time, he told me: "Leo, you're too negative, senior managers I work with aren't happy with you, I cannot protect you, so try to change your attitude."

One month later, I was gone. The day I got fired, I saw Gordon going into Pierre Malo's office (my boss) and knew something was up. 

Pierre was a nice guy but had no business whatsoever running Asset Mix Research at PSP. He was an old school currency trader who just kept buying volatility and only once made big money at CDPQ. He left there after they put Christian Pestre as his boss and begged Gordon for a job (Pierre loathed Pestre and for good reason, that guy was a disaster waiting to happen at CDPQ).

I also remember they (cowardly) put Donna Prahacs who is now Vice President, Talent, Culture and Sustainable Development at FÉRIQUE to give me the package and "explain the process."

I was furious, kept pounding the table: "This is total bullshit! I demand to see Gordon now!"

Donna was visibly pregnant at the time, a really sweet HR lady, and she was shaking so I apologized and left to go straight to my father's office where I saw him and started crying uncontrollably.

The next day, Gordon did see me and gave me the speech: "Leo, I know you, I hired you because you're the best investment analyst, you will come out of this much stronger.".

Well, he was right about the last part, at least.

Fast forward a year later when I saw Gordon Fyfe mowing his lawn in front of his house.

The next day, I was awoken by a goddamn bailiff at 6:30 in the morning at my apartment and PSP sent me a demand letter to cease all contact with Gordon Fyfe (not a restraining order, a bloody demand letter which is worthless!).

I was pissed, called Denise Workun, my lawyer, explained everything that happened and she sent a stern letter to PSP's lawyer, Assunta Di Lorenzo (yes, that Assunta Di Lorenzo, the former secretary to the former Governor General, Julie Payette who was accused of harassing her employees. Assunta was also accused of harassing employees in that scandal, which didn't surprise me one bit given how many lawyers left PSP when she was in charge of that department).

After that, I used to go after PSP twice as hard on my blog, they never bothered me again.

I focused on finishing my report for the Treasury Board and even they made my life miserable because they didn't like my findings which made them look much worse than PSP!

I actually had to wait six months to get paid a measly $25,000 from these jerks back then.

That's when I realized, consulting isn't for me, organizations that hire consultants only do so to make them look better than they really are and as you can tell reading my blog, I don't sugarcoat things, I only provide the brutal, more like BRUTAL truth!

So, if you ever hear malicious rumors that "Leo was harassing/ stalking Gordon Fyfe" and they had to put a restraining order on me, I can unequivocally tell you that is total bullshit and I have all the emails and demand letters to prove this is totally false.

I can also unequivocally tell you that I put what happened at PSP in 2006 way in the past and want that organization to succeed. 

I also want the world to know, I have nothing personal against Gordon Fyfe, have spoken with him many times and think he's a better leader now (although I hear mixed reviews about some senior execs at BCI).

Lastly, and this is important so pay attention, a friend of mine who is the CFO of a Crown corporation told me: "There is no arm's length between governments, all governments, and Crown corps. This is a myth, I can assure you of this to the point where they should no longer be called Crown corps."

He added: "And if large pension funds start exhibiting egregious behaviors, it's only a matter of time before governments get in there and close that compensation party for good, and that will effectively mean the death of the much touted Canada model."

I couldn't agree more which is why this post was necessary, some of you disagree with it, think it's too personal or wrongly accusing people, but I'm fair and tough and if I'm tough, it's for a reason, I too see the end of the Canada model as we know it -- and this is something we all need to make sure never happens!