Som Seif- The Man Behind Purpose Investments

Small Business Canada

Purpose is an investment company leading innovation in Canada. Canadians have many great accomplishments to be proud of in the investment world, including some of the most innovative and well-structured pension funds on the planet and the creation of the first ever exchange-traded fund. However, much of what is available for the broader investor in Canada is less innovative, and we believe too expensive relative to the quality delivered. We are focused on changing that. Our goal is to always be innovative, and to make investing simple, intuitive and more affordable for everyone. In other words, it’s the kind of investing experience we want for ourselves.

Som Seif is the founder and Chief Executive Officer of Purpose Investments Inc., which he formed following the sale of Claymore Investments to BlackRock Inc. in March 2012. Prior to Claymore Investments, Som was an investment banker with RBC Capital Markets, where he played a key role in developing the structured products group, raising capital for both Canadian and U.S. asset managers.

Som is a CFA® charterholder and has a Bachelor of Applied Science with an emphasis on Industrial and Systems Engineering from the University of Toronto. He has a strong commitment to community and is currently a member of the Sunnybrook Hospital Foundation Board, Chair of the Art Gallery of Ontario Corporate Development Committee, a member of the Art Gallery of Ontario’s Foundation Board and University of Toronto Mechanical & Industrial Engineering Advisory Board, and a board member of The Next 36. In 2011, Som was recognized for his vision and leadership by Caldwell Partners International with the Top 40 Under 40 award.

What was the inspiration behind the launch of Purpose Investments?

Purpose is a business that I founded when I sold Claymore Investments, my previous company. I built it up over 7 years and I started off in a very naive form. When I sold the company and stepped back, I was very proud with what we’ve done but I didn’t solve the real job I was supposed to do and focus on risk management and help clients succeed with their goals. I have been working on Purpose for 6 years now and our goal is to create the best investment company there in the world.

What sets Purpose Investments apart from other investment companies?

We’ve been focused predominately not just on the idea of if the markets go and up and down – let’s just beat the market. Rather, we focus and give more respect to the fact that risk management is a core component in investing. Also, doing that with low fees (not just being a predatory high cost management like a hedge fund for example). Finally, we focus on delivering this all into a way that investors can get outcomes. We’re always focusing on innovating and differentiating ourselves. Our goal isn’t to win massive market share. Rather to showcase to all of our peers that the industry needs to be focused on this as a priority, rather than the way most investment companies are managed.

What is your ultimate goal of the company? What are you hoping to accomplish through Purpose Investments?

To truly help the industry be better on behalf of our customers.

What are some of the challenges you face on a daily basis and how do you overcome them?

The reality of a business is that when everyone comes together, it’s fun and exciting. But executing is a challenge. It’s an up and down ride. None of the people reading this would be unfamiliar with this – it’s a volatile experience. Some days have amazing ups and some have tough downs. That’s what I do more than anything else- my job is focused on continuing and setting vision, and ensuring we’re on the right path and making sure we have the best people solving the problems that have to dealt with.

Purpose Investments strives on being innovative. What are some of the strategies you take in order to stay innovative?

Our entire business is based on our people. It starts with the ability to bring and inspire a group to think on behalf of the market. We hire amazing, energetic, curious, passionate people that ask questions and push each other to not just settle on being “okay”.

By innovating, we’re always looking and creating a theme of innovation. In every meeting, I’ll ask why do we do this and why are we thinking this way. When you get others to think in those terms, you end up leading by your own design.

What is the most common mistake that entrepreneurs make when it comes to their investments and how can Purpose Investments help them?

The hardest thing that everyone has to recognize that you don’t get rich investing in the markets. You get rich in investing in yourself. As an entrepreneur, you’re taking a risk in investing in yourself. You become wealthy in life through investing in yourself – whether than be intellectually, monetary, etc.

The more you invest in yourself, the more you can drop into the savings line and then invest. You should be very conservative in what you expect in your investments.

You’ll often have an expectation of return that is high (20%, 30%, or 40%) because you’re used to investing in yourself and achieving high returns within your business. When investing in the market, you should have a more reasonable expectation. The goal of investing in markets is that you’re diversifying yourself from the core risks of your business.

What is the best investment advice you can give to a small business owner who has just started out?

Nothing to do with the markets at all. It is all about prioritizing and focusing on building the business that you’ve established and staying true to that. I have many friends that have started businesses and will often dilute their business by focusing on other ventures. Stay focused on building a foundation with your investments that stays outside of what you’re doing on a daily basis. Spend 99% of your time focusing on your business and the other time on the investment structures you’ve set around you.

At what stage of their business should entrepreneurs consider investing some of their profits?

As soon as they have excess capital sitting on the balance sheet which is above their debt capital. If you’re using working capital debt, you should be paying that down first and foremost. Whether it starts with the most risk averse strategy, or ultimately in the long run if you have excess profits, then tax-efficient strategies become more efficient.

On a final note, you’re also part of several charities and foundation boards. What foundation would you say is closest to your heart and why?

I’m an immigrant to Canada. My parents came when I was very young and that what the greatest decision they made for my life and career. I love this country and I’m involved heavily with various organizations since I was a teenager. It’s a moral and structural dedication that I have and to work on making Canada even better in the future.

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