Larry Sarbit quits AIC

[Shakespeare]

Y'mean here?

[Brix]

Yup, thanks.

[optionable68]

Extra! Extra! Step right up! Advisors seeking full trailers on money market funds, new and improved mutual funds will soon be available to ensure you get paid on your clients portfolio allocation to cash, using the new funds nearly 3% MER and the clients unwitting subsidy to your compensation while they've entrusted you to act with fiduciary responsibility on their behalf.

What a deal !

[MidniteGardener]

Hey! Let me in. (loud banging on door with bruised fist)

Action Direct does not have Sarbit Asset Management listed.

Has this fund traded yet? Price unch $10 since inception.

Updated Oct 5

Sarbit US Equity Trust is now listed at Action Direct, but i still receive this message: "You have selected an invalid mutual fund symbol. Please select another symbol and try again."

Fund codes:
SAR 710 (C$)
SAR 810 (US$)

[Bylo Selhi]

Hey! Let me in. (loud banging on door with bruised fist)

Action Direct does not have Sarbit Asset Management listed.

Neither does AIC's Berkshire Securities. If the reason is a mystery for anyone, then Jon Chevreau provides a plausible answer in today's FP:

'Little guy' Sarbit fighting AIC Goliath
Berkshire insists new policy nothing personal

Jonathan Chevreau, Financial Post, Wednesday, October 05, 2005

Two weeks after after star fund manager Larry Sarbit started a rival firm, AIC Ltd.'s distribution arm -- Berkshire Securities Inc. -- has blocked new mutual fund firms from selling their products. Winnipeg-based Sarbit Asset Management (SAM)'s first fund went on sale Sept. 16th. On Sept. 27th, Burlington, Ont.-based Berkshire Group sent a memorandum to advisors describing a new policy for funds sold on its shelf: they must be in existence five years and have at least $200-million in assets.

That conveniently leaves Sarbit's new firm out in the cold. Sarbit believes the new guidelines are a blatant attempt to stem redemptions of the $1.5-billion fund he managed for five years: AIC American Focused. Indeed, AIC said yesterday more than half its 41 funds were in net redemptions in September, with more than $200-million departing.

In an interview, Sarbit described the timing of the memo as "extremely suspect ... I don't know how else to interpret it except to say it's a block." Sarbit depicts himself as David fighting Goliath. "I'm just a little guy trying to open a business and here's the billionaire trying to keep me out. Why is he afraid of me?" That's a reference to AIC's helicopter-flying founder, Michael Lee Chin, who was not available to comment...

TD Waterhouse hasn't joined Larry's bandwagon either. Nor has E*Trade.

[CBass]

My understanding is that most of the discount brokerages will allow investors to purchase Larry's funds once the "commercial prospectus" has been received.

[Bylo Selhi]

Now [almost] all can be revealed...

Sarbit fund reveals holdings

Larry Sarbit is in love with cash-rich, small-cap U.S. companies. Mr. Sarbit, best known for his successful stint with AIC Ltd., launched Sarbit Asset Management Inc. last summer. Last week, he revealed for the first time some of the holdings in the $27-million Sarbit U.S. Equity Trust Fund.

Clear Channel Communications Inc. The media company is one of the U.S.'s largest radio and billboard operators.

DTS Inc. The digital technology firm, best known for its audio systems in movie theatres, is expected to expand into consumer products.

Collectors Universe Inc. The authenticator of high-end collectibles has a partnership with eBay Inc. and is entering the potentially lucrative diamond market.

Diamondex Resources Ltd. The exploration junior has rights to the Lena West property in the Northwest Territories.

The $27-million fund holds an additional four undisclosed U.S. stocks. About 50 per cent of assets are in cash but more investments are in the works, Mr. Sarbit said.

[Norbert Schlenker]

Sarbit gives in.

Sarbit Asset Management Inc. (Sarbit) announced
today, that effective immediately, a Deferred Sales Charge (DSC) purchase
option is available for their flagship fund, the Sarbit US Equity Trust.

...

"We have created a DSC option that has the best interests of the
investor and advisor client in mind" says Larry Sarbit, CEO and President,
Sarbit Asset Management.

My emphasis. How this is in the best interests of investors and clients is beyond me.

Benefits of the DSC purchase option are:

- Up Front Commission: 5% (paid to the dealer)
- Trailer Remuneration of 0.50% per year (paid to dealer, monthly)
- Declining redemption fee schedule of 6%, 5%, 4%, 3%, 2%, 1%
over 6 years
- Sarbit will waive redemption fees from death after the first
2 years in the redemption schedule.
- Up to 10% of the units will be able to be redeemed free of charge
each calendar year.

Some list of benefits.

[yielder]

How this is in the best interests of investors and clients is beyond me.

Certainly it's a great inducement not to chase performance.

[parvus]

"We have created a DSC option that has the best interests of the
investor and advisor client in mind" says Larry Sarbit, CEO and President,
Sarbit Asset Management.

Not to be too cynical about incentives and who's receiving them for what purposes, but here's a letter from this week's Economist:

My 12 years of experience as a professional fundraiser in Britain has taught me that few donors spontaneously decide to support a particular cause; charities certainly won't get far sitting around waiting for a particular donor to call. Like most things in life, philanthropy is usually sold, not bought.

My emphasis. That makes me wonder: can misanthropy be sold?

[Bylo Selhi]

How this is in the best interests of investors and clients is beyond me.

BOSTON: John Bogle, the founder of Vanguard Group and a longtime critic of the mutual fund industry, said that excessive fees were a "subtle" scandal that cost investors more than the sales and trading abuses uncovered by regulators since 2003. "Mutual fund investors have paid a far greater penalty for grossly excessive management fees and fund operating costs and marketing costs," Bogle said in an interview. "The scandals are there, but they're very subtle ones."

The $9.2 trillion fund industry came under intense scrutiny in 2003 when the New York State attorney general, Eliot Spitzer, alleged that some fund managers permitted hedge funds and other investors to make abusive trades at the expense of long- term shareholders. Spitzer, the U.S. Securities and Exchange Commission and other regulators have since fined companies and former executives more than $4 billion.

Routine industry practices have cost investors more money, said Bogle, who retired from Vanguard in 1999. In the last 20 years, the stock market has posted an average annual return of 13 percent, while the typical stock fund has gained 10 percent, Bogle said. He attributed the difference to management fees, high turnover of holdings and sales charges. "We've let the investor down in a great bull market," he said. "Think of what's going to happen in the market I foresee in the future, which is a much more subdued return."

[jiHymas]

How this is in the best interests of investors and clients is beyond me.

Exactly. And what's more, you see this type of thing over and over again.

Why, just last night I went to the local Loblaws because I wanted 37.5 grams of 1997 Iranian Beluga Caviar (the sturgeon on the south side of the Caspian Sea are better than the northern ones, due to greater folic acid in the seaweed. The maestro of Caviar salting retired in 1998, so you need the 1997 stuff).

And you know what? Those morons didn't have it on the shelf!

I just flipped! I kicked in the manager's door, grabbed him by the collar and told him exactly what I thought of immoral, unethical, selfish, grasping store managers who didn't have exactly what I wanted on their shelf at the price I wanted to pay in the form I wanted.

That little pipsqueak just whimpered something about running a business and if there wasn't enough money in it for him to stock something then he wouldn't put it on the shelf. Turd. I punched him in the nose and reported him to the police.

[Bylo Selhi]

Another one bites the dust.

AIC seems to be having some serious issues.

Now two (or three or more?) managers later...

Mutual fund reports are about accountability. Some companies fall short.

...The approach taken by AIC Funds in its most recent management report on AIC American Focused. A quick recap: management of this fund was changed last year because of a decision to load up on U.S. financial stocks that have been annihilated in the past year.

AIC tells us the fund generated a one-year return of "(42.3 per cent)," which is how accountants, not everyday people, express a financial loss. Unitholders are then told that a firm called Ariel Capital Management took over the fund on Oct. 25, 2007, and that all commentary will focus on the period between then and year's end. This is an odd decision, given that between May and October the fund turned an investor's $10,000 into just over $6,200.

AIC's response is that it has been keeping its clientele updated on the fund by communicating extensively with investment advisers.

Plus ça change, plus c'est la même chose.

[squash500]

It doesn't seem that Kim Shannon is with Brandes anymore . the weird thing about both Brandes' Canadian equity funds in that in both cases the Brandes Global Equity fund is the fund's top holding . What kind of stock picking is that .

[Taggart]

Sarbit sells out to Industrial Alliance

September 09, 2008

Jonathan Chevreau

As noted in today's Financial Post, maverick value manager Larry Sarbit has thrown in the towel and sold his Sarbit Asset Management Inc. (SAMI to Industrial Alliance Insurance and Financial Services Inc.

[squash500]

The "cash man" takes the cash .