PAUL HARRIS

PAUL HARRIS

Portfolio manager
AVENUE INVESTMENT MANAGEMENT

Years in the industry: 27
Years as a PM: 25
Industry accreditations: CFA
Typical clients: Those with a minimum of $1 million in assets

For Paul Harris of Avenue Investment Management, there are many other perks of being a portfolio manager than the financial benefits. “What I really like about what I do is that you can really help people,” he says. “I’m invested alongside my clients because we see this as a pension plan. It is my money, my partners’ money and my employees’ money, all invested alongside our clients’ money.” 

Like his chosen profession, his company – and particularly its unique fee structure – is a source of pride for Harris. “One of the things we do here that nobody else in North America does is that if we lose clients’ money in a given year, we cut our fee in half,” he says. “We also have a different fee for equities and fixed income. There is a bonus structure, so any return above 10%, we take 10% of the excess to a maximum of 1%. So in a year, if we do 18%, we take an extra 80 basis points of fee, but if we do 25%, we will only take an extra 1%.”

Presently celebrating his silver anniversary as a PM, Harris has witnessed his clients’ asset allocations change over the years. He says the typical split is now around 70/30 between stocks and bonds, which reflects the fact that people are living longer and thus need the higher returns equities can provide. However, he stresses that fixed income is still a vital part of any portfolio. “Over the years, we have found that having diversification in equities won’t help you, as they generally go in the same direction,” he says. “The only thing that offsets equity risk is fixed income. In 2008, when the equity market collapsed, the fixed-income market did really well.”

Stocks still make up the bulk of Harris’ holdings, and he undertakes a painstaking process to select companies to invest in. This takes a lot of time, but it’s certainly worth the effort when it comes to long-term returns. “We look at good companies with good balance sheets that have a good dividend yield,” he says. “We won’t be changing our strategy and probably won’t for many years – we will continue to buy the companies that have a lot of free cash flow that we can use to reinvest in other companies.”

“Over the years, we have found that having diversification in equities won’t help you, as they generally go in the same direction. The only thing that offsets equity risk is fixed income”

Company Information

  • Avenue Investment Management
  • 47 Colborne Street, Suite 300 Toronto, Ontario M5E 1P8

Contact Information