Fund pioneer has stayed the course for 60 years

December 01, 2006

George Frazer receives Career Achievement Award for his proven theories and solid fund management

George Frazer was investing decades before most advisors were even born; long ahead of the retail mutual fund boom, before credit cards and socialized health care, before the Maple Leaf was branded on the Canadian flag and before China was Communist.

“I really feel humbled by this whole thing,” says Frazer, 80, chairman of Toronto-based investment firm Leon Frazer & Associates Inc. and the recipient of the Canadian Investment Awards 2006 Career Achievement Award.

“I’ve never really touted anything I can’t prove, and it’s taken me a long time to prove them,” he says of some of his investing theories. For example, he has always advised investing in dividend-paying companies; to invest while keeping in mind that your firm is a business unto itself; and to aim for the bottom line. He has also advised not to fool yourself into believing in capital gains, because over the long term — and on average — you can only count on stock prices to rise with the cost of living.

“You have to have profits from the company you’re invested in, in dividends, to make it worthwhile investing,” he says. “That’s fundamental.”

Frazer’s philosophy has proven true, especially these days, not only as boomers head into retirement with income on their minds but also as the government’s income trust ruling has added an extra sheen to dividend-paying stocks.

Sixty years on, Frazer’s investment philosophy is the same today as it ever was. “No, no way,” has it ever changed, he adds emphatically.

The original Associate Investors Ltd. fund, started in 1950, was owned and run basically for the family and acquaintances, explains Frazer. Bill Tynkaluk, who still helps manage the fund, joined in 1956. When family members began to buy houses, Frazer says, the only way the firm could keep operating was to feed the fund with some distributions, which it found initially by joining with Guelph, Ont.-based Co-operators General Insurance Co. ’s Canadian Conservative Focused Equity Fund.

Co-operators later sold the fund to Clarington Corp. When Industrial Alliance Insurance and Financial Services Inc. acquired Clarington, Frazer’s fund took on the name IA Canadian Conservative Equity Fund. Frazer still co-manages the $278.5-million fund with Tynkaluk and Patrick Magee. Their firm manages about $1.3 billion, including a handful of portfolios for Counsel Wealth Management, the Mississauga, Ont.-based firm ultimately owned by IGM Financial Inc.

Frazer is still heavily involved with the investment decisions: “I work every day.”

Since 1981, the first year that Morningstar Canada began tracking IA Canadian Conservative Equity Fund’s data, it has had an annualized return of 10% to Oct. 31, slightly edging out the return of the S&P/TSX composite index over the same period. The fund ranks in the top quartile over 10 and 15 years.

“We’re having fun,” says Frazer. “We’re coining money. The income to each individual account in this office has gone up more than 50% over three years ago. How do you get that? Just by honing in on the dividends that are going to give you a good percentage of your investment back.”

Although many fund managers today point to the likes of Sir John Templeton, Warren Buffett or David Dreman, these people are, in fact, Frazer’s peers. And one or two major international fund companies have looked to Frazer’s original fund charter for a model on which to base their own funds, although he doesn’t want them known publicly.

Principles of investing learned from father

Frazer is an original himself, having learned the principles of investing in the early 1950s from his father, Leon, who founded the company in 1939.

In fact, Frazer’s career is not one that has taken him far, unless one counts dedication and loyalty in miles. His resumé isn’t adorned with multiple presidencies, chairmanships and managerial positions. The last job offer he ever accepted was in 1947, on a day that he calls the “highlight” of his career.

After the Second World War (he never made it overseas), Frazer attended the University of Toronto to study commerce and finance, then took a job with a chartered trust company. Frazer recalls that every Friday afternoon he would meet with his boss, who would ask him investment and market questions. He would go home for the weekend and consult with his father. “And Monday morning I’d go into the office and say, ‘I think I have the answer’,” quips Frazer.

It was on a Saturday afternoon a few months later, when he was peppering his father with more questions, that the younger Frazer asked to join the firm. His father stood up promptly, shook Frazer’s hand, gave him the key to the office and said, “I hope I can afford you.”

That year, Frazer worked for $600 and continued to live at home, where he stayed for five years until he married his wife, Elizabeth, to whom he has been married for 51 years. They have raised three children — Bruce, Anne and Jacqueline.

Like Frazer’s father — who never pushed him into the investing world — Frazer is not one to proselytize. But he does dole out one piece of advice to advisors, planners and salespeople of all sorts in the financial services industry: “They talk in such big language, and I don’t understand them. If they’d just come down to earth. That’s my only wish. It’s so simple.”

Frazer was born on April 12, 1926. That he should be accepting this award at his age, he admits, is appropriate. He was involved in team sports, but sailing was his first love. The sport took him around the world, racing a 14-foot boat up until the late 1960s.

“Sailing suited my personality because I can never go straight to the point,” says Frazer. “I have to find a way around it.”