AGF committed to comeback, says Goldring

(September 14, 2005) After a lengthy run of net redemptions, AGF returned to positive territory in the month of August and company president Blake Goldring says he believes the firm has finally returned to growth mode.

“We’ve turned the corner and we’re going to get stronger by the day,” Goldring said Tuesday at an investor conference in Toronto. “The changes we’ve made in our fund business are translating into sales success.”

For August, AGF reported $131 million in net new sales. However that figure includes $276 million in sales from ING Investment Management, which AGF purchased last month.

Still, Goldring, and Randy Ambrosie, AGF’s head of sales, were decidedly upbeat about the fund company’s prospects, with Goldring pointing to AGF’s respected international investment management team, an important competitive advantage since the elimination of the foreign property rule, as well as the firm’s rising share price.

Ambrosie admitted that AGF had “lost touch” with both its retail clients and advisors and was getting similar feedback from institutional clients, referring to the company’s condition last year, when he was brought on board. “And we were being beaten to the punch by our competitors.”

Since then, Ambrosie says the company has revamped its advertising campaign to focus on the advisor channel, cutting back on what he called the “cute and interesting” consumer advertising AGF was known for in the past.

In addition, the fundco has increased its sales force by 25%, Ambrosie said. “Over the course of the last 12 months, we have made dramatic changes within our sales organization. We feel we may have the strongest sales leadership group in the country.”

“We constantly review the feedback we are getting from clients and we’ve seen a massive increase in sales activities.”

On the product side, Ambrosie conceded AGF had “significant gaps” and has introduced three new offerings in the popular dividend/income sector, “a space we were not in a year ago.”

Two of those, the AGF Monthly High Income Fund and the AGF Diversified Dividend Income Fund — launched in January and managed by Cypress Capital Management — have already seen inflows of more than $70 million, Ambrosie said. “Considering that’s a fairly mature category, we feel very good about that.” He says AGF will be launching another new product this fall, based on feedback from advisors.

With CI considering converting to an income trust, Goldring was asked if that’s a move AGF would consider. While not ruling it out, he said AGF has other priorities, such as completing the firm’s $122 million sale of subsidiary Unisen Holdings to U.S. banking giant Citigroup, and executing plans to “fix” retail mutual fund sales.

But having said that, Goldring added “anything we can do to advance shareholder value, we’re obviously going to give it very serious consideration.”

“The ‘trustification’ of corporate Canada is going to increase at an even faster pace unless the government takes steps,” he said. “Many corporations will inevitably look towards trusts.”

“But our capital structure has done well. We’ve doubled our share price over the last decade and we’ve been able to increase dividends at a healthy rate. So we’ve created shareholder value within the current structure.”

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com