Outline of Presentation: 1. Review the current landscape of wealth and family offices in Canada; 2. Outline the various forms of family offices and services available to families; 3. Explore various Canadian family office examples; and 4. Conclude with the trends impacting on this fast growing field and where it may be leading.

1. Family Offices in Canada:
Current Trends and Applications for Transgenerational Wealth
Presentation to the Estate Planning Council of Vancouver
Tuesday, February 25, 2020
Nicole L. Garton, B.A., LL.B, LL.M., C.Med, FEA, TEP
Principal, Heritage Law & President, Heritage Trust

2. Family Offices – A Hot Topic These Days
• One of the fastest-growing investment vehicles
in the world today?
• Or a marketing term used to sell financial
products and investment services?
• It’s both.
• Let’s discuss …
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3. Outline of Presentation
• Review the current landscape of wealth and family offices in
Canada;
• Outline the various forms of family offices and services
available to families;
• Explore various Canadian family office examples; and
• Conclude with the trends impacting on this fast growing field
and where it may be leading.
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4. What exactly is a family office?
• A means for a HNW family to manage
their assets, both tangible and
intangible, while at the same time
being a focal point of contact for the
family and their numerous advisors;
• “If you have seen one family office, you
have seen one family office.”
• Often driven by a significant liquidity
event and the desire to retain some
degree of coordination over the
management of that wealth.
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5. What is the ultimate purpose of a family office?
Many HNW families wish to preserve their legacy and wealth to pass
along to future generations and to impact the world in a positive way.
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6. Example of Success: the Richardson Family
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7. Example of Success: the Richardson Family, cont.
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• Over 160 years, the Richardson family has quietly
built a $9-billion prairie powerhouse;
• James Richardson, a 19th-century Irish immigrant,
founded what is today Canada's largest independent,
privately owned enterprise, now in its 6th generation;
• Winnipeg-based James Richardson & Sons, Ltd. (JRSL)
handles more than a third of the country's grain
trade, owns one of the top-performing Canadian mid-
size oil and gas producers and co-owns one of
Canada's largest independent wealth management
firms;
• The family's charitable foundation is the top
benefactor in its hometown Winnipeg, giving away
$14 million last year.

8. What Families Hope to Avoid: the Stronach Family Dispute
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• An immigrant from Austria, Frank Stronach took Magna International Inc.,
an auto parts company he founded in his Toronto garage in 1957, and built
it into the billion-dollar Stronach Group, which now includes world-class
horse racing tracks, vast real estate holdings and an organic farm business;
• Frank Stronach is seeing his business reputation take a hit in an increasingly
nasty courtroom battle with his daughter Belinda Stronach and her allies
for control of the company.

9. The Stronach Family, cont.
• The continuing bitter dispute erupted after Frank left Canada in 2013
for a brief foray into politics in his native Austria - handing control
over a key family trust to his daughter, Belinda and co-trustee Alon
Ossip, a former Magna executive;
• The $520 million lawsuit filed by Frank now includes Belinda, her
children, Franks’ wife, Elfriede, his son Andrew, Andrew’s estranged
wife and Andrew’s daughter in various claims and counter-claims;
• “It saddens me greatly that we have reached this juncture in our
family,” Belinda Stronach said in a statement.
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10. Let’s keep the desired end in mind …
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The ultimate purpose of a family office is to enhance, preserve and
protect the legacy a HNW family has worked so hard to build.

11. The Current Landscape of Family Offices in Canada
• Over 10,000 single-family offices currently worldwide, at least half of them
were set up in the past 15 years;
• Family offices are currently estimated to hold assets in excess of four
trillion USD worldwide;
• Difficult to find Canadian specific data – still a relatively new and growing
phenomenon here;
• Canada has the fifth-largest UHNW population in the world, with over
10,000 people with a net worth of US$30-million or more, and the trend is
continuing upward;
• As expected, the family office industry is much more sophisticated and
developed in the US:
• Approximately 2500-6000 family offices in the US and at least 5000 more exist
informally inside privately controlled businesses.
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12. Origins of Family Offices
• Has roots in 6th century, when a king’s
steward was responsible for managing the
royal wealth (creating the concept of
stewardship, which still exists today);
• In 1838, the financier and art collector J.P.
Morgan founded the House of Morgan to
manage the family assets;
• The Rockefeller family office was founded in
1882 and is still in existence today as
Rockefeller Capital Management, managing
US$43 billion in assets for a range of families,
individuals and global institutions.
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13. Evolution of Family Offices
• Over the last 20 years, various types of family offices have emerged,
including:
1. embedded family offices (EFOs), linked to the family business,
where there is a low level of separation between the family and
its assets;
2. the single family office (SFO); and
3. the multi-family office (MFO).
• SFOs and MFOs are distinct legal entities and manage assets that are
separated from the family business.
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14. Single Family Office
• Separate legal entity serving one
family only;
• Provides dedicated and tailored
services, in accordance with the needs
of the family;
• A fully functional SFO will engage in
all, or part of, the investments,
fiduciary trusts and estate
management of a family;
• Many will also have concierge
functions;
• Can range in size from 1 to 500 plus
employees;
Multi-Family Office
• Service multiple families – generally
smaller size;
• Many MFOs started out as SFOs that
started offering services to other
families;
• Provide some of the advantages of a
dedicated family office, with shared
overhead and management
responsibility;
• May be a private firm offering family
office services to HNW clients
(accounting firms, investment firms,
banks and trust companies);
• Often focussed on advisory services.
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15. HNW Family Evolution to a Family Office
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16. Why Set Up a Family Office?
1. Privacy and confidentiality;
2. Governance and management structure;
3. Alignment of interest;
4. Potential higher returns;
5. Separation from family business;
6. Risk Management;
7. Centralization of other services; and
8. Focal point for the family.
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17. Family Office Services
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18. In-House or Out-Source Services?
• Typically, financial planning services, asset allocation, risk management,
manager selection, and financial accounting and reporting services tend to
be provided in-house;
• Global custody, alternative investments and private equity, and tax and
legal services are often outsourced;
• Pros and cons of in-house versus out-sourced services.
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19. Costs of a Family Office
• A full-service SFO will cost a minimum of $1m annually to run, which
would suggest that for a family office to be viable, a family should be
worth between $100m and $500m;
• A SFO can be set up for less, but the service range will probably be
limited to administration, control of assets, consolidation and risk
management; and
• A MFO can be implemented for much less, depending on the MFO
and the services the family chooses to utilize (can pay a percentage of
assets under management or on a monthly retainer basis).
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20. MFO Example: Loram 99 Corporation
• Started as a SFO of Alberta-based,
very successful and private Mannix
family;
• 3G Mannix siblings: Frederick P.
Mannix III, Maureen Mannix-
Eberts and Ronald Mannix.
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21. Loram 99 Corporation, cont.
• In 1898, Fred S. Mannix purchased a team of
horses and performed his first earth-moving
job as a sub-contractor on branch lines being
constructed for the Canadian Pacific Railway
in Manitoba and Saskatchewan;
• That humble business start developed into
one of North America’s most powerful
industrial forces, with interests in
construction, coal, mining, pipelines, oil and
gas production and the railroad industry.
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22. Loram 99 Corporation, cont.
• In 1997, the family divested themselves of a significant portion of
their energy business assets for over two billion dollars and re-
deployed much of the business capital;
• The three branches of third generation of the Mannix family now
conduct independent business activities;
• Loram 99 started out as a SFO to coordinate their joint philanthropic
and other family activities;
• Due to its success, the understanding is that Loram 99 now offers
family office services to select other HNW families.
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23. Loram 99 Corporation, cont.
• Margaret-Jean Mannix is currently
Chairman of Loram 99 Corporation, where
she is responsible for the strategic planning
of the office and the Family Council;
• As well, she is Chairman of the family
foundation.
• https://businessfamilies.com/videohome/a
chieving-generational-purpose/adopting-a-
mentorship-role/
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24. SFO Example: Werklund Family Office
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25. Werklund Family Office, cont.
• In 1970, David Werklund started Dave’s Oilfield Service, which is now
Tervita Corporation;
• Tervita has over a thousand employees across Canada and is one of the
leading energy-focused waste and environmental services companies in
Canada.
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26. Werklund Family Office, cont.
• In 2006, Dave Werklund established the
Werklund Family Office to preserve and
promote the legacy and values of the
Werklund family and to provide tailored
personal and wealth management
services for individual family members;
• In 2014, he created Werklund Ventures
Ltd. to personally invest in private
innovative companies.
• https://www.youtube.com/watch?time_c
ontinue=134&v=VEXXXl3sroY&feature=e
mb_title
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27. Trends Impacting on Family Offices
• Increasing concentration of wealth held by UHNW families;
• Rising globalization of business, wealth and people;
• Continued global uncertainty, politically and economically;
• HNW & UHNW families are seeking reduced fees, more stringent risk
management, more privacy and more direct and aligned control over
their holdings;
• The number of family offices and assets held under management is
likely to continue to increase on an accelerated basis.
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28. Family Offices:
an Increasingly Common Vehicle for HNW Family Legacy Preservation
Questions?