The Hamilton family gives back to their community
By Paul Knowles
An artistic director walked into the office of the president of a financial services company and asked him for a million bucks.

That’s not the set-up to a joke; that’s what happened in John Hamilton’s Kitchener office, as the Drayton Festival’s Alex Mustakas came to make his pitch.

The truth is, some businesspeople might indeed have seen such a bold request as a joke. But not Hamilton. “I thought it was an opportunity,” he says. “How many times in your life do you get an opportunity to do something for your community, and be in a position to be able to do it?”

Mustakas asked. Hamilton answered. “It was over in ten minutes.” And so, the Drayton Festival’s newest venue, originally opened as the Dunfield Theatre in Cambridge in 2013, has been rebranded the Hamilton Family Theatre Cambridge, in honour of John and his wife Terry, who have now donated $1.15 million to the Drayton Festival.

Hamilton’s company is now the largest MGA in Canada, with 31 offices, 380 employees, relationships with 10,000 insurance agents and financial services brokers, and an estimated five million customers.

In reality, the Hamiltons have traded up – in 2013, they donated $500,000 for naming rights to the theatre’s auditorium. John Hamilton says they would have opted for the larger package, even then, but Dunfield was first to the table. But when the Dunfield Retirement Residence was sold to the Revera company by owner Shiplake Properties, the new owners were not interested in continuing the Drayton branding opportunities, and the Hamiltons stepped in, immediately. (Mattamy Homes have picked up the naming rights for the auditorium).

It’s significant that the new Hamilton name does not have a corporate connection – it is a donation by a family, not a company. The Hamiltons are long-time Cambridge residents – they live in the same home they built “from scratch” in 1979 – and long-time lovers of the arts.

John explains that Terry has been a piano teacher all her adult life, she sings in two choirs, and the couple are enthusiastic attenders of theatre and concert events in Toronto and in Waterloo Region. John is also a big sports fan – his office on Frederick Street in Kitchener is festooned with Toronto Maple Leafs’ memorabilia. He played Junior hockey in Oshawa (Junior B and some Junior A), including suiting up on a team that included Bobby Orr.

Even today, he will play some pick-up hockey with his adult sons, Chris and Justin. He’s also an enthusiastic skier and golfer, a member at Deer Ridge.

Sales and marketing

His roots in the Region go back to school days; John, now 67 years old, is a graduate of the University of Waterloo (with an honours degree in history). Upon graduation, he had a couple of jobs in sales and marketing, one of which took him to far points of the globe. But “I had a girlfriend – who is now my wife – and I was never home.” So he got into the insurance business, joined Manulife in Waterloo, and eventually moving into a management role with Standard Life.

And then came 1999, when, says Hamilton, “the insurance business went through a real revolution.” Companies that had always controlled every aspect of their businesses changed their philosophy almost overnight, and moved the sales aspect of their businesses out of their “bricks and mortar” offices, appoint independent “managing general agencies” to represent them. “That’s what the insurance industry did, all of them pretty much at the same time.

Hamilton was not left with a lot of options. “Here I was, a branch manager of Standard Life, but they were getting rid of the bricks and mortar. They said to me, ‘You take it over’.”

So he did. On April 1, 1999, Hamilton opened a managing general agency representing his previous employer. His new company was branded “Financial Horizons Group”, with four employees located on the ninth floor of 22 Frederick Street in Kitchener.

That address is significant – because Financial Horizons Group’s corporate headquarters has never moved, although today, it occupies four floors (again including the ninth).

Overall, Hamilton’s company is now the largest MGA in Canada, with 31 offices, 380 employees (including John and Terry’s two sons), relationships with 10,000 insurance agents and financial services brokers, and an estimated five million customers across the country. It represents all of the financial institutions in the country who use Managing General Agencies.
Hamilton says that the “revolution” of 1999 was just the first salvo in an ongoing revolution in a business that was once dominated by insurance products, but now covers the gamut of financial investment. His company is now intensely involved in the mortgage business, and in succession issues.

And the financial services industry, he says, has to continue to renew itself. Across the industry, the average age of financial services representatives is over 60. Not so with Hamilton’s company. “We’re bringing new people in. We’re ahead of the curve.”
Those new people are essential if companies like Financial Horizons are to relate to the new market – the children of the baby boomers who are about to inherit massive assets. That reality, explains Hamilton, means that, “growth opportunities for our company are huge.”

Sold, twice

When we refer to “Hamilton’s company”, it requires a bit of explanation. In fact, says Hamilton, he has sold the company twice. In 2011, in need of investment to power growth, Hamilton sold 80% of the company to a private equity firm based in San Francisco. He retained 20% of the shares, and also kept control of the company.

The plan worked. From 2011 to 2017, Financial Horizons Group grew its business by 900%. The companies EBIDA (Earnings Before Interest, Depreciation and Amortization) went from $3.34 million to $27 million in five years.

The company accomplished the highly unusual feat of being named one of the Profit 500 fastest growing companies in Canada… and then doing it again, the next year.

Hamilton knew that there was one motivation driving the San Francisco investors – profit. He told Exchange, “Private equity firms are all the same – they’re investing because you’re profitable.” And they want to realize quick profits, themselves. He ads, “Private equity firms are always out in five years.”

So Hamilton told his team that the period from 2011 to 2016 was not about slow and steady growth – “this was not a marathon, it was a sprint.” In that period, the company made 30 acquisitions, and also registered “significant organic growth.” Hamilton is proud of that success – but equally proud that during that period, “I didn’t lose a single person from senior management.”

No one was surprised when the investors decided to cash out; that had been the plan, all along. So Hamilton prepared to sell the company for the second time.

A year ago, sale of the company – 100% of the company, this time – was finalized to Great West Life, which is a Power Corp company, owned by the famed Desmarais family of Montreal. Hamilton is pleased that this deal has brought ownership of his company back to Canada.

He won’t confirm figures, but it has been reported that the 2016 sale was a deal in the neighbourhood of $300 million.

Still in the office

The business has been sold, and this time, Hamilton did not retain any equity. But he’s still on the job, in the corner office on the ground floor at 22 Frederick. He explains that “I have a sense of pride, and a handshake deal with them [Power Corp}. I want to see a smooth transition. I want to make sure it’s running well.”

Part of his new mandate is “to find a successor in the next couple of years.” That, he says, will not be easy. And it also may be a challenge to bring in a potential successor to work with him through a transition. He says, “I don’t want to be in my successor’s way”, but he does want to be sure it’s a successful transition.

The company accomplished the highly unusual feat of being named one of the Profit 500 fastest growing companies in Canada… and then doing it again, the next year.

With his record at Financial Horizons, it’s a good guess that he will find the optimal approach. He says that within the next 12-18 months, he will be “out of the day to day.” In anticipation of that, he has changed his title from President and CEO to Founder and Chair – but he laughs that he still opens mail addressed to the president.

Hamilton admits that he is a tad concerned about life after the Financial Horizons Group. “What will I do?” he asks, rhetorically. “How could I retire? I’ve never worked,” he adds, underscoring his day to day enjoyment of his business life. “I keep going because all this stuff’s so exciting.”

He does enjoy his sports hobbies, and he and Terry are avid travellers – he rates several safaris they have taken as highlights. And he may find that his future will involved an increased focus on philanthropy.

The Hamiltons did not initially leap into donations at the seven-figure level. Hamilton recalls that they attended plays at Drayton’s King’s Wharf theatre, near their cottage near Penetanguishene. At first, they agreed to support the theatre at the $1000 a year level.

But Hamilton would run into Mustakas from time to time – they had a friend in common, Waterloo Region writer and “Dragon’s Den” investor David Chilton. “When the Cambridge Theatre was being built, we had just sold the company, and we thought maybe we should step up to the plate.”

They’ve never stepped back. They are also supporters of the Juvenile Diabetes Foundation, the Cambridge Food Bank, and have helped other charities and not for profits. “You have to pick your projects,” he says, “But my whole life, I’ve always paid forward.”

He points to other philanthropists whose names are on the marquees of regional facilities – the Conrad Centre for the Performing Arts, the A.R. Kaufman Y, the Chaplin Family YMCA in Cambridge – and he says that he hopes their example – and that set most recently by the Hamilton family – will inspire other local business people to “realize that, day by day, there are other private people who should be stepping up more.”

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ISSN 0824-45
Copyright, 2018.