The Man With The Golden Touch

Age: 49
Company: Clarke Inc., Halifax, N.S.
Business: Investment
2008 EOY Category: Business to Business Products & Services; Entrepreneur of the Year

Maybe it’s fitting that George Armoyan has been named Entrepreneur of the Year during the roughest year on investors in living memory. After all, the Syrian-born real estate developer/ activist investor has learned the hard way that a businessperson has to roll with the punches. When he began to develop subdivisions in Lower Sackville, N.S., in the early 1980s, his bankers called his loans in the first year. And in the late 1980s, when he moved his real estate business to Toronto, he invested heavily just as the property market crashed, almost wiping out three years of gains.

Today Armoyan is taking his licks again. He is the 48-year-old CEO and executive chairman of Halifax-based Clarke Inc., a value investment firm that takes large positions in distressed companies. And this cruelest of years is being particularly cruel to Clarke, which Armoyan has run since 2003. Clarke reported a net income of $100,000 in the third quarter of 2008, down from $30.1 million for the same period in 2007, mainly due to fewer realized gains. The company’s stock has fallen 63% from its peak in July of 2007.

Yet it’s worth remembering that this man has an extraordinary track record as a stock picker and developer. He was developing huge tracks of Lower Sackville when he was barely in his twenties and has thrived in the more competitive Toronto market. And under his direction, Clarke’s stock price has nearly quadrupled in four years. He was the guiding hand that led Clarke to such Midas-touch investments as Halterm Income Fund, Versacold Income Fund, and Royal Host Real Estate Investment Trust.

Armoyan describes operating in the current market as “a very humbling experience,” but is ready to get up off the floor and try to use the golden touch once again. “The worst thing about losing is giving up,” he likes to say. “Try and try again. But obviously, learn from your mistakes and failures.”

Entrepreneurial Style

Defining moment: When I was a very young kid, 11 or 12 years old, I started realizing that I loved business. I had small stands in front of my father’s store and I used to sell stuff. I knew I wanted to be an entrepreneur at an early age.
Biggest triumph: It’s just the whole business from starting off to where it is today. The whole journey is a triumph really.
Biggest mistake: I made a lot of mistakes. I still do. The biggest mistakes I would say came some times in the late ’80s. I was doing some real estate deals in Toronto and getting caught up in the hype. When things seemed too good to be true, I should have known they were. I lost a lot of the money I had made in those three years.
Financing nightmares: My bank loan was called twice in the early ’80s.
Worries about losing everything: What keeps you going is the fear of not succeeding or the fear of losing things. The moment you think you’re invincible it becomes dangerous.
Business mentor: I joined an organization called the Young Presidents Organization and there were a lot of them. One who stands out was the late Laurie Stevens from Dartmouth. There were others—Hugh Smith, John Risley, Ken Rowe. That’s just the local guys.
Best thing about doing business here: The people are very honest. There’s less competition than other regions of the country. You can count on people’s word.
The toughest: I don’t think we celebrate success as much as we should. Not being born in the region, I also think you have some challenges when you start off in your business. I think if you’re successful you’re a bit resented, but people are there to help you if you need help.
Developing an entrepreneurial culture: I’m not sure you can learn it so much as you’re born with it or it’s something you’re exposed to at an early age. People who are born in Atlantic Canada, they don’t really appreciate how lucky they are to live in such a place. I think people who come from the outside appreciate it more. I think people probably have to travel more, get more exposure to the outside world. Every thing is handed to us. I don’t think we’ve seen the hard times as much as people who have come from other places. We should not be taking things for granted.
Entrepreneurship should be taught: In middle school—some of it already is introduced by Junior Achievement, which is a great program.
Progress is: I guess it would mean our standard of living is improving on a regular basis.
How I’ve changed over the years: My outlook or my cash flow used to be day by day whereas now I look at things in a longer term. When I started, I looked at things just in financial terms. I never looked at the soft things, like what a deal had to do with your reputation and those things. I’m now more assertive than aggressive.
Regrets: Too many. There’s a lot: people misunderstanding me, doing things in a hurry, pissing off people when I developed a subdivision. It’s hard to list them. I never used to take into consideration the softer things as much as I do now.

Personally Speaking

As a kid I wanted to be: Doing more or less what I’m doing now.
Personality type: I’m a very hyper or type A person.
Best strength: My persistency and my memory.
Weakness: Too little patience. I have a lot more weaknesses than strengths.
First job: I worked as a cashier in a grocery store on Cobequid Road in Lower Sackville.
I’m reading: The market.
Spare time: I spend as much as possible with my family.
My ride: I’m not a very good driver so most of the time I take taxis.
Most treasured possession: Pictures of my late grandmothers.
Never leave home without: Never without giving my kids a hug or my wife a kiss. I’m not a very materialistic person. It’s not what I want in life. Objects don’t mean that much to me. I’m in business because I love the game.
In the movie of my life I’d be played by: Danny DaVito in Other’s People’s Money.
Words to live by: The worst thing about losing is giving up. Try and try again. But obviously learn from your mistakes and failures.

Q&A

How do you see the capital-raising challenges in the current market?
There is no market right now. You’ve got to wait until there is a market.

Where do you see the greatest value in current market?
These markets these days are confusing the hell out of me. It’s a very humbling experience.

Are we in for a long, protracted economic downturn?
I hope not but I think so. 

Since everyone keeps saying this is a market like no one’s ever seen before, what have you learned?
To never, ever, ever take things for granted, especially the things you don’t control. Don’t confuse access to easy money with you being a genius.

How did you get into business?
I started having a stand by my father’s store and then more officially started in 1983 in real estate business. Before that I went to auctions buying things and reselling them at a profit. That’s how I got capital for my first real estate deals.

How did you get good at seeing value that no one else sees?
I’m not sure that’s an accurate question. Other people probably see the value that I see. I’ve probably taken more risks.

How did your childhood influence the businessman you are today?
It had quite an impact. When you grow up in the Middle East it’s an entrepreneurial culture and you have to do things to survive. 

Are there any people you draw from?
Absolutely. My board of directors, my mother, my father. My mother always keeps me very humble. Everyone from clergy to the young presidents’ organization. I like to ask a lot of people.
 
What characteristics are needed to run a successful business?
Passion, persistency, humbleness. Passion is probably the biggest.

What would you do if you weren’t running Clarke?
Probably running the private investment company that I am president of.

For more profiles on our other Entrepreneur's of the Year please following the links below

Click here for Wadih Fares
Click here for Curtis Howe
Click here for Bill Sanford
Click here for Harvey Stewart
Click here for Greg Roberts
Click here for Irving Schwartz