A lack of growth and an increase in competition may force a mass consolidation in Canadas fund industry, the Globe & Mail reports. Most affected will probably be middle-of-the-road shops in other words the middle class will shrink and small fund boutiques and the industrys premier players will remain standing.
"There has to be fewer fund companies," said CI Fund Management President and CEO Bill Holland. "I dont think there is any doubt about it."
How will the negotiations work? Well, according to the Globe & Mail, speculation has already arisen about CI Fund Management itself continuing its acquisition-happy agenda. The purchase of Assante was one of eight deals it has made since 1994, and another one is not out of the question.
AGF Management Ltd. may be at the other end of the spectrum. Assets have shrunk from a peak of $30 billion to $24.1 billion, and even Blake Goldring, the firms president and CEO, said, "Are we doing everything perfectly? No." He did add that his company will continue to compete, but industry insiders see the company as a major candidate for a buyout or merger.
But if things get more crowded and growth continues to halt, consolidation could overrun the industry.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.