Christmas lights are illuminated at an office building of Swiss bank UBS in Zurich Dec. 4, 2012. U.S. group General Electric wants to sell its Swiss consumer lending business and UBS is a possible bidder, sources said Tuesday.Arnd Wiegmann/Reuters
Striking an acquisition to double the size of your business would normally be enough deal-making in one year for most chief executive officers. But not for Jean-Guy Desjardins. Not in 2012.
The head of Fiera Capital Corp. already bought Natcan Investment Management from National Bank of Canada in June, and added a tuck-in Western Canadian acquisition in October. But now he's scooping up UBS's Canadian asset management arm, adding fixed-income, equity and balanced funds to his fast-growing business.
Fiera is shelling out $52-million to acquire assets under management of $8-billion, bringing its total AUM to about $63-billion. After the Natcan deal, total assets jumped to $54-billion from $28-billion. In that deal, even National Bank head Louis Vachon acknowledged that the purchase price of 1.26 per cent of Natcan's assets under management was cheap, yet the deal for UBS's assets is even more of a bargain, amounting to 0.65 per cent of AUM.
The deal comes in the midst of major changes at UBS. In November, the investment bank announced it would cut 10,000 jobs, or 16 per cent of its workforce, adding that it would retreat from some of its riskier business lines after reporting a 2.17-billion (Swiss franc) loss last quarter. There were also rumours earlier this year that UBS was looking to unload its global asset management business, and Reuters reported that UBS held talks with State Street. A few months back, UBS announced that it needs to raise $16-billion (U.S.) in new capital.
In total, Fiera has added roughly $33-billion in new assets under management in 2012. The biggest chunk of that came from the Natcan deal, which was negotiated and discussed for more than a year. The final purchase price was $310-million, but National took a bunch of Fiera stock, something Mr. Vachon used as proof that he wasn't abandoning the wholesale money management business.
"It's not a strategic retreat at all," he said at the time. "We just feel that we'd rather own 35% to 40% of [a $54-billion entity] that can be used successfully for consolidating the industry in Canada, than owning 100% of a [$25-billion] internal manufacturer."
Fiera also bought Calgary-based Canadian Wealth Management Group Inc. in October, which operated under the banner of Société Générale private banking -- another European bank that's been in trouble. This deal was a lot smaller and financial terms weren't disclosed. Canadian Wealth is best known for its high net worth private clients, an area that Fiera wants to expand in.
Tim Kiladze