Montreal-based Fiera Capital Corp. (TSX: FSZ) and Toronto-based GMP Capital Inc. (TSX:GMP) Friday announced an agreement that will result in Fiera purchasing certain alternative asset funds from GMP Investment Management L.P. (GMPIM) for $10.75 million in cash.
The $570 million in assets under management being sold to Fiera will continue to be managed by Jason Marks, CEO of GMPIM, and key members of his team, who have agreed to join a newly created Fiera subsidiary, in which management will have a minority ownership interest.
The deal is expected to close in the first quarter of 2013.
The funds purchased by Fiera include GMP Diversified Alpha Fund and Canadian ABCP Fund. The two funds adhere to proprietary and disciplined absolute return-focused strategies designed to deliver steady growth, manage volatility and offer an attractive investment for high-net-worth and institutional clients.
Fiera says it will pay 25% of performance fees based on the acquired assets for a period of three years, subject to certain minimum asset under management thresholds. The deal is expected to be immediately accretive to Fiera earnings.
“We are very proud to have attracted this experienced and highly credible investment team, and we see tremendous potential as we expand our absolute return offering,” said Jean-Guy Desjardins, chairman and CEO of Fiera, in a release.
“The team brings a wealth of experience to Fiera, with numerous members having held senior positions at large Canadian financial institutions prior to founding GMPIM.”
“Our first priority will be to ensure a smooth transition for our existing clients, and we will then look to further grow our asset base through the development and launch of innovative products,” said Jason Marks.
Fiera has $58 billion in assets under management, excluding approximately $8 billion of assets under management acquired as part of the recently announced UBS Global Asset Management transaction, which is subject to regulatory approval and expected to close in the first quarter of 2013.
GMPIM announces leadership transition plans
In tandem with Friday’s sale, GMPIM announced that Dan McClure has been appointed co-CEO of GMPIM, effective immediately, and will succeed Jason Marks upon closing of the transaction.
McClure joined GMPIM in July 2010 and brings extensive industry experience to his new role. The new leadership team will continue to manage the GMPIM Equity Opportunities Fund and the Genesis Fund, and expects to launch new equity-based fund offerings over the next 18 months.
“The sale of these assets represents an opportunity to strategically reposition GMPIM and align its mandate more closely with GMP’s core equities business and our partners at Richardson GMP,” said McClure.