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Lee Chin to focus on developing AIC as international company
published: Sunday | October 8, 2006

Michael Lee Chin, chairman of AIC Limited. - File

AIC boss Michael Lee Chin said Friday he gave up the job of chief executive officer to concentrate on building out the international side of his business.

Over the past five years, the Jamaican-Canadian investor has been widening his base overseas under a strategy to transform AIC from a Canadian company to an international operation that is Canada-based, he said.

He has interests in Jamaica, Trinidad, the United States and India.

"That brings increased responsibilities to me," Lee Chin told Sunday Business from his office in Canada.

"I am one person."

On Wednesday, AIC Limited announced that Lee Chin, 55, its

founder, had handed the daily operations of the Canada based mutual fund to Chief Investment Officer Jonathan Wellum, 45, but would remain as executive chairman.

The announcement was emphatic that nothing else would change at the fund company, including the company's approach to investments, but on Friday, Lee Chin said, when asked, that it was not an acknowledgement that he might have been the cause of the fund's poor showing in the past five years.

AIC's assets peaked at C$14 billion in 2001, but are now at $8.9 billion, said Lee Chin.

The AIC chairman said, however, that the current position was actually reflective of a resurgence of business, saying the fund's assets had bottomed out at C$7.8 billion six months ago.

Additionally, customer redemptions have slowed, he said, from an average of C$400 million per month a year and a half ago to C$50 million per month for 2006.

Redemptions for September were actually C$75 million, but Lee Chin said it was merely a spike.

AIC had been losing clients, said the investor, because their demand for "hot" products, such as technology stocks in earlier years and now oil whose volatility had pushed prices to 20 year peaks. Oil prices have flirted with the US$80 per barrel mark, and analysts had predicted a rise to US$100 per barrel by year-end. The price is now back below US$60 per barrel.

"We could have stemmed the redemptions by going into the demand areas ... but we knew those areas were overpriced," said the AIC chairman.

Though Lee Chin has been building out his international business since his acquisition of National Commercial Bank, he claims that he remained as CEO of AIC to bear the brunt of the heat from investors wanting to take big risks, while allowing his executives to develop safe investments.

"I was willing to take the knocks...," he said, adding, "it was the right thing to do."

Wellum and Lee Chin have worked together for almost two decades, and are considered sparring partners.

"I have every confidence that under Jonathan's stewardship as chief executive officer, AIC will stay the course in creating long-term wealth for investors," said the billionaire investor when the change was initially announced, referring to Wellum's ascension as "a natural progression."

Lee Chin will also continue as executive chairman of AIC's sister companies, the Berkshire group of companies, NCB, and Senvia Money Services.

Lee Chin purchased AIC in 1987, and has run the business on a central and conservative guiding principle: buy, hold, prosper.

Wellum took the baton with a promise of "consistency " in AIC's investment approach through all markets, all cycles and for decades to come," adding that the overarching strategy of disciplined value investing "will never change."

On Friday, Lee Chin said AIC would be going after safe long term investments in the financial services and software and technology outsourcing.

He is already engaged in both sectors, having invested in Infosys out of India in 2003. He has put C$250 million in the company over the three years, giving AIC a "major" stake in that business. He did not qualify the ownership.

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