The Ewing Morris Opportunities Fund had a significantly poor performance in 2020, falling by 21.7% as of November of that year. It was revealed that Martin Connell, a $20 million investor in the fund, is the grandson of Frederick Connell, who founded Conwest Exploration Company in 1938. This information was revealed despite the fact that the fund had been experiencing difficulties, as was previously covered. Encana ultimately decided to purchase Conwest in the year 1996.
A Little Introduction to Ewing Morris
Devin Connell, who is Martin Connell’s daughter, is married to Darcy Morris, who is both a co-founder of Ewing Morris and its Chief Executive Officer. Martin and his wife, Linda Haynes, were also co-founders of ACE Bakery, which went from having an initial investment of $800,000 to being a business with 300 employees before being sold to private equity.
Martin is well-known for his charitable work, and he is one of the notable individuals who serve on the advisory board of Ewing Morris, along with other members of the community.
The participation of Martin and Linda, who are significant customers of Burgundy Asset Management, on the advisory board may be to blame for the board’s unwavering support of Ewing Morris. The company was established by Darcy Morris, who had previously worked for Burgundy, and John Ewing, who had previously served as the Director of Research at Burgundy. Together, these two individuals established the company.
Nevertheless, the performance of Ewing Morris and BloombergSen, which is another notable fund with negative performance in 2020, has been below average, and there are indications of internal tensions and bloat within E. Morris.
BloombergSen was yet another notable fund that had a loss in value as late as November 2020. Even though the takeover offer for Great Canadian Gaming led to a gain of 22.30 in their fund during the month of November alone, the fund was still in the red for the year at 9.68%.
What else do subpar performances, family backing that creates distortions, and millionaires who feel comfortable applying for wage subsidies have in common with Ewing Morris and BloombergSen? Burgundy Asset Management has provided both companies with all of their most important employees. Burgundy counted Martin and Linda as two of their most important customers.
Darcy Morris found employment with Burgundy and started working there. Darcy was inspired by BloombergSen’s achievements and came to the conclusion that he too could achieve success. As a result, he went into business with John Ewing, who was working at Burgundy as a Director of Research.
Not a portfolio manager in the traditional sense. In any case, I do not wish to tarnish the reputation of Burgundy through association. There is no such thing as a curse of the Burgundy plonk, in my opinion. Listen, if I want to disparage Burgundy, I will do so based on the merits of Burgundy; please don’t try to put words in my mouth. I hope everything works out for Harry Rosen.
In conclusion, the poor performance of the Ewing Morris Opportunities Fund in 2020 sheds light on the potential pitfalls that can arise in the finance industry when an individual relies on personal connections and the support of family. It is possible that the participation of notable individuals on the advisory board helped the fund attract investors; however, it is also possible that this participation contributed to internal tensions and bloat within the organisation.
In order for businesses to be successful over the course of a longer period of time, it will be essential for them to place a high priority on both their performance and their level of transparency.
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