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mass redemptions have been commonplace at AGF since 2008, although that tide finally appears to have turned. In the fourth quarter of 2016, AGF reported a 26% increase in mutual fund flows, which is welcome news for the company’s top brass. The financial crisis left its scars, however, so diversifying the firm is paramount for Goldring.
Staying active
“In our strategic retreat of 2012, we decided we needed to get into the world of
One of the major criticisms of the mutual fund industry in Canada and firms like AGF
After a long descent, it appears AGF is finally heading on an upward trajectory again. “These are interesting times,” Goldring says. “I think for a firm like AGF, given our size and the capital we can invest in different markets, but also small enough that we are fleet of foot, this is the perfect environment.”
“These are interesting times. I think for a firm like AGF, given our size and the capital we can invest in different markets, but also small enough that we are fleet of foot, this is the perfect environment” alternatives,” he says. “The idea of having hedge funds wasn’t that exciting to us, so we wanted to do something different. We looked for partners in the alternative space and came across Greg Smith, who had just finished a sterling career with Macquarie, Brookfield and RBC.” Smith ultimately joined AGF in 2014 and has since set about building its infrastructure platform. Central to that is the InstarAGF Essential Infrastructure Fund, which is expected to reach its target of $750 million and close in the second quarter of 2017. The crown jewel of the fund is its interest in Toronto’s Billy Bishop Airport, acquired in 2015 as part of the Nieuport Aviation Infrastructure Partners consortium. Looking at the company today, it’s clear that AGF is fully committed to its transition. Of its $34 billion in assets, $23.9 billion is in the mutual fund space, while alternatives account for $685 million, its burgeoning private client business has amassed $4.9 billion, and its new venture, the quantitative solutions ETF platform AGFiQ, has $4.7 billion.
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is that performance has lagged while fees remain high by global standards. With ETFs now offering a different option for investors, the industry has responded, and fees have come down across the board. AGF is no different – it lowered fees by 10 to 60 basis points on 23 of its largest funds in 2016. While there has been a lot of change at the company in recent times, one thing that won’t change is its commitment to active management, both in mutual funds and its newly launched ETF suite. As Goldring says, we live in interesting times – but they’re also very unpredictable, possibly tumultuous times. It’s a well-worn axiom that the markets hate uncertainty, and while that hasn’t proven to be the case so far in 2017, no one knows what lies ahead. “We have a change in policy in the United States, and every day seems like we are seeing something new,” Goldring says. “The best algorithm in the world won’t be able to anticipate that. Not only do you need to look at historical correlations, but marry that with real-time analysis by professionals.”
FAST FACTS: AGF MANAGEMENT
Founded by C. Warren Goldring and Allan Manford in 1957
Takes its name from the initials of the American Growth Fund, the first mutual fund in Canada to invest solely in US equities
The company went public on the Toronto Stock Exchange in 1968
By the following year, AGF had $350 million in assets, which represented 12.4% of the industry
Today, its assets stand at $34 billion
AGF has offices in Toronto, London, Dublin, Beijing and Singapore
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7/04/2017 8:18:18 AM