Mubadala-Backed CI Buys Invesco’s Canadian Fund Assets - Bloomberg

Mubadala-Backed CI Buys Invesco’s Canadian Fund Assets - Bloomberg

Atlanta-based Invesco Ltd. is selling its C$26 billion ($18.7 billion) Canadian investment fund business to CI Global Asset Management, furthering the M&A trend in the country’s mutual fund industry.

CI will become the manager for 100 Invesco mutual funds and exchange-traded funds, bringing the Toronto-based firm’s assets to C$170 billion. Financial terms were not disclosed.

Invesco will stay on as a sub-adviser to 63 of those funds, representing about half the assets, or C$13 billion.

Invesco will be “reducing its Canadian operating footprint,” Andrea Raphael, its chief communications officer, said in an emailed statement. The transaction is expected to close in the second quarter.

The Canadian mutual fund industry has consolidated over the past decade as the rise of ETFs and increased regulatory scrutiny led to lower fees and thinner margins. CI Financial Corp. itself was taken private last year by Mubadala Capital in one of the largest-ever acquisitions by an Abu Dhabi entity in the financial sector.

The Invesco transaction “will cement our ranking as one of the largest investment fund companies in Canada and position the firm for continued growth,” Kurt MacAlpine, CI’s chief executive officer, said in a statement.
Trimark History

Invesco Canada’s predecessor companies have a storied place in the country’s mutual fund industry.

Trimark Financial Corp. was founded by Robert Krembil, Michael Axford and Arthur Labatt in 1981. Focused on value investing, it was Canada’s sixth-largest mutual fund company with C$25 billion in assets before Britain’s Amvescap struck a deal to buy it in 2000.

Trimark “was a firm that launched products that they thought would really improve investor outcomes. They didn’t just launch the flavor of the day,” said Dan Hallett, head of research at HighView Financial Group in Oakville, Ontario. He lauded Trimark for starting Canadian natural resources and small-cap funds in 1998, before those strategies had widespread investor interest and proven returns.

CI has attempted to buy this division before. In 2005, it unsuccessfully tried a hostile bid for Amvescap, partly motivated by its desire to own the Trimark operations. Amvescap changed its name to Invesco in 2007.

Mutual fund and ETF assets in Canada totaled C$3.2 trillion as of Nov. 30, according to the Securities and Investment Management Association, with ETFs accounting for 22% of that amount.