Stuart raftus has
pulled the trigger on a major shakeup at Seamark Asset Management Ltd. in an attempt to staunch the flow of outgoing assets and turn around the failing fortunes of the Halifax-based money manager.

The key change at Seamark is the naming of Thomas MacLaren, a company veteran and its executive vice president, as the company’s chief investment officer. The company has also hired a number of new executives, while cutting staff to 34 employees from 42.

Raftus, the firm’s president and CEO, says the changes are to address two priorities — improving investment performance by defining clearer in-house roles and emphasizing customer service. They are also an effort to cut costs. Raftus says $750,000 in annualized savings will be realized by the staff reductions and through other cost-saving measures.

“We’re trying to enhance the performance we’re offering our clients,” says Raftus, who joined Seamark in March. He was previously COO of Toronto-based Rockwater Capital Corp. and president of its investment dealer subsidiary, Blackmont Capital Inc.

MacLaren’s promotion to CIO allows company founder Peter Marshall to return to his former role as the company’s chairman. Marshall retired in 2004 from day-to-day involvement in the company, but returned to the dual CEO/CIO role in 2005 when then-chief executive Robert McKim left the firm.

Seamark manages money for institutional clients, runs mutual funds on clients’ behalf, offers wrap programs and provides asset management for some private clients.

The announcement of the changes at Seamark came in early August, two weeks after the release of the company’s disappointing second-quarter results. Assets under management for the quarter ended June 30 were $5.3 billion, a $600-million drop from the first quarter and barely half the $10.3 billion the firm managed in the same period the previous year.

The firm has been in a slump for the past two years, during which its long-term, disciplined, value approach to investing has not been rewarded by the market. But the biggest blow to Seamark came in February, when Toronto-based ClaringtonFunds Inc. pulled its $2.9 billion in assets out of the firm.

“Losing Clarington was a very negative scenario for us,” Raftus says.

MacLaren will run a reconfigured four-member executive portfolio-management team, which will include new hire Angela Eaton, a 20-year investment industry veteran who becomes head of equities; Don Wishart, the firm’s chief portfolio manager; and Richard Fewell, who has been promoted from within to executive portfolio manager. There will be no change to the firm’s value-oriented, blue chip-focused investment philosophy.

Another key recruit, reporting directly to Raftus, is Darren Kosack, who comes on as senior vice president of institutional sales and marketing. Kosack, whose experience is in client relationship management, is part of a concerted effort by Seamark to try to keep existing clients onside and attract new clients, in part by improving client relationships.

“We’re trying to be a bit more proactive to clients’ needs rather than reactive,” Raftus says. “Investment performance is what ultimately will win the day, but the strength of the client relationship will be built on factors other than just performance.”

Raftus adds that hiring Kosack to head the company’s efforts to improve client relationships will allow portfolio managers to focus on their core tasks and will introduce a greater degree of accountability at the firm.

“In the past, a Seamark portfolio manager would be responsible for portfolio management, research and client service. One thing we’re doing here is unbundling that third piece.”

Seamark has also brought in three new executives by acquiring Halifax-based boutique investment firm Rudderham Norwood Ellison Investment Counsel Ltd. for $375,000 in cash and 134,000 in shares.

Jeff Rudderham comes in as vice president of client relations, and Scott Ellison and Jonathan Norwood will both serve as portfolio managers and equity analysts.

“These are three very talented and entrepreneurial individuals who we thought would make great additions to the team,” Raftus says. “It’s more of an exercise in purchasing intellectual capital than their actual business.”

Also, William Eeuwes, vice president and head of Manulife Capital, the private equity arm of Toronto-base Manulife Financial Corp. , has been named to Seamark’s board of directors.

Departed from Seamark are a number of administrative staff, the former head of marketing and three portfolio managers, including former head of equities George Loughery, who resigned shortly after the reorganization was announced. Loughery was to have been a member of the reconfigured executive portfolio-management team but he elected to leave instead. “He was disappointed and uncomfortable with some of the changes and acted accordingly,” Raftus says.

@page_break@An analyst report from GMP Securities LP expresses cautious approval of the changes at Seamark. “Investors must be patient during the next several quarters,” say GMP analysts Timothy Lazaris and Keith Lam about the effects of the reorganization at Seamark. “Overall, we are encouraged by changes to management and Mr. Raftus’s dedication to renewing the focus and performance of the company.”

Raftus says the fact that Seamark now has a permanent CEO and CIO, as well as a revamped executive, should reassure clients and shareholders. “I very much believe this creates the stability the market is looking for,” he says. “We’ve assembled an excellent team.”

The reorganization represents Raftus’s first shakeup of the company since he took the top executive position in the spring. While admitting that the changes have “my fingerprints all over them,” he says there was a natural progression to the decision to reorganize. He adds that no further changes are planned.

Raftus is also increasing his personal stake in the firm. In the last quarter, he added to his equity position in Seamark by buying shares from majority owners Manulife Financial, which now owns 31.3% of the firm, and from Peter Marshall, who now owns 12.8% of Seamark. Raftus holds a 6.7% stake in the firm; a company official says Raftus is slowly adding to his equity position with purchases in the open market. Seamark has traded on the Toronto Stock Exchange since 2001. IE