As the calendar changed from 2008 to 2009, investors were worried. The stock market was tanking, dragging portfolios down with it, and investment managers’ phones were ringing off the hook with clients concerned about dwindling account balances. But the clients of Heathbridge Capital Management Ltd. weren’t feeling quite the same squeeze, thanks to the company’s strongly disciplined, time-tested investment strategy. “Our philosophy was distilled from firsthand observations of the best and worst practices of money managers across North America over the course of a couple of decades,” says Richard Tattersall, CFA, one of Heathbridge’s principals and portfolio managers.
The firm’s trademarked “Checkmark Investing” is a methodical approach that “makes logical sense,” Tattersall says. Potential securities are carefully screened for the right mix of financial sturdiness and a position of strength within their industry, and then monitored over a period of time to ensure they’ll make good long-term investment vehicles. As stock prices fluctuate, companies grow, market pressures change, and the financial landscape evolves, Heathbridge diligently cultivates its portfolio. It purges low performers or companies that have likely reached the zenith of their earning potential, and add new companies with room to grow, all in an effort to maximize profits and minimize risk. “In practice, it has done very well,” Tattersall says. “Our track record is measurable over the past 16 years.”
Focused on high-net-worth clients who favour a careful, long-term approach to investing, Heathbridge currently serves about 155 families across Canada. Its average client invests around $2 million through the firm, more than double the company’s per-family minimum. When the downturn came, Rupel M. Ruparelia, CFA, also a principal and portfolio manager at Heathbridge, says the team’s long-standing proactive communication strategy headed off many of its clients’ concerns. “They receive a fair amount of information from us on a regular basis, so it helped to temper the phone calls we were getting,” Ruparelia says. And while the team did have clients calling in, Ruparelia says, the firm was “sending e-mails, blogging, chatting with people, and making sure clients were in the loop.”
When the economy was at its worst, Ruparelia says investors were bombarded with bad news every time they looked at the newspaper, a scenario that can make it hard for people to think long term. “Our role is to help them through dark periods like that, and make sure we’re there for them,” he explains. Heathbridge had already divested itself of the securities carrying the highest risk by the time the market nose-dived, and because the firm stuck to its strategy and avoided making panic-driven decisions, Heathbridge’s client accounts were still up year-over-year when most of its competitors were down. “We tend to go down by less and then recover more quickly,” Ruparelia says. “This happened in 1998, 2002/2003, and 2008/2009.”
Much of Heathbridge’s growth happens through word-of-mouth referrals, which is just fine with Tattersall. “We’re happy to grow slowly and steadily,” he says, “because our first duty is to do well for our existing clients.” The firm isn’t interested in becoming a behemoth, preferring instead to focus on the types of families that share its tried-and-true investing philosophy. “People who are interested in having a logical investment discipline and some no-nonsense financial advice—we’re the people for them,” Tattersall says.