Veteran value manager David Taylor will work with IA Clarington on new Canadian equity and balanced funds

By Megan Harman | April 2012

After almost a decade of managing mutual fund assets at Toronto-based Dynamic Mutual Funds Ltd., value manager David Taylor is bringing his expertise to Toronto-based IA Clarington Investments Inc., for which he hopes to repeat some of the asset-building success he has enjoyed at Dynamic.

IA Clarington has announced an exclusive agreement with Toronto-based Taylor Asset Management Inc. - the independent investment-counselling firm recently launched by Taylor - in early March. Through this partnership, Taylor will serve as subadvisor on two new IA mutual funds: a Canadian equity fund and a Canadian balanced fund.

"David Taylor is a talent, simply put," says David Scandiffio, president of IA. "[He's] a very talented manager - and the type of manager we want to be associated with, insofar as he has high-conviction views and a proven track record."

As subadvisor, Taylor will be responsible for the equities investment selection for the new funds. Both funds will boast the value investment style that Taylor has become known for during his 25 years in the funds sector.

Dan Bastasic, senior vice president and portfolio manager with IA, will manage the fixed-income portion of the balanced fund.

CULTURE CHANGE

Taylor had resigned from his position as head of the value team at Dynamic last year after its parent company, Toronto-based DundeeWealth Inc., was acquired by Toronto-based Bank of Nova Scotia. Taylor, eager to return to his independent roots, had launched Taylor Asset Management once his non-compete clause had expired.

"The culture changes when you go from a $3-billion company to a $55-billion company in market cap," Taylor says. "I loved working for the independents; I loved the 'David and Goliath' type of story line. And I thought I could replicate that with Taylor Asset Management and start something from scratch."

Taylor has hired Caroline Levitt as chief financial officer and Lisa McCorquodale as vice president of sales and marketing, and he hopes to build up an investment-management team. "Hopefully, down the road," Taylor says, "we'll do what Dynamic did and build a top-notch team of portfolio managers."

Taylor had decided to partner with IA after hitting it off with that firm's senior management team. He says IA's culture reminds him of Dynamic's when he had joined that firm in 2002.

"[IA's management and I] share similar philosophies," he says, "and we both have very strong desires to grow our businesses."

While at Dynamic, Taylor had devoted much of his time to building relationships with financial advisors across the country. This effort, he says, had contributed significantly to his success in growing the assets he managed at Dynamic to $8 billion from $300 million.

"I criss-crossed the country countless times," Taylor says. "I've gone branch to branch over and over and over again."

Taylor had wanted to work with a company with a similarly strong distribution network, and he was impressed by the advisor-oriented approach at IA.

"[IA] is very much all about the advisor and servicing the advisor as well," Taylor says. "It believes in the advisor network, and in the client/advisor relationship. So, the fit was perfect."

Dan Hallett, vice president and director, asset management, with Oakville, Ont.-based HighView Financial Group, agrees that the partnership is a natural one: "I think it's a good fit."

MANAGING MONEY

The agreement makes sense for Taylor, Hallett says, by providing an established distribution network that allows Taylor to focus his time on managing money.

"If you're really looking to grow significantly, you have to have that distribution," Hallett says. "So, it was a must [for Taylor] to partner with a fund company that had established relationships with brokers and financial planners."

Taylor is the latest in a string of new portfolio managers to join IA's asset-management team in the past few years.

Says Scandiffio: "We're really expanding our lineup of known managers with proven track records that financial advisors know and trust."

In September, IA had entered into a subadvisory agreement with Brad Radin, formerly of Franklin Templeton Investments Corp., and his company, Radin Capital Partners Inc. Last May, IA had hired Bastasic, previously a senior-level portfolio manager at Mackenzie Financial Corp., to its internal asset-management team. And Larry Sarbit had come on board at IA in 2008, when IA's parent company, Quebec City-based Industrial Alliance Insurance and Financial Services Inc., had acquired Sarbit Asset Management Inc.

"It certainly looks like [IA is] hiring recognizable names," Hallett says. "That's one of the ways it's looking to grow, for sure."

IA expects to release prospectuses on the two new funds shortly, with an anticipated launch in early summer. Both will be core Canadian funds, Taylor says, but they'll have "significant" foreign content.

Once the new funds are up and running, IA will explore the possibility of launching additional funds in partnership with Taylor.

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