Where now for Altamira?
Back in 1999, Altamira was flying high. The high-tech markets were soaring to record levels, and Altamira was right at the forefront of it all with exciting, high-performance funds like Science & Technology and e-business. Investors were scoring huge profits. Altamira’s seminars at financial trade shows were jammed with people seeking to gain insights into how these market geniuses were achieving such amazing results.
Just to cite a few examples, in 1999 the Science & Technology Fund gained 175 per cent. And it was actually eclipsed by the e-business Fund, which scored a 190 per cent profit. The Altamira stable was full of winners at that time. Altamira Asia-Pacific was up 86 per cent. Altamira Global Discovery added 83 per cent. Altamira Capital Growth advanced 51 per cent. Altamira Equity gained 48 per cent. Altamira Global Small Companies was up 47 per cent. And on it went.
As you might expect, the money came rolling in from all sides. Investors couldn’t get enough of these high-performance, no-load funds. By mid-2000, the company had more than $7 billion under management and was rising fast.
Then came disaster. The stock markets coapsed. Altamira’s aggressive style magnified investor losses. By 2001-02, the same funds that had been on everyone’s buy list two years before were burning cash faster than investors could pull back. Science & Technology lost 48 per cent in 2001 and almost 50 per cent in 2002. E-business dropped almost as much. It was a similar story across the board, although the losses elsewhere weren’t as dramatic.
Corporate shake-ups change company
Meantime, Altamira was going through a series of corporate shake-ups that have left this a much different company. While the firm still operates as a stand-alone entity, it is now firmly under the control of its new owner, the National Bank of Canada. Many of its funds are now being run by the same Natcan managers who look after National Bank’s own line of no-load funds.
Next page: Where to go from here
Increasingly, Altamira is becoming an appendage of National Bank. The investment side of the company, which has responsibility for managing the portfolios, is being given the Natcan name. Going forward, Natcan will operate its original Montreal office plus a Toronto office at Altamira.
The Montreal office will be responsible for Altamira’s income funds, global funds, Precision funds, and Canadian equity value funds. The growth funds, U.S. funds, and specialty funds will be run out of Toronto.
Consistent returns still key
The company also has a new chief investment officer, Anne-Marie Thomas. She took over the key position after the sudden, unexplained departure of Gisele Wilson earlier this summer, who had held the position for less than a year. Thomas says she intends to continue Wilson’s goal of providing core funds that offer investors “consistent, predictable, above median” returns, along with higher-risk speciality funds that have more reward potential.
“We want our core funds to be a rock solid part of any portfolio,” Thomas says. She feels the company is making real progress, noting that 73 per cent of the funds were in the top half of their peer groups on a performance basis over the three-month period to July of this year.
That’s encouraging news. But when all is said and done, this is a much different Altamira than the company that existed in 1999, when these portfolios were launched. Investor interest has fallen way off. Total assets stood at $3.8 billion at the end of July. National Bank has a major task ahead if it has any hopes of restoring Altamira to past glories.
It would not surprise me one bit to see the integration process continue. The next logical step would be to achieve economies of scale by merging funds of the two organizations that have similar mandates and offering the combined line through both the Altamira and National Bank distribution systems. It is even feasible that the Altamira name may ultimately disappear. Stay tuned.