National Bank Financial is building an interesting collection of minority postions in wealth management firms, taking a 20 per cent stake in ETF manufacturer AlphaPro Management on Thursday.
NBF is buying into a division of Jovian Capital JOV-T that creates exchange-traded funds, or EFTs, a rapidly growing sector of the retail financial market. No value was disclosed on the transaction, and relatively little cash is likely changing hands, as AlphaPro is a small player in money management, with just $64-million in assets under management.
However, this investment has a great deal of potential, as did NBF’s decision earlier this year to take a 12.5 per cent stake in independent investment dealer Wellington West, which has a strong retail franchise. With the backing of National Bank’s NA-T investment dealer arm, these independent platforms get growth capital. Down the road, it’s not hard to imagine National Bank Financial taking a larger stake.
AlphaPro bills itself as the “the only provider of actively managed ETFs in Canada.”
“As interest in ETFs continues to grow, we believe actively managed ETFs will significantly grow their market share. AlphaPro intends to be at the forefront in developing this market,” said Adam Felesky, CEO of AlphaPro. Adding NBF’s expertise in manufacturing and distribution of ETFs and other structured financial products can only help Mr. Felesky expand his business.
Jovian Capital has a total of $12-billion under management and is controlled by its executives and a relatively newcomer to money management, Calgary-based Murray Edwards, the lawyer-turned-oil baron who purchased a 31.5 per cent stake in the firm in December, 2007.
