Caisse, Al Gore’s firm join forces to take over U.K. fintech firm

MONTREAL •Thecaissede dépôt et placement du Québec is joining forces with a firm co-founded by former U.S. vice-president Al Gore to become the majority shareholder of U.K. financial technology firm FNZ in a deal that values the company at about $2.7 billion.

As part of this acquisition — one of the largest in this sector this year — announced on Tuesday, the Quebec pension fund manager and partner Generation Investment Management bought the 66-per-cent stake held by American firms General Atlantic and HIG Capital.

The approximately 400 employees of FNZ will continue to own one-third of the company.

The FNZ agreement adds to a surge in fintech transactions, which totalled more than $39 billion in the first half amid investments in payment processing, financial data and machine learning, according to a report from advisory firm Hampleton Partners.

This transaction is the first of the partnership unveiled by the Caisse and the private sustainabilityfocused investment management firm. The initiative forecasts up-front investments of $3.8 billion over periods ranging from eight to 15 years. This is a longer time frame compared to typical investments in private placements.

Founded in 2003 in New Zealand by Adrian Durham, FNZ manages more than $559 billion in assets for at least five million clients of international financial institutions such as Standard Aberdeen, Santander, Lloyds Bank, Vanguard and UBS.

The capital infusion will help FNZ tap a bigger share of the $30-trillion global market, according to Durham.

“The deal will help us grow share in the wealthmanagement platform market to trillions versus hundreds of billions,” said Durham. “You have to be a scale player.”

In total, more than 60 financial institutions in the U.K., Europe, Australia, New Zealand and South East Asia are partners of FNZ. York flagship store after shutting down in July 2015. Around the same time, rival Toys “R” Us Inc., which once owned FAO Schwarz, was facing financial woes and began liquidating U.S. stores only to cancel its U.S. bankruptcy auction and announce plans to revive the brand days ago.

Toys “R” Us’s Canadian business remained open and mostly immune to the rocky period the business encountered, but in recent years it and other toy companies grappled with the growing popularity of video and online games, the expansion of rival brand Mastermind Toys stores and the dawn of e-commerce that has pitted legacy toy retailers against online giants Amazon.com Inc. and ebay Inc.

FAO Schwarz, which is known for its bright, largescale displays, has attempted to counter these headwinds by opening stores within Macy’s, Saks Fifth Avenue and Bloomingdales department stores.

Niggli wouldn’t say whether the HBC partnership was a sign that FAO Schwarz will look to make a long-term foray into the Canadian market or open its own stores here.

“We always consider. We never say never,” he said.

“I think we will definitely have a good read, but right now it is us and Hudson’s Bay in Canada.”