BUSINESS WATCH

Far from the greedy birds of prey

Peter Cole is a card-carrying humanist who enjoys a relaxed lifestyle and who appreciates the absurdities of life on the bourse

Peter C. Newman September 19 1988
BUSINESS WATCH

Far from the greedy birds of prey

Peter Cole is a card-carrying humanist who enjoys a relaxed lifestyle and who appreciates the absurdities of life on the bourse

Peter C. Newman September 19 1988

Far from the greedy birds of prey

Peter Cole is a card-carrying humanist who enjoys a relaxed lifestyle and who appreciates the absurdities of life on the bourse

BUSINESS WATCH

BY PETER C. NEWMAN

Bay Street’s twitchy moneymen are always on the lookout for agents of excitement within their ranks whose bravado might help jumpstart their own imaginations. The latest candidate is Peter Cole, president of Central Capital Corp. (CCC), who masterminded last week’s $200-million takeover of Financial Trust Co. CCC, having grown from $5 billion in assets in mid-1987 to $13.6 billion a year later, now also controls Canada’s third-largest trust company. The current purchase was Cole’s largest bite since last summer when he acquired, for $440 million, the country’s fourth-ranking trust conglomerate, the Traders Group. CCC’s profit for the first six months of this year was up by 80 per cent, and revenues jumped by a dramatic 171 per cent.

Despite that exponential growth in his portfolio, Cole is not just another of the greedy birds of prey who roost in the skyscraper forest. Unlike most Bay Street hotshots, Peter Cole enjoys a relaxed lifestyle, a cost-effective temperament and a collegial approach to management. He is a card-carrying humanist who appreciates the absurdities of life on the bourse, and his many deals are characterized by his repeated insistence that what matters most is not the quantity of the assets he swallows but the quality of the brains he acquires in the process. During CCC’s 28 hectic months of existence, it has taken over three dozen once-independent enterprises, so that its organizational chart now looks like one of those schematic diagrams in computer maintenance manuals.

As well as attracting to his stable of internal negotiators such heavy hitters as Thomas Hodgson (formerly the vice-president of commercial banking for Canada Permanent Mortgage) and Alan Lenczner (a former McCarthy & McCarthy partner who is one of Toronto’s best legal minds), Cole has recruited distinguished directors, including Willard Estey (a former justice with the Supreme Court of

Canada who is now CCC’s deputy chairman) and Marcel Casavant (a former executive vice-president of the Canadian Imperial Bank of Commerce who becomes deputy chairman of Central Guaranty Trustco Ltd.). Among many other talented individuals whose firms have been acquired by CCC is Andrew Sarlos, who Cole rightly calls “the dean of the investment world.” Sarlos, in turn, calls Cole “the country’s most imaginative financial entrepreneur, determined to field an organization that will match the clout and calibre of the chartered banks.”

Cole’s amazing performance has transformed CCC’s controlling shareholders—Reuben Cohen of Moncton and his partner, Leonard Ellen of Montreal—into major participants within the ranks of the Canadian Establishment that once rejected their advances. In one of the shoddiest episodes of this country’s business history, the Canadian Imperial Bank of Commerce (where Cole later became the third-ranking executive) deliberately kept a key block of stock in the thenvaluable Crown Trust Co. out of their hands.

“Management in this group is fairly freeform,” Cole told me in a recent interview. “We don’t have much in the way of a hierar-

chy or reporting lines. Here on the management floor, everybody has complete access to everybody else, and there is a minimum of office politics. Everybody is well-paid and rewarded for excellence. In a major way, we have assisted about 70 of our senior people to acquire substantial blocks of CCC stock, so that as the company grows, they will do better in their own right at the same time. Unlike the banks, we want our people to make money from their own efforts. That is a major cultural difference.”

What Cole is really doing is evolving a corporate culture of his own, the fifth pillar of merchant banking. “Unlike the chartered banks,” he said, “we are prepared to commit our own capital to a client’s project or endeavor in the form of equity, then back it up through a long-term relationship and grow together. We are prepared to offer a pretty full package, but it is always the people rather than the project that we tend to relate to.”

Although Cole’s trust company deals have captured most of the headlines, CCC is equally active in money management (for pension funds and wealthy individuals) and insurance. Said Cole: “We can use our trust company distribution system—and we now have 320 branches—to deliver services not available to many of our competitors, so that we crosspollinate and cross-sell throughout our system.” Cole went on to say that he looks at Brascan “because it is incredibly well-run by some very astute people, and even if we don’t exactly pattern ourselves after them, it is hard not to look over at them and not admire what they do.”

On the money management side, Cole now has more than $15 billion under administration, which makes him and his colleagues a massively influential force in the money markets. As well as the Sarlos operation, Cole now has access to Lawrence Bloomberg at First Marathon, James Stewart—formerly of Triarch—and Peter Chrysdale, who was one of the mainstays in Norman Short’s successful Guardian group.

If all goes wefi, Cole’s next venture will take his team outside Canada. He has already purchased at least 9.8 per cent of New York’s U.S. Trust Corp., which has assets of $3.5 billion, and has moved strongly into Britain, with the acquisition of Capel-Cure Myers Ltd. He also holds a 49-per-cent interest in a London-based merchant bank, Jamestown Investments Ltd., and all of the outstanding shares in Connaught St. Michaels, a leading U.K. provider of corporate trust services.

As Peter Cole’s influence grows, his philosophy of chasing good people and not just fatter assets is catching on. Central Capital Corp. has deliberately been set up to nurture the talent it has collected and to reward the able with financial perks, so that senior members of management feel and act as if they were working for themselves. “When people leave here at night,” said Cole, “they always turn out the lights—because they know they’re burning their own money.”