Hartford investments Canada Corp.’s signing last month of fund manager Bill Kanko to manage its international equity fund is only part of a bigger plan.

Although scooping the fund manager who helped build the Trimark name is the most high-profile development so far, the tiny Canadian arm of U.S.-based financial services giant Hartford Financial Services Group Inc. says, recruiting Kanko is part of an overall strategy to increase its presence in Canada.

Kanko and his Toronto firm, Black Creek Investment Management Inc. , took over as subadvisor of Hartford Global Leaders Fund on June 15. The fund previously was managed by Boston-based Wellington Management Co. LLP, which still manages significant assets for the Hartford parent. The firm plans to place a number of other funds under Kanko’s management over the next 18 months.

Hartford Financial is one of the largest financial services companies in the U.S. It set up a small operation in Canada in 2000 to support Edward Jones & Co. , with which the firm has a special relationship in the U.S. — offering such services as sales support, advisor training and client education.

Hartford Canada didn’t develop a plan to establish a significant presence in Canada until 2004. In January 2005, it hired as president Laurie Davis, a specialist in developing dealer platforms who has worked at Brandes Investment Partners & Co. and the former Trimark Investment Management Inc., and who was a co-founder of 20/20 Funds Inc.

Hartford Canada has seen some growth. Its assets under management doubled to more than $391 million year-over-year to Dec. 31, 2005, and its 11 funds have $484 million as of June 2.

That’s still a small chunk of the market, and Davis hopes to increase it tenfold within four years. “We are looking to reach $5 billion by 2010,” she says. “If we look at the momentum we have now, it’s a reasonable target.”

Kanko first made a name for himself while co-managing Trimark Fund between 1985 and 1994, working under Trimark co-founder Bob Krembil. When Kanko left Trimark in 1994, he founded Bluewater Investment Management Inc. , through which he was subadvisor for Mackenzie Financial Corp. ’s Ivy Foreign Equity Fund.

Kanko joined the staff of Mackenzie in 1997, before going back to Trimark (by then AIM Funds Management Inc. ) in 1999. Accustomed to managing portfolios worth more than $10 billion, and with a record of producing top-quartile results at both firms, he left AIM in 2004 to start up Black Creek, for which he manages $40 million in pooled funds.

“I ended up managing $13 billion when I left Trimark, and it was just getting less and less fun because you can’t look at small companies,” Kanko says. “I didn’t want to do that again — at least, not in the short term.”

He accepted Hartford Canada’s offer because it afforded the flexibility of a small fund with the resources of a large firm, and he could get back into the fund business without having to start up a new company.

“I had an idea to do mutual funds again and spent some time trying to figure out whether another start-up made any sense or not,” Kanko says. “It would require a big commitment, in terms of people and capital, and I didn’t want to manage money for a big mutual fund company in Canada.

“Hartford [Canada] is sort of a start-up without being a start-up. It has the infrastructure in place, it has deep pockets [through its] parent, but it needs help growing the company.”

Global Leaders Fund had $16.8 million in AUM and 80 names under Wellington, which sold off all the assets before handing the reins over to Kanko. After taking over a portfolio of straight cash, Kanko has bought 16 companies, with plans to increase the portfolio to 20 to 25 companies. Turnover in the fund was 200% to 300% under Wellington, according to Kanko, who plans to keep turnover down to about 30%.

“The intent is to have a very focused and concentrated list of individual business ideas,” Kanko says. “It’s free to go anywhere in the world, but it’s not going to be your typical pie-chart global equity fund. The domicile of a company is far less important than the idea behind the holding.”

@page_break@Ten of the fund’s holdings are U.S. companies, but many of those are international in nature, he says. Others are in Britain and Japan.

Davis says Hartford Canada plans to launch two or three new funds in the fall, probably with mandates in fixed-income and international equities. Development of those products, and whether they are managed by Black Creek, will depend on the specialization of Kanko’s recruits.

And whether any other funds that Hartford Canada hands off to Black Creek are from the product shelf or newly created will also depend on the Black Creek team.

“Part of our strategy is to work with Bill to grow his business,” Davis says. “As he brings additional managers into his structure, we’re supportive of that and want to do more mandates with him as well.”

“It’s a bit of a chicken-and-egg thing,” Kanko says. “I have to get the appropriate people to get the right fund mandate. But [Hartford Canada’s] intent and my intent is to have more people added to Black Creek over the next year or two.”

Hartford Canada is focused on basic middle-market investment products for young to middle-aged people planning for retirement, with some retirement solutions.

“My strategy and Hartford Canada’s is to do what we know best — to provide a good quality basic mutual fund product,” Davis says. “We’re not going to go out and do complex high net-worth products. We want to get back to basics.” IE