Winnipeg-based IGM Financial Inc. has purchased an initial 10% stake in U.S.-based robo-advisor Personal Capital Corp. for US$50 million, with an agreement to invest an additional US$25 million within 12 months for a total 15% stake.
Personal Capital, based in San Carlos, Calif., provides wealth-management services that combine customer-facing digital technology with access to dedicated financial advisors. The company targets the mass affluent and high net-worth investor segments of the market.
“This opportunity will enable us to participate in the emerging digital wealth-management industry in the U.S.,” said Jeff Carney, president and CEO of IGM, in a statement announcing the deal.
Personal Capital’s founder and CEO, Bill Harris, formerly served as CEO of U.S.-based financial technology firms Intuit Inc. and PayPal Holdings Inc.
“Bill’s proven leadership together with the depth of talent of his management team, their combined experience and innovative technology, makes this is an attractive investment for IGM Financial,” said Carney, who will join Personal Capital’s board of directors.
The remaining interest in Personal Capital that IGM does not own is held by Personal Capital’s management team and existing investors.
IGM, which owns Investors Group Inc., Mackenzie Financial Corp., and Investment Planning Counsel Inc., is itself a subsidiary of Power Financial Corp. Insurance firm Great-West Lifeco is also a Power Financial subsidiary.
Last year, Power Financial announced it would invest up to $30 million in Toronto-based robo-advisor Wealthsimple Inc. The firm also held an option to make further investments in Wealthsimple over the following three years.
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