Former Trimark fund manager Tye Bousada has won an important vote of confidence as well as financial backing by garnering the support of his former boss, Robert Krembil, in his newly launched investment management firm, EdgePoint Capital Partners Inc. of Toronto.

Through holding company Chiefswood Holdings Ltd. , Krembil has become a significant shareholder in Cymbria Capital Corp. , which wholly owns EdgePoint. Bousada, who is still in the process of assembling his team, says Krembil’s ownership will be “somewhere between 25% and 51%” of the firm.

“Bob has vision, wisdom and strong business acumen, and I am very privileged to welcome him as a stakeholder of the firm,” Bousada says.

About a month ago, Bousada, 36, resigned from Toronto-based AIM Funds Management Inc. , at which he had been lead manager of the venerable Trimark Fund. That fund was originally launched in 1981 by Krembil, co-founder and former chairman of Trimark Financial Corp. , who headed up the investment team until the fund company was purchased in 2000 by AIM’s parent, Amvescap PLC.

When Bousada left AIM earlier this year, in the wake of the departures of chief investment officer Patrick Farmer last October and fellow fund manager Geoff MacDonald in August, he made no secret of the fact that he intended to launch his own firm.

Although Bousada was unable to disclose what kind of investors EdgePoint will be soliciting, he revealed that “independent financial advisors will be playing an important role.”

Bousada will likely launch a retail mutual fund management firm whose assets will be managed in house and whose products will be distributed through the advisor channel; it’s essentially “the next generation of the original Trimark,” suggests Rudy Luukko, investment funds editor at Morningstar Canada.

Bousada is keeping quiet on whether he will be hooking up with any of his former Trimark colleagues until the necessary regulatory approvals have been received and he’s ironed out the terms of engagement for new team members.

“Human ability, not capital, is always the scarcest resource when you go into business,” Bousada says. “We are assembling a team at EdgePoint, and the intention is to attract the best and the brightest.”

Although Krembil will not be taking an active role in the firm or in the management of money, his involvement as financial backer carries weight. He confirmed that he will “have some influence, more on the business side than on individual securities selection,” as he doesn’t want to run into regulatory constraints that would interfere with his personal investment activities.

“It’s an investment for me, but this is Tye’s show,” says Krembil, who describes Bousada as hard-working, conceptual and entrepreneurial, as well as a talented investor.

“You could put a bunch of bright investment guys in a room and they could go nowhere, but Tye also has energy and ambition. I like the people and I like the initial plans,” he says.

Krembil says EdgePoint’s investment approach will be similar to Trimark’s in that managers will regard stocks as pieces of businesses to be held for the long term. The firm will run concentrated portfolios rather than trying to mimic market indices, and will have a global investment mandate.

“The investment approach is to search for a discrepancy in the value of what you think a company is worth and what the market thinks it’s worth,” he says.

The involvement of Krembil as co-owner of the business adds significant credibility to the new enterprise, given his long and distinguished career, Luukko says.

“Not only is Krembil a successful investor but he is also a successful entrepreneur, taking Trimark from a startup operation more than 25 years ago to a multi-billion dollar investment management firm. While he will not personally be one of the managers at EdgePoint, you can assume any enterprise in which he is a major shareholder will benefit greatly from his involvement and expertise,” Luukko says.

Bousada says he approached Krembil after he quit AIM, and talked to him about his plans to launch his own firm.

“I expressed my thoughts to him and asked him to be an investor,” Bousada says. “He agreed based on what I laid out for him.”

Krembil says that, if EdgePoint can do something “novel,” it will make his investment a good one. He also hinted that EdgePoint’s management fees will be competitive relative to the industry, where fees have risen to such high levels that they are eating up a huge chunk of returns in less than stellar financial markets.

@page_break@Although markets have been rocky for the past several months, Krembil says it’s a much better time to start a firm than in the heat of a bull market when stocks are overvalued.

“It’s a good time to start up,” Krembil says. “It may take longer to get clients in difficult markets and the money may not come in as fast, but it’s a better time to invest.” IE