Danny Popescu is the CEO of Harbourfront Wealth Holdings and is responsible for the business operations of five underlying businesses, including its investment dealer, asset management firm, and US investment arm.
In 2013, Danny founded an IIROC (now CIRO) investment dealership called Harbourfront Wealth Management, to bring pension-type investment vehicles such as private equity, private real estate, and private credit to Canadian retail investors.
Danny launched Harbourfront with an $11 million personal investment and within nine years, established a $425 million enterprise value when Boston-based Private Equity firm, Audax Group bought a stake in the firm.
In an exclusive interview with International Finance, Danny Popescu, CEO of Harbourfront Wealth Holdings, shares insights on the firm’s recent acquisition of KJ Harrison & Partners, emphasises the importance of transparency, discusses future acquisitions, and touches on other key topics.
What strategic factors made KJ Harrison & Partners the right fit for Harbourfront Wealth’s latest acquisition?
We look for like-minded, profitable wealth management practices that value independence and put the client first. KJ Harrison (KJH) has an exceptional reputation in the wealth management community, with a strong track record of performance and growth. Their business acumen and vision for the future aligned well with Harbourfront Wealth, making them an ideal candidate to join our firm.
With Harbourfront’s AUA nearing CAD 11 billion, how do you plan to maintain a personalised client experience at scale?
Our model is designed to support advisors in maintaining a personalised approach to their clients. We do not dictate their approach or offerings. One key way we support our advisors is with our advanced technology. We provide best-in-class solutions that make day-to-day tasks more efficient and free up advisors’ time to focus on serving their clients. Some examples of this include our integrated data lake and unified experience, digital onboarding, and straight-through processing (trading by the next day). We are also developing a client portal with automated reporting, which we are planning to launch this summer.
Recently, you spoke about the importance of independence and transparency. In what ways do these values influence how you choose and approach acquisitions?
We partner with advisory teams and wealth management firms that have been successful in building reputable and profitable practices. Each team has its secret to success, and we believe it is important to enable them to continue growing in a way that works for them. We give our advisors the freedom to recommend any security they determine is best for their clients, define their own brand, and communicate with their audience in their own voice. We believe independence is the key to succeeding on behalf of clients, and we look for advisors who will thrive in an independent environment.
What specific synergies do you expect between Harbourfront and KJH, both culturally and operationally?
The KJH operating model is unique, and this acquisition will not disrupt their model. In fact, our goal is the opposite. We will look for additional advisors to join and benefit from the KJH model. From an operational standpoint, we are assessing common systems, applications, and vendors to take advantage of additional scale in our pricing models.
How does this acquisition position Harbourfront to compete with larger, bank-owned wealth management firms in Canada?
The industry recognises the benefit of independence in wealth management, and the KJH acquisition further emphasises this trend. KJH is an established and recognised High Net Worth and Family Office boutique, and choosing to partner with Harbourfront deepens our clout in the industry. Wealth management advisory practices are seeing the advantage of joining an independent firm instead of the more bureaucratic, less flexible, bank-owned firms.
What innovations or investment solutions can clients expect to see emerge from this new partnership?
Harbourfront has developed a robust platform of multi-asset solutions across both public and private asset classes. KJH broadens the Harbourfront Wealth expertise into bespoke portfolios built for private clients.
How will the integration of KJH’s CIRO-registered dealer enhance Harbourfront’s compliance and regulatory capabilities?
Both KJH and Harbourfront have strong compliance resources and oversight capabilities, and now we will be able to leverage both.
Can you share how your leadership approach has evolved as Harbourfront grows and completes major acquisitions like this one?
We have developed and grown a leadership team with deep operational knowledge, which gives us the expertise to know what to look for in potential acquisitions and how to avoid surprises post-acquisition. The strength of my team and their ability to absorb growth and scale our business is what sets us apart.
What trends are you seeing in the independent wealth management space, and how is Harbourfront positioning itself to lead?
We are seeing a large move toward private market investing. Institutional investors have been investing in private markets for decades, but this space has been inaccessible to everyday investors due to regulatory hurdles, high minimums, low liquidity, and lack of expertise. We have led the way in the industry, in bringing private market-related investments to everyday investors (starting in 2018), and we are seeing other firms starting to follow our lead. Our private markets expertise is one of the key reasons advisors choose to join Harbourfront.
Another trend that is resonating with advisors is the move toward firm ownership. When we partnered with Audax Private Equity in 2022, our advisors received handsome cheques through a partial monetisation event. In a couple of years, we will do it again, and four to five years after that, we will be on our third partial exit. Historically in Canada, independent shops often sold to banks or other conglomerates. No advisor desires that in today’s environment, which makes our model refreshing. Given that private equity investors are not operators, we will continue to maintain our independence while creating periodic liquidity events for our advisor shareholders.
Looking ahead, do you anticipate further acquisitions, and what qualities will you seek in future partners?
We are looking to close on a fourth acquisition in July and continue to explore others where cultural alignment exists and the deals are economically accretive.
What factors make Harbourfront an attractive acquirer for so many wealth management firms?
Harbourfront is unique in the industry, with a collegial and supportive culture and leading-edge technology that makes it easier for advisors to serve their clients. We are also extremely efficient from an economics point of view, which makes us highly profitable—and advisors get to share in those profits.
Why is Harbourfront making these acquisitions?
We want to be the independent wealth management firm of choice in Canada. These acquisitions enable us to accelerate growth and scale effectively.