YMG Capital Management Inc. has entered into an agreement with Malvin Spooner, vice president of equities at YMG, to sell its mutual fund operations.

The purchasing corporation, which has yet to be incorporated, will include Spooner as the principal shareholder.

In announcing the sale, Greg Edwards, president and CEO of YMG stated: “In the face of the changing competitive landscape, YMG management has decided that shareholders would be better served by YMG focusing its attention and resources on YMG’s core businesses of institutional and private wealth management.”

Although the sale of the business will result in a reduction in YMG fee revenue, management anticipates that this reduction will be more than offset by the elimination of expenses related to the business YMG will continue to provide investment management to mutual funds and life insurance companies and other distribution systems,” Edwards added.

Spooner, who has been instrumental in managing and launching new YMG Mutual Funds, said “My partners and I are all anxious to see the fund business move to the next level. The infrastructure and staff we have in place could easily support more assets and it is time to test these resources by creating and building an independent business with sufficient financing and strategic focus.”

“Trilon Financial and our other equity partners are jointly committed to this project,” he added.

YMG anticipates that other portfolio management and sales professionals and administrative personnel who are involved in the day-to-day operation of the YMG Mutual Funds will become shareholders and/or employees of the purchasing corporation. The sale will be affected by assigning the material contracts of the YMG Mutual Funds and the YMG Emerging Companies Fund to the corporation.

The deal is estimated to be worth $4 million. On closing, YMG will receive up to 500,000 common shares of YMG and the balance in cash. The YMG shares will be acquired pursuant to exempt issuer bid rules under Ontario securities legislation and will be cancelled on closing. If the maximum 500,000 common shares are tendered in payment of a portion of the purchaser price, YMG will have 12,666,800 common share outstanding after the closing of the transaction.


As at April 30, 2001, the aggregate net assets of the eleven YMG Mutual Funds were approximately $83 million. The sale is subject to regulatory and unitholder approvals.

On closing, the parties will enter into an investment sub-advisory agreement having an initial term of one year. YMG will act as an investment sub-advisor to the YMG American Growth Fund, the YMG Balanced Fund, the YMG Bond Fund, the YMG International Fund, the YMG Money Market Fund and the YMG Strategic Fixed Income Fund.