Admax Regent International Management Ltd. Faces Fund Manager Replacement Crisis

Strategic Insights -

Lou Voticky, chairman of Admax Regent International Management Ltd., has had to deal with the replacement of two fund managers in the past year. The company's Admax American Performance Fund suffered a significant decline in assets, from $25-million to $11-million, after its manager, Fred Moran, was replaced by Roger Maurer. Maurer, an experienced pension fund manager with a conservative investment style, managed to turn the fund around, returning 12.8 per cent in eight months compared to 5.5 per cent for the S&P 500. However, a crisis erupted around Admax Regent's $11.5-million Global Health Sciences Fund when its manager, John Kaweske, was fired for allegedly violating Invesco's code of conduct. Kaweske was replaced by Barry Kurokawa, an Invesco vice-president, who manages the company's Financial Strategic Health Sciences Portfolio and Global Health Sciences Fund.

Key Takeaways:

  • Admax Regent International Management Ltd. faced a crisis with the replacement of two fund managers in the past year.
  • The company's Admax American Performance Fund dropped from $25-million to $11-million in assets after changing managers, but was turned around by Roger Maurer, returning 12.8 per cent in eight months.
  • Maurer's conservative investment style and restructuring of the portfolio led to the fund's turnaround.
  • The company's Global Health Sciences Fund also faced a crisis when its manager, John Kaweske, was fired for allegedly violating Invesco's code of conduct.
  • Kaweske was replaced by Barry Kurokawa, an Invesco vice-president, who manages the company's Financial Strategic Health Sciences Portfolio and Global Health Sciences Fund.
  • Admax Regent pays a bonus of 12.5 per cent of any gain above the S&P 500 Index, and Invesco earned a performance bonus in the past year.
  • Managers of Admax Regent's other performance funds have not earned a bonus until this year, although they have come close.
  • The company's investment style has been refined over time, and the key factor is to retain a consistent investment style.

Statistics:

  • The Admax American Performance Fund dropped from $25-million to $11-million in assets.
  • The fund returned 12.8 per cent in eight months under Roger Maurer's management, compared to 5.5 per cent for the S&P 500.
  • The Global Health Sciences Fund returned 27.8 per cent for the six months ended Dec. 31 and 15.6 per cent for the year ended Dec. 31.
  • The fund lost $6.5 million in assets after John Kaweske was fired.
  • Invesco earned a performance bonus in the past year, equal to 0.85 per cent of the American Performance Fund's assets.

Sources:

  • "A New Day, a New Crisis" by MICHAEL RYVAL, Special to The Globe and Mail, no date provided.
  • The Globe and Mail, no date provided.