Briefly: “First Asset to buy Criterion” and more news

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VenGrowth Asset Management has announced the sale of its mutual fund operation, Criterion Investments, to First Asset Capital.

“Criterion is an innovative company that VenGrowth has nurtured over the past few years and we trust it will blossom within First Asset,” said Mike Cohen, managing general partner of VenGrowth. “This transaction allows VenGrowth to dedicate itself fully to its private equity business, while still participating in the future success of Criterion and First Asset through a minority equity interest resulting from the transaction.”

Criterion carved out a niche in the mature mutual fund market, offering investors themed funds, including the country’s first water infrastructure fund and first global clean energy fund. Its lineup consists of six funds.

First Asset will reportedly maintain the Criterion brand, which has been recognized by the Canadian Investment Awards, winning the marketing award in 2007 and 2008.

“The fit for First Asset is excellent. In particular, Criterion’s fund lineup, its refreshing investment philosophy and its marketing prowess are attractive to us,” said Barry Gordon, CEO of First Asset. “We anticipate considerable synergies and strong growth resulting from the combined First Asset and Criterion family of funds.”

First Asset focuses on tax-effective investment products, including TSX-listed investment funds, mutual funds, principal-protected notes and flow-through limited partnerships. It is one of the largest managers of TSX-listed investment funds in Canada.

The deal is still contingent upon satisfactory completion of due diligence by both parties, the completion of a definitive purchase and sale agreement, and receipt of all necessary approvals and consents. Closing is expected in Q2 2009.

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WCM honours Constance Sugiyama

Women in Capital Markets, the non-profit group that promotes the advancement of women in the financial services industry, named the winner of its 2009 WCM Award for Leadership last night.

Constance Sugiyama, senior partner at Gowling Lafleur Henderson, was honoured at WCM’s annual gala fundraising event, Vinifera, in Toronto.

“Connie has been a tireless supporter of WCM since its inception and is a mentor for women in both the capital markets and the legal profession,” said Martha Fell, CEO of WCM. “Not only has she advanced WCM’s mandate, but she’s forged a path for many woman to reach new heights of leadership in both their careers and their communities.”

Sugiyama served on Gowlings’ national executive committee from 2005-2007 and led its national corporate finance, securities and public M&A group from 2002-2007. She also served on the securities advisory committee of the Ontario Securities Commission from 1999 to 2002.

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Two B.C. firms admit to Ponzi scheme

Two British Columbia companies have settled with the BCSC, admitting to operating a Ponzi scheme that fleeced 191 investors for $570,000.

Wellspring Capital Group and Springpay Systems have agreed that $440,000 in assets frozen by the BCSC is the proceeds of the scam, and have agreed to court orders that would give the province’s Civil Forfeiture Office custody of the money.

The scheme was carried out over a period of seven months in 2003, with Wellspring offering investment programs that promised returns on investments through financing for new vehicles; a “Rent Relief” investment; payroll deductions; and a business expense reduction program.

The investors made payments for their investments through accounts managed by Springpay.

Wellspring falsely told investors that the programs would generate investment returns through sophisticated investments, including overnight transactions with high interest rates. In fact, the companies made scheduled payments to the investors with subsequent investor funds.

The two companies also admitted to trading and distributing securities without proper registration, or filing a prospectus, as required under the Securities Act.

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Naccarato leaves AIC

AIC Limited has announced the departure of vice-president and portfolio manager Pat Naccarato, who is joining Canada Pension Plan Investment Board. His resignation from AIC is effective today.

Naccarato was manager of the AIC Value Fund, and will be replaced in this capacity by AIC chief executive and CIO, Jonathan Wellum, effective immediately.

“We thank Pat for his service to AIC over the past three years,” said Wellum. “Going forward, investors in the AIC Value Fund can remain confident that the fund will continue to be managed within a value investing framework as it has been since its inception 19 years ago.”

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U.S. consumer confidence ticks higher

American consumer confidence may be low, but it’s showing signs of improvement, according to the latest reading of the RBC CASH (Consumer Attitudes and Spending by Household) Index.

The overall index stands at 8.2 for the March survey, up from 1.6 in February, which had marked a record low since the inception of the index in 2002.

“Consumer confidence looks to be trying to find a bottom,” said Larry Miller, managing director, RBC Capital Markets. “The March improvement, taken together with the stabilization of spending intentions we’ve seen in our restaurant and other consumer surveys and in the Institute for Supply Management, may suggest the consumer has dialed back spending to a level that is reflective of the current macroeconomic realities.”

One of the strongest gains in the index came in the subindex for current conditions, which rose from 1.6% in February to 14.8% in the March survey. Still, 35% of Americans rate their personal finances as weak, while 47% rate their local economy as weak.

Don’t expect the consumer to return to the stock market, as 70% see this as a bad time to invest. Job losses are widespread, as 64% said they or someone in their close circle has lost their job in the past six months.

(03/12/09)