Manulife Financial Corp. has closed the transaction to purchase AIC’s Canadian retail investment fund business, the company said Friday.

As a result, Manulife Mutual Funds, a division of Elliott and Page Ltd., becomes the manager of AIC funds in Canada and Portland Investment Counsel (formerly AIC Investment Services) will continue as a fund sub-advisor for certain AIC funds.

“This is an excellent fit for Manulife and AIC Ltd,” says Paul Rooney, president and CEO, Manulife Canada. “When coupled with Manulife’s solid wealth management services, this transaction strengthens our previously deep product line-up that meets the needs of investors and their advisors.”

The deal gives Manulfie significant scale and presence n the Canadian mutual fund market. The firm’s overall retail fund assets under management for Canadians will grow 38% to about $13.9 billion, Manulife says.

MFC Global Investment Management will provide portfolio management services for most of the broadened fund family, while Portland Investment Counsel, Third Avenue Management and Brookfield Redding will remain as sub-advisors for a range of funds.

Effective Jan. 11, 2010, Ariel Investments will no longer act as sub-advisor for AIC American Small to Mid Cap Fund, AIC American Focused Fund and AIC American Focused Corporate Class, and Loomis Sayles will no longer act as sub-advisor for AIC Global Fixed Income Fund. MFC Global Investment Management will retain sole responsibility for portfolio management of these funds.

“Both Manulife and AIC Limited have similar strong cultures designed to serve the needs of investors through independent advisors,” adds Rooney.

“We now have an excellent opportunity to broaden Manulife’s position in Canada’s wealth management market, while providing AIC’s clients access to Manulife’s broad platform of insurance, wealth and banking products and services.”

For a full list of the funds now being managed and their sub-advisors, see the attached list.

IE