Offering institutional access to private investment opportunities has helped Northland Wealth Management become one of the most recognized firms in North America
An alternative approach
In 2011, Arthur Salzer and Paul Mascard, his business partner formed Northland Wealth Management. The origins however, trace back to the early 2000s when they were at another firm and helping one of their client family’s deal with a liquidity event. The family took their company public, on the Toronto Stock Exchange, and Salzer and Mascard were helping in that process. They quickly realized that the money earned from the listing acted as an amplifier not only for the family’s assets but also their human behavior. That was when they decided their approach needed to include managing human capital and not just financial.
“That was what caused us to start Northland Wealth, to have an unconstrained, fully independent firm concentrated on financial and human capital,” said Salzer. “The services we provide include institutional access to investments, both traditional and alternative.”
Salzer and Northland are big believers in the new 60/40 split in asset allocation. “Traditionally that meant 60% equity and 40% fixed income. Now we look at 60% public market, 40% private and alternative. On the public side, we haven’t seen managers create material alpha after fees and taxes. So, we tend to have low cost beta approach to accessing the public markets. On the alternatives side, we look at private equity, real estate, debt and hedge funds.”
Offering that access to alternative investments has been a focus of Northland since day one. “Ultra-high-net worth individuals have created their money by owning and operating private businesses or private real estate. To be able to offer on an institutional basis was a differentiator for us,” added Salzer.
With their experience in alternatives, Salzer does admit there have been challenges, specifically educating the Canadian public on these types of investments. “There tends to be a broad understanding and acceptance of what a multi-family office does in the US but I think we are at the early stages in Canada. When you look at the banks and the major firms, they control 70-80% of all wealth in Canada. Too many investors think an IIROC dealer, who is a commissioned sales person, somehow has their best interest at heart. Investors think they can get them access to whatever they need and we have found that is not the case. Educating them what is available outside the major banks has been our biggest hurdle but also our biggest advantage.”
Dealing with private investments also comes the challenge of regulation. Yet for Northland, they do their homework to learn as much as they can before investing. “I think understanding the risk is the big thing,” said Salzer. “Before we make an investment we will look at an asset class to decide if we want exposure to it. We then look to see who the best investors or asset managers are in that space. Northland then reaches out and we have conversations with the company. It is a four to six month due diligence process that involves documentation and sub agreements. Then, we look at customizing fees to increase the performance for our clients. Once the investment is made we follow up with calls, going to AGMs and meeting with managers and investors that utilize the investments.”
Being fully independent, allows Northland to use their philosophy when it comes to investments and do what they feel is best for the families they work with. “We put the families we serve first and foremost. We believe if we do that on an investment and service basis, it will come back to us over time and that has occurred. If you are about clients first, it is best for them and you long term.”
Northland’s approach has gained them numerous individual and firm accolades. For Salzer, he was named Best Advisor for Alternative Investments at the 2018 Wealth Professional Awards. Meanwhile, the firm recently was named Best Family Office in North America, under $2.5B in AUM at the 2019 Family Wealth Report Awards.
Now, Northland is focused on expanding to the US. Later this year they plan to add a Miami office to the two they currently operate in Markham and Calgary. “The Miami expansion will be an SEC licensed registered investment advisor. That way we can increase the number of families we serve across the United States and we will have full cross-border services between Canada and the US,” added Salzer.
Northland Asset Management
Locations: Markham, Calgary and Miami (Late 2019)
Year established: 2011
AUM: look after 100 high and ultra-high-net worth families across Canada, Europe, the Caribbean and United States
Target clients: 5million-100million in assets