* Seif returns to scene after a few months off to think
* Firm committed to low fees "across the board"
* First fund launched offers ownership stake
By Andrea Hopkins
TORONTO, Jan 10 Som Seif, founder and former
president of Claymore Investments Inc, has launched a Canadian
asset management firm aimed at low-fee investments for
institutional and retail investors, unveiling its first fund on
The new firm, Toronto-based Purpose Investments, promises to
use rules-based investment management to keep fees low and risk
in check, a semi-passive management structure that hopes to
appeal to investors who like the low fees of the exchange traded
funds (ETFs) that made Claymore such a success.
Claymore, founded by Seif in 2005, was one of the
fastest-growing investment firms in Canadian history and
Canada's No. 2 ETF provider with assets of $8 billion before it
was bought by BlackRock Inc last year.
Now Seif is back on the scene with Purpose Investments. Its
first vehicle, NexC Partners Corp, is a closed-end fund focused
on dividend-paying North American equities. NexC aims to provide
long-term capital appreciation and quarterly cash distributions
at a projected rate of 5 percent a year.
"My goal is very simple. I want to deliver really
high-quality investment products but at a lower fee than others
would normally offer them at," Seif said in an interview.
Using rules-based management within the funds keeps costs
low, but Seif said he also simply believes it is the best way to
"Systematic, rules-based, disciplined investment strategy
will trump active management over the long term because we can
capture a large part of what the great active managers do
through our fundamental screening and rules, and then we can
also keep our costs low and outperform. I've proven that in the
past," he said.
But Seif, who, along with his partners, is funding the
company, also wanted to find a way for clients to invest in the
company as whole.
"I want our clients to be owners as well," said Seif, adding
he regretted not being able to do that at Claymore and has spent
the months since the takeover trying to think of a way to offer
ownership to investors.
To that end, Purpose is launching an initial public offering
for NexC. The fund, which will subsequently trade on the stock
exchange, will invest in a high-quality portfolio of 40 North
American growth-oriented companies while offering investors a
small stake in Purpose.
All in all, investors can own anywhere from 2.5 percent to
30 percent of Purpose, depending on how much the gross proceeds
of the offering are, Seif said, calling the ownership structure
He said it would take a few years to build Purpose's family
of funds, and he does not intent to make it the kind of asset
manager that offers 50 or 100 products.
"Every product should stand alone," he said, adding that the
firm's main commitment will be low fees across the board.
"I want to truly change the way people invest in Canada,
make it cheaper and better."