Fund manager AGF targets institutional investors, infrastructure

Tue Aug 4, 2015 2:41pm EDT
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By John Tilak

TORONTO (Reuters) - AGF Management Ltd (AGFb.TO: Quote), one of Canada's largest independent fund managers, expects its push into the institutional segment and infrastructure-related investments to drive growth over the next few years, its top executive said on Tuesday.

The shift is part of a broader strategy to diversify beyond its core mutual fund business, which has struggled with redemptions by retail investors since the 2008 financial crisis.

AGF aims to reach C$45 billion ($34.29 billion) to C$50 billion in assets under management in the next three to four years, Chief Executive Blake Goldring said in an interview. AGF managed about C$35 billion in assets at the end of June.

Strong growth in the institutional investor base could double the segment's assets under management in three to five years from about C$14 billion currently, he said. AGF's existing institutional clients include sovereign wealth funds, pension plans and endowments.

The Toronto-based company is also looking for gains in the high net-worth segment, where it anticipates the assets it manages for the very wealthy could rise from C$4.5 billion to about C$6 billion in the next three years.

"It’s an area of ongoing growth as we’re seeing a shift in wealth," Goldring said.

AGF's push beyond traditional mutual funds follows a rough ride for its own investors. The stock, which hit C$40 in 2007, was at C$5.90 on Tuesday. It has dropped about 39 percent since AGF slashed its dividend by about 70 percent in December.

Goldring said the company is taking a more balanced approach to capital allocation, combining a dividend, share buy-back plan and investment in growth in infrastucture-related areas.   Continued...