On-line broker Qtrade
Desjardins Group is scooping up a sizable minority stake in independent discount brokerage Qtrade Financial, beefing up the cooperative's online trading services outside of Quebec.
Based in Vancouver, Qtrade has built a solid business from Ontario to the west coast, and its clients will complement those served by Desjardin's existing discount brokerage, Disnat.
But Qtrade is more than just a discount brokerage. The company has also built up a wealth management unit that provides the back office infrastructure that credit unions need in order to offer asset management services. Chief operating officer Joe Perrin said this business now generates about half of Qtrade's revenues.
Under the current deal, Desjardins will acquire between 25 per cent to 40 per cent of Qtrade's existing privately held shares, but has the right to buy the remaining majority stake for six years.
Mr. Perrin said Desjardins made the approach, and for the first time, Qtrade's management was willing to strike a deal after being "approached by almost every sizable financial institution in this country at one point or another." (Qtrade's discount brokerage is well-respected, often earning top marks in The Globe and Mail's annual survey of Canadian online trading platforms.)
Financial terms of the deal weren't disclosed, so it's hard to determine if the price was a big factor, but Mr. Perrin said that Qtrade's management liked that Desjardins would leave the current team in place. "Both platforms [Qtrade and Disnat] will continue to operate independently," said Desjardins spokesperson André Chapleau.
However, "nothing will prevent us in the future from thinking of ways to optimize our procedures," he added.
For now it's business as usual at Qtrade. Mr. Perrin noted that there will be very few day-to-day changes, in large part because the deal simply allows Qtrade's early angel investors to cash out and existing management will remain.
Tim Kiladze