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Radlo set to run three new CI mutual funds

FUNDS REPORTER

CI Financial Income Fund has filed preliminary prospectuses for three mutual funds to be run by former Fidelity star manager Alan Radlo.

The offerings include CI New Canadian Equity Corporate Class, CI New Global Equity Corporate Class and CI New Canadian Asset Allocation.

CI Financial chief executive officer Bill Holland would not comment yesterday on who would run the three funds, but sources indicate that Mr. Radlo will pilot them.

The Globe and Mail reported in October that CI had managed to woo Mr. Radlo, who left Boston-based Fidelity Investments last December after a falling out with management.

CIBC World Markets analyst Stephen Boland said he believes the funds will be run by Mr. Radlo, even though CI won't brag about its latest hire.

"Although the manager listed on the funds is a generic CI Investments, we believe this was filed to begin the regulatory process while not violating Mr. Radlo's non-compete clause," he wrote in a report. "We believe he will attract considerable new assets."

Mr. Radlo begins running the funds next month as the registered retirement savings plan season kicks into high gear.

Mr. Boland, who has a target of $31 on CI, does not expect the financial impact of the new fund flows will be material in the first year. But CI could eventually attract a higher multiple given that companies with strong net sales and strong performance in their funds can command a higher valuation, he added.

Mr. Radlo - often regarded as the face of Fidelity in Canada - was a 17-year veteran of the U.S. fund giant, and oversaw about 25 per cent of the Canadian arm's $37.5-billion in assets at the time. He ran Fidelity Canadian Growth Company Fund, and co-managed Fidelity NorthStar and Fidelity Canadian Asset Allocation Funds.

Mr. Radlo left Fidelity after a dispute over his personal holdings in the firm's privately held parent company FMR Corp. Sources say he had a one-year non-compete clause that began after last Dec. 31.

He will be one of four lead Canadian stock fund managers at CI. They include Eric Bushell, Gerry Coleman and Daniel Bubis of Tetrem Capital Management Ltd. Mr. Bubis took over CI Canadian Investment Fund in 2006 after Kim Shannon jumped ship for Brandes Investment Partners & Co.

© 2007 The Globe and Mail. All rights reserved.

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