More changes are taking place at frontierAlt Capital Corp.
The Toronto-based company has let go managers at its own investment arm, MAK Allen & Day Capital Partners, in favour of hiring external adviser Tralucent Asset Management Inc. to run two of its mutual funds.
Starting Monday, Tralucent is now managing the sharia-compliant frontierAlt Oasis Canada Fund, formerly run by Zaigham Hassan, and frontierAl Opportunistic Bond Fund, formerly run by Edward Jong.
While frontierAlt issued a press release on the manager shakeup, no one at the firm was initially commenting or answering e-mails.
But Asif Khan, chief executive officer of frontierAlt Capital, called later to explain that the move to "outsource" the management of the two small funds was largely a cost-saving measure amid current economic conditions.
The Tralucent managers include Bill Siddiqui, Jim Lorimer and Ahmed Khan who have "80 years of institutional investment management experience between them."
Mr. Khan acknowledged that the frontierAlt Oasis Canada Fund, which posted a 43-per-cent loss for the year ended May 31 and an annualized 22-per-cent loss over two years, needs to be managed in a more institutional-like manner to gain the confidence of investors. "Having consistent performance is something that we need," he said. "Our fund was too volatile."
FrontierAlt Oasis Canada was the first sharia-complaint fund offered in Canada in 2007. In compliance with Islamic law, it avoids investing in firms involved in financial services, alcohol, gambling and pork products.
The changes come as the $2-million frontierAlt Oasis Canada Fund has seen some monies flow to rival Global Prosperata Funds Inc. Global Prosperata launched the sharia-compliant Global Iman Fund in March, and has already raised $1.75-million in assets.
There is also more potential competition for frontierAlt from other Islamic investments. Toronto-based Islamic financial services company UM Financial Inc. has also teamed up with Jovian Capital Corp. in a bid to list Canada's first sharia-compliant exchanged-traded fund later this year.