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Sprott nabs two top AGF fund managers

Charles Oliver, Jamie Horvat expected to be involved in precious metals, work with chief investment strategist

Two award-winning mutual fund managers have left AGF Funds Inc. and gone over to competitor Sprott Asset Management Inc.

Charles Oliver and Jamie Horvat, who managed or helped manage five top-performing funds with assets totalling nearly $2.3-billion at Dec. 31, unexpectedly resigned Friday, AGF Funds said yesterday.

"They'll be working with [chief investment strategist John Embry] and me," said Sprott chief executive officer Eric Sprott. "John's not leaving, but he is 67.

"We've always known we needed to provide some linkage for the future there. These guys are young and had excellent performances last year, and they are quite diversified in what they can do. They ran a lot of different investment styles at AGF, so they'll be very helpful to us and will complement the team. We have a pretty good group of guys here now."

Mr. Sprott added: "They will certainly be involved in precious metals. We may end up opening other funds they might run as well. For their own interests, they don't want to just do precious metals, so we'll probably open up something else."

However, he would not be specific. "No firm decision has been made there."

Neither Mr. Oliver nor Mr. Horvat could be reached for comment immediately, and AGF Funds officials declined to say why the two managers had left.

"I've heard the reason they were leaving [AGF] was to do with compensation, some issues with year-end bonuses," one industry source said.

Martin Hubbes, AGF Funds' chief investment officer and executive vice-president, said there was no bad blood behind the departure. "I want to stress that they left on amicable terms," he said in a telephone interview.

He and the firm's president, Randy Ambrosie, said they had had no advance notice that Mr. Oliver and Mr. Horvat were planning to leave.

"But these things happen from time to time," Mr. Hubbes said.

AGF disclosed the two managers' departures in one sentence in a news release that was otherwise devoted to an announcement that the firm's vice-chairman - and former chief investment officer - Robert Farquharson is assuming "full portfolio management responsibilities" for a number of funds with which Mr. Oliver and Mr. Horvat have been associated: the AGF Canadian Growth Equity Fund, (which had $1.14-billion in assets at Dec. 31), AGF Canadian Resources Fund ($460-million), AGF Global Resources Class ($120.3-million) and AGF Precious Metals Fund ($674.3-million).

Mr. Farquharson, 67, who has been with AGF since 1963, also will assume management of AGF Canadian Small Cap Fund ($355.2-million) and AGF's portion of the Harmony America's Small Cap Equity Pool, the release said.

AGF also said it is shifting associate portfolio manager Coulter Wright, who has been specializing in energy stocks, over to help manage the AGF Canadian Growth Equity Fund.

"He is somebody we've been very excited about," Mr. Ambrosie said in a telephone interview.

As well, Mr. Hubbes has launched a search to recruit at least one new investment manager specializing in Canadian and global resources.

He and Mr. Ambrosie insisted that, despite Mr. Farquharson's age, they expect him to stay with the firm for a considerable time.

Apparently anxious to calm fund customers who may be concerned about the departures, they emphasized that Mr. Farquharson not only has served as a mentor to younger portfolio managers at the firm, but also has been involved since inception on several of the funds the departing managers headed.

© 2007 The Globe and Mail. All rights reserved.

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