BUSINESS

Veronika rules

A mutual-fund star jumps ship

TOM FENNELL August 26 1996
BUSINESS

Veronika rules

A mutual-fund star jumps ship

TOM FENNELL August 26 1996

Veronika rules

BUSINESS

A mutual-fund star jumps ship

Until last winter, few people outside Canada’s tightly knit investment community had ever heard of Veronika Hirsch. But that changed after AGF Management Ltd., one of the country’s largest mutual fund companies, featured the 41-year-old newly hired fund manager in a $3-million promotional campaign touting “Veronika’s rules for RRSP success.” The sales pitch worked wonders not only for AGF, which in 10 months boosted the size of its AGF Growth and Income Fund from $53.5 million to $272 million, but also for Hirsch’s career. Last week, Hirsch abandoned her clients and jumped to Fidelity Investment Canada Ltd. for a reported $500,000 annually. “We took Veronika and made her a star,” said AGF senior vice-president Blake Goldring, clearly disappointed by her decision. ‘We could do it again, but after this I’d be reluctant to do so.”

Hirsch originally acquired a reputation as an astute investor during the 10 years she spent as a Toronto-based manager for Prudential Life Insurance Co. of America. Be-

tween 1988 and 1994 her Prudential Growth Fund surged 89 per cent, outpacing the 69-per-cent increase in the Toronto Stock Exchange 300 Index.

Impressed by that performance, AGF hired Hirsch and put her in charge of its lacklustre Canadian Growth and Income Fund last October. She quickly generated big gains for fund holders by loading the fund with shares in several small but high-flying gold mining companies, including Calgary-based Bre-X Minerals Ltd. For the year ending July 31, investors in Hirsch’s fund earned a tidy 24-per-cent return.

Those results did not go unnoticed by Fidelity. Despite being a subsidiary of Boston-based Fidelity Investments, the world’s largest mutual fund company, Fidelity Canada has until now had a rela-

tively low profile. By luring Hirsch, Fidelity Canada president Kevin Kelly has dramatically boosted his firm’s image. The company is now considering whether to promote Hirsch in another series of ads. Says Kelly: “Veronika brings a highly regarded reputation and a phenomew nal track record.”

? Hirsch herself was §> unapologetic about her 1 decision to jump ship, ï “I try to make investors ¡5 the most money I pos£ sibly can,” she said. “I will be better able to achieve it at Fidelity.” Money, she insisted, was not her primary motivation—even though her salary at Fidelity will dwarf her AGF earnings of about $175,000 a year plus stock options and bonuses. “Fidelity wants to become number 1 in Canada,” said Hirsch. “They are very impressive.” Others suggested that her move will likely make investment firms think twice about trying to turn their investment managers into stars. Veronika Hirsch’s star, however, shows no sign of dimming.

TOM FENNELL