Larry sarbit, lead manager of AIC Ltd.’s $1.6-billion American Focused Fund, has resigned from the Burlington, Ont.-based fund company, ending his five-and-half-year tenure at the firm.

Sarbit also managed the much smaller AIC RSP American Focused Fund and American Focused Fund Plus. The decision is effective as of April 27. He cites no reason, nor would he say if he would be joining another money-management firm.

Sarbit was a shining light in an extensive lacklustre period for AIC. Dan Richards, president of Strategic Imperatives, a Toronto-based consultant, says he had a strong following among advisors.

“Whenever someone like that leaves, it’s never a good thing. So it’s certainly a blow for AIC,” says Richards. “The question that remains: what will AIC do in the way of finding a credible alternative?”

It’s the second high-profile resignation at AIC so far this year. Just weeks ago, after less than a year on the job, David Whyte left his position as AIC’s executive vice president of sales and marketing, Whyte had been hired with some fanfare, with AIC CEO Michael Lee Chin calling him part of a “dream team” designed to improve sales results.

Sarbit’s departure “could exacerbate the sales problem that has plagued AIC for three years already,” says Dan Hallett, president of Windsor, Ont.-based Dan Hallett & Associates Inc., adding that Sarbit’s fund was one of a few funds, if not the only fund, bringing in money to AIC.

Sarbit, who held a senior vice president position at AIC, had attracted attention lately because of his contrarian equity investing style. He had been holding a cash position of at least 75% in the American Focused Fund, with the position reaching as high as 95% two years ago.

The fund’s cash position as of Feb. 28 was 79%, with its lone equity holdings comprising a 9.8% position in Clear Channel Communications Inc. and a 7.9% holding in AutoNation Inc.

In 2004, American Focused Fund underperformed the S&P 500 index, losing 0.5% as the index added 3.3%. But in 2003, the fund added 11.9% as the bellwether index added 5.3%, according to data from Morningstar Canada. IE