The Jackman Family Empire

In the Canadian corporate sphere there are many companies or groups of companies controlled by rich families sometimes going back several generations.  In this article I am going to look at the family of companies primarily owned and controlled by the Jackman family of Toronto.  The family controls four publicly traded companies: E-L Financial Corporation (TSE:ELF), Economic Investment Trust (TSE:EVT), United Corporations Limited (TSE:UNC) and Algoma Central Corporation (TSE:ALC).  They also control two private investment holding companies: Canadian and Foreign Securities Co. and Dominion and Anglo Investment Corporation.

Based on reading other people’s writings it looks like the family is slowly in the process of selling and taking their businesses private and will be focusing on philanthropy and charitable giving.  Let’s take a look at what this means.

I have talked previously about these companies here.  The family of companies was started by Harry Jackman building Empire Life Insurance (now owned by E-L Financial.  Harry’s son Henry (Hal) Jackman then took over and grew the family of companies including National Trust Company which was sold to Scotia Bank.  Now the reigns have been passed to Henry’s son Duncan Jackman.  For the last few years it looks like they are slowly working to take Economic, United and E-L Financial private via purchases from the family and their private holding companies: Canadian and Foreign Securities Co. and Dominion and Anglo Investment Corporation.  Here is a table of their purchases of Economic Investment Trust (from SEDI):

Year Purchases
2016 18,400
2017 11,100
YTD 2018 8,850

These purchases are primarily being made by Canadian and Foreign Securities Co.  Here is a table of purchases of E-L Financial:

Year Purchases Gift
2016 111,480 4,000
2017 500 2,900
YTD 2018 16,485 0

These purchases are mostly made by both Canadian and Foreign Securities Co. and Dominion and Anglo Investment Corporation.  Here is a table of purchases of United Corporations Limited:

Year Purchases
2016 39,900
2017 20,300
YTD 2018 8,400

These purchases are primariliy made by E-L Financial.  Lastly here is a table of purchases of Algoma Central Corporation:

Year Purchases
2016 0
2017 361,418
YTD 2018 52,400

These purchases are primarily made by Algoma buying back it’s own shares.

So we can see that the number of shares of these companies available to the public is a constantly shrinking number.  Economic and E-L Financial are being purchased by the family’s two private holding companies, United is being purchased by E-L Financial and Algoma is buying back it’s own shares.  The purchases are slow but fairly consistent and I can easily see some or all of these companies being taken private in the future though that can easily be a decade off.  My bet for the first to be taken private is Economic Investment Trust.  It is one of the smaller of the companies and is the one with the highest family and insider ownership and the most consistent buying.  My prediction is that in a decade or so they will offer to buy it out for 95% of net asset value similar to how Canadian World fund was purchased recently.  Given that Economic is currently trading at a %27 discount to net asset value this could give a nice boost to returns if holding this for the long term.

Disclosure: I own shares of EVT, ELF, UNC and ALC.

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