Harbourfront Wealth Management is a firm that embodies a philosophy of independent and unbiased advice with a commitment to delivering more financial independence for Canadians. Last year, Harbourfront received a nine-figure investment from Audax Private Equity. And CEO Danny Popescu and the firm were recognized for having an independent approach to wealth management with a unique business model. This includes the creation of uniquely architected private securities more practical for the retail investor space.
Popescu built and founded Harbourfront Wealth Management in 2013 with an $11 million personal investment. Just 9 years later, the firm was valued at $425 million when Boston-based Private Equity firm Audax Group bought a stake in the firm.
To learn more about the firm, Pulse 2.0 interviewed Harbourfront Wealth Management CEO Danny Popescu.
Could you tell me more about the idea behind Harbourfront?
“My vision was to launch an independent firm to bring pension-type investment vehicles such as private equity, private real estate, and private credit to Canadian retail investors. I wanted to build an environment where entrepreneurial advisors could thrive by accessing hard-to-reach investments for their clients all while building wealth for themselves through owning a stake in our firm,” said Popescu.
The firm currently sits at about 300 employees in 28 branches across Canada, all of which are dedicated to providing comprehensive wealth management services to clients. And it is one of the fastest-growing independent dealers in Canada and is on track to establish a $1.5 billion enterprise value by 2027.
Tell us a bit more about yourself
“I’ve been in the financial services industry for 24 years. I started my career as a financial advisor and built a large client base between 2000 and 2013. During that time, I learned that the large majority of retail investors simply can’t handle the volatility of traditional portfolios – ones invested entirely in public securities. That’s what drove me to switch gears and launch Harbourfront in 2013. I envisioned bringing institutional quality private securities to the retail channel and architecting them in a manner that would be practical for Canadian investors. My thesis was that true entrepreneurial advisors would jump on the opportunity to create more stability in their client portfolios while garnering equity ownership in a rapidly growing enterprise. Fortunately, I was right. We grew from one branch to twenty-eight and yet we’re only about one-quarter of the way into our business plan,” Popescu replied.
– At 39 years of age, Popescu was named Business in Vancouver’s Top Forty under 40.
– In 2021, at 46 years of age, as the CEO of Harbourfront, he was named one of Canada’s Top 50 Industry Leaders of 2021 by Wealth Professional.
– Popescu is also the Founder and Director of the Harbourfront Gives Foundation, supporting fundraising initiatives for a number of charities.
“We’re proud to help within our communities by contributing to some amazing programs,” he says about his role as Founder and Director of the Harbourfront Gives Foundation. “No one should have to worry about putting food on the table, especially in a wealthy country like Canada. I’m proud that in December, the Harbourfront Gives Foundation raised 15x our initial goal in less than 30 days. After matching and then doubling those funds, we were able to help supply thousands of nutritious food packs for children across the country in support of Food Banks Canada’s After the Bell program and participated in their recent Packing Day. Since then, we’ve hit a new milestone of over $450,000 total raised for over 65 charities.”
As an independent firm, many Partners joining the firm have been supporting their own local fundraising initiatives – often for many years. It’s a benefit that more advisors are looking for, as part of a firm that prioritizes giving back. Popescu said the Harbourfront Gives Foundation helps their employees increase their support in the charities that matter most to them, from local pond hockey tournaments to international earthquake relief.
How has Harbourfront’s thesis evolved over time?
“Harbourfront has grown rapidly over the past nine years, yet our thesis remains unchanged,” he revealed. According to Popescu, the majority of investment advisors in Canada are limited to investing their clients’ dollars the old way: exclusively in publicly traded securities with no allocation to private investments, primarily due to a general lack of awareness and access. According to a new study by Ipsos, the world’s third-largest market research company, a majority (60%) of Canadians are not familiar with private investments.
“While pension plans, endowment funds, and ultra-high net worth investors have been investing in private securities for decades, these asset classes had not made their way into the retail investor portfolio. Retail investors continue to compete for the same, limited list of publicly traded stocks and bonds, which regularly results in high valuations and unwelcomed volatility. Meanwhile, millions of private businesses exist, many of which also look to issue equity or borrow money from investors,” Popescu adds. “Unfortunately, the barrier to entry for private securities for retail investors has been high: private businesses seeking capital generally approach institutions, the Canadian securities commissions usually require certain investor accreditations, and bank-owned and other large investment dealers lack the agility and tend to be burdened by multiple layers of red tape.”
What have been some of Harbourfront’s most significant milestones?
Popescu told me that they start with access, a key theme for Harbourfront:
– In 2018, Harbourfront built and launched Canada’s first Accessible Multi-Manager Private Securities (AMMPS), to make private securities ‘retail friendly.’ Since then, we’ve added two more AMMPS to the family of private securities solutions.
– Seasoned advisors continue bringing their client practices to our independent firm, making them one of the fastest-growing securities dealers in Canada.
Popescu shares that AMMPS are a family of structured pools offered by Harbourfront, giving their clients access to diversified, multi-manager solutions, including a variety of private securities like private credit, private equity, and private real estate.
Next, we talk about milestones for growth:
– As of June 2023, the firm has approximately $5 billion in assets under administration and $2 billion in assets under management.
– We’re attracting top industry talent. The Harbourfront team grew by 22% this year, with a senior leadership team of 67% women.
– Not just a 5-Star Brokerage award winner (three years running), but also Wealth Professional’s Excellence Awardee for Most Innovative Use of WealthTech, Employer of Choice, and Brokerage of the Year.
– The Audax deal.
Yes, how did the deal with Audax come together?
“Last year, we announced a strategic investment from Audax Private Equity, which valued our company at that time at $425 million,” Popescu explained. “Harbourfront was not actively looking for funding, but after Raymond James’ capital markets group approached the firm last August – Harbourfront ended up fielding 12 offers from both U.S. and Canadian private equity firms before selecting Audax.”
“The partnership and strategic investment from Audax marks our first private funding and validates our business thesis. Given that we were already cash-rich, 100% of the funds raised were distributed to our shareholders, most of which are our advisors. The partnership with Audax has also set us up to acquire other investment firms some of which we’re currently in conversations with.”
What do you think differentiates Harbourfront from other firms?
“I believe autonomy, entrepreneurship, and partnership best describe our business model. We offer innovative investment solutions, state-of-the-art technology for our advisors, and have a client-first culture of excellence which is raising the industry bar and client experience,” Popescu affirmed. “Unfortunately certain segments of the financial industry may not be structured to service the best interests of clients, advisors, and teams.”
Over the years, Harbourfront has combined previously inaccessible private securities in a uniquely strategic architecture to provide extensive diversification, enhanced liquidity, and more stability for its advisors’ clients.
“We’re advocates of empowering Canadians to become more financially independent. That’s why Harbourfront’s mission is to enrich the relationship between advisors and clients and help make a difference in the lives of as many as we can. I’d encourage any advisors interested in delivering more access to investment opportunities for their clients to learn more at harbourfrontwealth.com,” Popescu concluded.
