When Daniel Holland returned to Canada in 2006 after working in the finance business in England, he joined his father's firm, Halifax-based Beacon Securities Ltd., the oldest full-service brokerage in Atlantic Canada. Lonny Holland then handed the reins to his son, who decided the only way for the firm to prosper and grow was to expand nationally, bring in new partners, and establish a strong presence in Toronto. Beacon set up shop in Toronto's downtown core in February, and is rapidly expanding its staff there with a new focus on institutional equity.
Why did you decide to turn Beacon Securities from a regional investment dealer into a national company? The firm was founded in 1988 and until earlier this year, head office and all of mind and management were always in Halifax. I joined the business six years ago and I was not interested in the status quo. I looked at our business, and I said, what are our opportunities here? We could sell ourselves. We could stay as we were – with a majority owner and a handful of minority shareholders – but in my mind that was the equivalent of withering on the vine. Or we could look at opportunities to grow the business.
I knew that successful independent firms are based on a partnership model. So my aspiration was really to create a partnership on a national basis, and that would involve having a significant presence in Toronto. What I have said from the outset was that there was an opportunity to take a firm that was regionally based, to being a national firm with national clients and national reach.
Was it crucial to have an office in Toronto as part of that shift?
There is no doubt that much of the financial decision-making in our industry takes place in Toronto. At the end of the day, if you are not there with a significant presence you are not going to be able to grow and be in the flow of information and opportunities.
Why did you decide to come back to Canada after working in investment banking in England for many years?
I moved to London when I was 24 years old and I was there for nine years. London was very exciting at that time in my life. But as much as I had British citizenship [because I was born there], I was not a Brit. I am a Canadian. And I wanted to be a part-owner of the next business I was involved in, and there are only a small number of independent firms in the U.K.
And the quality of life I could have was going to be far greater in Canada – what I could afford, where I could live, and how quickly I could commute to work.
Was it a tough decision to take over your father's business?
There was a natural amount of trepidation. When I first decided to come back to Canada, I looked at a few things in Toronto and in Montreal. [But I figured] the greatest opportunity was to be part of something that was going to grow, [and to glean] the long-term benefits of being a shareholder. I saw an opportunity in taking something that my father had built, and make it a national firm.
You are expanding in a tough business environment. How is it going?
We now have 12 people in Toronto. We think we will probably have at least 20, if not 24, by Christmas time. Richie Donohue and Alistair Maxwell were the initial two partners that joined me on Feb. 15, and then seven more partners joined in March and we have had a handful more since then.
The point of opening in Toronto was to become a full-fledged institutional equity capital markets player. We still have a great bond business, which is dovetailing into that institutional piece in Toronto.
Why did you decide to step back from the CEO job at the firm?
The simple answer is because Alistair [Maxwell, the new CEO] successfully ran an investment dealer as CEO for eight years before joining Beacon. At the end of the day, he has done this for eight years and I had not.
Alistair and I met last fall and we developed a rapport very quickly. He's got a tremendous amount of respect on Bay Street and amongst the corporate issuer community and amongst the people who have worked with him.
Is the brokerage industry too focused on the resource sector?
Much of what Canada has, in terms of exports, is a resource opportunity. But there are too many investment dealers chasing those opportunities. There has been a lot of time and energy and effort spent bringing resource names to the marketplace in the last number of years, at the cost of some of the other great businesses that wish to list on markets like the TSX and the TSXV.
So you are going to look more broadly, and into other niches?
There are few investment dealers bringing new non-resource companies to the public markets, or raising capital for non-resource businesses that are already listed. If you can fill that space, you are going to do well as a business. That is not to say that our business is going to exclude resource exploration stories. It is just not the primary focus.
What can you do as a small dealer that the big bank-owned firms can't to?
There is a tremendous sense of entrepreneurialism in what we are building. We are going to turn over a lot of rocks and look at a lot of opportunities more actively than other firms. Being small, we will make decisions very quickly. And we are all very keenly aware of what it takes to own and manage a business.
So you can identify with your clients?
I think so, because we are small, and most of the senior people within this firm are shareholders and they are intimately interested in how we manage our business.
Is there a Nova Scotia set of values you bring to the business? It is unspoken that we, as a Nova Scotia-rooted business, are fundamentally about relationships. We've taken our time in bringing partners on, because they have to be the right kind of individual. We want to make sure we are working alongside people we truly respect and want to work with.
There is no doubt we are in this to build the business, to be successful and to be capitalists. But we also want to make sure we are doing it in a way that is respectful of the people we are working with.
Do you think the tough current market will turn around? Will we see significant growth going forward?
Is this going to turn around? The answer is yes. You only have to look at both the political and economic ramifications of a significant recession, or a global bear market, to know that people are going to take this seriously and act. Do I see the markets with significant growth ahead of us in the next six, 12 or 18 months? Not significant growth, but modest. Fund managers who are sitting on more cash than they would like to be, and corporate executives who are not making significant capital expenditure decisions right now, will begin to get to work once they see modest increases in economic metrics. I don't see hockey sticks or parabolic growth in the next year or two, but I see certain niches and certain businesses within the marketplace growing.
Title Executive vice-chair and managing director, Beacon Securities Ltd.
Personal Born in Surrey, England; 40 years old
Education BA, political science, McGill University; MBA from INSEAD, Fontainebleau, France
Career highlights Opened Montreal office of the Halifax-based Information Technology Institute
Worked for Bank of Montreal and RBC Dominion Securities in London, England, and then as a consultant
Returned to Canada and joined Beacon in 2006, taking over as CEO
Became executive vice-chairman, based in Halifax