Mawer In­vest­ment Man­age­ment rules out sale in favour of stay­ing in­de­pen­dent

The Globe and Mail (Alberta Edition) - - REPORT ON BUSINESS - TIM KILADZE

Cal­gary’s Mawer In­vest­ment Man­age­ment Ltd., which over­sees $50-bil­lion of client money, has de­cided not to sell it­self. In­stead, it will forge ahead as an in­de­pen­dent firm.

For more than 40 years, Mawer has op­er­ated as an in­de­pen­dent that is free from bank own­er­ship. In Novem­ber, how­ever, the com­pany re­vealed that it had hired bankers to con­sider a sale amid a frothy mar­ket for as­set man­agers.

At the time, Mawer stressed that a sale was not guar­an­teed. On Fri­day, the firm for­mally ruled one out.

“While we ap­pre­ci­ate the ex­ter­nal in­ter­est in the firm, the process re­con­firmed our long-stand­ing be­lief that Mawer’s high-per­form­ing team and cul­ture, in­vest­ment ap­proach, and client-cen­tric fo­cus is best sus­tained by con­tin­u­ing our in­de­pen­dent own­er­ship model started over 40 years ago,” Mawer pres­i­dent Michael Mezei said in a state­ment.

Mawer launched its strate­gic re­view af­ter a num­ber of long­stand­ing in­de­pen­dent firms sold them­selves to large Cana­dian banks. In 2018 alone, Bank of Nova Sco­tia ac­quired MD Man­age­ment for $2.6-bil­lion and Jaris­lowsky Fraser Ltd. for $950-mil­lion, while Toronto-Do­min­ion

Bank ac­quired Grey­stone Man­aged In­vest­ments Inc. for $792mil­lion.

Lately, the banks have been hun­gry for as­set man­agers be­cause they see wealth man­age­ment as their ma­jor growth driver over the next decade. The lend­ing and hous­ing boom is cool­ing, and baby boomers are ap­proach­ing and en­ter­ing re­tire­ment, which raises ques­tions about sav­ing and in­vest­ing.

Many as­set man­agers are also search­ing for scale. The share of in­vestable as­sets that are in ex­change-traded funds is grow­ing rapidly, and the big­gest global providers of ETFs, such as Black­Rock Inc., can spread their fixed ex­penses over tril­lions of dol­lars in as­sets. In turn, they charge ex­tremely low fund fees. Ri­vals of­ten feel the need to ac­quire in or­der to com­pete.

Against this back­drop, as­set man­agers have been sell­ing for good prices.

Cana­dian money man­agers are typ­i­cally pur­chased for some­where be­tween 1 per cent and 3 per cent of their as­sets un­der man­age­ment (AUM), but Bank of Nova Sco­tia re­cently ac­quired MD Man­age­ment for 5.3 per cent of its AUM. At that same level, Mawer would have been worth $2.65-bil­lion.

Lately, the banks have been hun­gry for as­set man­agers be­cause they see wealth man­age­ment as their ma­jor growth driver over the next decade.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.