Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the funds listed below. These funds are established as a segregated funds under the Insurance Companies Act (Canada).

CI Global Asset Management (CI GAM) announced in July 2022 that they experienced further significant departures from the CI Canadian Income & Growth Fund (Income & Growth Fund) team and the CI GAM research team. In total, 16 professionals with research and portfolio management responsibilities across equities, credit, and asset allocation departed from the firm. Most of the professionals departed to join a single competitor – BMO Global Asset Management. 

Allan Maclean-Howard, VP, Asset Allocation, Risk Management & Derivatives, was the most notable departure. He had recently assumed Bob Lyon’s asset allocation responsibilities for the Income & Growth Fund. Drummond Brodeur has joined the team as a resource, providing input to the asset mix component of the fund. Kevin McSweeney makes the final asset mix decisions with input from Geof Marshall and John Shaw.

Sun Life GRS Investment Solutions’ view

The departures are a significant loss for the Income & Growth Fund. Each of the 16 departures were legacy Signature Global Asset Management (Signature) professionals. They left in two waves – first, portfolio managers in March 2022 and then analysts in June 2022. MacLean-Howard has a long history in the investment industry going back to 1987. He was the Chair of the Asset Allocation Committee and oversaw CI GAM’s asset allocation and risk management processes. Drummond Brodeur will now provide input on asset mix. He has over 30 years of investment experience and 15 years of tenure at CI. He is also a member of the Asset Allocation Committee. 

This update comes after the previously communicated simultaneous departures of CIO Eric Bushell and lead portfolio manager and head of Equities, Bob Lyon. The departures were unfortunate and negatively impacted the continuity and experience on the Income & Growth Fund. 

The combined departures over the past year represent an overwhelming loss that CI GAM was unable to plan for. CI GAM hadn’t anticipated that Bushell would retire in 2021 at the same time as Lyon’s expected retirement. Further departures reinforce our concern that the legacy Signature team has not fully embraced the new CI GAM structure. It is reasonable to expect that employee retention and recruitment may be ongoing issues in the foreseeable future. The Income & Growth Fund has lost its key individuals. They were responsible for research at macro and asset class level, asset mix and risk management and equity portfolio construction. 

As a result of these changes and following our team’s meetings with CI on June 24, 2021, April 25, 2022, and August 11, 2022, we have downgraded the following funds on our Watch List:

CI Canadian Income & Growth: Downgraded to "Suggested For Removal". We have lost long-term confidence in the Income & Growth Fund, due to the retirements and continued departures. Plan sponsors offering the fund in their line-up should consider alternatives. We expect to remove the fund from the core platform and governance program in 2023. We’ll communicate further updates on a suggested replacement fund, member communications and timing, before the end of 2022.

CI Portfolio Series: Downgraded to "On Watch". This is due to the elimination of CI Investments’ in-house brands and their integration into a single new brand, CI GAM. The integration has resulted in significant senior and analyst level turnover over the past two years. This turnover has impacted a significant proportion of the underlying funds within CI Portfolio Series.

CI Canadian Asset Allocation, CI Canadian Equity, CI Canadian Small/Mid Cap Managed and CI U.S. Stock Selection: "On Watch" due to various reasons communicated above and previously.

Additional Background:

In late 2020, CI Investments Inc. (CI) announced that it would be integrating its separate in-house investment brands. The following were re-branded into a single entity: Cambridge Global Asset Management, CI Multi-Asset Management, Harbour Advisors, Signature and Sentry Investment Management. The new brand became CI GAM. CI completed the rebranding over the first half of 2021. We communicated this in March 2021.

In June 2021, CI GAM announced the retirement of two key contributors to the Income & Growth Fund). Bushell retired on July 5, 2021. Lyon subsequently retired in the fall of 2021. CI GAM also announced that Kevin McSweeney joined the portfolio management team. John Shaw (Investment Grade Bonds) and Geof Marshall (High Yield) remained on the portfolio management team. We communicated this in October 2021.

We will continue to monitor the funds in upcoming quarters and will provide updates as necessary.

Questions? 

Please contact your Sun Life Group Retirement Services representative.