Leon Goren joins TIGER 21 as vice chair for the Toronto group and Jennifer Fuhr joins the Calgary group in the same capacity. TIGER 21 also has  groups in Vancouver and Montreal.

“In less than a year we have made great strides attracting members in all four of our initial Canadian launch cities. The addition of Leon and Jennifer to their respective groups is a sign that the TIGER 21 model of collective intelligence has been well-received in Canada and our growth trajectory is on course,” says Thane Stenner, TIGER 21’s Managing Director for Canada, and Founding Member.

Fuhr becomes vice chair of the Calgary group alongside chair Hal Walker. Fuhr is a financial consultant with many high net worth families, entrepreneurs, and family businesses as her clients. In 2011, she founded Family Wealth Consultants to advise high net worth families.

“The challenges and opportunities facing the wealthy are oftentimes complicated. TIGER 21 provides a very constructive environment for the super affluent to seek answers from their peers and receive honest feedback from people dealing with some of the same issues, all within a safe harbor and confidential environment,” says Fuhr.

 TIGER 21 has groups in New York, Dallas, Miami, San Francisco, San Diego, Washington,DC and Los Angeles. There are nearly 200 members throughout North America who collectively manage over $18 billion in investable assets.

BOSTON – Hedge fund managers Paul Singer, Robert Zoellner, Kyle Bass and Israel Englander are among the handful of people millionaires trust with their riches.

Norman Miller, Richard Dowdle, David Einhorn, Andreas Halvorsen and John Paulson — whose superstar reputation looks intact even after he lost billions — also made the cut.

Traditionally, the wealthy share stocks tips and the names of their favourite investment advisors in private, but occasionally a small group of very wealthy investors give outsiders a peek into what they like and where they invested.
TIGER 21, a high-end investment club whose 180 members collectively manage nearly US$15-billion, released its Member Favorites Survey Results on Tuesday. But they did not say who they are or how they made their money.

The 14-page long report, which the group says was “designed to highlight our Members’ most valued investments,” lists real estate as the most popular asset class followed by stocks and then hedge funds. The group put 12% of their money into the types of portfolios that cater to institutional investors and the very wealthy.

“For hedge funds, this was the highest level seen since 2007,” the report says.

But owning land and buildings was even more popular — maybe because the group likes what it knows best.

“Many Members have created their wealth in this space, understand it, and continue to invest in an area they know well,” the report said.

In Figure 2: the group voted Paul Singer, an outspoken investment manager who founded US$17-billion Elliott Management, as the best of its Top 10 Favorite Investment Managers.

There is little discussion why Elliott, which has long treated investors to double-digit returns, beat out the others and Singer himself is named only once.

The group’s favourite stocks are Apple Inc., Berkshire Hathaway Inc. and General Electric Co., largely mirroring other investors’ favourites.

“This is the second year in a row that Warren Buffett’s company has been the darling of TIGER 21 Members,” the group wrote.

Financial companies Bank of America Corp., whose heavy losses have inflicted such pain on Paulson and his investors this year, Citigroup Inc. and Wells Fargo & Co. are also on the list.

And the group said it sticks with what it likes.

“The majority of the Members said that they were keeping the same asset allocation structure,” the report said. “Typically, we see very little changes within twelve months time frames.”

© Thomson Reuters 2011

The consensus: The debt ceiling would be raised. The U.S. credit rating would take a hit. Right and right again. Then they came up with a few key strategies: Stay short on the duration of fixed-income investments; invest more in high-yield and investment-grade bonds versus government bonds; consider shorting government. And right again.

These investors — members of Tiger 21 — have a lot to lose. None of them have investable assets under $10-million and their average worth, exclusive of the billionaires, is between $70-million and $75-million.
Tiger 21, an acronym for The Investment Group for Enhanced Results in the 21st Century, is opening a Montreal branch in November with groups already in Vancouver, Calgary, Toronto and across the United States.

It was started in 1999 in New York by Michael Sonnenfeld, who sold his real estate business and wanted to learn how to best steward his own money.

Collectively, Tiger 21’s 170 members (30 in Canada) manage about $15-billion in liquid assets with the range of net worth of individual members anywhere from $15-million to upwards of $1-billion.

Thane Stenner, director with Richardson GMP in Vancouver, spent a year checking out the organization before he decided to bring it north of the border and became the founding member/managing director of Tiger 21 Canada (tiger21.com/Canada).

“This isn’t about business maximization,” says Mr. Stenner. “Tiger 21 is focused on helping members become excellent stewards of their investment capital.”

Members must go through a vetting process to ensure they have the minimum $10-million in liquid assets to play with. Applicants undergo character reference checks, background checks, credit, legal and RCMP checks.

And what goes on during the 10 annual day-long meetings is protected by confidentiality agreements.

For that privilege, members — between the ages of 28 and 84 — pay an annual fee of $30,000.

“The goal is within three years to have two groups with 15 members each in each of the four cities. That would cap out at 120 members,” says Mr. Stenner. “We want to make sure the experience is exceptional.”

Even though these investors work with professional advisors, since 2008 in particular, many wealthy investors have decided to delegate less and understand more.

“Since the market downturn, there is a thirst to become more knowledgeable in the area of wealth management. Being able to share with peers, where there is no selling and no biases in an open environment is attractive,” says Mr. Stenner. “To come to a place 10 times a year to share challenges you are trying to work through with people who have also been highly successful seems to be resonating.”

Meetings have an entrepreneurial vibe, are professionally facilitated or chaired and feature two external presenters, a Q&A and a discussion. Once a year, each member must present a 90-minute Portfolio Defence, opening up their balance sheet, investment allocations, investment philosophy core lessons learned, challenges, philanthropic plans and family structure to the group. They then ask for input on three areas. “It’s a discussion with your peer group in a very confidential setting,” says Mr. Stenner. “I feel like I’m back in Harvard in the executive program only these are real life cases. It’s highly stimulative. The day flies. And there is tremendous learning.”

In the spirit of sharing, Mr. Stenner offers an inside look at how Canada’s wealthy feel about the economy and some best practices you can apply to your own portfolio.

He says high net worth investors have learned to embrace volatility. It doesn’t mean they don’t get nervous, but they have the ability to step in to various asset classes when they get beat up. And right now, they are reducing gold exposure and government bond exposure (especially in the United States) after a great run-up, he said.

However, the $10-million minimum asset level and hefty annual membership fees puts TIGER-21 beyond the reach of  journalists and financial bloggers and I dare say most of their readers.

So I note with interest a release today announcing the launch of InvesTank 888, which describes itself as an “online wealth network.” You can find its web site here.

Members need only investible assets of C$250,000 and the annual membership fee is C$3,000 — a hefty chunk of change but an order of magnitude less than TIGER-21′s.

Name reflects role of good luck in investing

So what’s with the InvesTank 888 name? As with TIGER-21, I find numerals in names somewhat disconcerting. And given all the nervousness about the August stock market correction, the word “Tank” seems a tad ironic.

InvesTank888.com

Even so, InvestTank 888 founder Vincent Tang says the name gives some credit to the role of luck in investing: “The choice was inspired by the widely held belief that the number 8 represents luck and fortune.” Also, the Beijing Olympics opened at 8 pm on 8/8/08.

As for tanking stock markets, Tang’s press release brags that “InvesTank 888 members saw the latest market collapse coming and together were able to prepare for it, and to seize opportunities before the markets corrected.”

There are 15 experts on the network’s Personal Investment Board and a Speaker Series allows members to directly discuss their investments with various experts.  Tang says he started to bring together entrepreneurs and executives after the 2007 U.S. market decline, with members in New York, Boston, Toronto, Ottawa and Tel-Aviv.

The next expert slated to speak, on Sept 7th, is Ross Healy, CEO of Strategic Analysis Corporation.

– 62 –

Covenant Group

TIGER-21, a North American networking club for the ultra-rich, has announced regional chairs in four major Canadian cities. A meeting was held in Toronto in May and the group chair for the city and southern Ontario is Norm Trainor, president of The Covenant Group.

Dr. Nancy MacKay is the group chair for Vancouver, where a meeting was held in April. Dr. MacKay is president of MacKay & Associates, which caters to Canadian CEO networks.

MacKay & Associates

Vancouver is also the base for TIGER 21′s Managing Director for Canada, Thane Stenner. A founding member in Canada, the group has made “great strides” over the past six months, Stenner says.

Exclusive group has 180 members in North American

The Calgary group chair is Hal Walker,  founder of Ellemere Developments and the Meredith Michael Group. The first Calgary meeting was earlier this month.

Finally, the Montreal chair is Michele Desjardins, president of Koby Consulting Inc. The first Montreal meeting is scheduled for September.

TIGER-21 is a pretty exclusive club, given that members must have at least $10 million to qualify and pay hefty annual membership fees. Founded in the U.S. by Michael Sonnenfeldt, where it is in seven cities, there are now 180 members in North America, with personal investible assets of more than US$15 billion.

For more information, click here.

– 61 –

Jonathan Chevreau (JC): To start, I wanted to clarify your role with Richardson GMP Ltd., which is full-service investment firm.

Thane Stenner (TS): Yes, Richardson GMP is focused on the High Net Worth investor, defined as $1 million plus. Our group is $10-million.

JC: Decamillionaires.

TS: Right.

JC: Or Ultra-High-Net-Worth?

TS: Technically, UHNW is $20 million to $30 million. For our group, we say a minimum $10 million, which is decamillionaires. My group, which I founded, is Stenner Investment Partners, a private investment office within Richardson GMP, with clients across Canada.

JC: You describe it as fee-only, but I think you mean fee-based?

TS: Yes.

JC: So if you charged 1% of a $10 million portfolio, that would be $100,000 a year?

TS: Yes, but it’s a function of asset allocation and is less for portfolios with more fixed income.

JC: So what would your fee be for an all-equity portfolio?

TS? For a $10 million portfolio, around 1.2%, all in, and for Fixed Income portfolios 20 to 50 basis points (0.2% to 0.5%). It depends on the actual asset mix, how much dividends, corporate and government bonds, etc.

JC: So a traditional balanced portfolio of 60% stocks to 40% bonds would come in around 1%?

TS: Exactly.

JC: And the underlying investments are directly in individual securities held in segregated accounts?

TS: Yes, and pooled funds. On the pooled fund side, we have some good tax efficient wrappers to go around institutional pooled accounts, in order to turn interest income into ROC or return of capital. We add tax alpha by structuring it very tax efficiently.

JC: Do you use ETFs or mutual funds too?

TS: Yes, we use ETFs and institutional class or F class mutual funds. For sizeable portfolios we negotiate fees so they’re off the grid.

Charter cities are Vancouver, Calgary, Toronto, Montreal

JC: So for TIGER-21, you said you’ll be visiting each of the four Canadian cities once a month?

TS: Yes. I’ll visit and attend each of the four groups. I was in Toronto [this week] because we’re still recruiting. I met with eight Toronto candidates and to meet with the likely chair/ facilitator which we’re just finalizing.

JC: Richard Deacon?

TS: Yes. He’s an independent contractor who has been on the sponsorship side for many years. There are some strategic partnerships or sponsorships available for companies that want to align with TIGER-21. Candidly, they must be best in class.

JC: You became the Managing Director in Canada when?

TS: A few weeks ago. We announced it on October 5th.

JC: They pay you for this?

Thane Stenner

TS: TIGER-21 collects all membership fees. I’m paid a a stipend to assist in recruiting and developing an overall plan for Canada. In an average month it will probably take up three or four business days. But it complements what I do since I have clients in each of these cities [Vancouver, Calgary, Toronto and Montreal.] For me, this is personal and professional, since it allows me to have three or focus groups a month, and keeps me sharp for what I do with my own investments. I’m 46 so over the next 10 or 15 years this is a wonderful network to plug into in North America.

JC: Will you go beyond these four cities?

TS: Not in the next year and a half. The maximum is 14 members per city, plus a facilitator. Then we’ll go to a second grouping in each city, then see from there. There’s no current plans for other cities yet unless there’s strong demand.

JC: Apart from being worth $10 million and paying the $30,000 annual fee, how do you become a member?

TS: There’s a verification process on domain knowledge, background checks through Google etc. They must provide three character references: an accountant and typically a business lawyer. They’ll go through three or four interviews, and not just with me. There’s Nancy Reid in New York’s TIGER-21 office and Montreal members will talk to Martine Cunliffe.

JC: Do you see cultural differences among the wealthy in the U.S. and Canada?

TS: Yes. I do believe it will be a little bit more representative of humbler more private persona. I have a mandate to ensure Canadian content is relevant. Having worked with a US firm — Merrill Lynch — years ago, I can see how things can get too US centric; given my contacts and footprint I will ensure it’s Canadianized to be relevant every session; but there are some great thought leaders like Steve Forbes, Rudy Giuliani and John Paulson in private equity: the best of the best from an international perspective but also lifestyle issues around philanthropy, leading minds on philanthropic giving; issues like personal security and privacy. From a content perspective, portfolio defense is really the most dynamic piece of the curriculum.

Is the fee tax deductible?

JC; Is the $30,000 annual fee tax deductible in whole or in part?

TS: There’s a high probability of the majority being tax deductible, based on the latest my accountants are saying.

JC: So more than half the fee is tax-deductible?

TS: Yes, it’s legitimate, pertaining to investments so that’s a positive. It’s probably not 100% tax deductible but having said that given the quantum of the fee its something each member will need to get advice on just to be sure they’re comfortable with what they’re deducting, hence most of the content is around investments.

Thane Stenner

JC: What kind of speakers will there be?

TS: Private equity, hedge funds, long-only fixed income, credit. Bill Gross at PIMCO, Barry Allan at Marret. David Rosenberg of Gluskin Sheff speaks in the U.S.

JC: I presume these aren’t open to the press.

TS: No, but we’ll arrange for private media interviews out of sesson; if they come in for lunch or dinner, I’ll pick one or two national guys and a few local ones in each city.

JC: Can TIGER-21 members become your clients or vice versa?

TS: Absolutely. It’s quite regular that members can and do do business together; From a liability perspective, TIGER-21 can’t be seen as an advisory group; it’s not. It’s a network. Given US and Canadian laws, it’s simply facilitating an open forum discussion. That’s what they’re paying for but relationships are built in different ways and people deal together. It’s a little different than YPO or Tech, which are focused on maximizing business value while TIGER-21 IS more on being a good steward of wealth and being in essence a good CEO of your investment corporation is what it boils down to.

Members split on prospects of double dip

JC: Your Fall outlook survey suggests your members are still worried about the economy and the stock market.

TS: I’d agree. A big part is they feel responsible for themselves, the next generation and the community. You’ll find that most worked hard to earn it and want to preserve it: growth is secondary.

JC: Do you help them with hedging and options?

TS: Mostly, the third party managers do that since they can more efficiently capture the hedge cost-wise. Much of the managers or structures we use have that option built in to it and priced in it; at the end of they day you want some fluidity in an investment strategy. Some alternative managers will range from 50% to 100% hedged, often where can add incremental return.

JC; The survey shows members split about whether we’re headed for a double dip recession (40% said no, 37?% yes).

TS: I’d concur with that. I’d argue lots of that is already baked in to prices. It’s not a new theme.

JC: They’ve become more conservative since 2008? How much are they in alternative investments?

National Post

TS: They’re doing more but this was even before 2008. Historically it’s been between 20% and 40%, but it depends on the quantum of assets. Through our Portfolio Defense, speakers and dialogue, TIGER-21 members influenced each other other to get more conservative late in 2007 and early in 2008, before the bear market. It helped them preserve capital though they certainly weren’t immune. More cash, bonds and some market neutral strategies. Many reduced long-only exposure for sure, some shorted. In essence, they became more defensive.

Collective intelligence gave members early warning on financial crisis

JC: Did they identify the subprime mortgage problem before it was widely known about?

TS: Yes, absolutely. They were well aware of it and in tune. Having access to the brightest portfolio managers or economists out there does give you an edge.

JC: So in 2008 at least they recouped their $30,000.

TS: Easily. But seen the other way, there was also a tremendous amount of dialogue early in 2009 about members getting more aggressive. In hindsight, it may have been obvious there was a buying opportunity but when you have that much capital you want to debate the issue and do the right thing. From a fear perspective, it wasn’t that obvious but most did increase their risk profile and fully or almost fully recouped their high watermark balances.

$5,000 deposit to bring in guest attendees

JC: Can members bring in guests and family members?

TS: No, just one member per membership due but in the portfolio defence sessions, a member can bring in a spouse to listen in on the dialogue on Net Worth and asset allocation. They also tape it, which can be shared with spouses or advisors.

JC: Wouldn’t you want them to bring guests for referral business?

TS: That’s a different issue. Members are encouraged to introduce us to others but whoever is interested must go through a vetting process. To go to a meeting as a guest they must sign a confidentiality agreement and must put down a $5,000 deposit as earnest money that they get back if they decide not to proceed.

JC; A typical day goes on how long?

TS: From Noon to 7:30 pm. There’s tapas at 5:15 and a dinner after. It’s very content rich. When you’re in a group with really bright people with successful backgrounds, you learn a lot. There’s definitely a social aspect to it. The annual conference will be in West Palm Beach late in January. There will be a leading political figure I can’t reveal and sessions for spouses at that.

The day they look forward to each month

JC: The social part is a big element?

TS: Absolutely. The most frequent comment from them is that the monthly meeting is the day they look forward to the most each month. Some travel from out of town to attend. It’s a very vibrant network and at the end of the day you learn a lot and also have a lot of fun. That’s why we have to be very careful as to personalities. It’s one thing to have the money and background but at the end of the day you don’t want people who are too egocentric.

JC: So you deny membership to some who do have enough money?

TS: Yes, which is very delicate thing. There are different ways of doing that. It’s not easy but I prefer not to go into that. By the same token there are only 14 spots per city. Seven have agreed and we should be at 20 or 25 by the end of November and on our way to 40 or 50 by March/April.

JC: What if you don’t live in the four cities?

TS: Lots join from other locations. One Calgarian has joined Vancouver and we have Torontonians in Montreal and vice versa. These are busy people so we’ll schedule it out 12 to 18 months in advance. All the meetings are held at clubs.

JC: Who approached whom when it came to you joining TIGER-21?

TS: That’s interesting. I was approached by about 15 clients and contacts over the last 18 months after people read about TIGER-21 in the U.S. I contacted them. They have been considering Canada for five years. It seemed a natural fit after a 14-month dating period. I went to five sessions in New York. It can be quite intimidating. Compared to some, I’m a humble pauper.

I met with a 53-year old who sold his business and wants to do something to keep sharp and see what other bright people are doing with their money, how they vet things, and benefit from the collective wisdom of the group.

JC: How did you get to $10 million so fast yourself? You’re just 46.

TS: I’ve been an investor since I was eleven. My father [Gordon] was in the business for 45 years and I grew up living and breathing it.

JC: What was the stock you bought at 11?

TS: It was a fund, Templeton Growth Fund.

JC: You still own it?

Berkshire Hathaway most popular investment

TS: I own Templeton Emerging Markets Fund. The largest individual holding of TIGER-21 members is Berkshire Hathaway.

JC; You said two years ago you wanted 65 to 70 clients. Are you there yet?

TS: We’re at 52 now: we try to bring in one new relationship a month.

JC: Can they all become TIGER-21 members?

TS: They can if they want to but we have to be careful that everyone gets a good shot at it. Whoever responds first and is TIGER-worthy and met all the criteria can get accepted in.

JC: Remind me what TIGER-21 stands for?

TS: The Investment Group for Enhanced Returns for the 21st Century.

JC: Too bad about Tiger Woods.

TS: Yes, when you google it you do get some Tiger stories. Thankfully, this is not this kind of social network.

– 62 –

Tiger 21′s 140 men and women (“almost 10 percent” are gals, the Times dutifully reports) whose combined wealth is $10 billion are apparently having a tough time finding discreet places to chat about how to invest and distribute their billions. In an act of sheer desperation, I suppose, they’ve turned to the newspaper of record to recount their woes about tax shelters, inheritance conundrums and the like.

This newly emerging oppressed minority of “high-net-worth individuals” has thankfully discovered that 4-star hotels have board rooms where they can meet and share investment tidbits without “feeling attacked.”

That is, of course, if they cannot find space in their luxury private jets outfitted with multiple bedrooms, lounges, dining rooms and movie theaters. The market is soaring in these models valued at $40 million to, well, the sky’s the limit really ($320 million, plus $100 for cabin conversion, naturally, is the highest price noted). These were the “hottest items at the National Business Aviation Association annual convention in Atlanta,” I’m told.

Excuse me. Earth to filthy rich (and the editors who think that this is news): there’s a fucking depression on and if you must shoot the shit about the self-absorbtion of the mind-blowingly wealthy, do it in tony joints made for useless parasites. That’s what they’re for!

In my experience, nobody looking for a job, desperately trying to hold onto a job or scrambling around actually doing a job wants to read about the trials and tribulations of the people who never look at pricetags because such triflings are for the little people.

The only folks who want to read about this crap, aside from the itsy-bitsy segment of the population who are filthy rich, are the vacuous strivers who are delusional enough to think that they too will one day own more stuff than any human being could or should ever use or need.

Given the fact that no national newspaper in the country has a regular Labor Section, for example, which would apply to roughly 70 percent of the U.S. population, can editors just stop it with these high-brow versions of Lifestyles of the Rich and Famous?

In ordinary times it’s just annoying. These days it’s crass.

If you’re in the NYC area, come out to protest the Fox News bigots and their hate speech tomorrow, Saturday, Oct. 23 at 11 am Central Park South at 59th and 8th Ave. marching to their headquarters at 47th St. and 6th Ave.

My next speaking gig will be Saturday, Oct. 23, in Pittsburgh at 1PM in the Frick Fine Arts Building, Room 202, on Can the Working Class Unite, part of a three-part Socialism in Our Time conference.