MutualFundWire.com: American Funds for Canadians?

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Friday, August 10, 2001

American Funds for Canadians?

Capital Group, parent to Capital Research and Management and the American Funds is attacking north of the border. The US fund giant is adapting its highly-successful, low-cost, intermediary distribution strategy to a new venture based in Montreal. The firm is operating through a Canadian subsidiary named Capital International Asset Management based in Montreal.

The decision to open a Canadian effort was made as a part of a strategy to selectively grow the Capital Group in markets where it makes sense, explained a spokesperson. This will be Capital's first effort in Canada.

The group is being headed by Mark Tiffin, a Canadian native who joined Capital from Anderson Consulting. A spokesperson for the firm said that the unit is taking a slow growth approach at this point and is currently building relationships. The business plan is to work through intermediaries and broker-dealers to sell funds to individual investors.

Tiffin was hired in part from his understanding of the Canadian market. "He is Canadian and understands that market," explained the spokesperson. "We are not interested in telling people in other countries how they will run their business." Tiffin, it is hoped, will be able to construct a business that meets the needs of the Canadian market rather than just copying the US business.

Whether or not Tiffin is now hiring is something that the spokesperson could not confirm. It is clear though that Tiffin will be building a staff as the firm is established.

The unit has not yet created specific funds for the Canadian market. It will be doing so and using existing US funds as models. Still, Capital executives do not expect the new funds to be merely clones of their US counterparts.

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