Shannon leaves CI for Brandes

CI Financial is losing one of its star fund managers. Late Tuesday, the firm was informed that Kim Shannon, president of Sionna Investment Managers, is terminating her contract with CI.

Shannon was responsible for more than $7 billion in assets at CI as lead portfolio manager of CI Canadian Investment Fund, CI Canadian Investment Corporate Class, CI Canadian Small/Mid Cap Fund and CI Canadian Asset Allocation Fund.

“While it is unfortunate that Kim has decided to move on, CI is clearly blessed with an abundance of top-ranked and award-winning Canadian equity managers,” CI CEO William Holland said in a statement. “We are positive that CI will continue to provide the same high quality of portfolio management expertise to the investors in these funds.”

Shannon and Sionna, which she formed four years ago, are joining Brandes Investment Partners. The new arrangement is expected to be operational before the end of the year and the company plans to offer a number of new funds, Brandes said in a release.

“We are very pleased to be forming a retail alliance with Sionna and Kim, who is recognized as one the best investment managers in Canada. We are philosophically aligned and both believe that independence is an important part of putting client interests first,” said Brandes CEO Oliver Murray.

“This is an exciting, unique opportunity for Sionna,” added Shannon, who was named named Morningstar Fund Manager of the Year at the 2005 Canadian Investment Awards. “The Brandes team and the Sionna team are looking forward to combining talents and providing a good mix of value funds to investors who want choice and solid, long-term money management.”

Published reports suggest that haggling over compensation motivated Shannon to jump ship, an assertion dismissed by Holland. However, mutual fund industry analyst Dan Hallett says there’s little doubt that the fund manager’s new deal with Brandes will be more profitable over the long-term.

“CI, known for its tight purse strings, paid Sionna basis points on the CI assets managed,” Hallett said in a report. “Already well-paid in dollar terms, however, Sionna’s alliance with Brandes is potentially much more lucrative. While any new products will be Brandes funds, all revenues from and expenses of running the new funds will be shares equally by Brandes and Sionna.”

Holland says CI has already begun looking for a replacement for Shannon and her team and expects to make an announcement soon. “Our obligation to our fund investors is our most important duty and we are deploying our extensive resources to ensuring these portfolios are managed to the high standards our investors and their advisors have come to expect.”

(10/04/06)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.