Mackenzie’s Javasky announces retirement

By Mark Noble | January 7, 2009 | Last updated on January 7, 2009
3 min read

Mackenzie Investments is losing one of its most seasoned and prolific fund managers, as Jerry Javasky, head of its Ivy investment team, announced he is retiring from the investment business.

“Freedom 55” is the mantra of one of Mackenzie’s sister companies, but Javasky’s relatively young retirement age has surprised many industry observers, especially since he is coming off somewhat of a comeback after years of underperformance due to the disciplined, value-oriented style he employed that eschewed commodity investing.

Javasky, who will stay on with the Ivy team until March, will become a consultant advisor for Mackenzie. He stresses that the move has been in the works for some time and he has therefore worked hard to develop a strong succession plan.

“We have been preparing for this day within the Ivy family by building a talented team of like-minded managers over the past decade,” Javasky says. “Each member of the team is dedicated to preserving those attributes that define the Ivy investment style.”

Replacing Javasky as the head of the Ivy team will be his “hand-picked” successor Paul Musson, senior vice-president of Mackenzie Financial. Musson has been with Ivy for eight years and will take on the role of Ivy team leader in February.

Brian O’Neill, senior fund analyst with Morningstar Canada, thinks very highly of Javasky’s money management style and is fairly confident his discipline will continue to be deployed by his successor. Until they are certain, though, Morningstar is temporarily removing the Mackenzie Ivy Foreign Equity fund from its analyst pick list and putting it under review.

“Succession planning has been strong. Musson has spent a good eight years with Javasky learning his style (particularly with) European and foreign stocks. We think he is ready to take the reins,” O’Neill says. “The concern is that Javasky had quite a lot more experience. He’s been through a lot of ups and downs in the markets. A really conservative approach like the one they employ at Ivy really requires a manager not to get caught up in the fads and trends and the markets.”

Interestingly, Javasky’s discipline was sometimes his biggest weakness, a value investor who traditionally held large cash reserves and tended to focus on giving relatively large weightings to companies that had relatively simple balance sheets. The style served him well in the late 1990s, when he won Fund Manager of the Year in 1998.

The style served him well in downturns, but tended to do poorly in up-markets — particularly the commodity run that occurred over the last few years, O’Neill says. Adding fuel to his detractors was the fact that Ivy Funds co-founder Gerry Coleman has had a much more consistent track record of success over the last decade after he left to join CI Investments, leading some to make allegations that it was Coleman not Javasky who was behind Ivy’s early success.

“Javasky’s style was more conservative than Coleman’s. Coleman is an excellent manager; I don’t think their style is as similar as some have suggested. Coleman would invest in commodity companies, whereas Javasky tended to shy away from cyclical companies. There will be some commodity names, but not ones that are dependent on underlying commodity prices to be successful,” he says. “Javasky would prefer to pick companies with a cleaner balance sheet and maybe ones that didn’t have as aggressive a risk profile. That’s an approach that will inevitably lag in an up-market, but can protect a portfolio really well on the downside.”

Mackenzie Ivy Foreign Equity Fund seems to be proof of this, notes independent fund analyst Dan Hallett, president of Dan Hallett and Associates.

“I’ve never been a great fan of the Ivy team since Gerry Coleman left. [When]you think of Ivy, you think of Javasky at this point; he’s been the leader for so many years. What kind of impact his departure will have is tough to say. A lot of team members have been charged with leading their respective mandates at this point,” he says. “My understanding is Javasky preferred to spend most of his time on the Mackenzie Ivy Foreign Equity Fund — that has held up really well during this period. Up until mid-December they had managed to keep losses to the single digits.”


Mark Noble