A Winnipeg-based portfolio-management company has a new name, new owners and a new direction as a half-dozen employees of Elysium Wealth Management Inc. have purchased the majority of the company from its longtime leader and given it a new moniker, Index Wealth Management Inc.

Alan Fustey, the managing principal and portfolio manager with IWM who spearheaded the move, says the first order of business upon closing the deal this past summer was rebranding the firm with a name that matched its core investment philosophy — investing in financial market indices through exchange-traded funds.

“The new name reflects the philosophy,” he says, “and brands us closer to what we’re doing for clients in their investment accounts.”

Fustey notes that many clients and observers of IWM’s predecessor firm had no idea what Elysium — which refers to an obscure part of the underworld in Greek mythology — meant or even how to pronounce it.

“[Elysium] doesn’t tie into anything in the investment industry,” he says. “We looked at everything on the marketing side, and changing the name and getting it closer to the brand was Job 1.”

IWM has three offices, Elysium’s original one in Winnipeg, a seven-year-old location in Calgary, which is now its biggest, and a newly minted office in Vancouver. It has three portfolio managers and four other staff. Ken Serbu, who heads up the Calgary office, and Jeff Palles, a portfolio manager in Winnipeg, have joined Fustey, who had been a portfolio manager at Elysium for seven years, in purchasing the majority of Elysium from Ian Kalinowsky.

Discussions among the Elysium employees about the move began in the autumn of 2009, and the deal was consummated in July. No purchase price was announced.

Elysium’s strategy was to buy individual stocks and write call options on them, but IWM’s approach is slightly different — it buys units in the entire underlying index and writes options on the index. Fustey says this approach enables clients to receive a consistent “market-plus” rate of return along with reduced volatility.

“It’s more efficient to do it that way,” he says. “It allows us a little more flexibility to tailor the strategy to an individual’s investment objectives.”

Canadians overpay to have their money managed, Fustey says, even though there is a staggering amount of evidence that shows only a small handful of Canadian equity mutual funds — about 5% — outperform their benchmarks over a five-year period.

IWM offers segregated portfolio management for high net-worth clients as well as endowment funds, but the firm doesn’t have its own internal pooled funds. Virtually all of its business comes via referrals from current clients or accounting and legal centres of influence in Western Canada. IWM does not have a sales force, either.

“That means the clients save money because they’re not paying for the salesperson or trailer fees,” Fustey says. “They deal directly with the portfolio managers. They’re receiving one-on-one investment counselling from a registered portfolio manager.”

Individual investors and charitable foundations interested in becoming clients of IWM need to have a minimum of $500,000 in investible assets. The firm’s average account size is more than $1 million and its fee scale starts at 1.25%. (The fee is tax-deductible for non-registered assets.)

IWM’s clients, a wealthy and conservative group with an average age north of 50, are primarily looking to increase the amount of income they’re getting from their portfolios or reduce the volatility of their annual returns, Fustey says: “They’re looking to preserve that wealth, as opposed to doubling it in a two-year time frame.”

The Vancouver office is IWM’s latest effort in growing the business, as it handles the firm’s high net-worth clients and endowment funds on the West Coast.

But more is to come, Fustey says, although IWM won’t look to expand further just for the sake of getting bigger. The firm is, however, looking at opportunities in other major centres, with Saskatchewan and Ontario currently on its radar.

“Our philosophy for growth is more about finding the right people to join us,” he says. “I’d rather have the right people on the bus instead of just trying to run out there and fill up all the seats. Our core strength since we set up has been in Western Canada. We’re looking for people who share the same investment philosophy of index investing compared with active portfolio management.”

Meanwhile, Kalinowsky says, that he continues to run the remaining minority interest in Elysium in its reduced form as its president, CEO and chief compliance officer, overseeing the financial interests of members of his family.

“I’m running a very small shop with a dozen clients,” he says. “I’m going to do my own thing as a one-man shop. I’m not in the market for new clients.”

After 20 years with the same company, Kalinowsky says, he simply wanted a change: “I’m going to be a far more active trader with my own money and not have to worry about client accounts and all that compliance stuff.”

The majority of Elysium’s clients won’t see any change in their relationship with their investment manager, Kalinowsky says, as the same people are pulling the strings as before and the custodian hasn’t changed.

But, he adds, “There’s a new name, and I’m out of the picture for the bulk of those people.”

At virtually the same time as the new company was born, Fustey and his team decided to move out of their longtime office in the Richardson Building at the corner of Portage and Main in downtown Winnipeg. They found what they were looking for — more open space but virtually the same square footage — in the Royal Bank building just a few blocks away.

“We wanted to get into an environment where it was easier to communicate,” Fustey says. “We like operating as a team and we like to have conversations. In the chopped-up space [in the Richardson Building], it made it hard to function in the way we wanted.” IE