Winnipeg-based IG Wealth Management has launched an advisory service for owners of mid-sized companies.
The new Private Company Advisory Business (PCAB) will be housed within the company’s brokerage arm, Investors Group Securities Inc., to provide advice to Canadian business owners on institutional placements of debt or equity, succession planning, acquisitions and divestitures.
PCAB will initially target mid-sized companies with revenues between $20 million and $500 million, but the company is also considering launching a service for smaller businesses.
The five-person team — four based in Toronto, and one yet to be named who will be based in Quebec — will be led by David Turnbull. Turnbull joins IG as senior vice-president from Manulife, where he ran the firm’s advisory service for private companies of up to $1 billion in revenue from December 2019 to June 2023.
“What we’re doing is bringing tier-one investment banking services down to mid-size businesses,” he said, noting that this market segment requires advisors who are comfortable “valuing private companies, which require an illiquidity discount, and managing the process in a less-efficient marketplace.”
PCAB clients will be referred by IG Wealth’s financial advisors.
“Our IG advisors or consultant will act as quarterback to all [our internal] support products and service teams, including [PCAB],” Turnbull said.
Clients will pay a small retainer fee, but PCAB’s revenue model is largely based on transaction fees.
“We share the client’s risk, so if the transaction doesn’t close, we’re not getting paid,” he said. “Largely it is a ‘success fee.’”
Turnbull said there is a growing need in Canada for consulting services below the investment bank level, especially given data that suggests three-quarters of Canadian business will be sold over the next decade.
“For many business owners, this is the most significant transaction of their career,” he said. “So, it’s important to have an expert who knows what they’re doing and can make sure they complete the transaction with optimum outcome.”