David Kitai 00:00:06
Good day 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 perfect and brightest within the wealth administration trade, from advisors to funding resolution suppliers. Centurion Asset Administration was a type of award successful funding suppliers taking house the WP award for various funding options supplier of the yr. Greg Romundt, President and CEO of Centurion Asset Administration, additionally received CEO of the Yr. Greg joins us at the moment 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 received these two awards. Are you able to inform me slightly bit about what units you aside and why you suppose Centurion was acknowledged with these homeowners?
Greg Romundt 00:00:55
Positive. I am going to put that in to do two components. First for the corporate, I feel we work actually laborious to supply options to advisors and their shoppers to get true diversification within the portfolio. And a part of that’s serving to them perceive the enterprise of flats, you already know, so why they’d wish to be concerned? What drives its returns? The macro story of how flats will help a hedge in opposition to inflation. After which we’ve got this typically generationally massive provide demand imbalance, which can take a really very long time to handle, and the way we probably match into that resolution and a consumer portfolio. As to why I feel I used to be chosen, I feel there are a few causes. Primary, as I work actually laborious personally to construct empowered groups that carry out, and I consider that solely exhibits in our outcomes, but in addition on our shoppers or interactions, not solely residents, however our traders, advisors, and the individuals who borrow cash and CO make investments with us. So you already know. And secondly, I feel I’ve a fame for talking my thoughts and saying some issues that they are typically uncomfortable or politically incorrect and however I feel that have to be stated. And I sort of, I’ve at all times believed that folks respect that candor.
David Kitai 00:02:11
I feel, 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 Selection. So are you able to inform me slightly bit about why you suppose you have been nominated there, and what which means for you and your workforce?
Greg Romundt 00:02:30
Effectively, you already know, we consider that an organization is way more than an important thought or being on the proper time or the precise place. It is about folks. You understand, the perfect, most stable enterprise concepts can fail due to poor execution. And each firm of our dimension, you already know, we’re simply nearly 380 folks, we’re greater than the sum of our components after we all work collectively. And this implies we’d like not solely extremely succesful folks, however ones which can be completely satisfied and engaged. And as such, we spent years and considered it systemically. Methods to, you already know, give attention to constructing a powerful and inclusive tradition which is engaging to folks to come back and which maintain folks right here as soon as they’re right here, and, you already know, completely satisfied and executing. And to take action, we have arrange constructions organizationally to pay attention, to reply to that suggestions, to watch it and observe our progress over time. We attempt to prepare and mentor folks. We construct profession paths for them, in order that, you already know, 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 feel it is this means of steady enchancment and intention to constantly enhance, you already know, which I feel we’re very devoted to, as a result of she by no means actually arrived at a set vacation spot in a enterprise. It is all issues are at all times 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. Once we discuss fixed change, we discuss 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 just people have confronted at centurion and the way you’ve got overcome them?
Greg Romundt 00:04:20
Effectively, you already know, look, the latest change within the capital positive factors tax regime was was a problem. I imply, this took lots of people unexpectedly, and at a time when Canada requires actually trillions of {dollars} in capital to be invested in housing, vitality, resilience, nationwide safety, reshoring, you already know, AGI expertise, 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 already know, politely. Irritates me. Secondly, you already know, we have, we have spent years making an attempt to teach those who actual property shouldn’t be a homogenous product. So there is no such factor because the Canadian actual property market. And it is a time period we, we have had used, you already know, within the 20 years, 21 years, have been doing that is, there’s the Canadian actual property market. And we stated, you already know, actual property various, not solely by class, you already know, workplace, retail, inns, flats, single household properties, but in addition high quality, previous versus new location that is personal metropolis, and even neighborhoods inside cities will not be the identical. So we’re at all times serving to folks perceive that condos aren’t the identical as flats, and even rents reply in another way. Folks hear concerning the workplace market, which admittedly is a multitude, and I have been speaking about this for some time, however assumes that signifies that all actual property will endure like workplace they usually do not. So it is consistently about educating folks and the drivers of our enterprise and the way they’re very completely different from different segments of actual property and the economic system at massive. So it is a an schooling problem. However, you already know, this isn’t distinctive to at the moment. That is one thing we do constantly, proper?
David Kitai 00:06:13
Completely. And you already know, once more, going into what you will have accomplished and what you proceed to do, however, however what you’ve got accomplished for advisors, I imply, what? How have your methods served advisor than their shoppers up to now, even, even lately, and going again to by way of the entire historical past of Centurion?
Greg Romundt 00:06:31
Effectively, I do suppose we have been a stable, various purchaser for consumer portfolios. We have generated robust, low volatility returns, native relations to different investments for the 15 years that the our fundamental product, the actual property funding belief, has been out there. You understand, I’ve at all times 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 way more than timing the market. I imply, that is an previous adage, however I feel 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 shoppers which can be applicable for his or her distinctive wants and circumstances. Additional, I feel we have been in a position to carry out throughout low inflation, excessive inflation, by way of price hikes, covid crashes, inventory market and bond market volatility, a wide range of market situations which can be challenges for advisors and their consumer traders. So I feel, you already know, one other factor is, we’re simple to grasp as a enterprise, proper? As a result of everybody has seen what an residence seems to be like, and, you already know, will get what it’s that we do, at the least at a quite simple stage. It is not so simple as it appears. However, you already know, I feel folks perceive that. And plenty of funding merchandise the core enterprise, you already know, 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 motive why you need to be with us in two minute, elevator pitch, proper?
David Kitai 00:08:05
And elevator pitch for an residence. It is one way or the other dovetails properly. However after we’re speaking about multi residential, and I really 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 slightly bit about about multi residential What’s your outlook for the Canadian multi residential market proper now?
Greg Romundt 00:08:27
Effectively, you already know, I stated for years that Canada should and can construct extra flats within the subsequent decade than we’ve got inbuilt the entire final two generations, as a result of there is no different selection. You understand, I and others have estimated the quantity of housing required over the following decade will value about 3 trillion and you already know, that is each single household properties, condos, flats, and even when that sum of money was out there, it isn’t, we nonetheless haven’t got the labor to construct it if we assume {that a} third of that whole is flats of a couple of trillion assuming we’d like about 40% fairness to fund that, that is $400 billion which is 20 instances the quantity of whole fairness market capitalization of all the publicly traded residence 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 feel the following decade for our trade won’t solely be thrilling and very busy, however much more considerably, it is a nationwide precedence of urgency, which I feel, you already know, we’re very nicely positioned to contribute to in a optimistic means. And you already know, we’re not solely going to unravel it, however I feel we’re a part of the answer.
David Kitai 00:09:51
In order you’re employed in the direction of that resolution 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 can be on the market available in the market?
Greg Romundt 00:10:03
Effectively, we’re at the moment doing a significant 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 already know. So I am mainly gonna choose up value of that. You understand, the alternatives are coming. And I have been signaling this. I have been slightly bit early, however a few months in the past, I stated, 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 already know, I’ve stated all alongside, and I repeat it, that I wish to be prepared for it. I feel 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 plenty of capital, for for for growth and for fairness partnerships, which we’re, we sort of focus on. So I feel there’s going to be plenty 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 feel.
David Kitai 00:11:17
Okay, that is improbable. So in all this pleasure on this space of alternative and an space of nationwide want. You understand, advisors are having conversations with their shoppers about these property. How do you suppose advisors needs to be speaking to their shoppers about options generally, and Canadian multi residential specifically?
Greg Romundt 00:11:35
Effectively, you already know, 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 already know, nicely chosen options will help clean 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 objectives. Proper? Once more, it is a second time I stated saying that, however I feel it is actually vital you simply keep, keep invested so and, however, you already know, 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 can be out there and what’s applicable and what is going on to suit, it will have the precise, you already know, danger and return, and a few of them are simply most likely too sophisticated for some folks, proper? So, you already know, I feel advisors are actually wanted in that context to assist traders simply choose the precise issues for his or her portfolio. As to multi res, as I stated earlier than, I feel departments, in my view, have the perfect enterprise case of any enterprise in Canada proper now. Not solely that, however I feel we, what we do have is in brief provide, and this would be the case for a few years to come back. So this isn’t a two yr drawback. It is 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 wonderful observe to finish on. So with that, all I’ll say, Greg is thanks a lot in your time and in 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 important remainder of your day.