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Small-town presence goes big

Wellington West's Charlie Spiring eyes action on Bay Street, KEITH DAMSELL writes

MUTUAL FUNDS REPORTER

If you were to make a movie of Charlie Spiring's life, the Hollywood pitch would be Frank Capra meets Bay Street. The working title? Mr. Spiring Goes to Toronto.

The lanky Mr. Spiring -- he's 6 foot 3 in bare feet -- is chief executive officer and chairman of Wellington West Capital Inc. The private Winnipeg firm has built a significant presence providing financial advice across small-town Canada, and is now positioning itself to grab a bigger piece of Bay Street's bread and butter. Wellington is at work on about $2-billion in merger and acquisition deals and is fine-tuning a mutual fund product with a Toronto partner.

"We're not Bay Street guys, but we know who to call and how it works," said Mr. Spiring, who is 49 "going on 35." He has a boyish face that's accentuated by blonde highlights in his hair.

He is a proud Manitoban and built his reputation across the province. As a broker at Midland Walwyn Inc. in the 1980s, he found that few competitors were willing to drum up business in places like Thompson, Flin Flon and The Pas. He was soon a top performer.

In the early 1990s, Mr. Spiring set off on his own and has built Wellington into a formidable force. The firm employs a team of about 100 brokers and advisers who oversee some $7.5-billion in assets under administration. His winning sales model has changed very little; the company has outposts in 28 cities and towns from coast to coast.

"Bay Street doesn't want to go to Yorkton, Sask. They might fly over top of it and flush the toilet but they don't want to go there," he said. "We love being in what Bay Street calls secondary cities. Winnipeg, Saskatoon, Barrie, Ontario, London, Oakville . . . when you walk into those places, you find good brokers that aren't touched at all by head office."

In September, 2004, Wellington snapped up an interest in Harris Partners Ltd., a Toronto capital markets team. Wellington has since worked on a series of deals, including CanWest Global Communications Corp.'s $550-million newspaper income trust spinoff last year.

Mr. Spiring insists he is "not mooning the giants," but clearly delights in playing David to the Big Five banks' Goliath. He describes a recent legal spat with BMO Nesbitt Burns Inc. over recruiting practices as a "badge of honour."

The irony is that upstart Wellington West may one day end up in the hands of a Bay Street rival. Every quarter, Mr. Spiring entertains takeover and partnership pitches. The ultimate fate of the firm rests with the company's 450 employees and key shareholders, he said.

At some point, Wellington will have to let employees sell their shares, he said, quickly adding that there is still room to grow.

"I think there is room out there for 10 Wellington Wests. . . . The banks' market share is starting to creep back a little bit and that will continue. And if mergers ever happen, God bless, that will be a windfall for us," he said.

Making the most of a wild ride

A little-known fund company is making the most of this spring's roller coaster equity market.

A series of bear market funds offered by BetaPro Management Inc. have posted stunning returns in recent weeks. The Toronto fund company held down an impressive eight of the 10 best performing mutual funds in May. The U.S. currency version of the HBP Gold Bear Plus Fund is the best of the bunch, rising 11 per cent last month and more than 55 per cent in value for the 30-day period ended June 14.

BetaPro, an affiliate of fund veteran Philip Armstrong's Jovian Capital Corp., opened its doors for business in October. The company offers a mix of 14 bear and bull hybrid funds that use futures contracts to achieve the effect of doubling returns. For example, if you held the Horizons BetaPro S&P/TSX 60 Bear Plus Fund, you'd make a 10-per-cent gain if the index fell 5 per cent. The funds are sub-advised by ProFund Adviser LLC, a Bethesda, Md., private money manager.

Word is catching on. Investors have been pouring dollars into bear funds, and assets under management at the Toronto firm hover near $85-million, up from about $20-million only three months ago. Unlike conventional mutual funds, BetaPro has no minimum hold period and does not charge early redemption fees. Trading is climbing rapidly with a record $20-million funnelling in and out of BetaPro funds several days last week.

"The volatility in the markets that we've had now has just really opened people's eyes to what we're doing," president Adam Felesky said.

Keith Damsell is editor of GlobeinvestorGOLD.

kdamsell@globeandmail.com

© 2007 The Globe and Mail. All rights reserved.

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