Philip A. du Heaume
VP Legal & Compliance
Q & A
Q: Tell us about your background and career?
A: Currently, I’m the VP of Legal and Compliance with Raintree
Financial Solutions, one of Canada’s largest EMDs. Before that, I
practiced law at a firm in Edmonton called Bryan & Company LLP.
There, I was tasked with learning National Instrument 31-103 when
it came into force in 2009 and focusing on registrant regulation.
One of my first EMD clients was Raintree and I was really taken
by their uncompromisingly client-centric philosophy on how the
exempt market should work. When they asked me to come join
their executive team, they gave me an opportunity to help mold
the industry into what we felt it should be. It was tough to leave the
comforts of being a lawyer at an established law firm, but it’s really
exciting to be part of the private capital solution.
Q: What is your company’s focus in the exempt market?
A: It’s cliche, but our focus is our clients. An EMD has to be in this
for the long haul - especially a firm like Raintree, because we want
to bring the exempt market to the Canadian public at large, not just
the ultra high-net worth and institutional investors that typically
invest in private capital. To find success in this market you have to
help your clients find it first; and that means they have to be the
focus of your entire business. That’s an area where Raintree has
been extremely fortunate, because we’ve managed to surround
ourselves with dealing representatives that care about their clients
as much as we do. Even our investment selection process is really
about our clients. By maintaining independence from the issuers
whose securities we distribute, we’re able to make sure that our
clients’ interests - not our own - are the driving force behind
investment recommendations. That independence also puts us
in a position to negotiate for better terms on the investments
we distribute. We push to have offerings structured in ways that
align the interests of the fund’s managers with the interests of the
investors, because we think issuer management should get paid
based on their ability to earn money for their investors, not their
ability to raise money from them. It all ties back to the fact that we
have to create success for our clients in order to find success for
ourselves. That’s what independence and alignment are all about.
Q: In your opinion, what are the major challenges and
opportunities in the private capital markets?
A: There are the obvious challenges, like ongoing regulatory
reform, but personally I think one of the biggest challenges for
the private capital market will be the influence of traditional
marketplaces that are starting to encroach on this space. If you
look at the private capital market as a whole - the dealers, the
issuers and the professionals - you generally see an industry built
on innovation. Specifically, innovation that comes from challenging
the existing philosophies and models of what being an investment
dealer or issuer are all about. Innovation has become too rare in
traditional financial markets where the same business models
continue to be employed because they’re lucrative for financial
institutions regardless of the results for investors. The private
capital markets are challenging that. It’s the same with the issuers.
I’m always amazed with the creative investment products that
are being presented. The structural flexibility that private capital
issuers have allows them to create investment opportunities that
just don’t exist anywhere else. As we start seeing some of the
larger financial players enter into the private capital arena, I think
it will be a challenge for us to try to maintain the spirit of creativity
that makes it special.
Q: What are the benefits of being a member of the Private
Capital Markets Association of Canada?
A: This last year has been a big one for exempt market dealers
and issuers. The modern registrant regulatory regime turned 5
years old in September, and yet 2014 brought with it some of the
biggest changes to our industry since 2009: the introduction of
CRM-2 client disclosure requirements, the introduction of OBSI
as the mandatory dispute resolution service, and the proposed
introduction/amendment of the offering memorandum exemption
are just a few that come to mind. The PCMA effectively advocates
on behalf of its membership when it comes to these types of
issues, but they also give members like us a platform to advocate
for ourselves. That’s so important for us, being a western based
EMD, because we don’t always have relationships with certain
organizations that drive regulation in Canada, like the OSC or
OBSI. The PCMA helps us build those key relationships. This
year alone, the PCMA gave me an opportunity to speak on a
panel with OSC Vice-Chair, James. E.A. Turner about the offering
memorandum exemption in Ontario, and to meet with the board
of directors of OBSI to discuss dispute resolution in the exempt
market. The PCMA has become an invaluable business partner for
us because it’s a forum for us to share our resources and help the
private capital market get stronger.
Become PCMA Member today and make a statement that you are
committed to your profession and highest standards of business conduct.
Join now at www.pcmacanada.com