(Adds CEO comments, updates share price move)
Dec 9 (Reuters) - Canadian fund manager AGF Management Ltd said it would slash its quarterly dividend by 70 percent to 8 Canadian cents per share, the first cut in more than two decades, sending its shares down more than 17 percent to a more than five-year low.
The company, which has about C$37 billion ($32.3 billion) in assets under management, said the planned dividend cut would be implemented in the first quarter of 2015.
The funds saved will allow AGF to renew its share buyback program next year and allocate capital for growth, the company said.
"We looked at our dividend and in terms of our peer group we were a pretty good outlier and frankly, we were not getting any value for it in terms of the multiple," said the firm's Chief Investment Officer Kevin McCreadie, in an interview.
He said in the current context it makes more sense for AGF to put money toward buybacks and growth.
The new payout brings the dividend back to 2003 levels. AGF plans to continue to review its dividend on a quarterly basis.
AGF, one of Canada's largest independent fund managers, maintained its dividend of 27 Canadian cents per share for the fourth quarter ended Nov. 30.
The firm has been struggling to increase its assets under management amid higher redemptions by institutional investors spooked by volatility in global financial markets.
Institutional assets under management slid 10 percent to C$12.41 billion in the third quarter ended Aug. 31.
AGF shares were down C$1.70 at C$8 in late-morning trading on the Toronto Stock Exchange.
$1 = 1.1446 Canadian dollars Reporting by Euan Rocha in Toronto and Ashutosh Pandey in Bengaluru; Editing by Kirti Pandey, Siddharth Cavale and Meredith Mazzilli