Who says you have to merge to get bigger in the asset management business? IA Clarington is looking to do it differently.
The company believes it can double in size in five years with a slate of managers that now includes star Canadian equity fund manager David Taylor, says IA president David Scandiffio.
"Our plan is to put our heads down and grow organically," Mr. Scandiffio said in the wake of the announcement of a deal with Mr. Taylor.
At $10-billion in assets, IA is relatively small. National Bank of Canada recently agreed to merge its asset management unit, which is more than twice that size, with another company in the belief that it didn't have scale and had to get bigger.
It's not that there's no money for acquisitions. IA is owned by Quebec-based insurer Industrial Alliance Insurance and Financial Services Inc. , so it has big backing should it need capital to exploit an opportunity.
The company has a big network of wholesalers and advisers that Mr. Scandiffio and Mr. Taylor hope to capitalize on.
Mr. Taylor's ideal is to do at IA what he did at his previous employer, DundeeWealth, where he was a top performer in the Dynamic fund lineup. In his time there, he grew the assets he ran from a few hundred million to $8-billion, thanks to a combination of top performance and gruelling marketing. He left in October, after Bank of Nova Scotia bought the company.
Now's he's a sub-adviser to IA, with an exclusive agreement to run mutual funds for the company.
Why a smallish company such as IA? He said people view IA as a "sleepy company" but its wholesalers are popular with clients and it's "right in the sweet spot" for growth. Plus, it replicates the David vs. Goliath feeling he had when he was at Dynamic and trying to beat the big banks.
Mr. Taylor said he's set to hit the road to begin marketing when his funds are up and running.
"I'm hungry as hell," he said. "I'm dying to get out of the house."