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How can a retail investor match the returns of the Canada Pension Plan or the Ontario Teachers’ Pension Plan? The answer came to famed mutual fund mogul Michael Lee-Chin in the throes of the financial crisis: he should lead clients by example and offer them a seat at the private asset table where he sat, instead of leaving them exposed to a tough market.
“I got through the crisis less bruised because of my private assets not my public assets. The crisis underscored a dysfunctionality in how I advise my clients and how clients are generally advised,” said Lee-Chin in an interview with BNN.
Lee-Chin’s Portland Investment Council lets retail and high net worth investors access opportunities beyond the markets. He says it’s a strategy that affords insight and leverage beyond the usual shareholders’ meetings and investor relations departments, and allows assets to be secured at a considerable discount by sacrificing liquidity.
“Being in the private market, you can not only negotiate what price you buy for. You can negotiate protective covenant, and get a price that is 30 to 40 percent less than you would in the public markets,” said Lee-Chin.
He ascribes to the classic Buffet-esque strategy of holding a few quality companies over the long term, the types of holdings “the most erudite and eminent institution would salivate over.”
The private assets for retail investors concept is still in its infancy, and those used to the status quo are often skeptical. However, his first offering was a company he co-founded. Columbus Communications, a cable and broadband company servicing the Bahamas, Grenada, Jamaica, and Trinidad and Tobago, grew from zero revenues in 2007 to $500 million today.
“The highest form of leadership is to lead by example,” said Lee-Chin.