Canadian financier Michael Lee-Chin Wednesday announced plans to sell his AIC retail mutual funds business to Manulife Finacial Corp.

Portland Holdings Inc., a privately held investment company founded by Lee-Chin that owns businesses operating in media, tourism, health care, telecommunications and financial services, has agreed to sell the Canadian retail investment fund business of Burlington, Ont.-based AIC Ltd. to Manulife.

The sale is subject to regulatory and securityholder approval.

“By combining with Manulife, AIC can fully leverage the extraordinary strength and depth of a world-class financial services organization,” said Lee-Chin, chairman of Portland Holdings Inc., in a release.

“I believe this combined entity will become a formidable player within the Canadian wealth management landscape,” he added.

Portland’s relationship with Manulife dates back to 2007, when Manulife acquired Berkshire Investment Group, another Portland Holdings company.

“This is a great fit for Manulife and AIC Limited,” said Paul Rooney, president and CEO, Manulife Canada. “When coupled with Manulife’s solid wealth management services, this agreement will strengthen our already strong product line-up that meets the needs of investors and their advisors.”

Upon completion of the agreement, expected to close by September 25, Manulife Mutual Funds would manage all AIC Funds in Canada, however AIC Investment Services Inc. will remain as sub-advisor to the following Funds:

• AIC Advantage Fund;
• AIC Advantage Fund II;
• AIC American Advantage Fund;
• AIC Global Advantage Fund;
• AIC Diversified Canada Fund;
• AIC Canadian Focused Fund;
• AIC Advantage II Corporate Class;
• AIC American Advantage Corporate Class;
• AIC Global Advantage Corporate Class;
• AIC Diversified Canada Corporate Class;
• AIC Canadian Focused Corporate Class; and
• AIC Diversified Canada Segregated Fund (75% & 100% Guarantee)

Upon completion of the transaction with Manulife, AIC Investment Services Inc. is expected to commence operations under a new name. The new company will be a Portland Holdings company, Portland said.

AIC was acquired by Lee-Chin in 1987. At that time AIC had less than $1 million in assets under management. Under his stewardship, AIC grew to become one of Canada’s largest privately held mutual fund companies with assets under management of almost $4 billion.

Lee-Chin will retain management, as sub-advisor, of approximately $2 billion of AIC’s assets under management.

Once complete, the acquisition of AIC funds by Manulife will create significant scale and presence in the retail investment fund market. Overall retail fund assets under management by Manulife for Canadians would grow to approximately $13.7 billion.

IE