User:YVRJohn/Wayne Deans

Wayne Edward Deans (born September 18, 1946) is a Canadian businessman and portfolio manager. In 1992 he co-founded Deans Knight Capital Management, a boutique investment firm in Vancouver, Canada. He currently serves as its chairman and CEO.

Deans co-authored the 2012 memoir Don’t Listen to Everyone With an Opinion and has been described as “one of Vancouver’s more colourful money managers…known to dress loudly, laugh easily and swear fluently.” He is a noted philanthropist, and in 2012 he founded the Wayne Deans Investment Analysis Centre at the University of British Columbia through a contribution of $2.2 million.

Early life and education
Wayne Deans was born and raised in Montreal “on the wrong side of the tracks in a suburb called Notre-Dame-de-Grâce.” His father was a dockworker and he has often linked his modest upbringing to his ambition to enter the financial industry. “People I’d met over the years…all seemed to have a lot of money. And they all seemed to be having a lot of fun. They were all members of the best clubs, wore the best clothes and drove the best cars and lived in the best neighbourhoods. So why wouldn’t I want to be in that club?” As he said in his memoirs, “Most kids I grew up with wanted a new bike or a pair of skis. I wanted central heat.”

Deans graduated in 1968 with a Bachelor of Commerce (with Distinction) from Sir George Williams University (now known as Concordia University). In 1970, he graduated with a Master’s in Business Administration (with Distinction) from McMaster University in Hamilton, Ontario.

Early career
During his B.Comm, he worked summers as a trainee at the Royal Bank. After graduating, he moved to the bank’s head office in Montreal. After completing his MBA, Deans found work at the Bank of Canada, where he performed market analysis and evaluated the bank’s debt instruments for the Securities Department. In his spare time, he “and a few other guys” managed $30 million in the bank’s pension plan.

In 1980, Deans took a job in Toronto with A.E. Ames & Co., where he traded bonds on the fixed income desk. The firm moved him to Vancouver. When it began to experience financial trouble, he switched to Wood Gundy, brokering deals between companies in Quebec and the B.C. government. His title was Vice-President and Director in the Fixed Income Department.

In 1985, he was hired by Milton Wong of M.K. Wong & Associates, to work in the Vancouver office. Deans was originally hired to develop investment strategies and direct client communications, but rose over time to become president and lead its equities division. During those financially tumultuous years, reports the Vancouver Sun, he “rode out a $2-billion asset plunge to $1.5 billion and back again.” Deans left in 1992, either over an “ownership fight” or because my "philosophy on investing began to diverge from Milt's, so we parted company.”

Personal life
He is known for his interest in motorsports and has owned a series of custom luxury cars and supercars for his personal use. His support of professional auto racing goes back two decades. In 2001, he funded local driver Michael Valiante to enter the Molson Indy Vancouver, a race in the CART Toyota Atlantic Championship, racing for Lynx Racing. “Michael called and he said, ‘This is who I am. I want to run in Vancouver in front of my hometown crowd, but I need some money or it isn’t going to happen.’ Sometimes you make a [judgement] call right away on a person you feel good about.” That same year, Deans introduced Valiante to renowned Penske team mechanic turned team owner Derrick Walker. In 2003, Valiante, still funded by Deans, joined Walker Racing as his third CART driver in the Champ Car Atlantic series.

Deans and WasteCo Management president Stephen Caudwell have together supported other Walker Racing drivers, including Simon Pagenaud and Kevin Lacroix, who took an eight-year sabbatical from racing following the economic crash of 2008.

Wayne Deans divides his time between Vancouver and homes in Nicola Valley, B.C., and Punta Mita, Mexico.

Deans Knight Capital Management Ltd.
In 1992, Deans co-founded Deans Knight Capital Management with Doug Knight, himself a co-founder of M.K. Wong & Associates. The firm’s early days were modest: “We didn’t have much capital and I was single at the time, so I sold my house and moved into a 400-square-foot apartment with rented furniture. We sunk everything we had into our startup.” By 1995, Deans Knight was managing $350 million, split roughly into bond-oriented mutual fund clients (about 30 percent of assets) overseen by Knight; pension funds (about 60 percent) based in British Columbia, Alberta, Ontario, and New York; and private equity clients (10 percent). At its height, it invested $2.5 billion on behalf of private clients and institutions.

In 1996, Deans was named Canadian Mutual Fund Manager of the Year at the Canadian Investment Awards, thanks largely to the 49.9% gain he secured that year for the Marathon Equity Fund. At that time, Deans ran “nearly identical funds” for O’Donnell Investment Management (O’Donnell Canadian Emerging Growth Fund, O’Donnell Balanced Fund, and O’Donnell High Income Fund), Navigator Funds Ltd. (Navigator Value Investment Retirement Fund), and Atlas Capital Group (Atlas Emerging Growth Fund and Atlas High Yield Fund).

Deans Knight offers two in-house funds. Between 1993 and 2016, the Deans Knight Equity Fund averaged 14.5% annualized returns, compared to the TSX Composite Index of 8.4%. As of year end 2015, the Deans Knight Income Fund has posted an annualized return of 10.2% since June 1993 ; that compares to 6.4% for the benchmark Merrill Lynch US High Yield Master II Index.

Today, Deans is chairman and CEO of Deans Knight. Doug Knight is chairman emeritus. As of August 31, 2015, the firm oversaw $850 million in assets on behalf of private clients, foundations, endowments, and pension funds.

Investment philosophy
In 2012, Deans published Don’t Listen to Everyone With an Opinion: 20 Lessons Over 20 Years of Investing with Canadian journalist and ghost writer David Hayes. The book colourfully summarizes his approach to investing, which is summed up as “I find companies that have a competitive advantage and are well managed, I buy them at a reasonable valuation and then remain patient. Over time, they will pay off.” Deans prefers companies where management owns a stake (not just stock options), often run by families and with small capitalization (under a billion dollars), that are frequently overlooked by the major funds.

That approach is unchanged from what the Toronto Star described in 1997: “His companies must possess a distinct competitive advantage and operate in growth industries. They must be gaining market share and not be vulnerable to imitators who can come in and undercut them on price. He looks for entrepreneurial managers who personally own a significant stake in the company. A competitive advantage means the company could be the lowest cost producer in an industry, the sole producer, or the producer of a patented product.”

Quotes
“Investing can be extraordinarily complex. The genius is in keeping it simple.”

“You have to be very skeptical of the information that is coming your way and really pick it apart. A lot of the stuff that comes our way is bullshit. You have to be skeptical of who is bringing you information and what their motives are.”

“I think a lot of professional money managers are frauds.”

“If you can’t distill into one or two useful paragraphs why investing in a business is a good idea, then you probably want to move on to something else.”

“The simplest way to reduce risk is to know what the fuck you bought.”

“The single biggest weakness with most investors is that their time horizon is way too short.…The value is not always created overnight, or, if you’re a value investor, value is not always unlocked or realized overnight. I mean, you’ve got to be patient.”

Distrust of the Financial Press
“The job of newspapers is to sell newspapers. The higher the circulation, the higher the advertising rates, the more money that you make, so one has to keep that in mind. The quality of reporting varies. I think, as a general rule, newspapers tend to sensationalize things and it does a disservice to the average investor.…They provide opportunities for really professional investors to take advantage of the public’s overreaction to things.”

“No pundits can forecast the market. Only optimists are invited to appear and reappear on TV programs and in the popular press. And they never give you anything but conventional wisdom.”

“In business, we are bombarded with information. Numbers, figures, notions, from the time you get up in the morning. You have to question it, filter it. Media can’t tell the difference between a bicycle accident and the end of civilization. Is the breaking news a big deal? Usually not.”

“Warren Buffett was right when he said that in the short term, most predictions are like poisons that should be locked way from children, and adult investors. The sweeping generalizations people make about the market are worth nothing; they don’t know what they’re talking about. It’s far more complicated than they let on.”

Philanthropy
Wayne Deans is a regular donor to causes related to education and health. In 1987, he helped found the Portfolio Management Foundation at the University of British Columbia’s Sauder School of Business. The two-year extracurricular program offers formal mentorships and work internships for qualifying B.Comm. students. Participants direct an investment portfolio currently worth $7.3 million, which financially helps to support the school. The PMF is the “first real life teaching program of its kind in North America.” In its early years, Deans ran  the program.

In 2012, he donated $2.2 million to the Sauder School for the creation of the Wayne Deans Investment Analysis Centre. The learning centre provides students and faculty with access to real-time data, through nine Bloomberg terminals, four Standard & Poor’s Capital IQ workstations, and four Thomson Reuters Datastream workstations.

Deans has financed scholarships at Concordia University (through the Kenneth Woods Portfolio Management Program and the Mel Hoppenheim film School of Cinema ) and at the Sauder School. He speaks often to students and trade groups.

In addition to education, he supports a number of health organizations, including BC Children’s Hospital and the Alzheimer’s Society of B.C..

He has been a long-time supporter of the BC SPCA as a donor and fundraiser. In 2015 and 2016, he served as advisory chair of the BC SPCA’s Offleashed gala. The SPCA recently profiled him with his adopted rescue dog, Missie.

Wayne Deans is currently vice-chair of the Vancouver Police Foundation, a registered charity that works with the Vancouver Police Department by funding programs to connect police with at-risk youth and marginalized women, and by purchasing policing equipment. In addition to providing governance, he is a key fundraiser through the Chief’s Circle (he is a member of the $50,000-a-year donor group) and the annual Night Patrol Gala.