Seamark Asset Manage-ment Ltd. has launched its own family of funds. This is a first for the 25-year-old Halifax-based company, but it is not uncharted waters.

“We don’t consider this new ground for us,” says Stuart Raftus, president and CEO. “We feel we have wide brand recognition with investment advisors, who are the key conduits to the actual clients.”

That sense of familiarity stems, in part, from a long-term relationship Seamark had with what is now IA Clarington Investments Inc. Seamark acted as subadvisor for $3 billion in mutual fund assets beginning in 1996, the year Clarington was founded. That role disappeared when Industrial Alliance Insurance and Financial Services Inc. purchased Clarington in 2006. Seamark was left high and dry.

“We looked at our opportunities,” says Raftus. “We took our time, and we concluded the best way to re-enter the mutual fund industry was to go on our own.”

Seamark, a publicly traded company with 34 employees and $4.2 billion in assets under management, was also encouraged to start a new family of funds as a result of its existing business, which includes managing $1.5 billion in wrap funds. Dealers in these funds, notes Raftus, “often offer mutual fund products.”

Before developing its offerings, Seamark talked to advisors across the country to determine what products they needed. Two requirements rose to the surface: demand-driven funds and competency-driven funds.

Seamark, which manages pension funds, endowments and foundations, and high net-worth private investments, among others, feels it has met both needs in the three products it is now selling to advisors: Seamark Canadian Equity Fund, Seamark North American Equity Fund and Seamark Dividend and Income Fund.

The Canadian equity fund invests in a concentrated portfolio of Canadian equities that are expected to offer long-term returns.

The North American equity fund selects from what Seamark believes to be the best investment opportunities in Canada and the U.S. to build a concentrated portfolio from the bottom up. It is offered as both hedged units for investors who want to limit their exposure to further increases in the Canadian dollar and as unhedged units for investors willing to accept currency volatility or who expect the C$ to weaken.

“We believe this fund will generate considerable interest,” says Raftus. “There is demand.”

The dividend and income fund is designed for investors seeking a stable and recurring monthly income stream. It targets a distribution equivalent to approximately 200 basis points over the yield on Government of Canada 10-year bonds, to be paid from realized capital gains, dividends, other income or a return of capital.

“This is very much demand-driven,” says Raftus. “It was our largest offering with Clarington.”

Raftus believes advisors will be interested in purchasing some or all of these funds because they are managed by the company’s in-house team.

Seamark brings a level of expertise that, adds Brent Barrie, Seamark’s vice president and corporate secretary, includes being ranked in the top half of institutional managers for 17 of the 22 years that the company has been managing institutional money.

“These three mutual funds are just like three new institutional accounts,” Barrie says.

Adds Raftus: “It’s important to look at how we perform over the long term. We provide an above-average rate of return.”

That track record will be shared with advisors across the country as Seamark rolls out its marketing plan. No major ad campaign is planned. Rather, the company believes a personal approach will work best. “Our biggest advantage is leveraging the existing relationship we have at both the dealer level and the advisor level,” says Raftus. “We will do a lot of one-on-one.”

The funds are sold on a no-load basis. Advisors, through their dealers, will get a trailer fee of 1.25% on Series A units. “This is on the upper end of the market,” Barrie says. Series F units are standard fee-based programs.

The result is fully expected to be successful, if not an overnight success. “We anticipate slow but steady growth,” says Raftus. Indeed, the company has not even attempted to quantify that growth; no sales targets have been set.

There is a vision, however. Although Raftus stresses that “fundamentally, we’re an investment asset manager and that will always be our core business,” he adds that the foray into mutual funds holds considerable promise. “Right now, mutual fund revenue is a very small portion of our business. But we feel it will become a significant source of AUM and revenue to the firm.”

@page_break@That does not mean the company has donned rose-coloured glasses. Raftus is well aware of the market’s competitive nature and the dominance of a few large firms. But he feels Seamarks strengths will profitably address those realities.

“We feel confident, given the high demand for our expertise,” he says. “We have a very strong chance of success.” IE