Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

There's a two-decade tale behind AIC's decision to hire National Bank Financial as its advisor on the mutual fund company's sale to Manulife Financial.

In the early 1980s, AIC boss Michael Lee-Chin was a successful mutual fund salesman. He was well-established in a lucrative industry. He met Lawrence Bloomberg, founder and CEO at an upstart investment dealer named First Marathon, and Rob Grundleger, a top gun salesman on the First Marathon desk. The three became buddies.

Let's pause for just a moment. There's a sense that Bay Street is a closed, WASP club. To the extent that stereotype was once true, it helped drive the careers of this trio.

Story continues below advertisement

Mr. Lee-Chin, a native of Jamaica, Mr. Bloomberg, a Jewish guy from Montreal, and Mr. Grundleger, an ex-pat South African, all started out on the Street viewing themselves as outsiders, with something to prove in the Toronto community.

They all turned their back on successful first careers to take a chance on their own companies. Mr. Bloomberg broke in to the industry as a well-regarded analyst at what's now BMO Nesbitt Burns. Mr. Grundleger was a successful stockbroker in a storied Wood Gundy branch known as 42nd Street, in Toronto.

Now, back to our story…

At some point in the 1980s, over adult beverages, Mr. Bloomberg and Mr. Grundleger pointed out to Mr. Lee-Chin that distributing mutual funds was a classic middle-man job. They explained that if the market ever crapped out, and the public stopped buying funds, then their salesman friend would see his commission-driven income dry up. They also pointed out that over time, the middleman always gets squeezed.

On the other hand, manufacturing funds looked like a great business. Mutual funds earn fees in good markets and bad, as long as the money manager can retain assets. That was the smart place for an adept student of the markets.

And Mr. Lee-Chin was a very adept student of markets. With Ben Graham's value investing philosophy as his touchstone, Mr. Lee-Chin scraped together the cash needed to buy a fund with just $1-million in assets in 1987. Mr. Bloomberg was always around to provide counsel as AIC soared to $15-billion in assets by the late 1990s, then hit a redemption run in recent years.

Over those two decades, these three friends saw their situations change. Mr. Bloomberg sold First Marathon to National Bank for $712-million in 1999, but stuck around as a rainmaker. Mr. Grundleger departed a few years later to start a hedge fund, Groundlayer Capital. Mr. Lee-Chin has large, and high-maintenance, holdings in Caribbean financial services.

Story continues below advertisement

Mr. Bloomberg didn't need to show up at work each day after that sale to National Bank , which rebranded its investment dealer as National Bank Financial. But he keeps a hand in the business, and still can frequently be found near the NBF equity desk. And sources say he worked tirelessy over the past year to help Mr. Lee-Chin arrive at a graceful, honourable exit, in the sale of AIC to Manulife Financial.

When it came time for Mr. Lee-Chin to sell his baby, he tapped the investment bank that was home to the guys who helped give birth to AIC.

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies