‍Jean Desgagné has a portfolio most tech investors would envy. FinTech. Crypto. AI. The kind of investments that spark conversation at dinner parties and generate impressive pitch decks.

But ask him about one of his favorite investments, and he’ll tell you about Kingston Refractory Services, a company that installs refractory brick for industrial applications.

"I always talk to people about my ‘brick-making’ company," says Desgagné, a seasoned investor and advisor who has backed over a dozen startups. "There's something refreshing about it. These are real, solid businesses that employ people and create products people actually want and will pay for."

It's a contrarian take in an era obsessed with disruption and digital transformation. But Desgagné, who completed his first deal with PE Gate in Kingston Refractory Services (Project Heat), has a point worth considering. While everyone chases the next unicorn, there's serious money being made in businesses that make actual things.

The AI World Still Needs Pipes

The timing of this perspective matters. As artificial intelligence promises to transform (or eliminate) entire industries, investors are scrambling to identify what survives the disruption. Desgagné's answer? The physical world isn't going anywhere.

"In an age of AI where so many things are going to get changed, disintermediated, eliminated, we're all still going to need someone to take care of our pets. We're all going to need pipes to move water. These physical things are necessary, and nothing about AI is going to change that."

It’s easy to overlook the obvious when you’re hunting for 10x returns. But Desgagné’s investment in Kingston has performed just as well as many of his “sexy digital ones.” The difference? Nobody’s trying to sell him on a vision of the future. The value is already there, just underrecognized or undermanaged. Project Heat has delivered returns in line with PE Gate’s average IRR of approximately 40%, underscoring his view that fundamentals still matter.

When Private Equity Comes Calling (On You)

There’s another reason Desgagné is cautious about chasing the latest investment trends. After decades in capital markets and private investing, he’s learned to pay close attention to where value is created and when it’s already been extracted.

“The big PE firms are starting to create retail products to offload their investments. I take that as an indication they don’t think they can make money on it anymore. If they thought they could, they wouldn’t be giving it to retail investors.”

To Desgagné, that pattern is a warning sign. When assets are packaged for broad distribution, the upside has often already been realized by earlier, more sophisticated capital. It’s also where traditional private equity structures can work against investors, locking them into long hold periods with little control over timing or outcomes.

That skepticism shapes how he thinks about participation. Rather than committing capital to a blind pool or relying on forced exits to generate returns, investors engage on a deal-by-deal basis. Through The Gate, PE Gate’s investor portal, participants can monitor performance over time and access a secondary market, creating flexibility that’s rare in private equity without sacrificing long-term value creation.

For Desgagné, that structure better reflects how real businesses actually grow. Strong fundamentals, capable operators, and patient capital matter more than financial engineering or rigid fund mechanics.

The Story Matters More Than the Spreadsheet

Desgagné's approach to evaluating deals has evolved over his career. While he still conducts thorough due diligence (he jokes that he asked "a million questions" before investing in Kingston), he's learned that numbers alone don't predict success.

"The founder and the people driving things are as important as the financials and the business model. You need both, but I've learned that the story, the team and your sense of their resilience tell you just as much as the balance sheet."

That philosophy has served him well. Kingston Refractory Services has proven to be what he calls "a great deal" precisely because the fundamentals were sound and there was a clear story about why good management could unlock value.

That same lens shapes how he thinks about PE Gate more broadly.

“What stands out about PE Gate is its focus on undervalued businesses with a strong underlying model and a clear story for unlocking value.”

Rather than relying on financial engineering or scale-driven exits, PE Gate concentrates on established Canadian businesses with solid fundamentals, often in overlooked sectors. The opportunity isn’t about selling a future vision, but about backing strong operators and supporting the next chapter of growth where the value already exists.

What This Means for Your Portfolio

For investors tired of chasing hype cycles, Desgagné's perspective offers a different framework. Look for businesses where the value is obvious once you see it. Where the barrier to success was circumstantial, not fundamental. Where good operators can make a measurable difference.

These opportunities exist in every market, but they rarely come with the marketing budget of a Series B tech startup. They're the accounting firms serving local businesses, the manufacturers making components nobody thinks about, the logistics companies moving goods efficiently.

They're not going to be featured in TechCrunch. But they might just outperform your crypto portfolio.

"These are real businesses," Desgagné says. "And if you do it right, there's real money to be made in bricks and mortar too."

Jean Desgagné is a Chartered Professional Accountant, an ICD.D holder and member of PE Gate's Advisory Board. He has served on boards for regulated financial companies, professional services firms, and startups across Canada.

PE Gate partners with established Canadian businesses across industries from manufacturing to professional services. 

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