After a lengthy engagement, two well-known mutual fund brands were married last summer. The presiding official was Steve Geist, president of CIBC Asset Management Inc., who spent more than a year restructuring, revamping and retooling the Renaissance and Talvest families of mutual funds after leaving his job heading up TD Asset Management Inc.

The result of the combination — Renaissance Investments — is a simplified, scaled-down list of 40 funds and eight Axiom Portfolios products, with two new funds on the way. Geist says the strategy was adopted to overcome consumer and advisor confusion surrounding the two fund brands. The overhaul involved some tough decisions, including killing 20 funds, laying off many internal portfolio managers and bringing in more expert help from subadvisors.

After testing the two brands with focus groups of advisors across the country, the Renaissance name won out.

Over the past decade or so, CIBC had acquired both the Talvest and Renaissance families of funds along with other assets. The bank added the general, broad-based Atlas Funds when it acquired Merrill Lynch Canada Inc.’s retail advisor network in early 2002; Talvest mutual funds, with their emphasis on niche, sector-oriented funds, were acquired when CIBC acquired TAL Fund Management Inc. of Montreal in two steps, purchasing 60% in 1996 and the rest in 2001.

While these two groups suffered from brand-confusion issues after the acquisition, their sister funds at CIBC, which are sold only through the bank and not by the independent advisor channel, were also lagging in sales behind high achievers such as TDAM.

One senior mutual fund analyst says the rebranding was overdue. “It’s a good thing. It was a long time coming,” says Peter Loach, vice president and managing director of investment fund research at BMO Nesbitt Burns Inc. , adding that promoting two different fund families was bewildering for clients and advisors. “It was necessary to get them under one roof. I’m surprised it took this long.”

As for performance, Loach says, bolstering returns will take time. “It takes a couple of years to do a full stop and reverse,” he says.

The Talvest and former Renais-sance funds have also struggled with distribution problems, Talvest’s in particular. Veteran fund analyst Dan Hallett, president of Windsor, Ont.-based Dan Hallet & Associates Inc. , says the Talvest funds had only limited success in the past: “It was basically a growth investment shop vs value, in terms of investment style. It wasn’t a terrible company, but it certainly wasn’t shooting the lights out.”

With the restructuring behind him, Geist is launching a major campaign to promote awareness of the rebranding among advi-sors. To start, he has almost doubled the national sales team to 26 from 15, with the goal of developing relationships and supporting advisors rather than just “pitching product.”

Reducing the number of products for advisors to sift through was also crucial. “One of the keys to partnering well with advisors is to make their jobs relatively straightforward and simple. Do you wish to approach them with numerous small-cap funds — or one great one?” Geist asks, referring to the pared-down fund family.

Another major change is higher trailer fees for advisors who previously held Talvest offerings. When a Talvest and Renaissance fund were merged, the Talvest funds assumed the higher trailer fees of the Renaissance funds. Many of the former Renaissance funds, created by Midland Walwyn Capital Inc. (which was acquired by Merrill Lynch) came with a trailer fee of 1.25%, which Geist acknowledges is 25 basis points higher than the industry average of 100 bps. “The 1.25% did exist within the Renaissance family before the merger,” he says. “We really aligned many of the Talvest funds to that measure. Compensation is obviously a key metric for advisors.”

Although this may attract the attention of advisors, it may not sit well with investors who read the fine print. That said, MERs were adjusted to the lower end when two funds were merged, which benefits the retail investor.

“One of the critiques of the former Talvest funds was often on the MER side,” Geist says. “So, we have actually dropped many of the old Talvest MERs quite significantly.”

For example, the Talvest high-yield fund saw its MER drop by 35 bps to match its Renaissance partner. Talvest Canadian Equity Growth has shaved off 23 bps from its MER and Talvest Small-Cap Canadian Equity has trimmed 36 bps. The MER on the bond fund is also 20 bps lower.

@page_break@Geist acknowledges the sector funds’ MERs are still fairly high, but argues they cost more to manage. “A perfect example is Global Health-Care Fund, which at 316 bps is above average. But the fund, in terms of value for investors, is well above average,” he says of the award-winning fund.

Along with streamlining came downsizing: when a Talvest and Renaissance fund were amalgamated, only one of the two managers survived. However, the number of funds that have been farmed out to outside managers has increased.

“We have a team of 30 people whose job it is to monitor managers, pick managers, replace managers,” Geist says. “So, it’s not a matter of signing a contract with someone and hoping for the best.”

An example would be the former Talvest China Plus fund, which was being run by CIBC As-set Management but was handed over to Hamon Investment Man-agement in April. “Even though the fund would have had a very strong absolute return,” Geist says, “it was lagging our expectations, so we put a new manager in there and their track record has significantly outperformed other China mandates.”

Outside firms are more costly than managing funds in-house, but Geist believes it’s an investment that will pay off. The addition of subadvisor David Winters, the award-winning founder of U.S.-based Wintergreen Advisers who has been contracted to run Renaissance Global Markets Fund, is a point of pride for Geist. “The fund is slowly climbing from an underperformer to a significant outperformer,” Geist says, noting it returned 13.75% in the nine months ended June 30.

But beyond improved fund performance, Geist wants to differentiate the funds by giving the 20,000 advisors in the family’s footprint more practice-management support: “I want to know what advisors want next. We have been, in the stable of funds, working on having them all perform well.

“You’re always looking to raise the bar no matter how good you are,” he says. “We could win Fund Company of the Year and I’d always be looking to improve.” IE