(August 23 – 18:00 ET) – Merrill Lynch says that the loss of portfolio managers by Investors Group may not be a good thing, but its not crippling.
Investors has put IG Investment Management in charge of Summa, Global Science & Tech, U.S. Large Cap Growth and Global eCommerce following the departure of Geoff Barth and Allan Brown, lead managers of these funds. Merrill says these four funds account for 11% of Investors’ assets and 59% of year to date net sales. “While not a positive turn of events for the company, we do not believe the departures will significantly impact Investors Group’s business.”
It notes that its bench strength should cushion the blow, and suggests that IG may find a replacement internally before it picks up a free agent to take over these funds. Merrill suggests that Investors may have a hard time attracting external, free agent talent to work out of Winnipeg. “We suggest both the Montreal operations and the Scudder Maxxum subsidiary would be likely sources of bench strength for the company.”
Merrill reiterates its buy recommendation on the stock and is not revising its estimates.
-IE Staff