How asset manager tripled its business during pandemic

Advisors are moving further away from traditional stocks and bonds, says CEO

How asset manager tripled its business during pandemic

There’s a great story of pandemic success tucked behind a very modest announcement that Equiton of Burlington, Ontario recently made about acquiring another building for its popular apartment fund.

“We started the company to be an asset manager that focuses on providing high-quality, institutional grade, private real estate investment for Canadian investors,” Jason Roque, Equiton’s CEO, told Wealth Professional.

“Over the last couple of years, we’ve really seen an increasing demand for these types of alternative products because advisors are more and more getting away from the traditional stock and bonds portfolios since the products we offer are able to provide them with unique advantages that they’re not going to get from your traditional kinds of stocks and bonds.

“We’ve really seen that pick up over the last few years and, during the pandemic, we more than tripled our business,” said Roque.

Equiton’s assets under management grew to $581.7 million in 2021 from $175.8 million in 2019. Its number of investors also grew to 5,776 in 2021 from 2,075 in 2019.

“I think that just shows that, more and more, the investing community is starting to see the attraction of products like ours,” he said. “Not only are they able to provide their clients with often better returns, but, surprisingly, we’re also finding a lot of advisors are supporting our investments as a means to grow their business.

“Often, they’re positioning themselves as unique from your traditional advisor because they’re offering their clients alternatives like ours that are different than what they’ve typically used.”

The company began on January 1, 2015, and has grown from three to 100 employees.

It spent the first year laying the groundwork for its investments and launched its “apartment fund”, the Canadian-based Equiton Residential Income Fund Trust, in 2016. It has apartment buildings in Ontario and just acquired the Riverain District development project in Ottawa.

Roque said Equiton will close on two more apartment buildings – in Guelph and near Kitchener – in early March.  All three fit Equiton’s criteria of finding properties in smaller markets that are the economic hubs for their community and buildings which they can renovate or operate more efficiently to unlock their intrinsic value.

The fund currently has 26 buildings in 13 communities, but is considering expanding into Montreal or Alberta.

In 2019, Equiton also launched its Balanced Real Estate Fund, which invests in commercial income-producing properties, does some real estate-based lending, and invests in real estate development projects. It just acquired its first commercial asset in late 2021. It contains a bank and a Wendy’s, “tenants that you’re not going to have a problem with during a downturn,” he said. Equiton is looking for more commercial properties this year as it continues to grow. 

Roque isn’t one to brag, but said “the attractiveness of the product that we offer is that it tends to be very stable.  It’s private markets, so it’s really uncorrelated to the public markets. We usually find, during times of distress, people start to take notice.  So, we find that we get a lot more people that maybe weren’t paying attention to private market real estate starting, in times of crisis, to pay attention.”

As for what’s ahead, he said they’re building brand recognition as more people recognize them, especially since there aren’t many others offering similar products.

“There’s just a handful of similar type products, said Roque. “I think there’s really a gap in the marketplace that we’re hoping to fill. So, I think we’re just going to see continued growth.”