Michael Lee-Chin

Michael Lee-Chin
Michael Lee-Chin
Born 1951 (1951)
Port Antonio, Jamaica
Occupation Executive Chairman of AIC Limited, National Commercial Bank of Jamaica
Net worth increaseUS$1.8 billion (2009)[1]

The Honourable Michael Lee-Chin, OJ (born 1951) is a Jamaican-Canadian investor. He is the founder and Chairman of Portland Holdings Inc., a privately held investment company which owns a collection of diversified operating companies in sectors that include media, tourism, health care telecommunications and financial services. Amongst other positions, he is currently Executive Chairman of AIC Limited (a Canadian mutual fund), and the National Commercial Bank of Jamaica. In the latest Forbes Billionaires List, he was placed at number 701, with assets worth around $1.0 billion.[2] (Though Lee-Chin's wealth has been as high as $2.5 billion in the past.) Canadian Business has named him as one of the richest people in Canada. He is also a philanthropist. In 2003, he made headlines when he donated $30 million to the Royal Ontario Museum (ROM). Michael Lee-Chin also provided a $10 million gift to the Rotman School of Management at the University of Toronto. The gift established the Michael Lee-Chin Family Institute for Corporate Citizenship at the Rotman School of Management, University of Toronto. The Lee-Chin Institute's purpose is to help current and future business leaders integrate corporate citizenship into business strategy and practices. (http://www.rotman.utoronto.ca/lee-chininstitute) [3]

Contents

Background

Early life

Michael Lee-Chin was born in Port Antonio, Jamaica in 1951. Both his parents were biracial, Black and Chinese Jamaican. When Lee-Chin was aged 7, his mother married Vincent Chen.[4] Chin also had a son from a previous relationship, and the couple had a further 7 children together, including 6 boys and 1 girl.[5] His mother sold Avon products, and worked as a book-keeper for various local firms, while his stepfather ran a local grocery store.[6] He attended the local high school, Titchfield High, between 1962 and 1969.[7]

His first job came in 1965 working as part of the landscaping team at the Frenchman's Cove Hotel.[8] In 1966 he got a summer job working on the Jamaica Queen cruise ship, cleaning the engine room.

Introduction

In 1970 he went to Canada on a scholarship program sponsored by the Jamaican Government to study Civil Engineering at McMaster University,[9] and graduated in 1974.[10] In the first year at the University, he was spending by his own money. After the first summer, he received the scholarship.[11]

Career

He worked briefly as a road engineer for the Jamaican Government,[12] but unable to find work in his qualified field (and allegedly, because his Canadian wife didn't like living in Jamaica), he returned to Canada. At first he worked as a bouncer, but later found employment as a financial advisor for Investors Group.[13]

He spent two years at the Investors Group, in the Hamilton, Ontario office and in 1979, moved to Regal Capital Planners and became regional manager. Whilst at the company, in 1983, he secured a loan from the Continental Bank of Canada for C$500,000 to purchase a stake in Mackenzie Financial Group and formed Kicks Athletics with Andrew Gayle. By 1987, the investment was worth C$3.5 million.[14]

In 1987, took the proceeds from his Mackenzie investment and he bought a Kitchener-based company called the Advantage Investment Council (a division of AIC Limited) for $200,000. At the time, the company had holdings of around C$800,000. He renamed the company AIC, and developed it to a fund that today controls around C$6 Billion, with hundreds of thousands of investors.

Following the acquisition of AIC Limited, Lee-Chin set up the Berkshire group of companies – comprising an investment planning arm, a securities dealership and an insurance operation. By 2007, Berkshire amassed more than C$12 billion of assets under administration. In 2007, Manulife acquired Berkshire from Portland Holdings in exchange for shares, making Portland one of the largest shareholders of Manulife.

In 2009, Lee-Chin sold AIC Limited to Manulife for an undisclosed amount. With the acquisition, Manulife Securities will now manage some $13 + billion in mutual fund assets in Canada.

Investments 1990 - 2005

In the late 1980s, AIC suffered from a collapse in the real estate market, in which it had invested. It recovered throughout the early 1990s by maintaining investments in large groups, such as Merrill Lynch and TD bank (formerly Toronto Dominion). This caused investments to grow from US$8 million in 1990 to nearly US$8 billion by 1998.

However, Lee-Chin was reluctant to invest in the dotcom boom, and saw AIC investments lose 8 per cent in value, even as the S&P gained 56 per cent. Investors moved US$224 million out of AIC's flagship 'Advantage Mutual Fund'. The Globe and Mail ran an article predicting even more investors to leave the fund, meaning that they would run out of cash and be forced to sell its core holdings. Lee-Chin's response was to sell stock in Coca-Cola, and invest US$65 million into Mackenzie Holdings (the same firm in which he had invested US$400,000 16 years previously). Letters were sent to all 350,000 investors, explaining the strategy. The investors were calmed by the purchase, and the stock was later sold to Investor Group (the same company Lee-Chin had worked for in the 1980s) at more than twice the price AIC had paid for it.[15] In 2000 and 2001, following the dotcom crash, AIC outperformed the market with 26 per cent growth and 4 per cent decline respectively.[16]

In November 2003, AIC was part of a regulatory investigation involving 105 Canadian mutual funds companies. In its review of AIC, investigators found no evidence of late trading and market timing activity by AIC staff or in any of its funds. It did find however, market timing carried out by certain third party investors in AIC Funds. For this, the OSC fined AIC US$58.8 million for its involvement.[17]

On October 5, 2006, Lee-Chin announced his resignation as CEO of AIC, to be replaced by Jonathan Wellum, AIC's chief investment officer.

In 2005, two investment product managers offering structured products joined the Portland Holdings portfolio, Copernican Capital Corporation has offered retail investment products, primarily sold by brokers, and has raised more than C$300 million since its launch. Markland Street Asset Management, which launched the Oil Sands Sector Fund, raised C$430 million in one of Canada's largest closed-end IPOs.

Private life

In 1974, he married Vera Lee-Chin, a Ukrainian Canadian that he had met at University. They parted in 1991, and officially separated (though did not divorce) in 1997. Ms. Lee-Chin has since contested the terms of the separation agreement agreed upon at their separation, claiming that Lee-Chin did not disclose his actual wealth at the time of the separation.[18] The couple had three children (Michael Jr., Paul, and Adrian).

Lee-Chin now lives with Sonya Hamilton, with whom he has fraternal-twin daughters, Elizabeth and Maria in Flamborough, near Hamilton, Ontario, and Miami Beach, Florida.

Current fund growth and difficulties

Investment in Caribbean

In the late 1990s and early 2000s, Jamaica went through a period of financial crisis.[19] Lee-Chin saw potential in his native country, and Portland purchased 75 per cent of the National Commercial Bank of Jamaica for 6 billion Jamaican dollars (US$127 million) from the Jamaican Government.

In 2003, Senvia Money Services Inc., a global money transfer company was established. This was followed in 2004, by the acquisition of AIC Financial Group Limited, headquartered in Trinidad.

In 2004, he announced plans to set up the AIC Caribbean Fund with the intention of investing in the entire Caribbean region. The stated aim of the fund is to raise US$1 billion in order to "make investments in businesses located in countries of the Caribbean Community (CARICOM), with an emphasis on Jamaica, Barbados and Trinidad and Tobago".[20] So far, it has made a number of large-scale investments.

In 2006, Portland acquired an 85 per cent controlling stake in the United General Insurance Company, the largest auto insurer in Jamaica, and renamed the firm Advantage General Insurance Company. A controlling interest in CVM Communications Group (consisting of radio and television stations and newspapers) was purchased at the same time.

Portland partnered with the Canadian Risley Group to form Columbus Communications Ltd. – a Barbadian corporation that holds controlling interest in a number of telecommunications providers in the Caribbean including Cable Bahamas Ltd. Caribbean Crossings Ltd., Merit Communications Ltd. And FibralLink Jamaica Ltd.

In the tourism sector, Michael guided Portland through a number of acquisitions in the Caribbean. Among them, the hospitality operations of the Trident Villas and Spa in Jamaica, Reggae Beach and Blue Lagoon. Portlands first acquisition in the health care industry sector was announced in July 2006, when Medical Associates Ltd., a privately held hospital in Kingston, Jamaica, joined the Portland Group.

Commodities boom

Similar to the experience of the late 1990s, Lee-Chin again has shied away from investing in commodities and the energy market boom. He has specifically stated that "We [AIC] do not like commodities-type businesses nor most high-tech companies simply because they are implicitly poor enterprises which we would not want to hold for the long term".[21]

Again, this strategy has meant that AIC has significantly underperformed the S&P index, but Lee-Chin believes that the current boom is just another bubble. Lee-Chin describes the market since 1990 as "a series of rolling speculations", and now 'we see a commodities bubble'.[22]

Business strategy

While at Investors Group, he studied the strategies of successful investors, such as Warren Buffett, Benjamin Graham and Kenneth Thomson. Their buy and hold strategy is easily recognisable in the motto of AIC - Buy, hold and prosper.

Business ventures owned or operated by Michael Lee Chin

  • Sauce Cable Company
  • Affordable Enterprise Ltd.
  • Cabana Cable Ltd.
  • Dynamic Corp, a company in the making Eastern Cable Network Ltd.
  • Home Commercial Satellite Ltd.
  • Universal Cable Network Ltd.

See also

  • List of billionaires

References

  1. ^ #677 Michael Lee-Chin Forbes. Retrieved on 2008-05-16.
  2. ^ "#701 Michael Lee-Chin - The World's Billionaires 2009". Forbes. 2009-03-11. http://www.forbes.com/lists/2009/10/billionaires-2009-richest-people_Michael-Lee-Chin_7TE8.html. 
  3. ^ Leung, Calvin (12 2005). "John Risley And Michael Lee-Chin — The Cable Guys". Canadian Business. http://www.canadianbusiness.com/after_hours/lifestyle_activities/article.jsp?content=20051205_72925_72925. Retrieved 2006-08-24. 
  4. ^ "the man...the mom...the myth". Globe Advisor. https://secure.globeadvisor.com/servlet/GIS.Servlets.WireFeedRedirect?cf=sglobeadvisor/config&vg=BigAdVariableGenerator&date=20030530&archive=gam&slug=CHIN. Retrieved 2006-08-24. 
  5. ^ "Can a Billionaire Be Nice? - If you don't think so, Michael Lee-Chin may change your mind". The Tyee. 2004-02-05. http://thetyee.ca/Life/2004/02/05/Can_a_Billionaire_Be_Nice/. Retrieved 2006-08-23. 
  6. ^ "Michael Lee-Chin: Encyclopedia". About.com. http://experts.about.com/e/m/mi/Michael_Lee-Chin.htm. Retrieved 2006-08-23. 
  7. ^ "Titchfield Old Students' Association Newsletter & Events". Titchfield High Alumni Association. July 2006. http://www.titchfieldhigh.com/ja.htm. Retrieved 2006-08-23. 
  8. ^ "Why donate?". Jamaica Gleaner News. 2006-03-07. http://www.jamaica-gleaner.com/gleaner/20060307/life/life3.html. Retrieved 2006-08-23. 
  9. ^ "National Commercial Bank of Jamaica - Board of Directors". http://www.jncb.com/corp_info/bod.asp. Retrieved 2006-08-23. 
  10. ^ "Fund Profile AIC - Portfolio Managers". GlobeFunc.com. http://globefunddb.theglobeandmail.com/gishome/plsql/gis.fund_pro?fundname=AIC+Cdn+Balanced+Corporate+Cl+(US$)&pi_universe=PUBLIC_FUND. Retrieved 2006-08-23. 
  11. ^ Lowrie-Chin, Jean (2004-06-01). "If Shearer had refused Lee Chin...". The Jamaica Observer. http://jamaicaobserver.com/columns/html/20040531T000000-0500_60558_OBS_IF_SHEARER_HAD_REFUSED_LEE_CHIN___.asp. Retrieved 2006-08-23. [dead link]
  12. ^ "McMaster Alumni Association". http://www.mcmaster.ca/ua/alumni/gallery/leechin.htm. Retrieved 2006-08-23. [dead link]
  13. ^ "Focus on Michael Lee-Chin". AIC. http://www.aic.com/en/main/home.asp?Disp=http%3A//www.aic.com/en/Fund_managers/michael_lee-chin_bio.asp. Retrieved 2006-08-23. 
  14. ^ "Michael Lee-Chin - Every mickle makes a muckle - The acquisition king". Jamaica Gleaner. 2004-02-06. http://www.jamaica-gleaner.com/gleaner/20040206/business/business1.html. Retrieved 2006-08-23. 
  15. ^ Scott, Matthew (08 2002). "Buy, hold, and prosper - Cover Story - investment strategies". Black Enterprise. http://www.findarticles.com/p/articles/mi_m1365/is_1_33/ai_89648488. Retrieved 2006-08-23. 
  16. ^ Helman, Christopher (2002-04-15). "Get Rich Slow". Forbes. http://www.forbes.com/forbes/2002/0415/104_2.html. Retrieved 2006-08-23. 
  17. ^ "In the Matter of the Securities Act RSO 1990 cs5, as amended and AIC Limited - Settlement Agreement". OSC. 2004-12-15. http://www.osc.gov.on.ca/Enforcement/Proceedings/SET/set_20041214_aiclimited.jsp. Retrieved 2006-08-23. 
  18. ^ "Court reviews Lee-Chin split". Globe Advisor. 2005-05-30. https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20050530/RFUNDWATCH30. Retrieved 2006-08-24. 
  19. ^ "IMF Concludes 2002 Article IV Consultation with Jamaica". IMF External Relations Department. 2002-09-11. http://www.imf.org/external/np/sec/pn/2002/pn0298.htm. Retrieved 2006-08-23. 
  20. ^ "Lee Chin secures US$80m for Caribbean fund". The Jamaica Observer. Archived from the original on 2006-05-14. http://web.archive.org/web/20060514193818/http://www.jamaicaobserver.com/magazines/Business/html/20060506T210000-0500_104130_OBS_LEE_CHIN_SECURES_US___M_FOR_CARIBBEAN_FUND_.asp. Retrieved 2006-08-23. 
  21. ^ Lee-Chin, Michael. "Messages - the Writings of Michael Lee-Chin" (PDF). AIC. pp. 116. http://www.aic.com/en/PDFs/AIC5007ENG.pdf#search=%22lee-chin%20aic%20energy%20commodities%22. Retrieved 2006-08-23. 
  22. ^ Folk, Levi. "Lee-Chin sticks to his guns at AIC - Advantage fund focuses on wealth management". Canada.com. http://www.canada.com/topics/finance/story.html?id=cd52918d-81bb-4433-90d9-f46a26f40452&k=96424. Retrieved 2006-08-23. 

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