Montreal-based Fiera Capital Corp. has announced that its U.S. division has entered into a definitive agreement to acquire the management of City National Rochdale Emerging Markets Fund, a mutual fund with approximately US$1.7 billion in assets under management that invests mainly in Asian emerging markets.
The aggregate consideration paid at closing, in connection with the transaction, totalled approximately US$12 million payable in cash subject to various post-closing adjustments. Additional consideration in the form of an earnout of up to US$12 million of revenue share payments is payable during the five-year post-closing period. Further payments structured as revenue share payments linked to realized revenue is payable during the 10-year post-closing period.
The transaction is expected to be accretive immediately, adding high single digit accretion to Fiera's adjusted earnings per share within the first full year post-closing.
"We are pleased to add a new team and a complementary emerging-markets strategy to our offer for the U.S. market," says Jean-Guy Desjardins, Fiera's chairman of the board, president and CEO, in a statement. "We believe that fundamentals for emerging markets will continue to be favourable due to macro drivers such as continued low interest rates and a weak U.S. dollar."
Adds Benjamin Thompson, president and CEO of Fiera's U.S. division: "We are committed to making investments that are tailored to our clients' needs. This acquisition also broadens our macro regional and fundamental research capabilities and complements our offer for equity strategies."
City National Rochdale Emerging Markets Fund invests in quality companies in emerging markets. The mutual fund's approach aims to capitalize on underlying regional macro trends and global macro dynamics, which, combined with fundamental bottom-up security selection, may result in more concentrated regional investments.
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