Fiera Sceptre announced that it will acquire National Bank’s asset management division, NatCan Investment Management, for $310 million. National Bank will gain a minority interest (35%) in the combined entity. Looking at June 2011 data, the combined entity, to be named Fiera Capital, would hold $59.4 billion in assets under management (AUM). This would result in a rank improvement from 23rd to 7th in overall Managed Money, with Fiera Capital leading CI Financial by $3 billion but lagging Fidelity by $8 billion.
Fiera Sceptre’s business is largely comprised of institutional assets, and the combined entity would rank 10th in pensions, moving up from 14th. In not-for-profit, Fiera Capital would move up one rank to take the leadership position within the segment.
NatCan’s business is concentrated in individual segments. In these areas, it manages assets for the bank’s investment funds and private investment counsel divisions, as well as acts as a sub-advisor to third-party mutual funds. Fiera Capital would move up from 23rd to 12th rank as manager – and from 9th to 4th rank as a sub-advisor – of mutual funds. As a manager of private investment counsel assets, Fiera Capital would move into 5th position with $6.0 billion in combined AUM. Previously NatCan ranked 10th and Fiera Sceptre ranked 16th.
This transaction represents a shift in strategy by a bank. National Bank’s Big Six peers have been moving to strengthen their asset management groups and assign greater focus to these groups in recent years. Heading in the opposite direction are Scotiabank (acquired DundeeWealth in 2011) and RBC (acquired Phillips, Hager and North in 2008 and BlueBay in 2010). Regardless of strategy, Investor Economics expects there to be continued consolidation in the highly competitive asset management arena and will report on all transactions and comment on the impacts in the Managed Money Advisory Service http://investoreconomics.com/issue/managed-money-advisory-service. Posted by Kevin Spraggs Kevin@iei.ca.