Canadian Banks Expect to Buy More Fund Firms

Canadian banks, which command a 35% market share of mutual fund sales, will continue buying up mutual fund companies, said William Holland, CEO of CI Financial, Canada's second-largest fund firm, according to a report from Bloomberg. In 2000, Canadian banks had a 20% market share.

But Canadian fund companies shouldn't take banks' aggressive stance lying down, Holland said. "To compete with banks, we have to be as big as the banks," he said. Thus, CI Financial, which unsuccessfully attempted hostile bids for Clarington Corp. and Amvescap in 2005, will continue on the acquisition trail in 2006, Holland said. CI Financial is interested in firms with at least $4 billion in assets. If not, they should have a unique offering, he said.

The heads of asset management divisions of two of Canada's largest banks, Royal Bank of Canada and Toronto Dominion Bank, agreed with Holland that banks will continue to eye mutual fund companies.