UPDATED: Fiera Capital’s Canada private wealth AUM to exceed $6B after CGOV buy

Editor’s Note: This story’s headline has been updated to reflect that the company’s Canada private wealth AUM, versus the company’s total AUM, will exceed $6B. Fiera Capital’s total AUM is above $100B, as reported in its Q4 earnings report.

Fiera Capital Corporation is scooping up the business of CGOV, an Ontario-based investment management firm that’s focused on wealthy and institutional investors and which reported, as of December 31, 2017, approximately $5.3 billion in assets under management.

Upon completion of the deal, Fiera Capital will become the seventh-largest independent high-net-worth manager in Canada, with total private wealth AUM in the country to exceed $6 billion.

Fiera chose CGOV for its “rich history of success and growth” and its “proven management team,” says Jean-Guy Desjardins, chairman of the board and CEO of Fiera Capital, in a release.

Jean-Phillipe Lemay, president and COO of Fiera Capital’s Canadian Division, adds CGOV has “a solid base in Ontario and Western Canada” and that “the critical mass gained as a result of the transaction” will help grow Fiera Capital’s footprint in the “highly attractive high-net-worth segment across Canada.”

Once the buy is completed, CGOV partners and employees will be joining Fiera Capital. That will include Ted Ecclestone, who will lead Fiera Capital’s Canadian private wealth team. Ecclestone, who has more than 20 years of experience, joined CGOV in 2006.

“The combination of the firms will “bring robust investment solutions to CGOV clients, including access to enhanced fixed income and private alternative strategies,” says Don Cranston, founding partner and chairman of CGOV Asset Management, in the release.

Under the terms of the agreement, the purchase price totals $114.2 million, of which 42% is payable in cash on closing and 58% is payable in Class A Subordinate Voting Shares of Fiera Capital. The shares, which will be vested over a five-year period, will be issued at a price equal to $11.91.

The transaction is expected to be modestly accretive (low to mid-single digit) to adjusted EPS within the first full year post closing, according to the release. The deal is expected to close in Q2 2018.

Also read:

• Canaccord Genuity expands Canadian wealth management
• Purpose Financial buying small biz lender Thinking Capital
• Associations for private and exempt markets merge

Fiera’s Q4 and fiscal 2017 earnings

In a separate Friday release, Fiera Capital announced its latest earnings. Here are the highlights:

• Total assets under management reached $128.9 billion, which marked a 10% year-over-year increase
• Annual revenues grew 33% on a year-over-year basis
• Adjusted EBITDA per share of $0.43, compared to $0.52 year-over-year
• Net earnings per share of $0.01, compared to $0.07 year-over-year
• There was a net impact of a $6-million charge, or $0.07 per share, on its net earnings following the U.S. Tax Cuts and Jobs Act
• Adjusted net earnings per share of $0.32, compared to $0.38 year-over-year
• It announced a quarterly dividend increase of 5.6%—its second dividend increase in the last twelve months

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