On May 1, 2018, Jarislowsky Fraser became a wholly owned subsidiary of the Bank of Nova Scotia following a transaction worth nearly $950 million. It has been operating as an independent division of the bank ever since.
“Scotiabank president and CEO Brian Porter brought Jarislowsky Fraser onboard specifically because he liked its attributes. He’s determined to leave them intact and not to take up the assets,” says Maxime Ménard.
Ménard joined Jarislowsky Fraser in 2003 and was appointed president and CEO in December 2018. He has over 20 years of experience in securities trading, cutting his teeth at Fidelity Investments in 1997 after graduating with a degree in economics from Toronto’s York University.
“I’ve always known Maxime to be a go-getter, a fighter who loves a challenge,” says Martin Lavigne, president, National Bank Financial, Wealth Management, who knew Ménard during his time at Fidelity.
For Ménard, the first major challenge was choosing Toronto for his university education. At age 18, this young Quebecer did not yet speak English. “This experience [shaped] the rest of my life and literally defined my career,” admits Ménard. “When you’re a small-town boy moving to Toronto, learning to live outside your comfort zone takes the mystery out of a lot of things. It makes you realize that everything’s possible.”
Despite originally intending to return to Quebec to study law after his bachelor’s degree, he ultimately chose to work in Toronto for a year after graduation. But after learning the ropes at Fidelity, Ménard stayed in finance for good. He only returned to Quebec several years later, at age 28, to join Jarislowsky Fraser. Back in La Belle Province, he completed his MBA at HEC Montréal.
“It was a tremendous learning environment,” says Ménard of his time at Fidelity, referring to it as “the greatest experience I could’ve had.” At the time, it was an “emerging firm” with about 100 employees, very few of them in Quebec, he says. That not only resulted in many opportunities but also allowed him to meet a number of people who would shape his career.
“Maxime already had an incredible work ethic at Fidelity Investments. He was diligent, interested and driven in all circumstances and achieved fantastic business results,” says Vincent Hogue, who worked with him for several years during the period.
In Jarislowsky Fraser, Ménard found a boutique environment that helped him get better acquainted with the investment world.
“When I joined the firm, assets were still under $30 billion, and it already had solid momentum,” he says. “It was amazing: I had the chance to work with a mentor like Stephen A. Jarislowsky. Back then, he was talking about retiring and told me he wouldn’t be the one training me. As it turns out, he was never very far away.”
As Ménard points out, despite being 93 years old, Jarislowsky still works six days a week, 12 hours a day, with very early starts and many late nights at the office.
“Stephen A. Jarislowsky is a very humble person, and making the best choices for his clients has always been paramount to him,” Ménard explains. “His secret is his sense of discipline and integrity, his work ethic and strong convictions. That’s still how the firm operates today, and my role in the organization is to be the guardian of it all.”
High definition
Ménard says Jarislowsky Fraser’s expertise proves invaluable for Scotia, “because today, there’s no building institutional expertise with a 60-year history…you have to buy it.” He also says the acquisition will help nurture new growth opportunities.
For instance, he stresses capitalizing on an extensive distribution network, but particularly business opportunities in international markets, which he sees as a key growth vector for the firm’s future. In his view, Scotia had a limited presence in the institutional and high net-worth market. In contrast, as of December 2018, nearly 68% of Jarislowsky Fraser’s assets under management were in the institutional sector, with the remainder managed for retail clients, under sub-advisory mandates, and private clients.
He says Jarislowsky Fraser will be launching an office in Latin America, potentially in Mexico, in addition to its Montreal head office and locations in Toronto, Calgary, Vancouver and New York.
“I’ve already been to Mexico and Colombia, and I’ll soon be visiting Peru and Chile, which happen to be Scotiabank’s four largest markets,” Ménard says.
He also underscored the firm’s plans to develop an even broader range of high net-worth services to accommodate not only accounts of $2 million and over, but also accounts with a contained value of $25 million to $100 million. “To do that, we’d like to introduce a multi-family office concept with an obvious international focus.”
However, Ménard is wary of letting his enthusiasm get the better of him, saying that the firm’s principal mandate is to generate the best possible performance for investors. It is also worth noting that the 2016–2018 period was turbulent, pointing to “major market challenges.”
More specifically, Jarislowsky Fraser’s assets under management were worth nearly $38 billion in January 2019, but totalled only $35.7 billion in December 2018. They’re still shy of the $38.3 billion recorded in December 2016. Ménard remains upbeat about the future, however, and intends to drive significant growth in assets under management over the next five years, with the goal of reaching “at least $70 billion.”
Yet Ménard says his main challenge is to prioritize the best strategic opportunities to achieve realistic growth. “It’s a real challenge, because I’m a very enthusiastic person, although I’m working extremely hard on that,” he says with a laugh. “The people at Scotia are really excited to have us onboard and pass along numerous opportunities. They do business in nearly 50 countries worldwide, while we’re more of a small boutique firm. That’s why I have to ensure that, while embarking on this adventure, I remain true to who we are.”
He adds that while a number of transactions similar to Scotia’s acquisition of Jarislowsky Fraser didn’t pan out, that was due to the fact that “often, you don’t stick to what you are; you focus too much on the business end and lose your identity.”
That’s why it’s imperative that Jarislowsky Fraser keep its identity intact, he says. “The priority is to keep our head office in Montreal and stand firmly behind Stephen Jarislowsky’s fundamental principles of high-quality, low-risk, research-oriented and client-focused investment.”
Research and client experience are the two pillars on which Ménard intends to build for the future, particularly by investing in technology. He pegs Scotiabank’s annual technology spend at nearly $3 billion and considers that Jarislowsky Fraser’s access to that technology and compliance support, in particular, clearly provides “phenomenal leverage without which developing an economically viable structure would be impossible.”
Ménard also speaks of his desire to build the best possible research team, adding that a university recruitment program is already in place. “We built our reputation as a specialized research firm and have no shortage of talent, but to avoid being marginalized in an increasingly consolidated industry, we have to constantly hire the best resources.”
He adds that Jarislowsky Fraser is committed to driving growth from its Montreal base and having a positive influence on Quebec’s financial ecosystem. The firm is currently in a major hiring phase, in all areas, including investment, operations and client relations, while taking part in mentoring programs at various Quebec universities. “We believe that through this mentoring and our desire to integrate accessibility into our organization, we can give Montrealers the opportunity to build an amazing career right here in our city.”
Ménard is a strong believer in mentoring and coaching. “I’ve met people throughout my career who’ve helped me and to whom I owe much of my success. I guess it’s my way of paying it forward,” he concludes.