Polar is rapidly approaching the size of Wealthsimple. But much more lucrative.
In the year 2020, Paul Sabourin, the founder of Polar Asset Management Partners, made more money than the majority of his Canadian contemporaries did while managing assets. Even more impressive is the fact that Polar is quickly approaching the size of Wealthsimple.
The Securities and Exchange Commission (SEC) stated in a recent press release regarding the Polar trader who was charged with front-running that the company has at least $US19 billion. However, that number takes into account leverage.
According to the conventional definition of AUM, they have $7.5 billion in total assets. The flagship Multi-Strategy programme, which is responsible for more than $5 billion, saw growth of 22.53% in the prior year. Polar’s pricing for this strategy ranges between a hefty 1.5% and 20%.
Paul Sabourin is the top banana at Polar; he is the company’s founder, Chairman, and Chief Information Officer. He is a modest man who used to work as a trader for Burns Fry and has a penchant for wearing sweaters. (Or t-shirts; it just depends on the time of year.) According to what I’ve been told, Tom Sabourin serves as the CEO of the company.
They are joint owners of more than fifty percent of Polar. Paul, who wears a jumper, is therefore the head of the Canadian hedge fund industry. Please do not write to tell me that Picton Mahoney has virtually the same AUM because I am already aware of this.
If you want to do some rough calculations to figure out the economics, here are some numbers. Just for the prior year, the total amount of fixed fees would have exceeded $100 million Canadian. It’s possible that performance fees were in the range of $300 million.
Therefore, total revenues would be close to $400 million. The company has 114 employees and 7 other people who are in charge of strategy in addition to Paul (including 48 investment professionals). Anyway you slice it, Paul is swimming in money. Paul decided to call his holding company Flying Walrus Investments, in contrast to other wealthy people who name their holdcos after their children.
Only in 2008, 17 years after its founding, did Polar pass the one billion dollar mark in revenue. Since then, one Kurankye Sekyi-Otu has been serving as the company’s primary business development person. You are most likely curious as to whether or not he is related to the renowned Ghanaian-Canadian political philosopher Ato Sekyi-Otu. It could just as easily be yours as it could be mine.
The talent at Polar appears to be developed in-house, and the company employs people with diverse backgrounds, ranging from physics to orthodontics. For instance, Abdella Ruken, Polar’s Deputy Chief Information Officer, formerly served as the company’s Chief Risk Officer. I really need to throw up.
Tim Trapp, who has an MBA from Harvard and worked for a large US hedge fund, is part of the team. Another notable exception is Bob Poile, who holds a degree from Harvard and worked for Paloma Partners, a shadowy investment firm in Greenwich that is heavily involved in the Canadian financial market, for approximately seven years.
In 2007, he began working on a troubled programme for Polar, but it was ultimately unsuccessful. If you want me to write a profile of Bob Poile, all you have to do is say the word because I am virtually the most knowledgeable person in the world on Bob Poile. He doesn’t get much attention at all.
After taking into account expenses, the performance of the flagship multi-strategy fund since 2008 is a staggering 248%. Say it with me: the S&P 500, on the other hand, has seen its value increase by 303% over the same time period (with dividends reinvested).
I decided to focus on the year 2008 because it was a very long time ago and it featured multiple crises. When they were managing less than a billion dollars, it is obvious that I cannot give them credit for the returns that were achieved during the time that annual reports were sent by pigeon mail. If you had invested in the S&P 500 over the past decade, you would have had twice as much money.
Naturally, Polar will assert that they are less volatile, pointing out, for instance, that they suffered a loss of only 4.52% during the bear market in March 2020. In the fall of 1998, they experienced a drawdown of 43% of their capital (around the time of the LTCM collapse). But I have no doubt that the company has undergone significant transformations recently.
Here are the complete figures:
Polar has been testing out new strategies (as it has throughout its history). They expanded their offerings to include global long/short credit, global long/short equity, and power trading. They have apparently also stopped accepting new investments in their flagship. Please send any additional information about Polar. For more information, please see my original Polar post.
What exactly is Paul doing with all of his money? He is a collector of Canadian art. And, as far as I can tell, he has a small foundation with $800,000 in assets.
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