David Kitai 00:00:06
Howdy and welcome to a really particular episode of WPTV. My identify is David Kitai, Senior Editor at Wealth Skilled. This summer time, we hosted the tenth Annual WP awards celebrating the most effective and brightest within the wealth administration trade, from advisors to funding answer suppliers. Centurion Asset Administration was a type of award profitable funding suppliers taking residence the WP award for different funding options supplier of the yr. Greg Romundt, President and CEO of Centurion Asset Administration, additionally gained CEO of the Yr. Greg joins us at this time to speak about his award wins and his previous methods. Greg, congratulations and welcome to WPTV.
Greg Romundt 00:00:40
Thanks. It is nice to be right here.
David Kitai 00:00:43
So it has been an enormous yr for you at Centurion. You’ve got gained these two awards. Are you able to inform me somewhat bit about what units you aside and why you suppose Centurion was acknowledged with these homeowners?
Greg Romundt 00:00:55
Positive. I will put that in to do two components. First for the corporate, I believe we work actually laborious to supply options to advisors and their purchasers to get true diversification within the portfolio. And a part of that’s serving to them perceive the enterprise of residences, you realize, so why they might wish to be concerned? What drives its returns? The macro story of how residences will help a hedge in opposition to inflation. After which we’ve got this typically generationally giant provide demand imbalance, which can take a really very long time to handle, and the way we doubtlessly match into that answer and a shopper portfolio. As to why I believe I used to be chosen, I believe there are a few causes. Primary, as I work actually laborious personally to construct empowered groups that carry out, and I imagine that solely reveals in our outcomes, but additionally on our purchasers or interactions, not solely residents, however our traders, advisors, and the individuals who borrow cash and CO make investments with us. So you realize. And secondly, I believe I’ve a popularity for talking my thoughts and saying some issues that they are typically uncomfortable or politically incorrect and however I believe that must be mentioned. And I form of, I’ve all the time believed that folks admire that candor.
David Kitai 00:02:11
I believe, No, these are, these are nice causes, but it surely’s fascinating. You deliver up the Empowered groups since you have been additionally shortlisted for one more and also you have been named as an Excellence Awardee for it as nicely, which is Employer of Alternative. So are you able to inform me somewhat bit about why you suppose you have been nominated there, and what which means for you and your group?
Greg Romundt 00:02:30
Effectively, you realize, we imagine that an organization is rather more than an incredible concept or being on the proper time or the appropriate place. It is about folks. You understand, the most effective, most stable enterprise concepts can fail due to poor execution. And each firm of our dimension, you realize, we’re simply virtually 380 folks, we’re greater than the sum of our components after we all work collectively. And this implies we want not solely extremely succesful folks, however ones which might be completely satisfied and engaged. And as such, we spent years and considered it systemically. Methods to, you realize, give attention to constructing a powerful and inclusive tradition which is enticing to folks to return and which preserve folks right here as soon as they’re right here, and, you realize, completely satisfied and executing. And to take action, we have arrange buildings organizationally to pay attention, to reply to that suggestions, to observe it and monitor our progress over time. We try to prepare and mentor folks. We construct profession paths for them, in order that, you realize, not solely can we assist them advance of their profession, however we hope that they’re going to advance their profession right here, versus some someplace else, and they also’ll keep for the long run. So I believe it is this means of steady enchancment and intention to constantly enhance, you realize, which I believe we’re very devoted to, as a result of she by no means actually arrived at a hard and fast vacation spot in a enterprise. It is all issues are all the time altering. So we’ve got to adapt to.
David Kitai 00:03:58
Completely and once more, to segue very neatly into my subsequent query. After we speak about fixed change, we speak about fixed evolution and that diligence required in there. You understand, it has been an fascinating yr for options. Are you able to define among the challenges that you simply people have confronted at centurion and the way you have overcome them?
Greg Romundt 00:04:20
Effectively, you realize, look, the current change within the capital features tax regime was was a problem. I imply, this took lots of people without warning, and at a time when Canada requires actually trillions of {dollars} in capital to be invested in housing, vitality, resilience, nationwide safety, reshoring, you realize, AGI know-how, we wish to be a part of the answer in delivering desperately want housing for Canadians. So something that reduces capital availability to our trade is a extreme disappointment, and it was one thing that actually, actually bothered me, and to this present day, nonetheless, you realize, politely. Irritates me. Secondly, you realize, we have, we have spent years making an attempt to teach those who actual property isn’t a homogenous product. So there is no such factor because the Canadian actual property market. And this can be a time period we, we have had used, you realize, within the 20 years, 21 years, have been doing that is, there’s the Canadian actual property market. And we mentioned, you realize, actual property various, not solely by class, you realize, workplace, retail, lodges, residences, single household houses, but additionally high quality, previous versus new location that is non-public metropolis, and even neighborhoods inside cities will not be the identical. So we’re all the time serving to folks perceive that condos aren’t the identical as residences, and even rents reply in a different way. Folks hear concerning the workplace market, which admittedly is a large number, and I have been speaking about this for some time, however assumes that signifies that all actual property will undergo like workplace and so they do not. So it is consistently about educating folks and the drivers of our enterprise and the way they’re very totally different from different segments of actual property and the financial system at giant. So this can be a an schooling problem. However, you realize, this isn’t distinctive to at this time. That is one thing we do constantly, proper?
David Kitai 00:06:13
Completely. And you realize, once more, going into what you could have executed and what you proceed to do, however, however what you have executed for advisors, I imply, what? How have your methods served advisor than their purchasers previously, even, even lately, and going again to by the entire historical past of Centurion?
Greg Romundt 00:06:31
Effectively, I do suppose we have been a stable, various purchaser for shopper portfolios. We have generated robust, low volatility returns, native relations to different investments for the 15 years that the our major product, the actual property funding belief, has been accessible. You understand, I’ve all the time believed that traders are their very own worst enemies, and having one thing that produces good, low volatility returns permits them to sleep at night time and stay invested. And being in market issues rather more than timing the market. I imply, that is an previous adage, however I believe it is a very it is a very true one, and having low correlation to different investments additionally helps our advisors construct options for his or her purchasers which might be applicable for his or her distinctive wants and circumstances. Additional, I believe we have been capable of carry out throughout low inflation, excessive inflation, by price hikes, covid crashes, inventory market and bond market volatility, quite a lot of market circumstances which might be challenges for advisors and their shopper traders. So I believe, you realize, one other factor is, we’re straightforward to grasp as a enterprise, proper? As a result of everybody has seen what an house seems to be like, and, you realize, will get what it’s that we do, at the very least at a quite simple stage. It is not so simple as it appears. However, you realize, I believe folks perceive that. And quite a lot of funding merchandise the core enterprise, you realize, like we’re not a hedge fund or a black field. So it is a lot, a lot simpler for folks to grasp and get consolation with. And I can pitch anybody on our the core purpose why you ought to be with us in two minute, elevator pitch, proper?
David Kitai 00:08:05
And elevator pitch for an house. It is in some way dovetails properly. However after we’re speaking about multi residential, and I like that, you begin with, there isn’t any one Canadian actual property market, so I will not ask for a broad outlook, as a result of keep in our lane. However we’ll, let’s, let’s speak somewhat bit about about multi residential What’s your outlook for the Canadian multi residential market proper now?
Greg Romundt 00:08:27
Effectively, you realize, I mentioned for years that Canada should and can construct extra residences within the subsequent decade than we’ve got inbuilt all the final two generations, as a result of there is no different alternative. You understand, I and others have estimated the quantity of housing required over the following decade will value about 3 trillion and you realize, that is each single household houses, condos, residences, and even when that amount of cash was accessible, it isn’t, we nonetheless haven’t got the labor to construct it if we assume {that a} third of that whole is residences of a few trillion assuming we want about 40% fairness to fund that, that is $400 billion which is 20 instances the quantity of whole fairness market capitalization of the complete publicly traded house REIT house. So this scarcity of housing is so epic, and I can consider no different trade in Canada that has such a core demand and enterprise case behind it. So I believe the following decade for our trade is not going to solely be thrilling and intensely busy, however much more considerably, it is a nationwide precedence of urgency, which I believe, you realize, we’re very nicely positioned to contribute to in a optimistic means. And you realize, we’re not solely going to resolve it, however I believe we’re a part of the answer.
David Kitai 00:09:51
In order you’re employed in the direction of that answer and work to seize alternative, what are you doing now that nicely within the type of both capital elevating or initiatives or. Yeah, new concepts to seize among the alternatives which might be on the market available in the market?
Greg Romundt 00:10:03
Effectively, we’re at present doing a serious capital increase of about 200 million, whereas the supervisor I am leaving waiving charges for 2 years, so we will supply a 2% low cost, which is mainly going to be non dilutive to unit holders, you realize. So I am mainly gonna decide up value of that. You understand, the alternatives are coming. And I have been signaling this. I have been somewhat bit early, however a few months in the past, I mentioned, Look, after we nonetheless, after we see the primary price reduce, we’ll know that we’re into the following cycle of the actual property market. And, you realize, I’ve mentioned all alongside, and I repeat it, that I wish to be prepared for it. I believe the alternatives are, are going to be coming shortly. The segments we’re most enthusiastic about might be the brand new sector. You understand, that is what wants quite a lot of capital, for for for improvement and for fairness partnerships, which we’re, we form of specialise in. So I believe there’s going to be quite a lot of lot of issues coming. And we have, we have seen a pair which we’re beginning to to nibble at. So yeah, fairly thrilling time forward. I believe.
David Kitai 00:11:17
Okay, that is implausible. So in all this pleasure on this space of alternative and an space of nationwide want. You understand, advisors are having conversations with their purchasers about these property. How do you suppose advisors needs to be speaking to their purchasers about options normally, and Canadian multi residential particularly?
Greg Romundt 00:11:35
Effectively, you realize, look, I, I do know, for many traders, they noticed what occurred within the portfolio in 2022 and 2023 and people commonplace 60/40, portfolios, you realize, nicely chosen options will help easy out a few of these bumps and supply entry to different sources of return in order that traders can sleep higher at night time and thus keep invested to satisfy their long run targets. Proper? Once more, it is a second time I mentioned saying that, however I believe it is actually necessary you simply keep, keep invested so and, however, you realize, traders want steering to do, to do these items, as a result of there, there are such a lot of variations within the merchandise which might be accessible and what’s applicable and what is going on to suit, it’ll have the appropriate, you realize, threat and return, and a few of them are simply most likely too sophisticated for some folks, proper? So, you realize, I believe advisors are actually wanted in that context to assist traders simply decide the appropriate issues for his or her portfolio. As to multi res, as I mentioned earlier than, I believe departments, for my part, have the most effective enterprise case of any enterprise in Canada proper now. Not solely that, however I believe we, what we do have is in brief provide, and this would be the case for a few years to return. So this isn’t a two yr drawback. This can be a decade plus drawback, however that traders can profit from and be a part of the answer by investing on this house, significantly within the new development house, the place we’re most lively.
David Kitai 00:13:10
Okay, that is nice. That is a that is a superb notice to finish on. So with that, all I’ll say, Greg is thanks a lot to your time and to your insights, and congratulations once more in your wins.
Greg Romundt 00:13:19
Thanks a lot.
David Kitai 00:13:21
And thanks to all of our viewers for WPTV. I’ve been David Kitai, have an incredible remainder of your day.
