The return of Sandy McIntyre as chief investment officer (CIO) of Toronto-based Sentry Investments Inc. should bring a high degree of continuity to the firm in the wake of the sudden exit of former CIO and executive vice president Dennis Mitchell in July, says Chris Davis, director of manager research with Toronto-based Morningstar Canada.

“Sandy has a long history as a portfolio manager and strong investment acumen,” says Davis, who adds that he doesn’t expect any big changes in the firm’s direction.

While there is a dearth of information on the reason for the departure of the high-profile and articulate Mitchell after 10 years with Sentry, the firm says it decided to end the relationship. Mitchell and Sentry both are maintaining a vault-like silence as their respective lawyers iron out the details of disengagement.

McIntyre says only that the departure of his protégé was “completely unanticipated” and that it was not related to the management of the portfolios under his leadership.

Mitchell had begun shifting away quietly from his role as CIO to focus solely on investment management before his unexpected exit, McIntyre adds: “The transition was already in place. Dennis wanted to focus full-time on managing money – not people.”

Overtaken by events

Sentry was ready to issue a formal press release about this change, McIntyre says, but that plan was overtaken by the events.

As Sentry’s CIO from 2008 to 2012, McIntyre is well equipped to take up the reins again, but had held high hopes for Mitchell. McIntyre promoted Mitchell from senior portfolio manager to deputy CIO in 2011, grooming him to take the reins as sole CIO, which he did in 2012.

“One could see how it might be a personality clash, but it’s hard to confirm,” Davis says. “Mitchell was not a shrinking violet by any means.”

McIntyre would not comment on whether there is a non-compete clause in Mitchell’s contract or about what’s happening with any ownership stake Mitchell may hold in Sentry, which is a private company.

“[Mitchell leaving Sentry] certainly has the appearance of a sudden departure. And whenever that happens, it raises a lot of questions,” says Dan Hallett, vice president and principal with HighView Financial Group of Oakville, Ont. “Mitchell had a fairly steep ascent at the organization and took on a lot of responsibilities in addition to a high public profile.”

McIntyre, 63, relinquished his role as CIO in 2012 to become Sentry’s chief executive officer and later co-CEO with Sean Driscoll. He stepped down from that position last January to focus on guiding the investment team as vice chairman rather than being responsible day-to-day executive decisions.

“I have continued monthly meetings with the investment team and inundating with them my views,” McIntyre says.

McIntyre will retain his title of vice chairman and also be back in charge of the investment team, but will not be assuming Mitchell’s role as lead portfolio manager of specific funds. In total, the funds formerly under Mitchell’s oversight – including Sentry Global Growth and Income Fund, Sentry Global Balanced Income Fund, Sentry Global Mid Cap Income Fund and the international component of four Sentry Personal Pension Portfolios – account for about $850 million of Sentry’s $19 billion in assets under management (AUM).

Mitchell’s specific fund responsibilities have been assumed jointly by Michael Missaghie and Gajan Kulasingam, senior portfolio managers on the global equities team responsible for the funds. Both portfolio managers also occupy lead roles on narrower portfolio mandates within Sentry: Missaghie on global real estate; Kulasingam on infrastructure.

For Global Balanced Income Fund, James Dutkiewicz, chief investment strategist and senior portfolio manager, will provide additional input on asset allocation.

Young analysts

“I will provide advice to the team, but won’t be the lead manager,” McIntyre says. “I won’t go back to writing tickets, but I will be providing suggestions. The way I run investment teams is by counsel, not command.”

McIntyre finds investing and mentoring young analysts and portfolio managers a gratifying occupation, but does not plan to be CIO indefinitely.

“We will look to fill the CIO position at some point. But, in the meantime, I am very much looking forward to working with the next generation of portfolio managers and analysts within Sentry,” he says.

One of the challenges of the CIO role, McIntyre says, is managing “alpha personalities”: “You need conviction and confidence to be a good portfolio manager. Portfolio managers love managing money, but there is also a people-management aspect of the job. And some [portfolio managers] are not highly skilled at that.”

McIntyre is hoping to step back a few years down the road, a little later than originally planned due to his resumed responsibilities as CIO. Once semi-retired, he hopes to remain in a role with Sentry that will keep him “productive, but with less intensity than the past 15 years” with Sentry.

“I don’t expect to be doing what I’m doing now into my late 60s and 70s,” he says. “In reality, it’s a young person’s job with long hours and a lot of travel.”

Sentry has grown rapidly in recent years, with AUM soaring to $19 billion today from $3.2 billion at Dec. 31, 2008.

Under McIntyre, the firm has developed a distinctive style of investing that concentrates on well-financed, dividend-focused companies that have strong cash flow and growth potential.

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