BMO taps Wells Fargo executive to lead Global Asset Management unit

Bank of Montreal sent another signal Wednesday that it is serious about building its asset management operations in the United States, announcing that an outgoing executive of California-based Wells Fargo & Co. would be taking over as CEO of BMO Global Asset Management.

The appointment of Kristi Mitchem is effective March 18, BMO said. She will succeed Richard Wilson, who had been in the role since 2014 and who is retiring.

“Kristi is highly respected across the industry,” said Darryl White, CEO of BMO, in a press release. “I look forward to her joining our team and building on Richard’s success in leading BMO’s asset management business to drive exceptional performance and service for our clients.”

Mitchem, who also has experience at State Street Corp., BlackRock Inc. and Goldman Sachs Group Inc., was head of Wells Fargo Asset Management, where she oversaw approximately US$500 billion in assets under management. BMO GAM has more than $320 billion in assets.

The move comes a few months after BMO said it was aiming to double its wealth management-related earnings over the next five years.

At an October investor day, the head of BMO Asset Management noted that the bank had 19 per cent of its assets under management in the U.S., but that the U.S. market represented 50 per cent of a $100-trillion global asset pool.

“And so clearly in the U.S. we’re undersize,” an executive said at the time.

BMO said Mitchem will report to Joanna Rotenberg, the group head of BMO Wealth Management.

“(Mitchem’s) asset management expertise, creativity, and technological acumen will be a strong catalyst in our next chapter of growth,” Rotenberg said in the release.

The appointment of Mitchem speaks to the “growing international flavour” of asset management among Canadian banks, which have “absolutely dominated” that space within Canada over the past 10 to 15 years, Barclays Capital analyst John Aiken said.

“We’ve hit what one might call a saturation point, where you’re going to continue have growth, because Canadians are going to continue to save. And the banks, given their influence over distribution, are going to … presumably continue to get the lion’s share of sales,” Aiken said.

“But, if you’re going to look to continue to grow the platform at a stronger clip, you have to look for larger markets, and the U.S. remains the largest wealth management sector in the globe.”

The U.S. asset management industry has been hit harder by the passive-investing trend than Canada’s thus far, Aiken said, which is experience Mitchem could bring to BMO.

She is at least the second Wells Fargo veteran the bank has recruited for a high profile role in recent years; Brett Pitts was named chief digital officer in November 2017.

Mitchem will step into her new role as other big Canadian banks have made moves to enhance their own wealth businesses, adding to their slates of investment products and looking outside Canada’s borders for growth.

Email: | Twitter: GeoffZochodne

China ‘absolutely necessary’ for Ontario Teachers’, CEO says

Ontario Teachers’ Pension Plan has a long-term plan for China that’s unlikely to be derailed by political tensions, its chief executive officer said.

“China’s a long game from our perspective and while there’s always skirmishes of one kind or another, in the short term, we believe that it’s absolutely necessary to be there,” Ron Mock said in a Bloomberg Television interview Wednesday at the World Economic Forum in Davos. The fund invests a lot in technology in China which is very different than doing so North America, he said.

Mock’s comments come as relations between Canada and China are at one of the most strained in their history. Canada is holding Meng Wanzhou, chief financial officer of Huawei Technologies Co. in Vancouver at the request of the U.S. who want to extradite her while China has detained two Canadians and sentenced a third to death on a drug charge.

The Toronto-based fund is Canada’s third-biggest pension plan, with about $194 billion (US$145 billion) in assets, and oversees the retirement savings of 323,000 retired and working teachers in the province.

OTPP is also ready to invest billions of dollars in Brazil now that the worst seems to be behind for the Latin American country, Mock said. Brazil plans to sell a large number of state-owned companies are nearly ready, President Jair Bolsonaro said in an interview with Bloomberg on Wednesday in Davos. Sales will include airports and ports, he said.

“Those kinds of things don’t come on the market very often. And if it’s the right asset with the right partners, we’re not shy about moving into it,” Mock said. “It could be billions or tens of billions in some cases, let’s just say it could be billions.”

Mock said that OTPP’s assets in Brazil have “performed extremely well” and that he has teams on the ground and that the opportunity set is starting to pick up.

–With assistance from Erik Schatzker.

Dyson, whose founder is a vocal Brexit supporter, is moving its head office out of Britain to Singapore

Dyson, the British appliances company founded by a vocal supporter of Britain’s departure from the European Union, has decided to leave for Singapore.

The company, which makes vacuum cleaners and hair dryers and has an electric car in the pipeline, is moving its headquarters from Malmesbury, in southwest England, to Singapore in response to demand for its products in Asia, the company said Tuesday.

“An increasing majority of Dyson’s customers and all of our manufacturing operations are now in Asia,” the company said in its financial report. “This shift has been occurring for some time and will quicken as Dyson brings its electric vehicle to market.” The company said it would also double the size of its technology centre in Singapore.

The company insisted the relocation of the headquarters would involve only two job moves: Jorn Jensen, the chief financial officer, and Martin Bowen, the general counsel, will move to Singapore. Overall, the company said, it employed more than 12,000 people around the world, with more than 4,500 in Britain.

A spokeswoman said the move was not a response to Britain’s plan to leave the EU, known as Brexit, or conditions in Britain. “We remain committed to the U.K., but are growing quickly in Asia, too,” she said.

Still, that did not stop people on Twitter from suggesting that the move was hypocritical and contradicted claims by James Dyson, the company’s founder and chairman, that the country would be better off outside the EU.

Singapore signed a free-trade agreement with the EU in October, but Britain’s relationship with the bloc remains unclear, as it is still negotiating its departure.

“Dyson’s decision to move his HQ to Singapore reflects his narrow business interest,” said Sam Gyimah, a Conservative member of Parliament, on Twitter. “Betrayal of the public who put their faith in him as a British business advocating a No Deal Brexit.”

Dyson told The New York Times last year that “Europe is a protectionist setup designed to keep competitors out. It’s not a good thing to be in.”

“It was the right decision for Britain,” he said of the vote to leave.

In a conversation with the BBC about Brexit last year, Dyson also praised Singapore’s ability to change. When asked about how Britain would make money around the world, Dyson said, “We’ve got to refocus ourselves, as indeed Singapore did 50 years ago when it split from Malaysia.”

The company, which started by making vacuum cleaners, has become a ubiquitous presence across the country, with electric hand driers adorning the walls of many public bathrooms and air purifiers and hair dryers in many homes.

Dyson, 71, has lost none of his charm, lending his voice to TV commercials for the company’s products. He remains the face of the company and is now one of Britain’s richest people, as well as a knight.

The New York Times

Billionaire Stronach family feud heats up as court filing alleges Frank’s ‘passion projects’ lost $380 million

Former Magna International Inc. Chief Executive Officer Belinda Stronach is rejecting claims of mismanagement made by her father Frank, saying she was instead trying to prevent him from pursuing “idiosyncratic and often unprofitable projects” that threatened the family fortune.

Belinda Stronach, a former Canadian lawmaker, is seeking about $33 million from her father, according to a statement of defence filed Monday in Ontario Superior Court of Justice. The amount includes funds “gifted” to Frank Stronach for his 2013 Austrian political campaign, and for a subsequent tax settlement with Austrian authorities.

The statement of defence and counter-suit intensifies a feud that has torn apart one of Canada’s richest families. In October, Frank Stronach sued Belinda and individuals including Stronach Group CEO Alon Ossip for $520 million, claiming mismanagement of the family fortune. None of the allegations have been proven in court.

Belinda Stronach “has engaged in no unlawful conduct. To the contrary she has taken steps to rectify the irregular affairs of (the group) she inherited from Frank,” according to her 78-page statement of defence, obtained by Bloomberg News. “She has paid particular attention to ensuring that TSG is operated in a manner that is to the benefit, rather than the detriment, of future generations.”

One of Frank Stronach’s lawyers referred a request for comment on the dispute to Dennis Mills, a former Canadian lawmaker and Magna executive who knows both the Austrian-born billionaire and his daughter. Mills said he’s not seen any of the legal documents filed Monday.

“I’m confident Frank and Belinda will figure this out,” Mills said by telephone. “Frank’s whole life been dedicated to his family. He would want peace in the family. Nothing is more important to him.”

Passion Project

Frank Stronach’s failed “passion projects” amounted to about $850 million in investments over the years, according to a separate statement of defence filed Monday by Stronach Consulting, a unit of the Stronach Group. This includes $324 million on agriculture and $157 million on thoroughbred horse operations, according to the filing.

At the heart of the dispute lies “a fundamental disagreement over the proper test to be applied to managing the business and affairs” of the closely held Stronach Group, Belinda Stronach said in her statement of defence.

Neither she nor her father have any involvement with the day-to-day operations of Aurora, Ontario-based Magna, Canada’s largest car-parts maker.

A separate statement of defence from Ossip, an executive and trustee of the Stronach Group, paints a similar picture of a successful businessman who may have lost his way.

“Today, at 86 years of age, Frank’s business judgment is not at all what it once was,” according to Ossip’s claim. “His refusal to let go of his failing business ventures has become financially disastrous. These ventures, combined with his excess spending, have eroded the net worth of both his family and Alon.”

Bronze Statues

Among Frank’s “passion projects” were two bronze statues of a 12-story high Pegasus horse defeating a dragon that wound up costing $55 million, according to the statement. One statue is at a race track in Florida, the other is in storage in China. In all, these investments in golf courses, restaurants and farming have resulted in a net loss of $380 million for the group, according to the claim from Ossip.

Frank’s October lawsuit represents “an attempt to force Stronach Group’s to fund Frank’s imprudent and, in some cases, fanciful schemes to the detriment of TSG and its stakeholders,” Belinda said in her filing. While successful in building up Magna, the elder Stronach “has also experienced significant failures in nearly all of his other non-auto parts business ventures and his political affairs.”

After a few years of working as a machinist in his native Austria, Frank Stronach arrived in Canada in the early 1950s with a few hundred dollars in his pocket and built Magna into a company with revenue of US$28.7 billion and net income of US$1.1 billion by 2011 — the year he stepped down as chairman. Magna had sales of about US$40 billion in 2017.

Auto Ventures

Frank Stronach’s non-automotive businesses and investments have included magazines and multimedia operations; a restaurant; a residential development at a ski resort; a tennis equipment company; thoroughbred racetracks; an energy drink company; as well as Austrian soccer league television and marketing rights.

Over time, Frank “began to engage in activities, many unauthorized, which placed the business and assets of TSG at considerable risk. These activities escalated to a point where they became a significant distraction for the management” of the Stronach Group, Belinda’s suit said.

In the original suit, Frank Stronach claimed Belinda was starving his grass-fed cattle farm of financing, selling off assets over his objections while using company funds to bankroll an extravagant lifestyle of parties, vacations and limousine rides.

Frank Stronach and his wife Elfriede said their relationship with their daughter has suffered a “complete breakdown.” The lawsuit against her is a “last resort” after trying for 20 months to find a settlement, according to a 73-page statement of claim filed in a Toronto court on Oct. 1.

Stronach Group holds racetrack assets such as Santa Anita Park and Golden Gate Fields in California; Florida’s Gulfstream Park; and the Pimlico Race Course in Maryland. Under Belinda Stronach and Ossip, TSG is generating “significant positive cash flow,” Belinda Stronach said.

Stronach Group also has an agriculture unit, which includes Adena Farms, a grass-fed cattle ranch located in Florida. The unit was unprofitable under Frank’s direction, according to Belinda’s lawsuit.

The billionaire family feud is good for business at Toronto’s biggest law firms. Blake, Cassels and Graydon are working for Belinda. Davies, Ward, Phillips and Vineberg are on for Frank; Ossip is represented by Osler, Hoskin and Harcourt; Goodmans is working for Belinda’s children and Torys is with Stronach Consulting.

B.C.’s money laundering problem may involve billions of dollars, documents say

VICTORIA — Documents that say money laundering in British Columbia now reaches into the billions of dollars are startling to the province’s attorney general who says the figures have finally drawn the attention of the federal government.

David Eby said he’s shocked and frustrated because the higher dollar estimates appear to have been known by the federal government and the RCMP, but weren’t provided to the B.C. government.

He said he recently spoke to Public Safety Minister Ralph Goodale about information gaps concerning cash being laundered in B.C. and he’ll be meeting next week with Minister of Organized Crime Reduction Bill Blair.

“I’ve been startled initially by the lack of response nationally to what appeared to me to be a very profound issue in B.C. that was of national concern,” said Eby in an interview.

Last June, former Mountie Peter German estimated money laundering in B.C. amounted to more than $100 million in his government-commissioned Dirty Money report into activities at provincial casinos.

Eby said that number now appears low, especially after the release of an international report that pegs money laundering in B.C. at more than $1 billion annually, although a time period wasn’t mentioned in the report. A second report by the RCMP estimates $1 billion worth of property transactions in Vancouver were tied to the proceeds of crime, the attorney general said.

The government had estimated that it was a $200-million a year operation, instead the federal Ministry of Finance has provided estimates that pegs the problem at $1 billion annually, Eby said.

The provincial government only learned about the reports through media leaks or their public release and it wasn’t consulted about the reports, Eby said.

“The question I ask myself is why am I reading about this in an international report instead of receiving the information government to government,” he said. “It’s those information gaps that organized crime thrives in and we need to do a better job between our governments.”

A report issued last July by the Paris-based Financial Action Task Force, a body of G7 member countries fighting money laundering, terrorist financing and threats to the international financial system, highlighted B.C. money laundering activities.

Eby said the report includes details about a clandestine banking operation laundering money in B.C. that was not fully known by the provincial government.

“It is estimated that they laundered over $1 billion (Canadian) per year through an underground banking network, involving legal and illegal casinos, money value transfer services and asset procurement,” stated the report. “One portion of the money laundering network’s illegal activities was the use of drug money, illegal gambling money and money derived from extortion to supply cash to Chinese gamblers in Canada.”

The report stated the gamblers would call contacts who would make cash deliveries in casino parking lots and use the money to buy casino chips, cash them in and deposit the proceeds into a Canadian bank.

“Some of these funds were used for real estate purchases,” the report stated. “Surveillance identified links to 40 different organizations, including organized groups in Asia that dealt with cocaine, heroin and methamphetamine.”

Eby said the G7 task force report included information the province didn’t have about money laundering in B.C. from the federal government via the RCMP.

He said the B.C. government also confirmed the RCMP compiled an intelligence report about proceeds of crime connections to luxury real estate property sales in Vancouver, but his ministry doesn’t have the report.

“We still don’t have a copy of it,” Eby said.

Blair could not be reached for comment but in a statement said the federal government takes the threat posed by money laundering and organized crime seriously and is collaborating with the B.C. government and German.

“We are taking action to combat this by enhancing the RCMP’s investigative and intelligence capabilities both in Canada and abroad, and our Financial Intelligence Unit further helps protect Canadians and our financial system,” said the statement.

German’s report to the provincial government last June concluded B.C.’s gaming industry was not prepared for the onslaught of illegal cash at the casinos and estimated more than $100 million was funnelled through the casinos.

He was appointed last fall to conduct a second review identifying the scale and scope of illegal activity in the real estate market and whether money laundering is linked to horse racing and the sale of luxury vehicles.

“We’re having some difficulty getting the information we need for Dr. German to make a true assessment of the extent of the problem facing B.C.,” said Eby.

Maureen Maloney, a former B.C. deputy attorney general, was also appointed last fall to lead an expert panel on money laundering in real estate and report to the government in March.

“We do realize there is a lot of anecdotal evidence on the extent of money laundering in real estate, but we really don’t have a good handle on that,” said Maloney. “We’re looking at whether or not we can produce some good evidence of that. We’re looking at do we have that data available in B.C. or indeed Canada.”

Confidential provincial government documents dated April 2017 and released through Freedom of Information requests show the government was tracking suspicious currency transactions at B.C. casinos, especially in $20 bills, for years. The high-point of these transactions was more than $176 million in 2014-2015.

Documents dated August 2016, show the government’s Gaming Policy Enforcement Branch observed so-called “high roller” patrons at a Metro Vancouver casino for a year starting in January 2015 and concluded people connected to real estate were the top buy-in gamblers at $53.1 million.

A spokesman for B.C.’s gaming industry said reports from the gaming operators about cash transactions flagged concerns of money laundering.

Peter Goudron, B.C. Gaming Industry Association executive director, said casinos implemented measures to combat potential money laundering, including placing cash restrictions on players in 2015.

“This had the effect of reducing the value of suspicious transactions by more than 60 per cent over the next two years,” he said. “More recently, operators implemented Dr. Peter German’s interim recommendation requiring additional scrutiny of large cash buy-ins in January 2018 and this has further driven down the number of suspicious transactions.”

Top-performing hedge fund is shorting Canadian banks on all the usual suspects — and something even more worrying

A small U.S. hedge fund that was a top performer last year is shorting Canadian banks.

Crescat Capital sees the Canadian economy heading for recession as the housing market buckles. That might be bad enough for the banks but they face an added strain: outside the financial sector, more than 80 per cent of Canadian companies aren’t generating enough cash to support their businesses, the highest in the world, according to Crescat.

“Canadian banks will be left holding the bag and the ones to suffer from what is likely to be a major economic recession,” Tavi Costa, a global macro analyst at Denver-based Crescat, said by phone.

Crescat has only US$55 million under management, but it returned 41 per cent in its Global Macro Fund last year and 32 per cent in its Long/Short Fund, bolstered by a short wager on China, according to its website. That put the company among the top performers in a year in which the industry saw its biggest loss since 2011, declining 4.1 per cent, according to Hedge Fund Research Inc.

The country’s biggest lenders are Royal Bank of Canada and Toronto-Dominion Bank, along with Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada. Costa declined to name the banks Crescat was shorting. Representatives for Canada’s six biggest banks didn’t immediately comment or declined to comment.

Crescat’s short comes amid long-standing warnings from economists, investors and even the Bank of Canada about elevated consumer debt, which was driven higher by a decades-long housing boom. Canada’s ratio of household debt to income has been hovering at about 175 per cent for the past two years, compared with a peak of about 134 per cent in the U.S. at the height of its housing bubble in 2007.

Now Canada’s housing market is beginning to cool. Sales plunged 32 per cent in Vancouver last year and 16 per cent in Toronto amid rising interest rates, stricter mortgage rules and new taxes.

“China is in the process of reversing its key role as a driver of global economic growth,” the 29-year-old Costa said. “Countries like Canada and Australia, and their respective housing markets, are the economies most vulnerable in this scenario.”

Meanwhile, Crescat calculates that about 80 per cent of Canadian non-financial stocks have been cash-flow negative in the past 12 months, which he measures as cash flow from operations minus capital expenditures.

That may be inflated by the the large numbers of “zombie” companies on Canadian stock exchanges, which the Organisation for Economic Co-operation and Development defines as those 10 years and older and whose earnings aren’t high enough to cover interest payments on their debts. In a September study, Deloitte found 16 per cent of public companies on the Toronto Stock Exchange and its sister Venture Exchange are considered zombies, compared with 10 per cent globally.

Cash flow in the energy sector may have been hammered by a slump in crude prices in the past year.

But Costa said even if he excludes energy and materials stocks, 70 per cent of Canadian stocks have still lost money on a free cash-flow basis. If you consider only non-financial stocks with a market value of more than $100 million, the share is still more than 50 per cent, he said.

“How is it sustainable for companies that generate no cash to continue to employ people?” Costa said. “Many of these troubled companies would be bankrupt under tighter monetary conditions.”

Previous Shorts

The country’s biggest lenders could face troubles on both the housing and corporate fronts, according to Costa.

At their peak last year, the six largest banks, traded at an average of 1.9 times book value, a similar valuation to U.S. banks prior to the global financial crisis in 2008, according to Costa. He expects that to drop to 0.7 times book value or so, where U.S. banks were trading post-financial crisis.

Other investors have recommended shorting Canadian financials on a looming housing correction in the past, including Steve Eisman, who predicted the U.S. subprime mortgage collapse.

And Canadians bank stocks have largely defied naysayers as the country’s unemployment rate has hovered near records lows amid steady growth — until recently. The S&P/TSX Composite Commercial Banks Index slumped 11 per cent last year amid market global volatility, the biggest decline since 2008.

“Most of these banks are off their highs and have just started to break down,” Costa said.

With assistance from Doug Alexander and Brandon Kochkodin.

‘I feel good about the progress we’ve made’: How CEO Roy Gori is working to reinvigorate Manulife

Roy Gori doesn’t expect to be able to turn Manulife Financial Corp.’s stock performance around overnight.

The insurance and asset management giant’s chief executive, who has been in the job for just over a year, says he’s pleased with progress the company has made pursuing his strategic initiatives, such as rolling out consumer-friendly and cost-saving technology, and the redeployment of capital into higher-return businesses.

But as to whether they will be enough to bring back investors — who have been waiting since the financial crisis for shares that closed Thursday at about $21 to regain their pre-crisis heights — he has no illusions.

“The honest truth is there is some skepticism as to whether we can continue to execute,” Gori said in a wide-ranging interview with the Financial Post this week.

“We can’t just do that over the course of three quarters. We need to do that consistently over many quarters.”

For Manulife, it hasn’t been an easy road since the post-crisis days of 2009, when over-exposure to interest rates and equities forced the firm to shore up capital through measures that included cutting the quarterly dividend in half.

The subsequent years of historically low rates that followed combined with increasing longevity to drag on returns.

By design, the Manulife that Gori inherited is far less sensitive to interest rates and equity markets than it was then.

As CEO, Gori has already led the company to realize more than two-thirds of a pledge last year to free up $5 billion from underperforming “legacy” businesses by 2022, through a combination of stronger accountability, cost management and new strategic opportunities.

But for the Australia-born 49-year-old, who took over as CEO in late 2017 after a quick introduction to Manulife via its Asian operations, not everything has gone according to plan.

This past October, the short-seller firm Muddy Waters targeted Manulife with the suggestion the Toronto-based company could lose a court case in Saskatchewan, which would put it on the hook for billions of dollars. Shortly after, Manulife issued a statement refuting the report’s conclusions, and added that it believed the position advanced in the lawsuit by hedge fund Mosten Investment LP was “legally unfounded.”

Despite the company’s defence, Manulife shares fell 5.7 per cent in the two days following the short report, dipping from $23.19 to $21.86, before sliding below $20 as markets in general tanked that month.

Gori: “We remain highly confident we’re going to prevail in the matter. This is not going to have a material impact on our business…”

In the interview this week, Gori reiterated the company’s position and characterized the attack as being among the sort of “unexpected challenges (that) are par for the course for any big company and any CEO.”

Though the court case described in the short-seller’s report had not been disclosed in the company’s financial statements, he noted that it had already been “in the public domain for a long time.” A story in the Financial Post last February detailed the fight at the heart of the case over side accounts on certain life insurance products that allowed investors to hold money at guaranteed interest rates.

“This is before the courts and that process often can take time, but we feel very confident about our position and where this will ultimately end,” Gori told the Post this week.

“We remain highly confident that we’re going to prevail in the matter. This is not going to have a material impact on our business, I feel very confident about that.”

Shortly after the Muddy Waters report was published, Saskatchewan amended its insurance regulations to prohibit insurers from accepting deposits above what’s required to pay premiums over a policy’s eligible period. As a result, Manulife said it would seek to have the court dismiss the hedge fund’s claims that life insurers can be compelled to accept unlimited premium payments, adding that the Saskatchewan amendments should accelerate resolution of the principal matters of the case in Manulife’s favour.

In November, the month after the short report, Manulife announced agreements to release more than $1 billion of capital in keeping with its previously announced strategy. This included reinsuring substantially all of Manulife’s legacy U.S. pay-out annuities businesses.

The firm also announced plans to buy back up to 40 million of its own shares and increase its common share dividend by 14 per cent.

Again, these moves had little lasting impact on the direction of the stock.

Creating value for shareholders, and having that reflected in the share price, is “obviously very critical” to his job as CEO, said Gori, who was preparing to leave this weekend to attend the World Economic Forum, which begins Sunday in Davos, Switzerland.

Manulife Financial’s head office in Toronto.

“I feel good about the progress we’ve made (on) an execution front in 2018,” he said. “We’ve got a lot of great, in my mind, proof points that articulate that we can execute the agenda we set and we can achieve the ambition we are setting for the company … but we have to continue to do that.”

One plank in the plan to get there is to focus on areas of growth, such as Asia, where Gori got his start at Manulife after leaving Citigroup to join the Canadian company in 2015.

Despite recent trade and political tension between North America and China, Gori said he is “more excited now about (Manulife’s) Asia opportunity and … business than ever before,” particularly with China’s movement toward more liberalized markets for investment products and the loosening of foreign ownership and control restrictions on insurance companies in China.

“While there is some (recent) tension there … that we’re all seeing, I really don’t see that that will have any effect on our business in a material way, and certainly not one that would derail the progress that we’re making and the opportunity we see,” Gori said.

The company’s beachhead in China is Manulife-Sinochem Life Insurance Co. Ltd., of which it owns 51 per cent alongside partner SinoChem.

Gori said the venture is already in good position to take advantage of a growing middle class and demand for insurance and wealth management products in China, but that it is only a beginning.

“We clearly would like to have a greater interest in China, because we think the opportunity is very significant,” he said.

“We’d love to (have) a greater share of the business, but it’s only an opportunity if we see that SinoChem has a desire to divest and at this point they don’t, and we’ll continue to work with them.”

He said diversification within Asia — in addition to China, Manulife operates in Hong Kong, Singapore, Japan and Vietnam — and across their North American operations gives him comfort the company can ride out any short-term issues.

In recent years, the company has fielded questions numerous times about whether it is considering selling John Hancock, the Boston-based insurance firm purchased in 2004 that doubled Manulife’s size and catapulted it into the upper echelons of Canada’s financial services industry. Some of the U.S. business lines, including variable annuities and long-term care, which face challenges due to longer lifespans and low interest rates, have also been the subjects of sale speculation.

Gori said the U.S. market is the largest for both insurance and wealth management, and while nothing would ever be ruled out as the company looks to get the highest return for capital invested, there is no need to sell Hancock.

“The pivot for us in the U.S. is really to see how we can use digital ways of interacting to transform the (insurance business and) allow us to gain share,” he said.

“So our focus in the U.S. is to really double down on the opportunity we see there and to … complement that with a very strong wealth management business.”

Even in this scenario, there is still room to do more when it comes to dealing with the “legacy part” of the business, Gori said.

“As I highlighted in 2018, we would never take anything off the table.”

Despite the constant talk about dealmaking and pursuing growth in hot markets around the world, Gori says the lasting mark he would like to leave at Manulife during his tenure as CEO has more to do with the corporate culture. He wants the company and its employees to focus on technology and customers, rather than products, and use the digital transformation to make processes more efficient for both the company and customers.

And he wants the value of the company to be evident, even to the skeptics, through consistent performance.

“We have to make sure that quarter in, quarter out, we’re executing against the agenda and that we’re demonstrating that we can deliver against the goals that we’ve articulated for the street,” Gori said. “I believe once we’ve established a credibility against that, we’ll unlock value in the stock price.”

Likelihood of hard Brexit may increase odds of no Brexit. That might be best thing for everyone

David Cameron doesn’t regret calling the referendum that ended his political career and tossed his country into chaos.

Or at least so Britain’s former prime minister-cum-private citizen said, when reporters caught up with him going for his morning run on the day after his successor, Theresa May, and her latest deal to withdraw the U.K. from the European Union went down to crushing defeat in the House of Commons.

Sure, Cameron (in slimming black running gear) admitted, he regretted losing the referendum, and regretted the hard time politicians are having in coming up with something that satisfies the will of the people. But no, he said, “I don’t regret calling the referendum.” And off he jogged into the figurative sunset.

Oh well, at least that’s one person on the planet who doesn’t regret the Brexit vote and all the palaver of the ensuing two-and-a-half years. No doubt, anyone who’s been watching the drama unfold has become inured to the enduring sense of crisis, the stumbling path from setback to setback, the panoply of insurmountable obstacles (for example, the Ireland “backstop”) that all boil down to a truth that can’t be run away from: no one faction in British politics has enough clout to see its vision of Brexit become reality. The fact that each faction sees the opportunity for political gain in the defeat of the other’s vision only perpetuates the impasse.

Markets, which have been jolted on and off since June 2016 like a death-row inmate suffering a botched execution, seem to have become immune to the shocks. After the defeat of the latest May agreement this week, European stocks gained marginally, as did the S&P 500 and the Dow, while Japan’s Nikkei 225 went sideways. In Britain, the pound actually gained against the U.S. dollar after the agreement’s Commons defeat on Tuesday, and consolidated its gains after May’s government survived a vote of no confidence on Wednesday. (It’s still down more than 10 per cent since its April high, however.) In London, the FTSE 100 index, heavily weighted in multinationals, looks headed toward a more or less flat week, while the more domestic FTSE 250 has actually gained — perhaps on expectations that any further rate hikes from the Bank of England are now firmly off the table.

Given the scale of May’s loss this week — 432 against and only 202 for — you might wonder where the shock and awe have gone off to. No doubt, markets had already priced in the defeat of the agreement, which was widely expected. But there’s another read: markets might be betting on the upside of no deal. Not the disastrous “no deal” whose impact the Bank of England has forecast at around an eight per cent hit to GDP, but the “no deal” that leads to “no Brexit,” in one form or another.

Prime Minister Theresa May, after surviving a no confidence vote.

Here’s the possible thinking: After surviving the no-confidence vote, May promised to work with other parliamentary leaders to cobble together another agreement. Well, good luck with that. Before he even talks with her, Labour leader Jeremy Corbyn has demanded May promise there won’t be a hard Brexit — chances are, given the strong hard Brexiteers in her own party, she won’t do that. Even if Labour and May do agree, then the deal and/or May herself could go down in defeat at the hands of her own Conservatives. If, on the other hand, she comes up with something that satisfies all of her own party as well as the allied Democratic Unionist Party, and the agreement wins parliamentary support — well, that “something” would likely include demands the EU would not be of a mind to agree to. So the upshot is, there’s not going to be a deal.

The big question, of course, is what happens when there isn’t a deal. There could be a hard Brexit, which means the economic relationship between Britain and the EU reverts to World Trade Organization rules and all hell would break loose (how much, depends on which side you listen to) at the borders, at the drug stores, at the supermarkets and the ports. And time is running out: the deadline for an agreement, triggered when the May government invoked Article 50 in March 2017, is now just two months away.

There are still a few alternatives, however. The U.K. could try to get an extension to keep working at it, which would at least punt the problem down the road, but that would be complicated; the EU might not agree. Or the U.K. could try to repeal Article 50 — it’s not clear it can without European support — and just re-invoke once it gets closer to a deal. Meanwhile, political and popular support for a second referendum appears to be growing — but would be difficult for politicians like May to justify, since they’ve been prattling on about obeying the will of the people as expressed in the 2016 referendum. Since Corbyn isn’t going to get a chance to form the next government (Labour’s default option on Brexit), he might now switch to the “people’s vote” movement. But who knows?

Any of those outcomes would be better than a hard exit, but the big ray of sunshine that emerges from no deal is no Brexit at all. All sides admit defeat, hang their heads in shame at failing the British people, and say “Sorry, we know 51.89 per cent of those of you who voted in that referendum two and a half years ago might still want this, but it’s just not on.”

For investors and for the rest of the world, that would certainly be a happy ending, insofar as happiness is possible after such a long, useless and dreary saga. I’m not betting on it happening, and think a hard Brexit is still the most likely scenario. But wouldn’t it be nice to just write down the whole mess to experience, and get back to jogging along on our merry way?