From Building Homes to Portfolios

Canadian billionaire Peter Gilgan is stepping down as chairman for Toronto-based home builder Mattamy Homes to create a new parent investment company, Mattamy Asset Management Inc.

Gilgan is using the projected $1.1 billion USD of extra cash flow from the builder to invest in other sectors. The new parent company will target a variety of asset classes and risks, possibly including startups, strategic partnerships, and private equity. Gilgan will be the company CEO and chairman, and tells Bloomberg, “I basically had all my eggs in one basket for 40 years and it’s time to take a few of those eggs and put them into a more diversified portfolio of assets." While Gilgan did not offer specific investment details, he voiced interest in infrastructure, sustainable initiatives, and technology. “As an entrepreneur by nature, I’m more inclined toward toward the more adventurous spectrum of investment,” he said.

The extra cash flow from home building will also be used to reduce Mattamy’s debt, with a goal of lowering the ratio of debt to capital to about 40 percent, from the high ’40s percent, Gilgan said. Mattamy finished last fiscal year with just under C$2 billion in debt, and is rated BB at S&P Global Ratings, two levels below investment grade.

“You can attract a broader interest group of people and obviously at more beneficial rates as your risk profile continues to improve,” he said. “I’m not going to say we’re going to get to be an investment-grade bond lender, but we certainly want to move up a notch or two in order to attract capital less expensively.”

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