“This transaction marks a significant step forward in Dundee Corporation’s strategic plan to build its private wealth and capital markets divisions into first class entities,” said Ned Goodman, chief executive of Dundee Corp., Dundee Goodman’s parent company, in a statement.Kevin Van Paassen/The Globe and Mail
Independent wealth management firm Richardson GMP Ltd. is transferring about 60 investment advisers who oversee $2-billion in assets to Dundee Goodman Private Wealth, the two firms said Monday afternoon.
The adviser group comprises former Macquarie Private Wealth Inc. employees who could not be integrated into the Richardson GMP business after it bought Macquarie last year. Dundee Goodman is paying $15-million in the deal.
"Not every adviser fits at RGMP," said Andrew Marsh, chief executive of Richardson GMP, on a conference call. "We weren't willing to compromise the successful formula that's led us to become Canada's top independent [wealth] firm today."
Richardson GMP cemented its lead as the largest independent wealth manager in Canada when it bought Macquarie Group Ltd.'s Canadian retail business for about $132-million. The deal closed in November last year.
The integration with the Australian bank's Canadian division hit some bumps along the way, but Richardson GMP will retain 85 per cent of the $12.9-billion in assets under administration that were originally tied to the deal. The enlarged Richardson GMP will have $26-billion in assets under administration, the firm said.
The addition of the Macquarie advisers dramatically increases the size of Dundee Goodman, a former division of DundeeWealth Inc. which was bought by the Bank of Nova Scotia in 2011.
"This transaction marks a significant step forward in Dundee Corporation's strategic plan to build its private wealth and capital markets divisions into first class entities," said Ned Goodman, chief executive of Dundee Goodman's parent company Dundee Corp., in a statement.
Dundee Goodman now has 100 investment advisers across Canada, and the value of the portfolios it manages has increased by $2-billion to $6-billion.
Dundee Goodman will take over Macquarie offices in Ottawa, Montreal, and Victoria. A smaller group of advisers from Vancouver, Calgary and Toronto will also move to Dundee Goodman's offices.
Dundee Securities, also owned by Dundee Corp., also gains a Toronto office through the move.
The team of new Dundee Goodman advisers will have the flexibility to pursue various business models, according to John Cucchiella, the company's head of retail. Dundee supports the autonomy of these advisers, the company said, but the new staff will still have access to Dundee resources.
Richardson GMP wanted to do the deal with Dundee because it is also an independent wealth management firm, and Mr. Marsh said the two firms had a "kindred relationship." Dundee Goodman just needed "a little bit of a boost in terms of scale," he said.
"I think it is important that independent firms can have close relationships as we all build our businesses as competitors, but as mutual beneficiaries of an independent landscape," Mr. Marsh said on the conference call. "That's why this deal was so important for us to highlight Dundee as a partner."
The deal is expected to close before April and is dependent upon regulatory approval and other closing conditions.