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New players shake up Canada’s advisory options

Executives from D.F. King Canada and Kingsdale Advisors have launched complementary businesses offering proxy solicitation and investor relations consulting.

Dexter John, formerly executive vice president at D.F. King in Canada, is president of new proxy solicitation firm Gryphon Advisors Inc., while Jackie Cheung and Victor Guo have left Kingsdale to form Frontline Advisors Inc (Frontline). Frontline will advise corporations before and after their initial public offerings on environmental, social, and governance (ESG) issues, as well as investor voting behavior and proxy adviser recommendations. “The two firms work hand-in-hand but can be hired independently”, John said.

“The marketplace is going in a certain direction,” John said in an interview with Activist Insight Online. “There’s a focus on governance, executive pay, and ESG.”

Proxy solicitors across North America have increasingly offered more extensive governance advisory services in recent years, with Kingsdale Advisors one of the first in Canada to market itself as a one-stop-shop. It hired former Institutional Shareholder Services (ISS) Vice President Guo in 2017. Cheung initially joined Kingsdale in 2013.

However, a prolonged commodity price dip has hung over Canada’s equity markets. Last year, Laurel Hill stormed up Activist Insight Monthly’s intermediary rankings. Laurel Hill began offering corporate governance consulting in 2017.

“The purpose of setting up these new entities is to offer more options, efficiency, and transparency to the market,” Guo told Activist Insight Online. “ISS and Glass Lewis are increasingly important but also changing the way they look at situations. It’s a dynamic industry, so you need advisers who are up to speed.”

Data suggest activism has slowed considerably in 2019 after a record year in 2018 but John says dissidents are increasingly vocal, even if not every fight goes to a vote.

Also new in Canada is the burgeoning public market in cannabis securities, with attendant opportunities for investor relations firms. Already, two Canadian-domiciled companies have faced shareholder activism.

According to John, rules governing D.F. King’s U.S. owners meant that firm has been legally constrained from pursuing work in the industry.

Gryphon and Frontline will both seek clients in the sector, working on both activist and M&A campaigns. “According to John, you’re going to see a lot more consolidation in the cannabis industry”.

 

Originally published on Activist Insight Online

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