Adam Elliott only recently became president and CEO of Toronto-based iA Clarington Investments Inc., replacing Andrew Dalglish in April after he retired from the industry.
Yet Elliott has been refining the investment management firm’s product lineup since he joined in 2018 as senior vice-president and national sales manager — a position he’s retained alongside his new title.
Beginning in 2018, and in part prompted by know-your-product reform, “we underwent a full review, with plans for major rationalization of our fund lineup,” Elliott said. The firm has now removed or merged any products that were outdated or didn’t meet clients’ needs, he explained.
As part of the same exercise, iA Clarington trimmed its subadvisor list. “We went from [working with] 10 down to four subadvisors,” based on which firms stood out as “best-in-class,” he said. iA now works with three Canadian-based investment managers and one U.S.-based firm (Natixis Global Asset Management subsidiary Loomis, Sayles & Company L.P.).
iA’s lineup today includes only products that are competitive and where the firm sees potential for growth, Elliott said. This includes environmental, social and governance (ESG) products.
“We have a competitive advantage in an area where there’s a lot of new entrants,” Elliott said, pointing to iA Clarington’s 10-year relationship with Vancouver-based Vancity Investment Management Ltd.
In contrast, iA Clarington will avoid burgeoning areas like cryptocurrency — at least for now. While “niche players” can do well and Elliott said he sees evidence for long-term opportunities, “we tend to be more conservative. That’s not our area of expertise.”
Instead, the firm will focus on investing in “large, addressable markets” for which data can be analyzed rather than “the more speculative areas.”
Elliott said refining the product lineup has paid off.
“We have very strong momentum in terms of sales and asset growth at the moment, and I see no reason why that can’t continue,” Elliott said. “I would expect us to be able to double our asset base [more than $16 billion, as of March 31, 2021] in the next four to five years.”
Also part of iA Clarington’s long-term strategy is investing “significantly” in the firm’s own asset management teams and tools so the firm doesn’t become dependent on any of its four subadvisors, Elliott said.
“We’re very focused on differentiating [our team] from the subadvisor teams,” he explained. For example, the company’s internal managers focus on “asset allocation using a data-driven, quantifiable approach,” versus more traditional fund processes and offerings.