It has been four months since Halifax-based Seamark Asset Management Ltd. announced it was joining forces with Toronto-based GrowthWorks Ltd. to create their mutual parent, Halifax-based Matrix Asset Management Inc. Since then, executives have been working to quell client concerns about Seamark\u2019s stability while GrowthWorks rea-dies to launch a new line of funds.
\u201cOur clients were looking to us to put questions about the strategic and corporate direction of the firm to rest,\u201d says Brent Barrie, Seamark\u2019s CEO. \u201cThey wanted to do business with us, but they wanted to know that we were going to be able to continue to provide the services they had received in the past.\u201d
Barrie believes clients and employees of both Seamark and GrowthWorks will be assured of the new parent\u2019s stability. Merging under the Matrix banner, he says, has provided the best platform for growth for both firms.
\u201cIt provides greater corporate stability for the organization,\u201d he says, pointing to the new structure\u2019s three \u201clegs\u201d: Seamark, on the institutional money-management side; GrowthWorks, for venture capital; and Mavrix Fund Management Inc. \u2014 a wholly owned GrowthWorks subsidiary acquired in June 2009 \u2014 to represent the retail funds side.
Those three areas give Matrix multiple sources of revenue across several asset classes. Under the new parent, Seamark and GrowthWorks remain intact while enjoying the benefits of working together. The structure provides opportunities for \u201ccross-fertilization,\u201d says David Levi, president and CEO of GrowthWorks and Matrix.
For example, Mavrix and GrowthWorks have access to Seamark\u2019s portfolio management, while Seamark gains access to research from the GrowthWorks side and the stability of joining a larger company.
Both Seamark and GrowthWorks also benefit from the size of the new entity, which now has $3 billion in assets under management. That\u2019s double the size of Seamark before the merger and triple the size of GrowthWorks. \u201cWe moved from being a relatively small manager to being a bigger manager, and we are quite profitable,\u201d Barrie says. \u201cFrom a stability perspective, it will add quite a significant bottom line to both organizations.\u201d
The three business divisions of Matrix will be run as separate entities, although there are some functions that will be merged.
With seven offices across Canada, GrowthWorks and its subsidiaries offer a family of vencap funds. It also offers specialty retail investment funds, including flow-through limited partnerships, through Mavrix.
Seamark, which provides investment-management services to institutional clients, mutual funds, private clients and managed-portfolio advisory programs, has already taken on some of the management of the Mavrix funds, including Mavrix Dividend Income Fund and Mavrix Strategic Bond Fund.
Another benefit of the merger for GrowthWorks is its access to Seamark\u2019s expertise in core fund products, such as bonds, equities and dividends. Over the next six months, Levi plans to launch a set of core funds that are likely to be managed by Seamark.
\u201cWe have a proven track record in the management of retail mutual funds,\u201d Barrie says. \u201cWhat really differentiates us is that we bring an institutional approach to the management of money into the retail space. We offer good returns, with low volatility and risk.\u201d
Seamark had provided money management to ClaringtonFunds Inc. (now IA Clarington Investments Inc.) for slightly less than 10 years, managing up to $4 billion in AUM. When Quebec City-based Industrial Alliance Insurance and Financial Services Inc. <\/b>purchased Clarington in 2006, Seamark lost that business.
\u201cWe now have the opportunity to regrow our presence in the retail mutual fund space without having to become a mutual fund company,\u201d says Barrie. \u201cThis is similar to the relationship we had with Clarington funds; except now, we are under common ownership, so we don\u2019t run the risk of having those funds sold out from under us.\u201d
Both Levi and Barrie insist the response from clients from all three areas of the business have been positive \u2014 even despite the surprising resignation of Stuart Raftus, former president and CEO of Seamark, in March 2009. Many of the institutional clients turned to Barrie for answers immediately after he was appointed to succeed Raftus.
\u201cThe No. 1 thing that I heard from our clients was [a need for] certainty on the corporate side of things,\u201d Barrie says. \u201cWe are quite happy that now our portfolio-management team can go to their clients and spend the time talking to them about their portfolios, as opposed to discussing corporate matters.\u201d
@page_break@The reaction has been similar on the retail side. Many advisors are pleased that more services will be available to them under the new structure, Levi says.
Clients of Mavrix had questions about stability, too. \u201cIt was the first discussion most Mavrix wholesalers were having, from January to June,\u201d Levi says. \u201cNow, having put that to rest, we saw a spike in new investors into the funds right after the merger.\u201d
Seamark and GrowthWorks came together after Levi, who had plans to launch a set of core mutual funds, needed someone with the skills to manage them. Seamark was on his list of firms to contact.
\u201cWe saw an opportunity to work with someone who could provide us with the management skill,\u201d Levi says, \u201cin terms of the core funds we wanted to establish.\u201d
The formation of Matrix took six months, involving a series of discussions among executives of the firms about the corporate culture and the combination of people within the companies.
\u201cOur businesses are very different,\u201d Levi says, \u201cand the real question was whether we could coalesce around a single vision.\u201d
After considering proposals from several firms, Barrie decided that GrowthWorks was the best fit both for Seamark\u2019s employees and for its clients. The merger became final on Jan. 15. Both firms\u2019 head offices have remained in their respective locations and with no loss of employees or management. Barrie and Levi have visited clients to discuss the merger, answer questions and reassure them that the firms will remain on solid footing.
\u201cThe key is to keep each group focused on what it does best,\u201d Levi says. \u201cThen, the strength of the organization as a whole will bring more success than it would [to each company] individually.\u201d\tIE<\/b>
<\/p>\n","protected":false},"excerpt":{"rendered":"
Seamark is managing funds for GrowthWorks under the new Matrix parent; both firms to benefit from size of the new entity<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3013,3021],"tags":[2347],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/319619"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=319619"}],"version-history":[{"count":1,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/319619\/revisions"}],"predecessor-version":[{"id":375256,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/319619\/revisions\/375256"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=319619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=319619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=319619"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=319619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}