Once pilloried, now a pillar, Peter Brown has done it all: Controversial Canaccord Capital boss warily returns to the limelight as entrepreneur of the year
By Ian Mulgrew
Vancouver Sun, Nov. 23, 2001
Thirty years ago, Peter Brown was the Penny Stock King.
Twenty years ago, he was Western Canada’s most renowned Cowboy Capitalist.
Ten years ago, he was a lightning rod for criticism and all that was supposedly wrong with the Vancouver Stock Exchange.
This year, he was named the Pacific Region’s entrepreneur of the year — a recognized pillar of the B.C. establishment and nationally celebrated for his achievements.
Yet, he is ambivalent about the award, sponsored by international accounting giant Ernst & Young, because it has pushed him back into the limelight, brought reporters back to his doorstep and his face to a magazine cover. ”I’m trying to stay out of the media,” Brown said when first approached for an interview.
“It’s distasteful to me.”
More than a decade ago, in fact, he abandoned public life to get his privacy back, rankled at how the media tattled about his family and bitter at the insinuations that his high-living, his hijinks and his haughtiness were hallmarks of turpitude.
Brown mostly vanished from view, eschewing especially The Vancouver Sun.
No matter how thick his skin, no matter how much chutzpah he professed, the assaults on his integrity and his family hurt him deeply.
“If you take a look at what The Sun has done to me over the years,” he sighed, “[the] paper in particular was pretty vicious. They took pictures from the air of my home, they took pictures of my summer home and the headline under the picture was that Peter Brown lives here with his two adopted children. It was so distasteful. It was so awful.”
The Sun was not alone.
In other newspapers, magazines and books, Brown was presented as a caricature, a man into swilling Dom Perignon champagne as if it were Perrier, a man in love with toys like his Rolls Royce Corniche and 31-foot Bertram Maritime — a racecar of a boat capable of staggering speeds; in short, a man of surface flamboyance rather than substance.
He sported a gold family signet ring on his left hand and the initials PMB (M for father’s clan name MacLachlan) were emblazoned on his shirts [“I guess I’m a slave to my upbringing,” he quipped].
He bragged about owning 70 pairs of identical Guccis before Imelda Marcos found a shoe store. He claimed to be “the most conceited man I have ever known” [a phrase stolen from Earl Louis Mountbatten].
Vancouver magazine turned titillating accounts of his exuberant behaviour in restaurants and bars into regular monthly fare.
If there were adjectives his critics reached for in those days, it was “obnoxious” and “boorish.”
Who could blame him for retreating behind the protective hedges of his Belmont Avenue mansion and a panoply of friends?
Now he is a very changed man. “I just grew up,” is how he puts it.
Brown is no longer as interested in blowing his own horn (well, maybe the occasional toot), as he is in crowing about his company. Canaccord Capital Corporation now employs more than 1,200 people and has 28 offices worldwide. It is the largest independent investment dealer in Canada not owned by a bank and “number two is about half our size,” Brown boasts.
“We have 20 senior partners, it’s a real team effort,” he emphasized. “I’m almost 60, we have a lot of bright people in this company and I think it’s more important that they get some of the credit for what goes on here. Because it sure isn’t all me, I can tell you.”
Still, Brown remains one of the truly interesting and intriguing native scions of B.C. His is an amazing life, summed up in superlatives by long-time friend and no-slouch-in-theachievement-category-himself, Jimmy Pattison.
“He’s got it all,” declared B.C.’s most famous billionaire. “I don’t know anybody that’s got it all, but he has. Everything. He’s good looking, he’s loyal, he’s smart, he’s got a good family, he’s fast on his feet, he cares about B.C., he’s given community service, he’s built a great business. He’s done it all.”
Although Brown tries to shrug off the adulation — “Remember, Jimmy is my best friend and biggest client,” he quipped, adding, “and I’m not really an entrepreneur” — it’s difficult not to agree with Pattison or the award’s jury.
Born in Vancouver on Dec. 15, 1941, Brown grew up with the proverbial silver spoon in his mouth — dirty with affluence if not filthy rich.
His father Ralph and his grandfather were provincial managers of Crown Life Insurance Company. His family always has been prominent – – his brother became headmaster of St. George’s Boys School (which Brown attended) and his uncle was one of the city’s high-profile Queen’s Counsel.
During the war, his father moved them to Kelowna, where Brown’s life first intersected with that of Herb Capozzi, whose own family figured prominently in the province’s development.
“This is where the little guy started,” said Capozzi from his Kelowna home. “My dad had the grocery store here. It’s very funny, he always tells everyone that I used to deliver his groceries, which I did.”
It was the beginning of a friendship that endures. ”He’s a surprising individual in the sense of incredible determination,” said Capozzi, a former professional footballer, provincial politician and stock promoter.
“He was a surprisingly good athlete growing up, particularly rugby, he was one of the top players in B.C. If there had been a national team back then, he would have played for it. A very strong man and very competitive.
“When he wanted to take up golf, before he would play anyone he took lessons for almost a year. Same when he was learning to gamble and play backgammon. He brought in an expert from New York and played with him for almost six months before he would play anyone.”
But it was his love of practical jokes and his outsized sense of humour that distinguished him.
Brown attended the exclusive Shawnigan Lake Boys School, where he was known as a brilliant if unruly rich kid. His love of fun became legendary when he moved to the University of B.C.
For instance, he lived in a coachhouse on Southwest Marine Drive until two of his party guests felled a couple of trees one night that landed on the estates of neighbours Chunky Woodward and Frank McMahon. The apocryphal version of the story has McMahon arriving at Brown’s door the next morning and curtly saying: “I’m here to tell you I want you off the property by tomorrow. I’ve just bought the place.”
It was the first of a thousand anecdotes about his irreverent, rambunctious lifestyle.
Brown spent five years majoring in partying at UBC and left — not surprisingly — without a degree.
At 20, he joined Greenshields Inc. in Toronto, where he learned about the market, returning to Vancouver in 1967 to the firm’s branch office. Back then, the VSE was in the midst of a speculative orgy and Brown discovered his element.
“I met Peter when he first became a broker at Greenshields,” recalled Basil Pantages, another longtime major player in the markets and winger for the late Murray Pezim.
“I became one of his clients. I still see him socially and I’m still an investor with Canaccord. I respect him very much and it’s tough to say that about a guy who’s been in this business for 40 years.”
In 1968, Brown joined Hemsworth, Turton and Company. A few years later he and partner Ted Turton bought the company.
“We bought 51 per cent of the company for $23,000 renamed it Canarim Investments Corp. and I’ve been there ever since,” Brown said.
The Wild West days of the late 1960s and the 1970s were a time for Canarim to expand and grow. And it was back then that Pattison met Brown.
“The year that comes to mind is 1973,” Pattison recalled. “I was in a meeting and there must have been 12 people in the room. I can remember walking out of the room and saying to our people, ‘The smartest guy in that room is that young fellow Peter Brown.’ I think that’s the first time I remember really seeing him in action.” What impressed Pattison was not just Brown’s grasp of financial issues and numbers, but his people skills. ”The numbers are the numbers,” Pattison said. “But in the final analysis business is about people. And Peter is a people guy among all the other qualities that he has.”
Throughout the 1970s, Brown, Turton and company built Canarim into a major financing force in western Canada, opening offices in Prince George, Whitehorse, Winnipeg and Regina. Their sales force grew to 120 and by the end of the decade, they were looking to move into Geneva, Calgary and Edmonton. As they expanded, so did the scope of their ambition.
Brown became the financial eminence grise of the Social Credit party and a key supporter of former premier Bill Bennett.
(He remains a fierce defender of Bennett even though the erstwhile Socred leader was caught in a messy insider-trading scandal. While a provincial court judge acquitted Bennett of insider trading, a panel appointed by the Securities Commission found Bennett and his brother received stock tips from Herb Doman that allowed them to make a profit of $2.3 million.)
In those days, Brown began giving time to community agencies and waded into public life with gusto. He became a part owner (with Capozzi) of the now-defunct Vancouver Whitecaps professional soccer team and the old Montreal Alouettes of the Canadian Football League.
In 1976, he engineered a coup of the old guard of the Vancouver Stock Exchange that culminated in the resignation of president Cyril White. The result was a rewriting of VSE trading and underwriting rules to give penny-stock players a more level playing field and the beginning of Brown’s ascendancy.
Ensconced on the exchange’s board of directors, Brown became an integral part of the Vancouver market. Many would say that without him the VSE would have collapsed long before its merger this summer into the Toronto Stock Exchange.
By the early 1980s, anyone who is anyone was doing business with him or calling him a friend — Jack Poole, David Radler, Andy Sarlos, Tony Reid, Stephen Sharpe, Edgar Kaiser, Jr., Bob Lee, Ross Turner, Angus MacNaughton, Pezim….Peter C. Newman in The Acquisitors, the second volume in his chronicles of the Canadian establishment, described Brown in those days as a swashbuckling capitalist predator, “the jewel in the slightly askew crown of the Vancouver Stock Exchange.”
It was 1981 and Brown was on top of his game. He was named businessman of the year by the Vancouver Junior Chamber of Commerce and he was instrumental in the deal that returned ownership of Whistler from Garibaldi Lifts of Toronto to a B.C.-based company.
In those days, he raised money as easily as he raised a glass of bubbly. But his in-your-face style grated on the more restrained of Vancouver’s elite and provided no end of entertaining fodder for the chattering classes.
Valerie Gibson, Vancouver magazine’s former gossip doyenne, regularly excoriated Brown for behaviour most would consider boorish, such as standing on a table at the trendy Whistler restaurant, Il Caminetto, and yelling, “More Dom!”
“To show he’s bad, he’ll moon people,” Capozzi said. “Go out in the middle of anywhere and moon somebody. This is an interesting man.”
Brown’s larger-than-life sense of humour and his love of ostentation made him an easy target — although often it was those around him that suffered the collateral damage.
In April 1982, Socred cabinet minister Peter Hyndman’s career was torpedoed after he billed his public expense account $374 for a dinner with Brown at the elegant Il Giardino di Umberto restaurant. Hyndman claimed it was a business meeting but the $37.50 bottles of Puilly Fuisse made taxpayers gag — and Brown didn’t help matters by wisecracking that he rarely drank the cheap stuff.
Still, the controversy did little to curb Brown’s taste for pomposity. Within months, he rented the Regency Ballroom of the Hyatt Regency Hotel and feted 200 people with an Arabian nights Christmas party. His version of the nativity featured oasis of champagne, tables laden with mid- East delicacies, harem girls, costumed bellydancers, jugglers, a snake charmer, geese, chickens, pigs, a donkey, two miniature horses, three full-sized Arabian steeds, an Indian python, six sheep, a sheepdog and an elephant.
But before the end of the decade, Brown found himself pilloried.
In early 1988, he was a central figure in a civil stock trial of promoters Edward Carter and David Ward — conmen who duped a Texas mutual fund into spending nearly $27 million on nearly worthless stock. While he wasn’t a defendant, denied any knowledge of the scam and was never formally accused of any wrongdoing, Brown was tarnished by association.
Shortly afterward, his firm agreed to pay a $90,000 penalty and return more than $300,000 in commissions in connection with another sour deal — the public offering of Banco Resources Ltd. which the B.C. Securities Commission found to be “riddled with inaccuracies, inconsistencies and omissions.”
Brown’s company later would be dinged another $50,000 for failing to disclose the partial collapse of an underwriting for Prime Resources Corp.
Yet his business continued to boom and no amount of criticism dulled his appetite for la dolce vita and financial derring-do.
In 1989, Brown engineered a merger between Canarim and Central Canada’s Loewen Ondaatje McCutcheon Inc. and began operating as L.O.M. Western Securities Ltd.
But it was an ill-timed move and marked probably the worst years of his business life. The political party he had helped build was in tatters, his investment strategies were under fire and the media sniped at him.
Authors David Cruise and Alison Griffiths depicted him as a veritable Mephistopheles in their best-selling, highly critical book on the VSE, Fleecing the Lamb: “Peter Brown is betrayed by his eyes. Although pouched and reddened by years of hard living, they demand attention like a slap in the face. When you look into them, the camouflage of urbanity — the relaxed soft voice, the monogrammed silk shirt, the signet ring, the even, milky suntan, the manicured fingernails — drop away. The eyes are glacial, with a deep, very deep molten core. In the space of an instant, they have sized you up, calculated your net worth, evaluated your political leaning and gauged your nuisance potential.”
The jabs and insults proved more than even the flint-skinned Brown could stomach. He stopped talking to reporters and began to focus on his business and family.
In 1992, he bought his company back from Loewen et al and renamed it Canaccord Capital Corp. Since then, he has guided it to staggering success — absorbing nine firms in the past eight years, opening Canaccord Europe, a wholly owned subsidiary that is probably the biggest European operation of any Canadian dealer, with about 90 people in London and Paris. Recently the firm moved into the VSE’s former highrise home at Granville and Dunsmuir and, renamed the Canaccord Tower.
Yet, if the media painted an enduring picture of him, his friends and those with whom he did business portray an entirely different kind of man — a man who is loyal, generous, steadfast and brilliant.
They point to his volunteer work with the Arts Umbrella, Big Brothers, the Vancouver Art Gallery and the University of British Columbia or his involvement in the Atlantic Institute for International Affairs and on the Accounting Research Advisory Board, the lay board that advises the Institute of Chartered Accountants. ”He’s always been ahead of his time,” Pantages said. “And I guess the most important thing is a lot of the friends Peter had 40 years ago, he still has.
Not very many people in this business or any business can say that. Particularly in this dog-eat-dog business that can make and break you so easily.” Capozzi wholeheartedly agreed.
“His closest friends are the guys he grew up with,” Capozzi said. “He’s a good friend and a worse enemy. A very good friend and a worse enemy.”
Indeed, 32 of his Canaccord colleagues have been with him for 25 years, another 180 for more than 15 years — testament to the devotion he inspires and cultivates. Pattison, the only outside shareholder in Canaccord, insists no one who really knew Brown would have swallowed the cartoon character drawn by his detractors.
“Peter Brown is a giver,” he said. “He gives of his time. You know during Expo [the 1986 World’s Fair held in Vancouver], he put in hundreds and hundreds of hours, volunteer hours to make that thing go. Peter Brown was right there anytime we needed something. He packed a lot of freight and deserved a lot of credit for the success of Expo 86.”
Newman, the country’s foremost observer of the country’s rich and famous, says Brown’s quiet transformation from maverick to mentor is complete. “It is a huge shift from the guy I portrayed in The Acquisitors,” the best-selling author said. “He has become very wise. He’s not just part of the establishment, he’s a guru to the establishment.
“He’s an amazing guy,” the Vancouver-based writer added. “It’s that quote from [U.S.humourist] Art Buchwald that sticks in my mind: ‘When you attack the establishment, they don’t put you in jail or a mental institution. They do something worse. They make you a member of the establishment.’ That’s what happened to him. And there’s still a twinkle in his eye. The humour is still there.”
Just back from hospital from having kidney stones blasted, Brown grimaced at even the thought of talking to a reporter.
“I just think if I gave a profile interview to The Sun, my wife [Joanne] would leave me,” he joked. “Actually, I’ve got an absolutely fantastic wife, who’s been very successful in her own right. She was chairman of family services for 10 years. She has her own list of attributes. She’s one of those really positive, non- complaining upbeat people. She’s always like that. She gets mad about every four years and it lasts about a minute.” Times have changed and Brown said he was willing to let bygones be bygones. He said he bore no grudges and hoped none were held against him.
“I have two great kids — Jason and Jamie,” he beamed. “They’re both good, they’re very different, they’re both their own guys. I kind of like this phase now. I enjoyed every phase with them but I like this one because I’m not their boss any more. And they still come around a lot which must mean they like it. They’re pals.”
Brown remains an inveterate workaholic with a voracious appetite for information. Like the last prime minster he liked, Tory Brian Mulroney (“No one gives him credit for what he achieved”), Brown devours newspapers, magazines and books. He says George Bowering’s volume on B.C. history should be in every classroom.
“I’m a third-generation British Columbian,” he said. “I’m a real hooked-in-the-west kind of character. I love western Canada, British Columbia.” He exhaled cigarette smoke.
“I inherited three things,” Brown confided. “All my friends had trust funds, my dad was an insurance peddler. What he left me was my love of history, my love of community and my love of art. They’ve turned out in the long run to be a better inheritance than a trust fund.”
He has been an art collector since the 1950s — “everything I collect is Canadian.” There’s an Arthur Lismer on one wall of his 20th-floor office, an Ivan Eyre on the other, and another 400 works hanging in the four homes he maintains in Vancouver, Bowen Island, Blackcomb and Palm Springs. ”I’ve got some really major historic Canadian pieces,” Brown said.
“I have A.J. Casson’s Country Crisis, it’s his number one work, it’s on the cover of every book. I’ve got one of Tom Thompson’s four winter scenes. I’ve got A.Y. Jackson’s largest canvas. I’ve got lots of work that’s very distinctive. [James Wilson] Morrice’s [The] Woodpile, which hung in the Louvre for several years and I think it’s the only Canadian painting to ever hang in the Louvre. I would think I have one of, if not the largest, collection of Group of Seven and Montreal Group west of Ontario.”
He also has probably the world’s premier collection of carved duck decoys — some 4,000 in all that will be featured in a soon-to- be-published book and ultimately donated to the Museum of Man.
“Prior to 1914,” Brown explained, “the food staple in Canada was wild fowl, not beef. Decoy carving pre-1918 was actually a fantastic art form.”
But finance and politics remain his true passions. He refers to Prime Minister Jean Chretien as “an idiot.” “He’s embarrassing to the country,” Brown said. “The guy will go to Washington but can’t go to Ground Zero because he has a Liberal fund raiser? Four presidents go to the funeral of King Hussein of Jordan — North America’s biggest ally in the Mid-East — but Chretien couldn’t get out of Whistler? I mean how much of this stuff — how many times does this guy humiliate the nation before we say perhaps it’s time he retired?”
He believes, however, that Chretien will stay for a fourth term “just to make sure [Finance Minister] Paul Martin never gets it.”
“His hero is [Sir Wilfred] Laurier and Laurier ran four terms,” Brown said. “And I think he would like to have one more term than Trudeau. You know, when Trudeau died he tried to capitalize on his affection for Trudeau, but the truth was they hated each other. He’s not showing any signs of going anywhere.”
Brown dislikes Martin, thinks Industry Minister Brian Tobin is Chretien’s hand-picked successor and believes Foreign Affairs Minister John Manley would be the best bet for the country.
“But he would have to be a Joe Clark — a compromise dark horse candidate [who came up the middle at the Conservative leadership convention to win],” he ventured. “Manley’s a long way from the favourite among the delegates.”
Provincially, Brown is a huge supporter of Liberal leader Gordon Campbell and was on hand election night to help celebrate his landslide victory. “But the tough stuff is just ahead of him,” Brown added. “Cutting taxes is easy, cutting expenditures is tough. He’s got the February budget, labour issues [such as the teachers contract] and the lumber tariff and if he can get by that, I think he’s a guy who could end up with national stature.
“The only two premiers I can remember doing that were [ex- Alberta premier Peter] Lougheed and [former Ontario premier] Bill Davis. Bennett never got there. This guy could get there. “My son [Jamie] was his assistant when he was mayor. He works a 20-hour day and it’s all positive energy.” But the biggest item on Brown’s agenda these days is the crusade he has launched against the banks and what he says is the over- regulation of the investment industry.
“Canada is a regulatory nightmare,” he said. “We have 760 licensed salesmen and because the provinces can’t agree, we have to register in each province individually, so we have to file 7,600 notarized forms every year. Now that’s just one regulatory piece of nonsense. Multiply that by several hundred. We’re just talking about complying with securities commissions, we’re not even talking about all the other layers of government. We spend $10 million a year on compliance alone.”
Only very large firms and the banks have the economies of scale to pay such extra costs, he fumed. The Investment Dealers Association, the industry’s self-regulatory body, says there are roughly 180 independents in Canada, but Brown says “150 of them are 10-man firms in Podunk Maritimes and Clearbrook — there are only about 15 independents left that underwrite small-cap business, 10 years ago there was 50.”
“Every time I’ve sat down with the federal or provincial politicians, the first question they ask is what are we doing for small business,” Brown said. “They want to encourage small business finance. But they’re allowing their securities commissions and the banks to choke it off. They’re killing it and they don’t know it. I don’t think they are aware of how the regulation is killing small-business financing. I don’t think they have a clue.”
To fuel his fight, Brown has commissioned a $350,000 research study that he hopes to take to his peers across the country to get them to form an independent dealers’ group that can lobby Ottawa and the provinces. ”I want to get the independents together to go and talk with governments and say, ‘Do you realize what is happening?’“ he said. “All these securities commissions are out of control. They’re not accountable to anybody. There is no group lobbying the government to say, ‘Pull your head out of the sand and take a look at what’s happening.’“ In Brown’s view, the major banks in Canada are colluding to kill independent investment companies and, as a result, the ability of small and medium-sized businesses to raise capital.
“There’s a deliberate plan by the banks to force the independents out of business. These [securities] commissions are well- intentioned but they become unwitting co-conspirators of the banks who want to dominate the entire financial, insurance, mutual funds, lending, they want it all. And they work together. What they’re doing is restraint of trade. It would be illegal in any other business.”
He is especially critical of the IDA, because it is dominated by the banks and their agenda. “There’s no voice for small business finance or the independent brokers who do that financing,” he said. ”Today if a company wants to raise $1 million publicly, it costs them half a million and it takes a year because of the regulation. They have almost ruined the small business finance market in the country.”
Indeed, Brown says the industry is already moribund and may be beyond resuscitating. “Ten years ago, 90 per cent of the financings in Canada were public financings in which the public could participate,” he says. “Now 90 per cent of the financings are private placements. Recently, the Ontario Securities Commission passed a rule that if you want to participate in a private placement you had to have a combined spousal income of $300,000 or a net worth of $1 million.
“I wrote them and said this is crazy. Two key points to a fair market are equal access to information and equal access of opportunity. You’ve now said only two per cent of Canadians can effectively buy 90 per cent of the financings. I got a one-page letter back saying, ‘Thanks for your letter, please refer to our Web site.’ We pay $1.5 million a year in fees to the IDA and we have no voice.”
In spite of the odds, Brown thinks it’s a fight he can win. “Everybody hates the banks,” he insisted. “Their employees hate them, their customers hate them, the politicians hate them, the media hates them. They’re quite easy to campaign against, nobody likes the banks. They gouge, their fee schedules are ridiculous. And the bank-owned dealers, if you have an account under $200,000 you have to go into their managed-money accounts — you can talk to a machine. No service. Small business, they don’t want to know about it. So who’s going to service small business, who’s going to service the small account in this country?”
Brown clearly would like it to be himself. He exhaled a stream of smoke from one of his ever-present cigarettes. “You know, we’ve taken Canaccord from a little regional venture capital broker to a large national full service broker,” he said. “It’s not where I want it. By the time I retire, I would like it to be a high-quality Canadian financial institution.”
But when does a guy with more money than he or his family could probably spend in several lifetimes decide he should retire?
“I don’t know,” Brown says. “Not yet. I don’t have an age in mind. I think I’m a young 59. I guess I’ll retire when my partners throw me out.”