CALGARY, Feb. 13, 2015 /CNW/ - Aston Hill Financial Inc. ("Aston Hill" or the "Company") (TSX:AHF) announces certain corporate initiatives and the non-renewal of the sub-advisory agreement (the "Agreement") between Aston Hill's subsidiary, Aston Hill Asset Management Inc. ("AHAMI"), and IA Clarington Investments Inc. ("IAC") which had a five year term. Under the Agreement, Aston Hill's President and Co-Chief Investment Officer ("Co-CIO"), Ben Cheng, provided portfolio management services to 3 IAC funds.
"Aston Hill's goal has always been, and continues to be, to provide Canadian retail investors with best in class investment products to meet their personal financial goals. When Aston Hill was re-capitalized in 2007 with 6 employees, the Company's belief was that the best way to achieve this goal and monetize Mr. Cheng's talents was to partner with a large distributor that provided a stable base upon which to build an asset management business. Since then, Aston Hill has established and grown its in-house mutual fund business, which faces retail advisors directly rather than through a sub-advisory relationship," said Mr. Tremblay, Chief Executive Officer.
The relationship with IAC has been an important part of Aston Hill's growth, however we now look forward to providing Canadian investment advisors and investors with new investment solutions and the opportunity to take advantage of Mr. Cheng's portfolio management expertise, something we have not been able to do while providing portfolio management services to IAC. The on-going investments that we have made to create an expansive retail distribution platform and in our internal infrastructure gives us the opportunity to drive significant profitability and growth in our proprietary products.
"As President and Co-CIO of Aston Hill, it has long been my goal to manage in-house investment products we create for our clients," said Mr. Cheng. "While I am thankful to IAC for their partnership and trust in our abilities over the past 7 years we are now mature enough as an organization to control our own future without limitation. I believe Aston Hill has a unique ability to service the Canadian retail market and we look forward to continuing to bring innovative products including liquid alternative mutual funds to the marketplace. To this end, we intend to propose to unitholders the conversion of Aston Hill VIP Income Fund, currently a closed-end fund listed on the TSX under the symbol VIP.UN, to an open-end daily redeemable mutual fund. Following the conversion, the fund will change its name to "Aston Hill North American Dividend Fund". VIP unitholders will receive an information circular that will provide more detail on the proposed conversion prior to a unitholder meeting to approve the conversion."
Today, Aston Hill is one of the fastest growing asset management companies in Canada. Specific achievements since the launch of the Company in 2007 are outlined below:
- Over the past 8 years, AUM has grown from $12 million to over $4 billion (excluding the assets sub-advised for IAC);
- Aston Hill's core mutual fund strategies combined have accumulated over $1.0 billion in a short period of time. The firm continues to launch new, differentiated strategies that provide investors with enhanced risk-reduction and the potential for long-term capital appreciation;
- Over the past 18 months, Aston Hill has built a sales and marketing team comprising 15 employees with coverage from coast to coast enabling Aston Hill to fully service investment advisors, and provide clients with continuous access to Aston Hill's portfolio managers and information to make intelligent investment decisions;
- Since inception, the portfolio management team has grown from Mr. Cheng alone to a team of 8 portfolio managers. The firm's portfolio managers were specifically selected for their unique talent of having multi-asset class expertise and, in most cases, both buy and sell side experience. Under Mr. Cheng's leadership, the investment team has developed specialized skills to provide investors with unique investment solutions including liquid alternative mutual funds;
- Aston Hill's private equity mandates, run out of Calgary, have provided strong cash flows that have enabled the firm to build a strong asset management division over the years;
- Aston Hill has invested in its operations and accounting teams. These teams are sufficiently scalable to accommodate the anticipated growth; and
- The firm expanded its distribution into hedge funds and closed-end funds which complement its core asset management activities and leverages existing distribution capabilities, providing a high margin, high return line of business.
Revenue earned from the Agreement accounts for approximately 16% of overall revenue. Aston Hill continues to operate from a position of financial strength, generating substantial EBITDA (excluding the Agreement) and an estimated cash balance of $12.2 million as at December 31, 2014. As part of the new initiatives, the Company announces it will reduce the quarterly dividend from $0.015 per share to $0.005 per share to maintain an appropriate payout ratio and continue to reinvest in Aston Hill's growth. Going forward, Aston Hill will remain focused on realizing efficiencies through managing its cost structure and will be taking a number of cost cutting measures that include staff reductions.
Of the Company's 89.2 million outstanding shares, Aston Hill executives and directors hold 41.7%, or 37.2 million shares and have collectively purchased over 750,000 shares in 2014. Neither executives nor directors have decreased their position in the Company.
Mr. Cheng and Aston Hill are each subject to customary lock-up provisions, extending for 9 months after termination of the agreement for Mr. Cheng and 6 months after termination for Aston Hill. Subsequently, Aston Hill plans to provide new investment solutions managed by Mr. Cheng to Canadian retail investors.
National Advisor Roadshow
Aston Hill welcomes the opportunity to discuss these changes and its exciting future with investors, advisors, and clients. As part of our ongoing dialogue we will be hosting our first roadshow.
Mr. Cheng* will be providing an update on Aston Hill Financial for Canadian investment advisors beginning February 17. Aston Hill's portfolio managers will also be present discussing their mutual funds. If you are an investment advisor and would like to attend an event, please contact Aston Hill's Sales & Marketing team at 1-800-513-3868 or [email protected].
Tuesday, February 17, 2015: Vancouver, BC, 1:00 PM PST
Wednesday, February 18, 2015: Calgary, AB, 12:00 PM MST
Thursday, February 19, 2015: Toronto, ON, 12:00 PM EST
Friday, February 20, 2015: Halifax, NS, 12:00 PM AST
Monday, February 23, 2015: Winnipeg, MB, 12:00 PM CST
Tuesday, February 24, 2015: Regina, SK, 12:00 PM CST
*Ben Cheng acts as a Portfolio Manager exclusively to investment funds managed by IA Clarington Investments Inc., and for one other fund. See www.astonhill.ca for details.
About Aston Hill
Aston Hill Financial Inc. is a diversified asset management company with a suite of retail mutual funds, closed end funds, private equity funds, hedge funds and segregated institutional funds. Aston Hill has offices in Calgary, Toronto and Halifax.
The TSX has neither approved nor disapproved the information contained herein.
- EBITDA: EBITDA are not standardized earnings measures prescribed by IFRS; however, management believes that most of its shareholders, creditors, other stakeholders and investment analysts prefer to use these performance measures in analyzing Aston Hill's results.
- Forward-Looking Statements: This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.
For a detailed description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's annual financial statements and management discussion and analysis for the year ended December 31, 2013, both of which are available at www.sedar.com. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking statements.
SOURCE Aston Hill Financial Inc.
For further information: Please contact: Eric Tremblay, Chief Executive Officer, Aston Hill Financial Inc., (403) 770-4817; Ben Cheng, President and Co-Chief Investment Officer, Aston Hill Financial Inc., (416) 583-2300