TORONTO - AGF Management Ltd. (TSX:AGF.B) profits more than doubled in the first quarter as global markets improved, but the firm's chief executive says he remains determined to keep clients from exiting their investments over market jitters.
"Despite the overall economic environment, we've been focused on getting clients to stay put and stay invested so they can benefit as equity markets improve," chief executive Blake Goldring told analysts in a conference call on Wednesday.
The Toronto-based mutual fund and investment management firm reported $30.6 million in profits for the quarter, worth 34 cents per share, missing analyst estimates by a penny but up from $12.2 million or 14 cents a year before.
Quarterly consolidated revenue increased to $156.2 million from $138 million in the same period ending on Feb. 28 a year earlier.
The firm noted that improved economic and market conditions helped increase the company's profits during the period, particularly from institutional clients.
The company said its quarterly dividend will be 26 cents per share, as previously announced, or the equivalent of $1.04 per share on an annualized basis.
AGF is emerging from a rough patch when the company and other investment firms grappled with uncertainty as financial markets around the world lost value. That led investors to pull their money out of the markets, causing losses and reduced assets under management at money managers.
The impact was spread over several years at AGF, where assets under management tumbled from $53.7 billion in 2007 to $35.6 billion in 2008, before recovering to $44.6 billion in 2009.
In response, the investment firm launched a major restructuring plan that re-examined its compensation practices and expenses, and placed a priority on higher profit-margin financial products.
AGF's assets under management have started to show improvement, rising to $43.8 billion at the end of February.
"There's been a degree of sales that (have fallen) on the institutional side - but there have been net redemptions on the mutual funds side," said Gabriel Dechaine, an analyst at Genuity Capital Markets.
"So any gains in assets have been entirely market driven."
For the quarter, assets managed for institutional and high net worth clients were ahead 49.4 per cent to $21.7 billion for the quarter, up from $14.5 billion.
Mutual fund assets rose 22.2 per cent to $22.1 billion from $18.1 billion.
Management has maintained a cautious outlook as markets recover, and Goldring told analysts that AGF will also focus on net mutual fund sales in the near term while remaining realistic on its targets.
"We've always focused on long-term growth and we recognize that turning around, when investors remain more conservative than usual takes time," he said.
"We remain confident that behind-the-scenes work, the relationship building and the focus on the right products will pay off over the long term."
AGF is one of Canada's largest wealth managers with about one million investor clients, and 823 employees at the end of 2008.
Its shares rose 19 cents or one per cent to close at $18.77 on the Toronto Stock Exchange.