Martin Connell and the Ewing Morris dilemma

The Ewing Morris Opportunities Fund had one of the more notable negative performances of 2020. It was still down 21.7% as of November 2020. I have already covered their struggles before here.

I mentioned that fund had a $20m investor and I finally solved that mystery. It all started with Frederick Connell, who in 1938 started Conwest Exploration Company. In 1996, Conwest was bought by Encana. Martin Connell is Frederick's grandson. Martin has a daughter, Devin Connell. Devin is married to Darcy Morris, who is co-founder and CEO of Ewing Morris. So I have to assume Martin Connell is Ewing Morris's $20m man. His overall investment is probably even bigger than that, since the firm has other funds.

Martin Connell along with his wife Linda Haynes co-founded ACE Bakery in 1993. An initial investment of $800k grew into a business with 300 employees that was sold to private equity. That business is now in the hands of the Westons and is probably worth 9 figures. Martin is an Order of Canada type with a long and distinguished record of charitable work. Now I understand how Ewing Morris managed to attract this calibre of an advisory board:

I commend these grandees for their loyalty and/or inertia. The only change since last time is that Harry Rosen is gone. I deny any responsibility for that. John MacIntyre, co-founder of private equity firm Birch Hill, is more actively involved, as he sits on the formal board of directors of Ewing Morris. He backed Ace Bakery in the 90s. So in summary, Martin Connell and Lynda Haynes backed their son-in-law with millions and corralled many of their friends to lend their names and I assume some of their money to Ewing Morris. The fund has compounded at something like 4% over nearly 10 years, and has negligible returns over the past 5 years. They have done a lot of shifting around in their portfolio. Assets are dwindling. Devin has a brother, Luke Connell. You can figure all the tensions this situation might create. Sometimes all wealth does is give you the ability to create your own bespoke brand of misery.

Martin and Linda own a big chunk of Ewing Morris's equity, in addition to being the anchor clients. The firm has too many people and 7 management entities registered federally, also a sign of bloat. When the firm claims 20% of assets are owned by insiders, they are probably not referring to Ewing or Morris. I am told things might be coming to a head this year and a lot of it is in the hands of Martin Connell.

Another notable fund with negative performance as late as November 2020 was BloombergSen. Their fund was up 22.30 in November alone thanks to the takeover offer for Great Canadian Gaming, but that still left it down 9.68% for the year.

What do Ewing Morris and BloombergSen have in common besides subpar performance, family backing creating distortions and millionaires feeling comfortable applying for wage subsidies? All the key people at both firms come from Burgundy Asset Management. Martin and Linda were large clients of Burgundy. Darcy Morris went to work for Burgundy. Darcy saw BloombergSen's success and decided he could do the same. And so he partnered with John Ewing who was a Director of Research at Burgundy. Not really a portfolio manager. Anyways, I do not wish to smear Burgundy by association. I don't think there's a curse of the Burgundy plonk. Listen, if I want to tar Burgundy, I will do it on its own merits, don’t put words into my mouth. Best wishes to Harry Rosen.


You can read all my previous posts here

You can follow me on Twitter here

If you haven’t already done so, subscribe: