Winnipeg-based IGM Financial Inc. has made an additional US$25 million investment in San Carlos, Calif.-based Personal Capital Corp., according to an announcement released Thursday.
This increases the Canadian financial services firm’s stake in the U.S. robo-advisor to 15% from 10%. IGM made an initial investment of US$50 million in Personal Capital in May with plans for a second influx of cash dependent on the robo-advisor hitting specific growth targets.
Personal Capital surpassed those targets by adding US$1.5 billion in assets under management (AUM) within the past year to reach more than US$3.4 billion in AUM, according to IGM’s announcement.
“Personal Capital continues to experience rapid growth in the affluent investor segments of the market by offering a unique, compelling and valuable proposition for its clients,” says Jeff Carney, president and CEO of IGM, in a statement. “We are very pleased that the company has outpaced its performance target, giving us further opportunity to participate in the emerging digital wealth-management industry in the U.S.”
As a result of the new investment, Paul Desmarais III, vice president of IGM’s parent company, Montreal-based Power Financial Corp., will be joining Personal Capital’s board of directors. Carney already has a seat on Personal Capital’s board.
“IGM Financial has been a great investor,” says Bill Harris, CEO of Personal Capital, in a statement. “Over the past six months, we’ve been able to grow marketing, staffing, and offerings to our users and clients.”
IGM also has invested in Canadian financial technology (a.k.a. fintech) as the firm announced in 2015 it would invest up to $30 million in Toronto-based robo-advisor Wealthsimple Inc., with an option to make further investments in Wealthsimple during the following three years. IGM, with its parent company, is also a backer of Portag3 Ventures GP Inc., which is a venture-capital fund targeted specifically to fintech startups.
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