This article is part of our Beyond the Family Business series.
Hosted by Luke Hansen-MacDonald, a second-generation family business leader, “Beyond the Family Business” is one of the most thoughtful and engaging podcasts about family enterprise in Canada. In the podcast, which Canadian Family Offices shares with readers every two weeks, Luke goes beyond the headlines with other leaders in family businesses and family offices to explore lessons they have learned and their successes and challenges.
In this episode of “Beyond the Family Business,” Luke sits down with Pierre Somers, founder of the family investment firm, the Walter Group, headquartered in Montreal. Somers talks about his family’s roots in Germany, how he has navigated bringing his children into the family business fold, and his seeming inability to retire.
In this episode of “Beyond the Family Business,” Luke sits down with Pierre Somers, founder of the family investment firm, the Walter Group, headquartered in Montreal. Somers talks about his family’s roots in Germany, how he has navigated bringing his children into the family business fold, and his seeming inability to retire.
In his conversation with Luke, Somers shares:
- The emotional toll of selling his father’s business and how the family ensured they did so on their own terms.
- The evolution of the Walter Group and where it stands today.
- How Somers was able to attract top-tier talent for Walter Capital Partners, the private equity division of the Walter Group.
- The separation of the Somers family office from the investment firm and how that has sparked a new era of growth.
Previous episodes of “Beyond the Family Business” on Canadian Family Offices feature K.C. Daya, Jeffrey McCain , Ian Wilson and Derrick Hunter.
Transcript – Beyond the Family Business: Pierre Somers
Luke: Hi, welcome to Beyond the Family Business, a podcast in partnership with Canadian Family Offices, where we dive into the stories, lessons and challenges of managing a family enterprise.
This episode is brought to you by BMO Private Wealth. My family has been a longtime client, so I’m proud to have them as a sponsor of this episode.
Today’s guest is Pierre Somers. He’s a Montreal native and founder of the Walter Group, an investment firm that branched out of his family office from converting boilers to steam engine locomotives in Germany in the early 1900s to building tractors and concrete rollers, to relocating to Canada and pivoting into the machine tool industry, and ultimately selling that business to reemerge as an investment group.
The Walter Group family story is a tale of reinvention and tenacity. We also discussed the different types of investment strategies that the Walter Group employs, including GP stakes and private equity. And lastly, Pierre shares how he has enabled the next generation to step into his own family business, and his son has become a restauranteur, and his daughter has become a VC investor, taking their own paths into the future.
Alright, this is Beyond the Family Business podcast. Let’s jump into it.
Luke: I always start off every episode with the same three questions. Who are you, where are you from, and what do you do?
Pierre: Okay, so I’m Pierre Somers. I am talking to you from Montreal, where I was born and raised. My mother’s a Maritimer, from the Magdalene Islands, and my father was originally from Germany.
And so I was born and raised in Montreal and then more or less left Montreal to do my schooling in the US and then worked in Europe and all over North America, and came back to the family business, which is the only job I ever had, working for the family since I’m four years old, or five years old, when I was going with my dad.
So the name of the company and everything that we have is always usually called Walter because it’s a family name, and it’s the name of my father.
Luke: And what is your role and your position today?
Pierre: I’ve just been kicked out officially for the fifth time, so retiring for the fifth time. I’m very good at making parties to make retirement, but I don’t do so well in retiring.
So, what do I do today is I am a founder. I’m no longer CEO or chairman, since November. Maybe I can go a little bit through the history of the family business a little bit, then the evolution with kick in after.
Luke: Exactly.
Pierre: So basically, the roots of the family business, the Walter Group, finds itself in Germany. It was probably started with the financing from my great-grandfather, but it was really my grandfather that started the business.
He decided to, in Germany, he decided to buy a small boiler maker that made small boilers. His idea was to use the boilers to make things that would be mobile. So, he put the boilers on with a small team, very small company, to make steam engines basically to work tractors and street rollers to roll the asphalt on the streets, and locomotives.
The business part that grew the most and was the most dynamic, and what we were known for, was small rail locomotives. But we also did large rail as well.
I never met my grandfather. My father was the youngest from a second marriage, but he was the only one that was going to be the one that would be taking over the business. From the first marriage, there were only two girls, and that was absolutely not thinkable that they would run a business in Germany at that time. We’re talking 1890s to early 1900s.
And my grandfather from his second marriage had two sons. One was my uncle, who was three years older than my father, and his interest was medicine and research in medicine. So, he went to the best school at the time, university, which was Cambridge in the UK.
He was about three years older than my dad, and when my father was going to go to university, why not go to Cambridge as well, because his brother was there already. So he did. But my uncle was in, and then World War II breaks out, and Germany’s at war with the UK. The two brothers from the same mother, same father, were sharing the same flat in Cambridge. The military police knocks on the door at night, looks at the papers of my uncle and says, okay, your papers are good. You’re a landed immigrant, you’re working in R&D at Cambridge, that’s fine.
And my father, he was a student, German national, but with a student visa. So they said, no, you come with us. “You come with us” meant coming to Canada. So, he was deported from the UK to Canada.
Luke: By himself?
Pierre: Yeah, and well, he was put on boats, and there was a number of these boats where they were cleaning up. Apparently, this was quite something, and there are some books written about it. These were going to be Union shields to protect the convoys coming in through the St. Lawrence and the Maritimes to bring military support to England. The U-boats thought this was kind of funny, and they sunk those boats one after the other. So my father was very lucky not to be on one of those boats that sunk but one of those that came through. He came through and was interned in Quebec City for a little while. He had almost finished his mechanical engineering studies.
Luke: When you say interned, do you mean he was put into a camp, or what does that mean exactly?
Pierre: Actually, at the Citadel in Quebec City, and because he was mechanically inclined and he was basically a mechanical engineer, they put him as an apprentice plumber at the Citadel for the maintenance. They saw he wasn’t very dangerous, a few months. And he went to work for Dominion Engineering in Montreal, working in power generation on the seaway was his main job, for the planning of the Seaway.
So that’s that. And then he lived there and worked as an engineer. When the war was over, he saw that basically Canada and certainly Montreal we were not as advanced on the mechanical side as the Germans were.
So, he saw the opportunities and started importing some. So, in 1952 he started importing some tools and things that he knew about into Canada. At the same time, he and his brother and sisters recuperated ownership of some of the factories left over from Germany.
It was a significant business originally, but there was only a very small part in West Germany. The rest was in East Germany, Poland, Czech Republic, Romania, mostly towards the east.
So, they recuperated some and they did something else. I worked there actually as a mechanical engineer for a year or two, some summer vacations and a year after.
So, I really have no memory of making a conscious decision of joining, because I was very, very young. On Saturday my father would go and get the mail, and I’d open the mail with him and whatever on Saturday mornings.
Basically, I just went and I became a mechanical engineer as well, and I just gravitated into the business.
Luke: Very cool. So before …
Pierre: There’s no … but I have no conscious recollection of doing this.
Luke: Right. Of ever making that decision. So, before we jump into your story, I’d love to just pick a little bit more of your dad’s story.
So, he moved to Canada or was deported to Canada. He was alone and sort of had to find his own way. He eventually started this tool business. And can you speak a bit more about that tool business in Canada? What did it evolve to over time?
Pierre: Well, it’s still, the business still is not only existing but is thriving. But he started it in Montreal. It was called J. Walter Company Limited originally. And through different pivots, it is today called Walter Surface Technologies.
And so, my father started it by, I think by telegrams and mail to write letters and get some of the products to come and eventually, and he was running it from the basement of the family home. And eventually my mother kicked him out because there was just too much going on there. So, he rented a small place and then started selling the products in Montreal and then the rest of Canada. And even some of the clients were in the US as well.
And the locomotive factory had been, it was not restarted but made machinery. So, it was called Walter Maschinen. It’s still now, they changed it because we sold it. It’s called Waltec. We changed one letter, and it’s going very well, probably number two in the world in glass machinery. And we sold this, the employees as a management buyout in 2000. It wants me to buy back now but thank you. But so that’s a little bit the history there.
Luke: Very cool. And so it must have been pretty incredible to learn about this as a kid that, you know, your dad went through such a challenging sort of re-creation of himself and, you know, as you mentioned, there was also the re-creation of the business back in Germany.
Can you speak a little bit about what impact that had on you as far as, you know, your family obviously has a very resilient streak to it? Was that a lesson you learned, or did that have any impact in sort of how you viewed business?
Pierre: Well, definitely, you know, we all through growing up, we would go back to Europe because we had business there. So, my father would bring me along with my sisters, and we’d make a holiday and a working part, and he would go occasionally on his own, of course.
But he kept the two businesses apart. And one was machinery for the blast industry, and one was tools for the industrial field. So, there were some connections, they produced, we produced in Germany some saws because we were cutting metal. That was our bands here. But at a certain point it was basically, really, they were basically kept separate, the two unit, the two entities. And the ownership was separate as well, because it was his sisters and my uncle and my dad on one side, and the other one was just my dad. So, it was never really put together.
I looked at trying to do that, and I also said no, and eventually sold it because we just had too much going on, on the surface technology side.
Luke: Okay. Very cool. And how did you get involved in the family business? You said you can’t remember the moment when you decided, but when did you actually start working in the family business, so to speak?
Pierre: Officially, I graduated from university in 1976. And I started almost two years to work for Walter, but in Europe. So, I lived and worked in Germany for about two years. And then I came back to Montreal at the beginning a little bit. And then my job was primarily to expand the business and basically retire the original team that my father had built because, you know, from 1952 to 1978-79 is 25 plus years there of the founding team, which became my specialty. I became very, very good at retiring people and pivoting the business to more modern things as well. They had their ideas and so on. So that’s basically what I started doing.
But first I had to pivot the keynote, then I had to see what was the best things, put some people in business on their own. We had a service facility in Dartmouth, and we put the guy in Dartmouth on to his own business. And I had one in Toronto and Vancouver and London, Ontario. And basically, my father’s case of business was mostly Canada. And what I did was basically expanded the business through the US. That was a natural thing. And then I had operations in nine countries when I finished, with sales offices and partnerships in the countries.
Luke: Wow.
Pierre: And that sounds like big, but it’s all real, so yeah.
Luke: Yeah. No, but very, very cool. So, you put your own spin on the family business as well, taking it into sort of new markets, etc.?
Pierre: Yeah. Different times, different ideas.
Luke: Yeah. Very cool. And then you eventually sold that business?
Pierre: Yeah. Well, what happened is we had quite early on, we’ve had family meetings, structured family meetings, because I saw and lived through the issues my father had with his siblings when they were, right? And I was raised separately a little bit than my two sisters. I have no brothers, I have just two sisters, and they are not business minded, really.
Luke: Sure.
Pierre: One is an artist. The other one was a lawyer. And so, one didn’t like risk at all. And so, we realized quite early that, you know, and we saw what my parents’ generation was doing. So, when it came to turning my generation and my children’s, we started having structured family offices where I was not the boss.
Luke: Okay. Very cool.
Pierre: And so, as we kept having them on a regular basis. And at one point my children said that, you know, “Dad, you’re doing a great job. Keep on doing that. We love what you’re doing, and we think you’re doing great. But we want to be in business, but we don’t want to be in that business.”
So, my daughter who’s studying in finance, who has a master’s in finance, and she’s worked, and she says, I like to do VC venture capital, and now that’s what she’s doing. And so, what we did is we, there was no interest, so we sold the business. So, in 2018, we sold it to a private equity. So, we went through a process. We had more than 30 companies wanted to buy us. It was very good business. We sold it for a very good price, we think, and we recuperated.
But at the time already, the family office was existing, and we were able to bring in the funds from the sale and redeploy them. But we had to get more serious about it.
Luke: Was that a difficult emotional moment for you, you know, having the family business that your dad built and selling it off? I know from my own experience where my dad sold Clearwater a number of years ago, it was definitely a very emotional decision for our family. What was that like for you?
Pierre: Yeah, of course. But I was very, very careful on how we sold it, and we did not sell it. We were very, very prepared. I even had the due dil done prior to the sale for the acquirer. My management team remained in place. I had a new CEO in place for it. We had a five-year plan, and now it’s seven years, and they’re still executing on the plan. They’ve of course kept going, and it’s done very, very well. So, I still feel very, very good. I don’t have much contact. I get Christmas cards and occasionally I need some tools for my farm, so I know where to go. But basically, I’m not involved in the business, although we’ve retained still a small piece just to symbolically not make the people think that I was abandoning them or the family was abandoning them.
A picture of my father is still in the lobby at the office.
Luke: Sure. Yeah. Wow. So, it’s fair to say you sold it on your own terms and were very at peace with the decision and the process, which is great to hear.
And then can you speak a bit about your newer business and sort of the Walter Investment Group and how that has evolved and or how it started originally and how it’s evolved?
Pierre: Well, we had a family office, and it was basically a small team. I think I had 5-6 people in to basically do some investments that were not in the business per se. And mostly it was publicly traded vehicles, investments of stocks or some debt or different things. We did a little bit of LP, as an LP in some things that we understood. Some were good, some were not, but it was learning.
And then, you know, so if we go by the timelines and all this, I personally did not believe that we would live in, you have to understand there was a crisis in 2008 and the interest rates went to zero, and I could not believe that interest rates would remain at zero forever. That didn’t make any sense to me.
And I have a main thing where probably we would be selling the business at that time, even if we had not made the formal decision. So, we started what was a private equity business inside. So, in 2014 we started, so it’s 11 years now, Walter Capital Partners. And so, I got two outside partners, one that was well known financially in the community to give us some credibility, I think was good for us at the beginning, and one that was, and I was supposed to do the industrial stuff. The one that was on the financial side, he had a background of pharmaceutical and health and wellness, so he was going to do that. And then we had a younger one who’s still with us, and he would do the risk.
So, we have Walter Capital Partners now that is one basically Canadian based. It’s a private equity small, mid-sized Canadian headquartered businesses. And they’re very diversified. They have about 15 platforms now in that business.
Luke: Wow. So why did you decide to bring some outside capital in?
Pierre: To get the talent. See, I’m a really good perfectionist, and if it was just the family funds internally, I could see that we would not be able to attract the talent and let it, make it grow and all this if we didn’t take some outside investors. And I was getting lots of requests because, you know, socially people were looking, hey, you’re doing a pretty good job, and you have some pretty … you know.
So, but it’s relatively recent because we only started taking outside capital in 2019 just before COVID.
Luke: Oh, wow. Okay.
Pierre: So, in last November in 2024, we announced that we were going to separate the family office from the investment office. So, before COVID we were 12 people. Now today we are 65.
Luke: Wow. Incredible.
Pierre: We will be, and we should have about as much outside capital as our own by the year end with commitments. We’re already over them.
Luke: Congratulations. That’s amazing. And how did, I mean, it’s incredible. Like one of the tropes you hear is a person who is an entrepreneur in one business sells the business, tries to get into investment, and then, you know, doesn’t really know what they’re doing, but they think they know what they’re doing because they were successful in this completely other avenue.
You have done that, you know, impossible transition of going from an industrial (indiscernible) to now having, you know, what sounds like an incredibly quick growing investment business. How did you pivot that? You know, how have you learned to manage this new business or at least oversee it now?
Pierre: Well, I’m probably the only one in the business that is not a financial guy. Everybody else is. But a lot of engineers, I have lots of engineers, so we understand each other on that part. And lots of operators. We have pure financial guys. We have different skill sets, so you know, we have, but yeah, I think we’re able to attract people. We’re good at that. We’ve always been good at that because, you know, you try to be the best, and the best attracts the best, and the people and the investors like that too, and they get good results.
So, it’s performance, people, and process, and the fourth one of our 4 P’s is purpose.
Luke: Very cool. And what are the other types of investment strategies you have? So, you have private equity.
Pierre: We have two private equity funds. So, we have one that I mentioned, which is Walter Capital Partners, where we have, internally we have I think about 12 people that are in town. So, and they have three partners, and they have four or five businesses each that they’re operating.
We take occasional minority positions, but we basically usually take control or are able to step into full control, and we’re not afraid of doing that. Because most all of my guys have operated businesses before, so they respond to just to the financial part.
Luke: Right.
Pierre: So that’s, and that’s a deal-by-deal structure where we’re a GP on there, we have LPs, limited partners. And yeah, so that’s going along.
Then we started Walter GAM (Global Asset Management), which is a private equity fund, but it’s an evergreen fund. It’s not a deal-by-deal structure. It’s an evergreen fund, and it’s basically where we take minority positions in the asset management industry.
So, we have about 12 companies that we’ve made investments in. We’ve had some partial exits and have returned 78% of the money originally invested to the investors, and it’s a great business. And it’s global: 50% is Europe and 50% North America.
Luke: And when you say asset managers, you mean is this the GP stakes fund?
Pierre: It’s the asset management industry. So, the asset manager industry, there’s wealth managers, there’s asset managers, and there’s also the asset management technology businesses.
So, we have these three different buckets of investments, and basically, we are a GP stakes business.
So, we take, and because basically in that type of an industry, there’s very little capex, and your assets will be, they take the elevator every morning to come in and go out. If we take a minority position, it still remains their business, but we can help them grow. So, we like to take them when they’re 1 to 5 billion of AUM and bring them to the next level.
Luke: Very cool. And how do you help them grow?
Pierre: Well, very many of them, it’s, you have to look at, but they’re quite diverse. So, we have one that’s the next exception, and that is the largest fund for agriculture in Canada, which is called Bonnefield. And there we have majority, because it was a management buyout. And we have two-thirds and management has one-third. That’s going well because, you know, we have a good team. We have a good product. And when I say, I have to say, very humble, we are the largest, okay. It’s the most (indiscernible) business I’ve ever seen was agricultural land. I don’t think we have 1% of the market. And we are the largest. Right. So, there’s a runway for a very, very long time.
Luke: Sure. Oh, very cool.
Pierre: That’s a separate one. We have some that do risk, very special niche boutiques in the field. So how we can help them with distribution. We have sometimes it’s 2-3 guys in a small team of 10-15, something like that. And they’re very, very good at doing their thing, but they’re not so good at doing their relationships. We have the team that can go and bring the institutional industrial zone. We have an institutional team.
Luke: Oh, excellent. So, you help them with business development, basically.
Pierre: For sure. And sometimes help them acquire and merge too. So, we have like a multifamily office that bought another multifamily office, put them together in different ones, and know to help one in the UK escape into Europe. They needed funds, so we helped them and we had the contacts to help them.
Luke: Very cool. Okay. And moving on from the Walter Group or from the investment business, I wanted to talk a little bit about the next generation. So, you briefly mentioned your daughter, and your son is also, you know, sort of taking his own path as well. Could you speak a little bit about what he’s up to?
Pierre: Well, when we sold the business, prior to us selling the legacy business, we had a conversation and I basically asked them all, okay, what do you want to do?
And my son, he’s a chef, and so he’s very interested in things that you put in your mouth. And so basically the hospitality business. So, we created along this side, his interest, a business unit called Walter Hospitality.
And he does basically, he has three things: restaurants, which is his passion, but real estate that is attached to hospitality, could be hotels or restaurants. And he has also done some investments in the food sector, in startups, in the food industry, which is his interest.
Luke: Very cool.
Pierre: And bring something in. So that is Walter Hospitality.
And on the other side is Walter Ventures, which is my daughter, and she’s got her own VC team. She’s based in Europe, in Spain. And she has an office where she lives in a very nice place in Spain, Marbella, and she has a small office in Barcelona, and she just opened the Munich, Germany. And she’s looking at either London, it’s not so easy now because of Brexit, so maybe Paris. So, you know, she’s looking at putting a fourth leg.
So, and she has a small team there, and they’ve done about 12 investments, and she helps make the bridge for the Europeans that want to go. And she does primarily business-to-business software.
Luke: Okay. Very cool.
And I guess you’ve managed to deal with your own transition from your dad to you very gracefully. And you’ve sold the family business and gone, you know, have your new business growing and everything like that. And now your kids have kicked you out, as you said, and you know, they’re now leading in their own direction.
What advice would you have for, you know, a business owner and a parent who wants to get engagement with that next generation, and wants to, you know, follow in a similar path that you did, which seems like your kids are filled with purpose, going in their own direction?
Pierre: Well, most entrepreneurs, you’re talking, it’s very different. If you’ve seen one family office or one family business, you’ve seen one family business. We’re all very, very different.
There have some things in common, but basically, they’re all very, very different. One thing though, if it’s entrepreneur-base that starts a business, he spends an awful lot, but spends all his energy and all his time on his business, and a little bit what he has left, it’s work balance, it’s going to be having good time with the family and maybe transmitting some of the values.
But he doesn’t really spend that much time in transitioning the business to the children or to the next generation, because he expects it to get done. You know, it’s natural or whatever. It depends, or it’s no good. I mean, you shouldn’t do it. Right. So that’s also positive.
So, yeah, the advice is start early doing this. And so, we started having family meetings. My daughter was 8 years old, and my son was 12. And we were doing simple things, you know, we were family, nothing to do specifically with the business.
But I have two children. We have a breakfast table in the kitchen, and there were five chairs. And we always, in the fifth chair there was, the business was sitting there every morning. So they knew that the business was there, but, well, you know, so I don’t know how to say it, but if you don’t spend time and if you don’t listen, if you don’t talk, it’s probably not going to go as smoothly as if you do.
Luke: Sure. Yeah. No, that’s great advice.
And coming up to the end of our interview, one last question. Your family moved to Canada, has benefited from being part of this community. You have, it sounds like, done incredibly well in your own lifetime as well. What impact do you hope you and your family business will have on this community, being Montreal or Canada broadly?
Pierre: Yeah. Well, we’re based in Montreal, so, and we’re perceived, I think, as Montreal only, although we have more investments outside of Quebec than we have in Quebec, but that’s another story. But perception is reality in a way.
And I’d say that from the client base, you have more, see we have about 60 relationships just in the US, about the majority are family offices, where we can offer them things that they can’t do on their own, you know, and helps them in various situations. And we have some institutions that invest with us help them as well.
So, I don’t know. I think the objective of the team is to at least be Canadian, but not just a Quebec one. We’ve never been that. When I sold the business, Canada was only maybe 20% of our business. And Quebec was about around 5-7%, something like that. I’m not sure, something like that, maybe 10%, you know.
And so, I’ve never, ever not had an office in Toronto. We have four businesses, we’re all in Toronto, that we all have an office per se. So, I think we’ll naturally be at least in the largest financial market, have a presence there. But we are present in other countries, so I don’t know, it’s not my job anymore. I’m a founder. I’m not a, so my new job is I’m becoming a writer. That’s how I go on.
Luke: Oh, no way. What kind of writing?
Pierre: What I’ve been doing is I have basically not a podcast, but I read a lot, and I’ve had a strong interest internationally, and that’s access to some think tanks. And so, I have a different perspective than the normal main media perspective that’s been given.
So, I’ve been writing and have a following, I don’t know, some hundreds of people that like to read, have too much time on their hands.
So, but now I’m starting to write a novel.
Luke: Oh, amazing. What kind of novel is it? Is it fiction, nonfiction, or?
Pierre: Oh, it’s a geopolitical novel. Because that’s my expertise. And, yeah, it’s partially, I guess, it’s fiction, so the names of the guilty have been changed, or not all of them, but most of them. And, yeah, so it’s daunting, not my background. I’m not a liberal arts major. I’m a mechanical engineer, so I can make a bigger plan, and I made a plan for the novel. And it’s, you know, but to work with characters and all this, so I’m getting good support from some of my entourage. It tells me, oh, you know, you have to make it a little bit more interesting and not so technical. You know, put some women in there and let them have relationships so that it’s, yeah. So, I write every day. An hour, an hour and a half.
Luke: Oh, that’s awesome. Wow.
Pierre: My new career.
Luke: You’re an incredibly motivated person that, you know, as you said, you’ve tried to retire a few times, but you obviously share the same sort of tenacity and re-creation philosophy that your family had of, you know, you always re-create yourself and do something new, which is very cool.
Pierre: Oh, we’re good at pivoting. We’ve been pivoting for generations from one business to another. So, my great-grandfather was a building material lumber wholesaler, and he had some interest in forestry a bit. My grandfather decided to go into the boilers and to make locomotives. So he pivoted a number of times. My father pivoted as well. I pivoted as well. And I think my children are comfortable globally and are able to do that too.
Luke: That’s very cool. Great, great point to leave it on. So, thank you so much for your time, sir. I really appreciate it. It was very fascinating.
Pierre: Thank you. And anytime you’re coming to Montreal, let me know.
Luke: Yeah, no, I would love to.
Thank you so much for watching. This is Beyond the Family Business podcast. Please like and subscribe. Alright, talk to you soon.
Disclaimer: This podcast is sponsored by BMO Private Wealth. The information provided in this podcast is for informational purposes only and does not constitute financial, investment, or professional advice. The views expressed by the host and guests are their own and do not necessarily reflect the opinions of any organization or company. Always consult with a qualified financial advisor or professional before making any investment decisions.