A professional hockey career took Kenndal McArdle from Vancouver to Västerås. Venture capital brought him back.
The Pender Ventures principal on his passion for finance, life and hockey in Sweden, plus what the future holds for venture capital in Western Canada.
Västerås is a city in central Sweden, a perfectly round 100 kilometres from Stockholm, notable for an inland port—the country’s largest—and a robust electrical industry. The city is also home to Västerås IK, a professional hockey team within a hockey-crazed country. With a week left in the 2013/2014 season, the team’s fifth-leading scorer broke the news of his impending retirement.
That player was Kenndal McArdle. McArdle was in the midst of his seventh season of professional hockey in a career that spanned four leagues (including the NHL), two continents and over one thousand minutes in the penalty box. Despite being a first-round draft pick, he found it difficult to find a job on a professional team after the 2012 NHL Lockout—the league’s second work stoppage in under a decade.
So, he joined Västerås. “It probably happened a little quicker than I thought,” he told Sports Illustrated in 2015 of the move overseas. “But it was something I wanted to do before it was all over. The last lockout year was a transition year. It was the first year when it was hard to find a job. My wife and I wanted to go to Sweden and experience a different kind of hockey. I had a lot of injuries and the North American game was taking its toll on me.”
This was the McArdle I knew, a name I remembered from his days playing major junior hockey for the Vancouver Giants and my seemingly endless scrolls of the stats website, HockeyDB. But I felt compelled to learn about what McArdle’s up to now and hear the story of how he went from professional hockey player to principal of local firm Pender Ventures.
I couldn’t help but start my conversation with McArdle by asking, between hockey and venture capital, what was the first love?
“Well, you don't grow up—at least I didn't at four years old—dreaming of being a venture capitalist. Hockey, even just athletics in general, was the first love. I played everything as a kid and happened to land on hockey. I had a passion for that. Then it really, quite quickly, became serious and something that I could see opportunity in. I just ran with it,” McArdle reflected.
Despite his quip regarding an aged four version of himself, McArdle’s interest in his “second” passion had early origins, too.
“I have always been super interested in finance and investing. I was actually introduced to trading at a pretty young age. My closest friend growing up, his dad was a trader. So, I became interested in the public markets through him. I read my first annual report when I was 12 years old. I remember printing it out and reading about this business. I found a small-cap business that was doing renewable flooring for patios. It was a small-cap business but it was going to be a hit at the time,” McArdle recalled.
Fast forward a few years and both of his passions had accelerated. Playing Major Junior hockey, the highest level for the sport for his age group in Canada, meant McArdle had a lot of travel time on his hands. Teams span from Vancouver to Brandon, Manitoba and the trips are made by bus. For McArdle, this meant ample time to catch up on his reading list, which I soon learned almost certainly differed from his teammates.
“I was introduced to [the theories of] Warren Buffett and Charlie Munger. I was actually playing in the Western Hockey League, I was reading on them on all the bus rides. A guy I met, his father, was huge into value investing. His father even owned Berkshire Hathaway,” McArdle explained.
Books in tow, McArdle navigated the rigors of professional hockey. He drifted between the NHL and the two minor leagues that act as feeders back to that highest level—the American Hockey League and East Coast Hockey League. In 2012, the NHL once again faced a work stoppage, meaning an oversaturated player pool in those two minor leagues.
“[Finance] was a hobby of mine that became a passion when I was playing. Once the lockout year happened, I went from playing in the NHL the year before to having no job. I had to figure out my plan. I had a lot of time on my hands. That same friend, actually, whose father was a trader, he did the Chartered Financial Analyst course,” McArdle said.
This got the competitive juices flowing.
“I’m like, ‘Well, if you can do it, I can do it.’ I'm just as interested, if not more, in finance, investing—all these kinds of things. So, I signed up for the course and wrote a long email with help from some friends so I could write the exam without having an undergraduate degree. I was looking for internships while I was playing,” McArdle recalled.
While McArdle worked on the transition into finance behind the scenes, the lack of spots on North American hockey teams forced him to look elsewhere, opting for Sweden.
“I played a season in Sweden but I had a contract for another two years, actually. My wife and I thoroughly enjoyed Sweden, and it's very similar to Canada in a lot of ways. It takes you a while, a couple of months to really start to see the difference and those quirks become interesting in their own right. Long story short, we loved it and could’ve seen myself playing there for years,” he reflected.
“When I retired, I actually did so a week before I was scheduled to fly out. I was doing an internship at Pender. I had spent a ton of time looking into the finance community and knew that I wanted to do that after hockey, but thought it was going to be a couple of years away. I was preparing myself for the future after hockey, and I ended up getting a job offer after that internship. So, I told my team a week before. I very much wanted to play but, at the same time, had a young family. My daughter was just born that same spring and working at Pender hit everything I was looking for. It was an opportunity I couldn't pass up and I don’t have any regrets,” McArdle recalled.
Hockey players are well known for their cliches. Post-game press conferences are laced with reminders that “it’s a marathon, not a sprint,” extolling the value of “getting pucks in deep” and just trying to play hard for “all three periods.” The words are punctuated by sniffs, a Hockey Night in Canada towel draped over one shoulder. Flipping the script on a former professional hockey player, I asked a clichéd question: What were the key lessons that you took from, say, the Winnipeg Jets to Pender Ventures?
“I have a, hopefully, non-cliché answer here. The cliché things would be, you know, the value of culture and teamwork, alignment, accountability, all of those things. I think a high-performance athlete, like once you get to the professional level, there can be a lot of similarities with a high-performance company,” McArdle shared. I thought this was a fascinating comparison at the professional level, but he also had a takeaway at the personal level.
“There’s value in leaning into your strengths. As Canadians, we're humble and we tend to be introspective. What that can lead you to do is to always think about your weaknesses. Always think about what you need to improve. And that's actually the opposite. I learned this a little bit too late in my professional [hockey] career. When you're playing at an elite level, and you're doing it in a team, you don't need to work on your weaknesses as much as you think. Because if you have the hardest slap shot, you can have a spot on the team. There's going to be another player that's on the team because they’re the faster skater. You’ve got to lean into your strengths,” McArdle pointed out before he restated the importance this can have in a professional context.
“In business, to bring this full circle, companies are a team. Companies have their own strengths and weaknesses. People within a company have their own strengths and weaknesses. It's up to a management team to allow their employees to really lean into their strengths and build a culture around that. There’s going to be people to pick up the slack where you're not great at. Companies, in their strategic vision, can be so worried about competition. Maybe sometimes the answer is, let [other companies] win one aspect of it all, but lean into your strengths and go to a market that you're really good at. Or, lean into your strengths in a product feature. If everybody knows you for that one thing, that can be enough, right? That's my philosophy.”
McArdle traded Västerås for Vancouver after the 2013/2014 hockey season. Like a free agent explaining why they chose to sign with a particular team, McArdle laid out the case for Pender.
“The majority of what we do is public equity investing. That's not what I do now but that's what I was hired as: a public equity analyst. Like I was saying, my first passion was playing hockey. Outside of that, I was interested in the public markets, entrepreneurship and small-cap investing. That lens of reading Warren Buffett and Charlie Munger, that’s in Pender’s DNA. We are value investors that have great expertise and track record within small-cap investing. David Barr, our CEO, was a portfolio manager at the time. He and the firm had an expertise that checked all the boxes of things I was interested in,” McArdle shared.
McArdle held the position of public equity analyst for four years. When Maria Pacella, now Pender Venture’s managing partner, joined the team, he saw an opportunity. “We went back to our roots in venture capital. Pender has this long history of venture capital before they went into the public equity world. She joined us and I saw the opportunity to help in an area I was really interested in: ‘Okay, I've had a couple of years of public equity work, now I am interested in exploring how to be more hands-on with the portfolio companies,’” McArdle said.
Despite his interest, McArdle knew it would take a different approach to be impactful on the venture capital side. “In the public world, [being] a lone wolf can actually help you. In fact, you want to be contrarian, outside the noise, all of these kinds of things, and you get a little bit more removed from the actual companies. They’re just a number on the screen, right? Although we do fundamental analysis and talk to the companies, it's still very surface level compared to venture capital. Venture capital is more roll up your sleeves. It’s less breadth of companies but way more in-depth with a couple of companies,” he explained.
McArdle raised his hand to help Pacella launch Pender’s venture capital platform. He got to work on a couple of key investments, but felt called to return to his roots. “I was like, ‘Okay, you know what? I want to switch back over.’ I was lucky enough to be part of a team that encouraged that and encouraged me to go where my curiosity lies. For me, that was within helping portfolio companies build and being a part of the value creation process,” McArdle shared.
Now that McArdle is a fixture at Pender, I was curious where things were at with his original passion. His current relationship with hockey is that of hockey dad. “I have a young family, I have a seven-year-old and a four-year-old. My youngest is just starting to get into hockey. So, I'm going to be spending some time at the rink. My oldest, as well, she’s played for a couple of years,” he told me.
In addition to supporting his own family, he aims to support those who are trying to break through in a mostly white—“homogenous,” in McArdle’s words—sport and those trying to craft a post-hockey life. “I, more and more, look to do the sort of things that could have high impact. There's a bunch of diversity initiatives and networks. Probably the majority of my interaction with the community is helping other players and helping players transition. They say, ‘Hey, he seems to have made it.’ It's always easy on the outside looking in. But, I do consider myself fortunate in my transition. So, helping other people with what worked for me or in different ways that I approached things. I have a lot of empathy for what that is like,” he said.
As McArdle looks to support hockey’s next stars and post-career success stories, he’s excited about the future of Canadian investing and Pender’s role within it.
“We launched the Pender Ventures platform. I like to say that it's a platform, meaning this isn't going to be just a one-off project that we do. We're in it for the long haul. I feel really good about the portfolio that we've put together and about the entrepreneurs that I get to work with. We're going to go to market raising another fund. Hopefully that means more capital, more businesses that we get to partner with and solidifying our thesis,” he shared, before he zoomed out.
“There’s a surprising lack—this is personal opinion—of institutional-grade capital in the VC asset class within Western Canada. We've seen some incredible success stories and it's about time. There's going to be a lot more opportunities in high growth, high-impact investments and likewise, firms like us that are looking to provide capital to grow those businesses. All in all, that's a positive for the ecosystem. It's a lot different than Amazon or Microsoft hiring 1000s of employees. That's great. But that's not entrepreneurial. I'm starting to see it more and more in [venture capital]. I think it's extremely positive.”
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