Clarington severs ties with Seamark

ClaringtonFunds has dismissed Seamark Asset Management as the manager of several funds, replacing the firm with three different managers, most notably Clarington’s new corporate cousin, Industrial Alliance Investment Management.

Howson Tattersall will take over the management of Clarington’s Canadian Balanced fund, while OppenheimerFunds will oversee the Global Income fund. Industrial Alliance will manage Clarington’s Canadian Bond, Canadian Dividend, Canadian Equity, Canadian Income, Money Market and Short-Term Income mandates.

According to Morningstar Canada, most of the affected funds had only one- or two-star ratings, with the best rated funds being the three-star Canadian Equity and Money Market mandates.

“These changes reflect our commitment to strengthening fund performance and enhancing our world-class team of portfolio managers,” said Terence Stone, vice chair of ClaringtonFunds. “Each of these firms brings outstanding qualifications and an impressive long-term investment track record.”

According to Seamark’s 2005 Q3 interim financial report, the firm managed $3.2 billion in mutual fund assets. The affected funds total about $2.9 billion in assets, or nearly 91% of Seamark’s mutual fund assets under management. The company also manages several pooled funds and the firm says its total AUM (including mutual funds) was $9.1 billion at the end of January, 2006.

Shares of Seamark plummeted more than 16% on the opening bell this morning, as investors digested the news of the lost client. In a statement released on Monday, Seamark said it was “disappointed” by Clarington’s decision.

“Today’s announcement will not impact the delivery of our disciplined long-term investment approach to our many valued clients,” said Seamark CEO Peter Marshall. “Results so far in 2006 have been strong, with our portfolios for most asset classes having outperformed their benchmarks by a considerable margin. Coming on the heels of improving results in 2005, this confirms our confidence that our clients’ portfolios are well-positioned for long-term success.”

Howson Tattersall, a subsidiary of Saxon Financial, manages about $11 billion in assets for retail, private client and institutional investors. Of that total, $9 billion is for institutional assets, primarily for sub-advised mutual funds and pension plan clients.

“We are pleased to add the management of the Clarington Canadian Balanced Fund to our growing list of institutional mandates,” said Allan Smith, president and CEO of Saxon. “We will manage the Clarington Canadian Balanced Fund according to our value-oriented, disciplined investment approach.”

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com