Toronto-based Richardson GMP Ltd. plans to make access to alternative investments a little easier for its financial advisors and their wealthy clients thanks to its purchase of asset-management firm CQI Capital Management LP from GMP Capital Inc., which holds a non-controlling interest in Richardson GMP.
"There are many, many great alternative investment managers out there," says Andrew Marsh, president and CEO of Richardson GMP. "And so, we feel that more and more advisors are looking to diversify [clients'] portfolios in investments that are interesting and typically non-correlated to the risk and volatility of [stock] markets."
CQI will be re-launched as an in-house platform for Richardson GMP following the deal's close by the end of 2015. The asset manager is in the process of winding down all of its funds and Marsh says that no current personnel at CQI will come over to Richardson GMP as part of the sale. Instead, Richardson GMP's internal investment and portfolio services group will run the division.
Says Marsh: "What we're acquiring is the remaining shell [of the] licensed platform."
New investments will be available through CQI to Richardson GMP advisors starting in the first quarter of 2016. The products will give Richardson's ultra-high net-worth (UHNW) clients access to alternative investment options such as real estate, solar energy and structured notes.
Part of the advantage to having an in-house alternative investment platform, Marsh says, is that Richardson GMP can do the grunt work for its advisors in finding the best products and managers for clients.
"What we want to do is just organize [advisor access to products] a little better so that our advisors will have a roster of alternative investment managers that we've done due diligence on," says Marsh.
Although CQI will be run internally, most of the actual investment management will be done through third-party partnerships including global managers, Marsh says: "By partnering with hedge fund managers and alternative managers that are not necessarily in Canada but are world-class managers either in the U.S. or Europe, we'll also be able to give our clients access to really high-quality money management that they wouldn't normally get access to."
Access to alternative investments — both at home and abroad — is something UHNW clients want more of these days as they consider ways in which to diversify their wealth.
"It's really in recognition of what we feel wealthy families are looking for as their wealth has become more complex and they're trying to protect it from market swings and volatility," Marsh says.
GMP Capital launched CQI in 2007 under the name GMP Investment Management. The asset manager was rebranded as CQI Capital Management in 2013.