WEST PALM BEACH, FL (www.hedgeco.net) – One of the big names in the Canadian mutual fund establishment, Frank Mersch, has defected to the hedge fund investment arena. Mersch was a former manager atAltamira Management Ltd., and he managed an equity fund for about 12 years. During that period, his equity fund posted superior gains according to published reports; Mersch achieved an average annualreturn of 19%, making his fund the number one equity fund in Canada for a period of about ten years.
Mersch has joined Front Street Investment Management Inc., and today has become a critic of the mutual fund industry. In recent remarks, Mersch said, “After selling mutual funds for a number of years, we’re in a process now of trying to introduce hedge funds, not only to our high-net worth clients and the institutional client base here in Canada, but also the retail side.”
He criticized the mutual fund industry when he said, “I don’t think [the mutual fund industry] serves the interest of the investor any longer. It really serves the interest of large institutional fund managers, who are more interested in size rather than returns.�
Many other Canadian mutual fund investors are crossing over to hedge funds as well. While the Canadian hedge fund industry is relatively small compared to the United States, the industry has grown to $14.1 billion under management. The assets managed by the Canadian mutual fund industry are far larger, however experts believe the rate of growth of the Canadian hedge fund industry is greater than that of the mutual fund industry. According to the Toronto-based Investor Economics Inc., the Canadian hedge fund industry grew at an annual compound rate of 46.2 percent, between 1999 and 2004 while the mutual fund industry grew at an annual rate of 4.6 percent during the same period.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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