The Pathbreakers

Excerpt from A Vision Greater Than Themselves: The Making of The Bank of Montreal, 1817-2017 by Laurence B. Mussio


Left to right: Richard Wilson, Chief Executive Officer & Chief Investment Officer of BMO Global Asset Management (CEO of F&C at the time of the acquisition) and Gilles Ouellette, Group Head, BMO Asset Management and Vice-Chair, International, BMO Financial Group (Group Head, BMO Wealth Management at the time of the acquisition).

Foreign & Colonial Investment Trust (F&C) has the distinction of being the world’s first investment trust. Its founding in London in 1868 is a landmark event in the history of finance. F&C helped to popularize, for the first time, share ownership for the ‘investor of moderate means.’ The stock market of the nineteenth century had been largely limited to wealthy individuals and institutions. As F&C’s first prospectus declared, “The object of this Trust is to give the investor of moderate means the same advantages as the large Capitalists, in diminishing the risk in investing in Foreign and Colonial Stocks, by spreading the investment over a number of stocks, and reserving a portion of the extra interest as a Sinking Fund to pay off the original capital.” That prospectus launched one of the great financial innovations of its time.

As the historians of F&C note in their fine history of the Trust, “it was the precocious talents of City lawyer Philip Rose” that gave life to the company. Rose was born in High Wycombe in 1816, son of the physician who would later become the Disraelis’ family doctor. Young Rose met and befriended the great statesman and future prime minister Benjamin Disraeli, creating a lifelong and mutually beneficial friendship. Rose became a partner in Barker & Rose, solicitors, a forerunner of the present-day London law firm Norton Rose Fullbright. Rose, who had risen to prominence during the railway boom of the 1840s, involved himself in philanthropic pursuits (he founded the Royal Brompton Hospital) before turning his mind to the creation of this new form of investment. Rose approached the Rt Hon. Richard Bethell, 1st Baron Westbury, a Liberal politician, lawyer, and judge (born in Bradford on Avon on 30 June 1800), to discuss the new venture. Lord Westbury was said to epitomize “trustworthiness, security, prudence and reliability.” He served as Lord Chancellor of Great Britain between 1861 and 1865. It was also said that Westbury should “be remembered as a zealous and wise reformer, and as the boldest judge who ever sat on the English bench.”

With those credentials, F&C could differentiate itself from the indifferent reputation of the financial sector in London. The Trust went on to become one of the most successful institutions of its kind in the City.

The Bank of Montreal acquired F&C in 2014 as part of a strategy to expand BMO Global Asset Management’s European operations. In the process, it made these two gentlemen co-founders of the Bank of Montreal – an outcome that they assuredly would never have expected in their most fevered imaginings.


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