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Problem: Sector stagnation. Solution: Go big

Bill Holland, a man who has done some good deals in 16 years as a senior executive at CI Fund Management Inc., has never forgiven himself for the one he didn't.

It was the spring of 2000, and struggling Trimark Financial Corp. was on the block. Mr. Holland could foresee the day when Trimark's value investing style would be popular again, and when CI's stable of growth funds would fall out of favour. Not only would it make CI one of the largest Canadian fund companies, but it would also stabilize the firm's sales in a market downturn, Mr. Holland thought.

As he tells it, he chickened out. CI never submitted a final bid in the Trimark sweepstakes.

"At the time, we were [doing] $400-million a month in net sales and they were $400-million in net redemptions," he says. "We let the market bubble affect our thinking, my thinking . . . It was a mistake. We clearly blew it by not buying Trimark then. It was an incredibly smart way to diversify our business."

CI moved on to other prey: A failed hostile bid for Mackenzie Financial Corp. -- "It looked as close to Trimark as we could get out there" -- and successful deals for the mutual fund assets of Sun Life Financial Inc. and the Canadian unit of Assante Corp. But Mr. Holland continued to lust after Trimark, a zeal that's led his most adventurous move yet, the decision to lob an unsolicited (and apparently unwanted) takeover bid at Trimark's parent, London-based Amvescap PLC.

This is not Mr. Holland's first stab at Trimark since he talked himself out of making a play for it five years ago. In 2001, CI held preliminary talks with Rob Hain, then Amvescap's top executive in Canada, about combining their operations in this country. The discussions went nowhere and Mr. Hain moved to London in early 2002 to run an Amvescap division there.

Before long, Mr. Holland was busy bringing the Sun Life and Assante assets under CI's control and completing smaller acquisitions like Synergy Asset Management Inc. With the Assante deal, CI took on a tough project, plunging into the financial planning business for the first time.

It wasn't until last summer that he started thinking seriously about his next deal. The markets had made the pursuit of Trimark, one of the premier names in Canadian mutual funds, seem possible again. While CI's stock price had doubled from its 2002 lows, Amvescap's continued to slide.

Mr. Holland got together with three chief lieutenants for one of his regular strategy chats: Peter Anderson, head of CI's mutual funds division, Joe Canavan, who runs the financial planning business, and Stephen MacPhail, the president and chief operating officer. If they couldn't buy Trimark straight up, he asked, why not buy the whole firm?

The idea of taking over Amvescap wasn't exactly new. When a company's stock price falls by 85 per cent, it isn't long before some wise investment banker starts calculating the numbers. Mr. Holland had been taking calls from Wall Street bankers and others keen to advise or even join the company in taking a run at Amvescap. He mulled over the idea with Paul Derksen and Jim Prieur, the two directors who represent Sun Life. The support of CI's largest shareholder was critical. "We've been talking to the board about it probably every board meeting for the past year."

In the meantime, he got his staff to work on producing sets of financial projections on how CI would look if it swallowed a company whose money management business is about nine times larger.

With the Assante integration mostly complete and CI's stock again near a record high, things got serious this spring. Mr. Holland sent an investment banker -- he won't say exactly who -- to sound out Amvescap CEO Charles Brady on talks with CI. The banker sent Mr. Brady's response back: No thanks.

So, in mid-May, he sent a letter to its directors with a firm offer for Trimark and a vague promise that CI would consider taking over the parent company, if that's what it took. He soon received a letter back. "Just one sentence," Mr. Holland says. "They said, 'We are not interested in discussing the referenced matters with you.' They really are parsimonious with the ink there."

Mr. Holland waited a week and decided, with the board's backing, he would go for broke. He sent another letter offering a cash deal for the whole company, asking for a response by June 30. He heard nothing until this past Wednesday, when Amvescap sent out a news release telling the world it had rejected CI's advance. But this time, Mr. Holland hopes Trimark won't get away.

The biography

46 years old; married; two children, a 10-year-old son

and an eight-year-old daughter

Education: Undergraduate degree in economics from York University

Crummy job: He used to drive a 7-Up delivery truck.

Weird investment: He's part-owner of three ocean liners.

Management style: "Common sense. I think most things in this world are decisions that are black and white. There's usually a common-sense answer."

Role models: None.

Favourite book about management: Moneyball, Michael Lewis's book on how the Oakland Athletics use unconventional methods to choose players and compete against wealthier baseball teams. "I think most of business is that way. People use the same terms, think the same way ... Looking at data rather than having old baseball players tell you who was going to be good in 10 years probably makes more sense."

Now reading: Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, by Steven Levitt. "It's awesome. The guy is smart. And it really, again, is turning conventional wisdom upside-down on a lot of things."

Warm-weather pursuits: Not going to the cottage. "Mostly, what I like to do is I like being in Toronto in the summer. The city's empty."

© 2007 The Globe and Mail. All rights reserved.

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