Montreal-based FieraCapital Corp. is ready to ramp up its presence in Western Canada with its most recent acquisition, Calgary-based Canadian Wealth Management Group Inc. (CWM), a subsidiary of Paris-based Société Générale.
“We have a very limited presence in the western part of Canada,” says Sylvain Brosseau, Fiera’s president and chief operating officer. “And we felt that it was important to have a strong presence there to establish a truly national high net-worth practice.”
Fiera is ranked as the fourth-largest independent asset-management firm in Canada. It has been busy building its business, both organically and through acquisitions, since its inception in 2003.
Although no details have been released about the CWM acquisition, that company will be fully integrated into Fiera’s private wealth-management business, which provides non-traditional investment strategies to families, estates, foundations, trusts, endowments and high net-worth individuals.
This is the second notable acquisition for Fiera this year. This past spring, Fiera completed its largest acquisition to date when it bought the assets of Natcan Investment Management Inc., National Bank of Canada’s asset-management subsidiary.
The Natcan deal saw Fiera pay $309.5 million in cash and shares to National Bank; in return, the bank got a 35% ownership stake in Fiera, with an option to increase that to 40% by September 2014. As a result of the Natcan acquisition, Fiera almost doubled its total assets under management (AUM) to $54 billion from $28.9 billion.
“When it comes to growing our high net-worth business,” Brosseau says, “looking for strong partners to acquire makes the most sense. It is a [business] that is based strongly on relationships that are built over time. When we looked at CWM, it was the perfect fit. Clients will be able to be served by the same individuals but now have access to a larger array of investment products.”
The majority of CWM’s staff will be retained. Over time, Fiera plans to add to the number of portfolio managers in Western Canada. Paul Vaillancourt, CWM’s CEO and chief investment officer (CIO), will become the leader of Fiera’s Western Canada practice.
“Our first priority,” Vaillancourt says, “will be to ensure that our existing clients are fully satisfied and to provide them peace of mind during this time of transition. Next, we plan to expand Fiera’s private-wealth platform in Alberta and across Western Canada.”
CWM, established initially as a financial planning firm, has been operating for more than 30 years. In 2008, Société Général purchased CWM to run as part of its private-banking arm.
Today, CWM offers investment management, financial planning, estate planning, and tax advisory and tax preparation services. With Société Général looking to shift its focus toward the development of its business in core markets, the timing of the deal could not have been better.
“While acquisitions in the industry are widely believed to be difficult undertakings, Fiera appears to be continually successful with its growth by acquisition strategy,” says a recent report by Phil Hardie, an analyst with Toronto-based Bank of Nova Scotia‘s global banking and markets division. “We expect Fiera to continue to be active in acquiring businesses in both the private-client and institutional asset-management sectors.”
After the integration with Fiera is complete, Vaillancourt says, CWM portfolio managers will have access to an in-house asset-allocation tool as well as Fiera’s non-traditional investment strategies offering a higher predictability of return, such as a diversified lending strategy, an infrastructure fund and real estate.
“In our mind,” adds Vaillancourt, “this will become more important than ever as we continue to grind through this secular deleveraging environment with [its]low interest rates and forecasted lower returns for traditional asset classes.
“Recent years have seen a lot of volatility and have been challenging for investors,” he adds. “Our mission is to provide clients with peace of mind [in] knowing that their wealth is well managed and that their portfolios offer the best risk/return trade-off. So, we are excited at the opportunity of our partnership with Fiera.”
Fiera has come a long way since Jean-Guy Desjardins, chairman, CEO and CIO of Fiera, founded the firm after acquiring $5 billion in AUM and Elantis Investment Management Inc., a division of Lévis, Que.-based Desjardins Group, in 2003. Fiera continued to grow with the acquisition of Senecal Investment Counsel Inc. in 2005, YMG Capital Management Inc. in 2006, Sceptre Investment Counsel Ltd. in 2010 (all based in Toronto) and the Natcan deal in 2012.
This is Fiera’s fifth acquisition over the past nine years. As a result, Fiera now has offices in Montreal, Toronto, Vancouver, Halifax, Boston and New York, and employs more than 250 staff and 100 investment professionals.
As for Fiera’s growth strategy, Brosseau says, he hopes to grow the firm’s AUM to more than $100 billion over the next five to seven years. Fiera wants to expand its wealth-management business in its Vancouver office, which is mostly institutional, as well as look at smaller, more central cities such as London, Ont.
“If you look at the wealth-management landscape today,” says Brosseau, “it has been evolving and there are a lot of regional players that have been able to succeed. So, I think there are a number of locations that we could expand into.”
In addition to growing within Canada, Fiera also is looking south of the border. In the U.S., Fiera would like to add emerging-market assets capabilities, as well as global fixed-income.
Although the focus in the U.S. for the next few years will be on the institutional side, Fiera is actively looking for potential acquisitions in the private-wealth space that have AUM of between US$2 billion and US$10 billion.
“We realize that we are starting from scratch in the U.S.,” Brosseau says. “And, similar to our Canadian strategy, the best way to grow in the high net-worth space is definitely through acquisitions.”
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