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Arthur Salzer's secret sauce: Private investment from the start

Founder of Northland Wealth on his inquisitive, analyst-style approach, his firm's early jump into Bitcoin and what clients want today

Anna SharrattCanadian Family Offices

Published Jan 17, 2024

Improving risk and return for a family enterprise

Arthur Salzer was 22 when he realized he wanted to help family enterprises. Already an assistant manager at a bank in Milton, Ont., he knew he had to move to the private wealth side of the business.

Salzer, who today is founder and CEO of Northland Wealth Management, a multi-family office in Oakville, Ont., grew up knowing exactly what challenges family enterprises face. He spent 17 years working on a farm, getting up before dawn to feed animals and do chores, then resuming his tasks when he got home after school.

“You live through power outages, water freezing, barn fires – you sacrifice the body when you’re younger to make it all work,” he says. “But it’s a good life. It’s clean living and it’s honest.”

That same approach has served him well as one of North America’s leading family office experts.

“Doing what we do here, we understand family enterprise,” he says. “We want to help them, whether it’s through communication or better investment structures – we’re trying to have that wealth grow and create a legacy.”

Canadian Family Offices recently chatted with Salzer about his company’s unique investing approach, what he’s hearing from clients and his economic predictions for 2024.

What went into the creation of your firm in 2011?

“In 2008 to 2010, I looked at the family office market in the U.S. and analyzed the top 20 firms: What do they do, how they do it, what they offer. Being an analyst at heart, I would do things like go to China to understand the commodity market, and lots of mining tours through North America and the Caribbean. I wanted to bring what’s best in class to Canadian families.

And that meant looking at alternatives, private equity, private real estate, private credit. We’ve been investing in that almost since the inception of the firm. We were one of the first private investors in Shopify when it was valued at $70 million. We became one of the first multi-family offices in the world to invest in Bitcoin in the spring of 2019.

You have to be there. You have to travel. You have to talk with people.”

What’s your investment philosophy?

“I was on a panel back in 2015 and I said that at Northland, we use what we call the ‘new 60/40’ – that is 60 per cent public market and 40 per cent private. People today are starting to catch on to that. We have been doing that for the better part of a decade.

We have always been investing in hedge funds and private credit. We started investing in secondary private equity in 2012 and private real estate before the founding of Northland.

The big thing again was the addition of Bitcoin in 2019, which has added a lot of alpha to portfolios. And it’s outperformed private equity, real estate and all the hedge funds. You do have to rebalance it and reduce the volatility. But it’s an asset class that we now look at and families look at. Some families have 20 per cent allocation to Bitcoin.”

Your firm has won a number of awards over the years. What sets you apart?

“Northland has won every major award in North America, and we’ve won every division at the Wealth Professional Awards Canada. If you’re constantly shortlisted, it means you’re doing the right things. You’re trying to be the leader in the space rather than a follower.”

What are your clients focused on, given the current economic climate?

“They’re concerned about the political climate. It started the way the pandemic was handled by authorities. They froze bank accounts. They brought in the emergency measures act. [Clients] feel that Canada is not free for us to speak out. They say: ‘I don’t want some of my assets to be here.’ Capital has fled Canada. People who can afford it are leaving.”

Are you staying?

“I spend time between here and Costa Rica — my wife is Costa Rican. It’s actually less expensive to get a house in Costa Rica than a cottage in Muskoka. In Costa Rica they have a full public and private medical system. You can get an MRI in a couple of hours.”

What about the Canadian economy – do you foresee a major slowdown?

“We’re already in one. The difference today is the immigration rates are higher than they were in the early ‘90s. That may be just enough to slow down or elongate the market correction that we’re currently in in real estate. Because real estate plays such a large role in Canada for jobs, it does put a large dent into the economy.

It’s going to take a material decrease in interest rates and 200 basis points — maybe a little bit more — to make things stabilize. It’s going to take more time than people think.”

Northland Wealth is heavily involved in philanthropy. Why is that important to you?

“In 2012, I went to what’s now called Family Enterprise Canada. They help family enterprises communicate better, which means more success for family businesses, more employees, more salaries, more taxes, more money that goes into communities and philanthropy. And we started supporting them; we’ve probably given more than a quarter-million dollars in the last 10 years.

We want to see family enterprise do better. And if we help a not-for-profit that helps family enterprise do better, we help Canada.”

What’s the most rewarding aspect of your job?

“The best part is meeting all of these individual families and hearing about the trials and tribulations that they’ve gone through. And how through a combination of luck and hard work and grit, they overcame it. It is very fulfilling to see people doing better than they had hoped.

It’s the results — seeing the improvements for families, seeing them not worry about money. That’s the real win.”


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