Alberta Land & Investment Brokers Offers Private Investing To The Little Guy

This private investment house quickly outgrew its Prairie turf in the under-the-radar “exempt” investment market. Now it plans to go national

by Greg Hudson

Whatever has happened in stock markets over the past year, there remains a growing mismatch between the rising demand for equity investments from a Baby Boom in its peak earning years (and thinking about retirement) and the shrinking cohort of publicly traded companies in Canada. For whatever reason – the income trust tax, the rising regulatory burden, industry consolidation – company after company has been delisting from public markets, leaving fewer and fewer options for retail investors. Moreover, their lacklustre returns fail to satisfy.

Enter Alberta Land & Investment Brokers (ALIB), a still small but astonishingly fast-growing firm from Edmonton that is making it possible for investors of middle-class means to get into the private side of investing. Just under five years old, ALIB almost tripled its revenue in the past year, and has in its short existence managed to consistently post returns double digits above mutual funds, despite a tepid economic climate.

The company sells “exempt market investments,” any private offering that doesn’t require a prospectus controlled by a securities commission. “The document offered by a private company is a little bit smaller than a prospectus, and there is a little less regulation to allow smaller players to get in the market of raising funds. The companies we deal with can be very similar to public companies. But we tend to like real estate investments because of the asset backing to them,” explains 33-year-old founder and chief executive Darvin Zurfluh, who represents one half of the ALIB’s brain trust, the other being managing director Mike Mack.

The ventures ALIB (a name Zurfluh says will likely change this year as the company rebrands itself and outgrows its provincial namesake) is flogging right now include Harbour View Landing, a residential development in Comox, B.C.; Evolve Opportunity Fund, which buys and holds apartment buildings; the Life Settlements Debenture Offering from Calgary’s Focused Money Solutions Inc., which purchases life insurance policies from holders no longer in need of them or unable to pay the premiums; Arizona Acquisition Fund, a Calgary-based buyer of recession-ravaged property in the southwestern United States; and Canadian Horizons Blended MIC, a mortgage holder. Each offering has its own minimum investment threshold, typically $5,000 to $10,000. Like any good retailer, ALIB strives to match the right opportunity to the right client, but its focus is on educating clients to make their own decisions as opposed to making the decisions for them.

Zurfluh started his career as a financial planner for an insurance company. He was actually recruited to that firm by Mack, who was the regional director. After a few years, though, they both left the company to work on their own. Zurfluh started Alberta Financial Solutions, ALIB’s parent company, for his own clients in 2005.

“By the end of 2006, I had 10 other financial planners who invested their own funds and client funds with the alternative investments I had on my product shelf,” he says. It was then that he incorporated Alberta Land & Investment Brokers. Then it was his turn to recruit Mack, who had the business prerequisites that ALIB needed.

In order for a private investment broker to succeed, it all comes down to due diligence, says Ken Parker, chief financial officer for Portfolio Solutions, an independent investment brokerage. Parker also worked with the Alberta Securities Commission for more than a decade.

According to Zurfluh, what sets Alberta Land & Investment Brokers apart from other investment dealers, and which has really enabled its quick success, is its rigorous due diligence process. Right now, Zurfluh estimates that ALIB chooses to offer about 1% of all the companies that approach it. “We are very selective. We get to know the companies so that any questions our customers have, we can answer,” he says. “In the last couple of years, there have been some companies that haven’t done so well for their investors, so our focus now is a really deep level of due diligence with the companies we deal with because in the private investment world, there are a lot of opportunities to lose all your money.”

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