The Canadian Women Entrepreneur Awards recognizes leading female entrepreneurs who have made significant contributions to the Canadian economy. Presented in five categories, the awards celebrate the outstanding leadership skills and vision of these dynamic businesswomen, who are role models for generations of young Canadian women.
In a special five-part series, Xchange shares the secrets of success of these leading women entrepreneurs. In our final installment, we feature Kim Shannon, president and chief investment officer of Sionna Investment Managers Inc. in Toronto, winner of the 2007 Start-Up Award.
Business wasn’t Kim Shannon’s first love. The president and chief investment officer of Sionna Investment Managers Inc. studied zoology at the University of Toronto and was set to do a master’s program in 1981 when a friend suggested she had the skills to do well in business. He was right.
Shannon spent 20 years honing her investment skills and building a reputation as a winning fund manager for the likes of Merrill Lynch Canada and Royal and Sun Alliance, before launching her own investment-counselling company, Sionna Investment Managers Inc. Four years later, the firm had $9 billion in assets–one of the most significant growth rates for a start-up firm in Canadian investment history.
A large-cap value-driven manager, Shannon attributes such growth to her success managing CI Financial funds. Indeed, since taking on CI’s Canadian Investment Fund in 1996, she has grown it from a “dead as a doornail” $48-million fund to “the largest equity mutual fund in Canada.”
“Value investing requires a contrarian mind, a mind willing to go against the crowd mentality,” says Shannon. “We’ve developed an investment approach that’s really low risk but gets above average returns.” Investors, she says, “count on us to do well for them in tough times, and they’re educated to know that in really strong markets we’ll lag. But in the long run, we get significant out-performance.²
That contrarian approach struck again in 2006 when Shannon severed her relationship with CI Financial Inc. and walked away from $6.5-billion in assets. “I said goodbye to my biggest client,” she says. “That was 90% of my revenue.”
Why did she do it? “For me, it’s important to have long-term partnerships. I think I did have one [with CI], and we clearly had a great thing going,” says Shannon. “But I suddenly realized that I was not in a partnership any longer,” she says. Once that happens, “you’re better starting over as quickly as possible and rebuilding again.”
Seizing the opportunity for more independence, challenge and growth, and trusting in her ability to repeat her previous successes, she forged a joint venture with Brandes Investment Partners & Co. (the Canadian affiliate of San Diego-based Brandes Investment Partners LP) to manage three new co-branded Canadian mutual funds.
Despite dropping her biggest client, Shannon did not cut any of her 14 employees, and she was the only one who took a pay cut. She credits careful saving practices, both personally and within the company, for having the resources to maintain the full cost base of the firm despite the huge revenue loss: “I’ve always believed in saving for a rainy day, so that if you have to make those tough decisions, you can.”
Shannon’s focus now is to “repeat the track record we’ve had in the past, and just keep doing it.” She appears to be well on her way. As of March 31, 2008, Sionna Investments had $1.9 billion worth of assets under management, and based on Investment Funds Institute of Canada data, the Brandes Sionna Canadian Equity Fund attracted more assets in the last year than any other Canadian equity mutual fund. “Our goal is to become one of the top five investment counseling firms in Canada, and we’re really excited about making that happen. That ride will be a blast for all of us.”