GMP Capital Inc., the second-worst performing financial services stock in Canada this year, plans to compete against larger banking rivals by presenting “disruptive” ideas to clients, the company’s new chief executive officer said.
“I think one of the currencies we’re known for, whether it’s to buy-side clients or sell-side corporate clients, is disruptive ideas,” said Harris Fricker, who will become CEO on Oct. 1. “I think that disruption arises from the fact that the guys who founded the business were entrepreneurs, and typically our clients are entrepreneurs.”
Bringing new ideas to clients helped GMP become the top equity underwriter in Canada this year, overseeing 34 sales valued at $2.4 billion, according to Bloomberg data. The Toronto-based brokerage co-led the C$1.35 billion ($1.2 billion) initial public offering of Athabasca Oil Sands Corp., Canada’s largest IPO in 2010. Athabasca has dropped 43 percent since the IPO.
“If we can be disruptive in a business and it’s complementary to our core skill set, we’re going to do it every time,” said Fricker, in an interview yesterday.
Fricker, 46, an Oxford University graduate who attended as a Rhodes Scholar, joined GMP in 2002 after working at companies including Bank of Nova Scotia and Toronto-Dominion Bank. He said he plans to transform GMP from a “being a great team to being a great franchise.”
Part of that will come from finding “synergies” between GMP’s investment dealer and private-client businesses, he said. Measures may include “aggregating” the company’s buying power, Fricker said.
GMP announced yesterday that Fricker will replace Kevin Sullivan, who joined GMP as a partner in 1995. Sullivan will become deputy chairman and focus on “client-facing” initiatives.
“I’m going to spend my time helping to build client relationships for all of our operating companies,” said Sullivan, 51. That will include “helping the next generation develop their client relationships by having the ability to bring a senior statesmen and company founder along with them.”
GMP shares have plunged 23 percent this year, compared with a 6.6 percent drop for the 41-member S&P/TSX Financials Index. The stock fell 10 cents to C$9.75 in 10:36 a.m. trading on the Toronto Stock Exchange.
“We try not to focus on the day-to-day activity in the stock market,” said Sullivan. “It would be untrue to say that we’re not disappointed by the performance of the stock this year.”