Aston Hill, Front Street Capital unite forces
TORON TO • Front Street Capital and Aston Hill Financial Inc. are j oining forces in the latest tie- up among Canadian i nvestment firms.
The combined company will have about $ 3.1 billion in assets under management, as of Aug. 31, and will be led by chief executive officer Joe Canavan.
“The combination of Aston Hill and Front Street creates an asset management platform with an at- tractive product mix and a talented team known for delivering exceptional client service,” Canavan said in a statement.
“This transaction positions the combined company for future growth as a leading intermediate independent asset management company and strong alternative to bank- owned asset managers.”
The structure of the friendly deal will give current Front Street partners about 46 per cent ownership in the combined company, and current Aston Hill shareholders roughly 41 per cent. Both companies are based in Toronto.
Canavan, a former CEO of Assante Wealth Management, has been granted options to purchase 24 million common shares, and will himself make a $500,000 investment in additional common shares, assuming the deal closes.
Aston Hill also announced that its chief investment officer, Ben Cheng, is taking a leave of absence, effective immediately, and will cease involvement in the firm’s investment activities. His portfolios will now be managed by Sandy Liang and Barry Morrison.
Aston Hill has encountered significant hurdles in recent years, including the termination of its $ 2- billion- plus asset sub- advisory agreement with IA Clarington in 2015. It’s also been reportedly caught up in the insider trading scandal at Amaya Inc.
The transaction is expected to close by the end of 2016.