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AGF president leaves fund unit

Speculation mutual fund firm is on auction block fizzles

Randy Ambrosie, president of AGF Management Ltd.'s AGF.B-T mutual fund arm, left the company yesterday as part of a management shakeup.

The departure of Mr. Ambrosie comes amid speculation that AGF, which has been suffering from net redemptions, might be put on the auction block following the recent death of Warren Goldring, co-founder of the firm and father of AGF chief executive officer Blake Goldring.

There had also been speculation that AGF's trust unit might be sold, given that it made a lot of investment loans that could go sour following the recent stock market collapse and economic downturn.

Mr. Ambrosie, a veteran brokerage executive as head of sales at HSBC Securities and a former Canadian Football League star, was first hired in 2004 as head of sales and marketing at AGF before being promoted later to the post as president of AGF Funds Inc.

He was hired to find ways to stem net redemptions that plagued the firm after San Franciso-based Brandes Investment Partners, which ran one-third of AGF's assets, left to set up its own Canadian company in 2002. The four-year sales slump ended in the summer of 2006, and resumed more than a year ago.

Mr. Ambrosie was behind new products such as Elements, a fund portfolio that pays rebates to investors if returns fall short of performance benchmarks and pays higher trailer fees to advisers for selling them than competitors.

"Though rumours of a sale will continue to float around, we remind investors that the Goldring family remains heavily invested in the company and that Blake Goldring continues to deny the possibility of an impending sale," said GMP Securities analyst Stephen Boland.

The analyst said in a note to clients that he is "not overly surprised by the resignation of Mr. Ambrosie who has been president for three years."

"AGF Trust has garnered considerable amount of attention in the past year, but the fund group has suffered declining gross sales during this period," said Mr. Boland, who has a "buy" on AGF with a target of $13.50. "Both the product lineup and the wholesaling group were under Mr. Ambrosie's responsibility."

Investment bankers and sources close to AFG say the Goldring family has no intention of selling the company. The stock slipped 20 cents yesterday to $10.85.

The company also announced that it is realigning its corporate structure to integrate AGF Funds, its retail arm, and AGF Asset Management Group, which deals with its institutional and private client business, under one banner called AGF Investments. The combined group will now be led by Mr. Goldring, who will be joined by Rose Cammareri, head of national adviser sales who was promoted to executive vice-president.

The promotion of Ms. Cammareri to this new job instead of president "implies that AGF may be moving to a more streamlined structure at this time," Mr. Boland wrote. "It may not have been a role Mr. Ambrosie coveted."

Other members of the executive include executive vice-president Rob Badun, chief investment officer Martin Hubbes and chief financial officer Greg Henderson. Mr. Goldring's sister, Judy, was also promoted to executive vice-president and assumes the role of chief operating officer. AGF Trust continues to be run by Mario Causarano.

AGF had flagged that some changes were coming after cancelling its previously scheduled analyst and investor day last month "pending organization changes." The event has now been scheduled for May 14.

"The market was hoping that the organizational changes would involve a sale of the trust," said Blackmont analyst Richard McCormick. "Many investors continue to be very worried about the sharp credit deterioration seen at the trust."

BMO Nesbitt Burns Inc. analyst John Reucassel was also not surprised by the management changes. He expects some changes in the fund lineup and perhaps in the Elements program. "Elements has been successful in terms of sales, but generates suboptimal levels of profitability," Mr. Reucassel wrote in a note to clients.

"The appointment of Judy Goldring should douse the flames of speculation that AGF may be put up for sale," added Mr. Reucassel, who has a "market perform" rating on its stock with a target of $11.05.

© 2007 The Globe and Mail. All rights reserved.

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