If status isn't the most important thing, then why is Richard Rooney - a man with $13 million just in his foundation and the body of a Greek god - insisting on re-casting himself of late as a co-founder of Burgundy Asset Management? Hmm???
Is he really a co-founder? We’ll find out. Already, we can see that alpha dog Tony Arrell is not playing along, look at his title below. Why is one “Co-Founder”, while the other is “Founder”?
I mentioned in my initial post that Richard Rooney is no longer Chief Investment Officer of Burgundy as of 2020. What I didn’t know is that the CIO transition had been telegraphed two years earlier. I guess Burgundy is a big ship. And it’s a political organization. Richard used to go by “President and CIO” going back to 1997. But lately, he officially calls himself co-founder. That can’t be accurate, Burgundy was founded in 1990, Richard joined in 1995.
Some of you know that even Tony Arrell is not a founder of Burgundy. When Burgundy was founded in 1990, Tony Arrell was CEO of Midland Walwyn, a large brokerage firm, later sold to Merrill Lynch. Midland took a minority stake in Burgundy. Tony Arrell left Midland in 1991 after losing a power struggle against their President Tim Miller. Tony then spent a year trying to put together a Mexican fund for institutional investors. Only in 1993, did he join Burgundy, taking a controlling stake and the Chairman’s role. The real co-founders of Burgundy were John Di Tomasso, Bryan Smith and the often neglected Lee Wong. Tony Griffiths was the original chairman. Lee Wong is still an active player with a string of ventures.
Anyways, until Arrell joined, Burgundy was nothing. He’s the one who brought the long-term, value investing philosophy. John Di Tomasso moved on elsewhere to managed futures. Tony and Richard can call themselves the Great Saviors and Builders of Burgundy, that would be more accurate. I am impressed that Tony, after all this time, and the growth in AUM and staff, has managed to keep a large stake in the firm, probably on the order of 40-50%. He’s a man with many hobbies and he’s not exactly indispensable to the operation, forgive me for saying so. Can Burgundy attract and retain the best people if the original owners, now more passive, still extract a significant tax on the economics? I prefer boutique-y, independent investment firms where the investment brains get the bulk of the economics. Tony Arrell, gentleman farmer, has $57m in his foundation alone. Not launching a Mexican fund worked out well for him. Tony is now in his 70s. Stephen Jarislowsky was 93 when he sold his firm, so there’s plenty of time to figure an exit strategy.
In other news, last week, United Corporations Limited, a $1.8 billion listed vehicle of the billionaire Jackman family, announced it was going to redeem out of the Burgundy Emerging Markets Equity Fund. This is a continuation of the string of major account losses I first wrote about here. The Jackmans seem to prefer a French firm called Comgest in replacement. A French firm! The dishonor is total.
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