There are titans and then there is Gerald Schwartz. From behind the faux-French windows at his 49th floor office atop the TD Tower in the heart of the Toronto’s financial district he looks down upon us all. He is the Founder-CEO of Onex Corporation, Canada’s largest private equity firm and one of the most powerful living businessmen in the country. Today, Onex manages over $33 billion in assets with over 218,000 employees scattered among the various companies it controls . It owns, or has owned, some very recognizable brands like Beatrice Foods, Husky Oil, Cineplex, Alliance Atlantis and Save-a-lot and a lot of obscure names like Intrapac and AIT .
But the brands and business are an artifact of the private equity process; the horses in the stable must be bought and sold. Even right now Gerry is in a boardroom somewhere planning his next big move; a company will be added or sold and Onex will be transformed yet again. What will not change, for it never does, is that Onex and Gerry will remain Canada’s largest private sector employer by ownership. No matter the form the company takes it has carried that mantle for decades. But do not mistake that for an omission of the company’s breathtaking reach. Operating across three continents, it is anywhere and everywhere; it is the very definition of global .
The man standing behind this shifting corporate labyrinth himself is something of a paradox. Gerald Schwartz, the chameleon of Bay Street. When a Toronto Life reporter attempted an unauthorized probe into his career Gerry sniffed her out quick. Spewing forth from the magazine’s fax machine came ominous and unsolicited warnings that every source and every citation used in the profile better be documented for potential legal action. When the unimpressed reporter tried asking around Bay Street anyway, she found herself almost invariably stonewalled; one contact went so far as to threaten to “drop her in acid”  if he was even named in the story.
The sense of secrecy surrounding this man comes more than one forlorn reporter. His personal residence, Toronto’s single most expensive home, is so notorious it has been dubbed “Fort Schwartz” . The monolith’s construction was only possible because Gerald bought the three adjacent properties to his original home and demolished two homes in Toronto’s elite Rosedale neighborhood, before barricading his newly-constructed bunker behind sixfoot wrought-iron fences and ten-foot shrubbery. He spared no expense to get his liar, the construction charge alone was rumored to be $25 million.
Even his own wife Heather Reisman concurs that the man has a secretive bent. Once asked to describe his personality to Macleans Magazine, she offered carefully, “Gerry’s never been the life of the party. He’s a very reserved, inward kind of person. He is also exceedingly bright and in control of his life. This makes him subject to being mistrusted and disliked.”.
|Gerry and his wife Heather Reisman at their “library”.|
And yet perversely, Gerald and his wife Heather’s smiling and relaxed faces are splashed out across virtually everything everywhere all the time. The dashing billionaire financier and his wife, the CEO of Canada’s largest book retailer Indigo/Chapters. There’s no shortage of glowing profiles of outgoing mega-watt mega-wealth, the billionaire fixtures on Toronto Life’s Who’s Who every single year. They’re not the richest couple in Canada – Canadian Business Magazine pegged the husband and wife duo as the 29th richest in 2017. But, for exposure, they are second to none. “When you look around, how many power couples are there in this country?” enthused their author Peter Newman at one book promotion event emceed by Heather at a Toronto Chapters location. “I don’t know of any—not in their league.”
“Gerry likes a little glitz”, his lifelong friend Izzy Asper once explained. He’s not kidding. Gerry’s got the collection of vintage cars with barely a spare moment to drive in that giant Toronto spread, and another in Palm Beach, another in Bel-Air and that’s before counting the beach-house with wicker furniture rented on a Nantucket bluff for summer vacations . He’s friendly and beloved and always surrounded by an orbiting entourage of high-level politicians like Paul Martin and celebrities like Barbara Streisand. Hollywood’s just a hobby, a way to unwind, but he’s dallied here or there producing critically acclaimed box-office smash hits like Terence Mallick’s The Thin Red Line. His spot-on Ronald Reagan impression sends laughter to the rafters at the glamorous galaparties he throws with Michael Douglas and Catherine Zeta-Jones at the Toronto Film Festival . The gifts he lavishes on his wife, my goodness, are just plainly legendary. Each and every one must cost twice the annual salary of the counter-girls ringing up the sales at the Chapters bookstores Gerald acquired for his wife in a $121 million hostile takeover. One year he hired the Kingston Trio just to sing her “Happy Birthday”. She showed her gratitude by stuffing a red Porsche in the thank-you note .
That’s not to imply it’s all sinecures, no sir. Gerald has a big heart and is one big giver. Those considering earning an MBA might try applying to the Gerald Schwartz School of Business at St. Francis Xavier. If anyone is feeling ill in downtown Toronto please check-in at the Gerald Schwartz and Heather Reisman Emergency Room at Mount Sinai Hospital. The address is in the ambulance. All across Israel the kids are learning chemistry at the Schwartz Science Centers and, if that’s too far to travel, try the Schwartz/Reisman Jewish Community Centre in Vaughan, Ontario. No need to thank Gerry, it’s all in a day’s work. He is the PT Barnum of Private Equity and the curly-haired good king of ‘Canuckistan’ all at once and all the time. The 7/11 of charity heaven.
Control and Secrecy
His company can’t help but crib the contradictions of its founder. Onex and its private equity partners (there have historically only been 12 ringed by a small army of analysts controlling the empire) have been described as cold. “They’re not known as warm and cuddly people,” revealed one Bay Street rival. “If they’re involved, they own you” . Yeah sure, but also please remember that one of Onex’s comparative advantages is “relationship building”. The CEO of one airliner supplied by an Onex subsidiary praises, “Gerry is an outstanding executive, whose handshake is his bond” .
Some say the company is but a foil for its founder, “Gerry Schwartz is a brand,” said Julie Rusciolelli, president of Toronto-based Maverick Public Relations. “It doesn’t matter what the name of the company is” . Gerald is paid like the company is just his ventriloquist’s dummy; he’s consistently at the top 9 of any list of Canada’s most highly compensated CEOs . But, no, Onex is one big collaboration, argues Doug Brent, former head at BT Capital: “Onex is a team. It’s not an individual, no way.” That’s certainly how Gerry would describe Onex: “I’m helping to guide what [Onex Capital Partners are] looking at. I’m coaching, I’m the in-house cynic, so I get to question the things they’re doing. I’m also the cheerleader: ‘Have courage, don’t be afraid to look at that.'” He says only the team votes on any investment. “We have enough respect for each other that if it’s seven to five, we won’t do it. If we have five smart people against [a proposed deal] that’s worth listening to”.
Confused yet? What the Onex mishmash actually means is that nobody on the outside truly understands the inside. An exasperated venture capitalist who once spent years hunting for unsolicited insider info gave up and told the Globe and Mail, “They’re very closed lipped” . Even its board of directors has been labelled a “closed-shop” that rarely changes or votes against the presumed wishes of its Chairman and CEO. Nothing really trickles out of the black box and so whatever morsel does is all of Gerry’s choosing. And what he chooses is confusion.
This hatches-battened-down mentality is only possible because of the fierce loyalty the company demands: none of its partners quit to join a competing private equity company for the first seventeen years of its existence. A phenomenal and bizarre feat considering how coveted they all are in the financial industry. Onex alone can pull off this magic trick because it’s the rare private equity company that is publicly-traded; it was in fact the first private equity firm to ever test the public market, beating its next major competitor to the exchanges by nearly twenty years. Gerald chose this unique structure, at least in part, because of the stock options public markets afford. The curly-haired king uses them to generously shower his core partners and analysts, keeping them satiated and fully bought in. As one rival alluded: “These are the guys [Onex employees] you’d want by definition. [But] you’d have to pay a fortune to bail them out of their [ownership] plans”.
That’s not to explain away all the secrecy with financial wizardry. There are hints here and there of something more sinister. More carnal. The reporter trying to pry open the Onex door and the scared Bay Street analysts slamming it shut. Threats of legal action. Another Bay Street insider mentioning in passing to another journalist he had to tip-toe when speaking about Gerry lest he “send his spies after me”. Maybe that journalist profiling Gerry and his wife in 2004 had them pegged when she wrote:
Tossing off breezy ad libs on an assortment of public stages, Schwartz and Reisman seem disarmingly open…Only gradually does it become clear that their banter can be deceptive—a calculated façade to keep uncontrolled inquiry at bay .
But Onex’s results are hard to argue with, Gerald’s formula truly works. The company consistently beats the markets and its competitors. The debt market responds by allowing it to raise more capital for another round of investment. Billions at the drop of a pin. On November 17th 2017 the company announced its Onex Partners V had hovered in $7.5 billion alone. Three years prior its Onex Partners IV raised $5.4 billion. It’s raised billions and billions over the years to acquire its large-cap assets. It needs to, because Onex has never built a thing. The whole firm is spare parts carved out from other companies and acquired like Gerald’s mansion in Bel-Air or the vintage cars.
Acquisition, everything by acquisition. Onex takes. It sells. It controls. But control is just a word and a corporation just a construct. In truth, Gerry controls. It’s all under his thumb despite the company being publicly traded. In yet another Gerald paradox, though the common shares are publicly traded a second class of shares controls the actual company. Gerry has a majority of those, and thus his will is, and always will be, final. The public shareholders have no say.
Control. That’s the binding thread and the only word that matters. It’s why everything seems to be a contradiction, but, in reality, never was. Onex screams control, from the deals; to the employees; to the pencils in the boardrooms; to how information dribbles out of it. Because simply by noting how little information trickles out of Onex hints that all of it does…
 See Onex Corporation: https://onex.com/about-onex#scroll-to-onex
 Onex Corporation’s Investment Portfolio: https://www.onex.com/portfolio
 Gerald Has Described his company as a “North-American”
 Marci McDonald, “The Heather and Gerry Show” in Toronto Life (2005) This article is no longer available at Toronto Life, but you can read about it here: http://archive.rabble.ca/babble/ultimatebb.cgi?ubb=get_topic&f=1&t=004821
 Cameron French, “The most expensive house in Toronto? Fort Schwartz” (Yahoo News, June 11th, 2015): https://ca.finance.yahoo.com/news/the-most-expensive-house-in-toronto–fort-schwartz-165406117.html
 “Why Gerry Schwartz needs Air Canada, Kimberly Noble,” (Macleans Magazine, October 11th, 1999).
 “Canada’s very own private-equity giant Onex quietly tops returns of big-name U.S. rivals,” (Financial Post, June
 John Lornic, “What’s the Big Deal” (Globe and Mail, June 24th) 2005: https://www.theglobeandmail.com/report-on-business/whats-the-big-deal/article982888/
 Canada’s very own private-equity giant Onex quietly tops returns of big-name U.S. rivals, (Financial Post, June
 “What’s the Big Deal”
 Reports indicate that Gerald Schwartz was the highest paid CEO in Canada in 2013 and 2015 and among the top
ten in 2011 (#4), 2012 (#8), 2016 (#3) Please see annual Globe and Mail Rankings.
 John Lornic, “What’s the Big Deal“.
 “The Heather and Gerry Show,” Toronto Life Magazine.