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© Copyright 2000 Rogers Media. The following article first appeared in the April 2000 edition of
BENEFITS CANADA magazine.
The Top 40 Money Managers of 2000
Pension assets managed by the 40 largest firms rose over 14% in 1999. But not all of the ink is
black.
By Barbara Clapham
It was a year of contrasts. After slipping into the single digits with 9.7% growth recorded for 1998, the
pension asset management industry rebounded to double-digit growth in 1999. The year's 14.4% increase in
pension assets nearly matched the 14.7% expansion in 1997. There is another side to the story, though.
Despite such healthy expansion, fully one-quarter of the Top 40 Money Managers lost pension assets in 1999.
Overall, the disparity in total returns on pension assets is a whopping 70%, varying from one firm's 48%
increase to another's 22% decrease.
The top 10 money managers of 1999, in terms of pension assets under management, retained their standing as
part of this group. However, within the ranking a few companies changed relative positions. In December, TD
Asset Management Inc. purchased Greydanus, Boeckh & Associates Inc., and the combined assets shifted
the company from No. 7 to the No. 4 spot. In addition, RT Capital Management Inc. leapfrogged Phillips,
Hager & North Investment Management Ltd. to move into second place.
According to David Wright, vice-president of marketing & services for RT Capital Management in Toronto,
a unique investment style accounts for the company's 14% increase in pension assets. "Designed to perform
in all types of markets, our style is not dependent on any one particular market," Wright says. "We are the
kind of firm that when we go to see our clients, we are not going in with a red Ferrari rate of return; we
are coming in with an Oldsmobile kind of rate of return. We come in every time with the same thing, though;
we don't come in with a klunker."
Mike Walsh, vice-president of institutional investments at Elliot & Page Ltd. in Toronto echoes this
sentiment. Walsh says his company's solid 19% growth was certainly "not due to first quartile performance
across all asset classes, but because of good, solid investment performance, as well as getting all the
qualitative issues right."
As can be expected, many firms in the Top 40 changed their placement on our list. In some cases investment
performance accounted for this shift in status, while in others a change in business activity increased or
decreased pension assets. YMG Capital Management Inc. increased its assets with the purchase of Ultravest
Investment Counsellors Inc., Greystone Capital Management Inc. merged its pension assets with those of
Mentor Capital Management Corp.
Two firms dropped out of the Top 40: Co-operators Investment Counselling Ltd. and Integra Capital
Management Corp. The two newcomers to the list are Sanford C. Bernstein & Co. Ltd. and Capital Guardian
Trust Co., both U.S.-based money managers showing outstanding growth (47% and 48% respectively).
In fact, the largest percentage increase in pension assets of all the companies in the Top 40 is recorded
by Capital Guardian Trust. According to Robert Broley, marketing associate with Capital Guardian Trust in
Toronto, about a third of this increase can be traced to new contributions, the rest to strong investment
returns. "Our EAFE account is up 65% and our global up about 45%, so that has helped a lot. When you have
the bulk of your dollars in either EAFE or global funds, which on average return 50% for the year, it
really helps juice up your total assets. But we had a couple of really big clients contribute a substantial
chunk of money on the way as well."
John Akkerman, vice-president of Sanford C. Bernstein in New York, attributes his firm's growth to new
business accounts, as opposed to investment returns. "A large part of our growth comes from acquiring
mandates to manage Canadian equities for Canadian-based pension plans," he says.
Once again the fastest growing firm in terms of dollar increase is the Caisse de dépôt et
placement du Québec, with pension assets increasing more than $9 billion in 1999, to stand at over $47
billion. "All our teams of managers outdid themselves once again in 1999, outperforming their benchmark
indexes on markets that were very difficult to beat," says Jean-Claude Scraire, chairman of the board and
chief executive officer of the Caisse.
On the flip side of the coin, 10 of the Top 40 Money Managers recorded a loss in pension assets last year.
No one reason accounts for negative returns. Certainly a number of firms were hurt by the uneven
performance of the Canadian equity market. This was particularly a factor for firms that use a value style
of investing, and consequently underweighted Nortel Networks and BCE Inc. As one manager put it: "Over the
past few years, value managers have been killed." Lacklustre investment performance in some cases caused a
double whammy as clients, frustrated with poor relative performance, switched money managers.
Barbara Clapham is a contributing editor with BENEFITS CANADA and the editor of Canadian
Investment Review.
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