Martin Weinberg, who built Assante Corp. before selling the wealth management firm to CI Financial Corp., is now on the hunt for firms that counsel pension funds and endowments on how to invest their money.
Pavilion Financial Corp., the latest brainchild for the Winnipeg serial entrepreneur, aims to be a major player in the North American institutional investment consulting business. It is looking to acquire smaller outfits that will have trouble competing against industry giants such as Mercer and Towers Watson.
“We believe that Pavilion has nailed the sweet spot” in being able to combine smaller firms into one that can compete against bigger players, and yet offer more personal service, said the chief executive officer of Pavilion Financial. “The industry is very split. You have a handful of very large firms … and then you have well over 100 small mom-and-pop shops.”
Winnipeg-based Pavilion, which now has 125 employees, quietly acquired Montreal-based Brockhouse & Cooper Inc. in 2010 and Chicago-based Stratford Advisory Group last year. Beginning Wednesday, they are now operating under the Pavilion brand name.
Pavilion’s acquisition strategy won’t mirror that of Assante, which acquired 18 firms from 1995 to 1999 when it went public, he said in an interview. “This isn’t a race to be big … We are looking at a much slower pace – maybe one or two a year.”
Mr. Weinberg doesn’t rule out the possibility of Pavilion going public some day. He is now the largest shareholder with under a 30-per-cent stake, while employees own the rest. He won’t divulge revenues, but said that Pavilion provides advice for client assets totalling $30-billion.
Before Assante was sold in 2003 for $846-million to CI Financial, it had about 1,000 financial advisers and $7-billion in assets under management.
Its U.S. arm, Loring Ward International Ltd., was spun off before the sale. The New York-listed company, which Mr. Weinberg ran until 2006, sold off its sports management business. Then, Loring Ward was finally sold to Werba Reinhard Holdings Ltd. in 2009 after a protracted bidding war.
“The proceeds were well over $1-billion by the time we were finished with the two pieces,” recalled Mr. Weinberg. After launching Pavilion Financial in 2007 with the help of former employees of Assante, he stuck to running a private equity fund for a while because he had signed non-competition agreements. “That period has expired and we are no longer investing in private businesses,” he said.