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Louie Palu/The Globe and Mail

One year after Manulife Financial Corp. announced it was buying AIC Ltd.'s mutual fund division, the Canadian life insurer is officially breaking all ties with the AIC name in a rebranding of its funds.

The move marks the end of an era for AIC, whose assets under management blossomed to $15-billion in 2001, when it was run by Michael Lee-Chin, but then plummeted to $3.8-billion amid poor returns before Manulife bought AIC in August, 2009.

Manulife will put its name on AIC funds; the AIC Advantage Fund, for example, will now be known as the Manulife Advantage Fund. Parts of the original company will continue to exist under Portland Holdings Inc., a separate firm controlled by Mr. Lee-Chin that runs some Manulife funds.

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AIC soared in popularity in the 1990s with its "buy, hold and prosper" mantra, making it a household name. The decision to rebrand AIC was made after "a thorough review of all fund mandates with the goal of providing advisers and their clients a stronger, more efficient and focused product offering," Jeff Ray, Manulife's assistant vice-president of mutual fund products, said in a statement.

Non-AIC funds have also been affected, such as the Brookfield Redding Global Infrastructure Fund, as well as those sub-advised by other managers, such as Mawer Investment Management Ltd. These funds will now have only Manulife in their names.

The insurer is taking action now because it is in the process of renewing its base shelf prospectus and all changes need to coincide with the new filing, said Tom Nunn, a spokesperson with Manulife.

He noted that while AIC was well known, Manulife didn't buy its mutual fund division for name recognition. "AIC has some very good funds," Mr. Nunn wrote in an e-mail, and the purchase "was intended to build momentum (and assets) for Manulife's Canadian fund business."

AIC benefited from the baby boomers who put retirement savings into mutual funds in the 1990s, but as returns often lagged the market, investors began to seek other opportunities.

Dan Hallett, director of asset management at HighView Financial Group, said AIC's brand had been affected by high turnover of both portfolio managers and sales stuff just before Manulife bought it last summer, so the insurer knew what it was getting into. "If somebody was there for a couple of years by the time the deal was done, that was a long time," he said.

"I think it's safe to say they were buying the assets," Mr. Hallett said. "The goodwill, or the brand, of AIC was quite damaged." (Within the industry, reworking AIC's tagline into "buy hold and suffer," for example, "became sort of a way to poke fun at the poor performance," he said.)

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Manulife has not publicly disclosed the price it paid for AIC, but Mr. Lee-Chin has noted there were higher bidders. He ultimately chose Manulife, taking shares in the insurer in exchange for AIC.

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