Skip to main content
The Globe and Mail
Get full access to globeandmail.com
Support quality journalism
Just $1.99 per week for the first 24weeks
Just $1.99 per week for the first 24weeks
The Globe and Mail
Support quality journalism
Get full access to globeandmail.com
Globe and Mail website displayed on various devices
Just$1.99
per week
for the first 24weeks

var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){console.log("scroll");var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))}pencilInit(".js-sub-pencil",!1);

National Bank of Canada put months of rumour to rest Tuesday and announced it will acquire mutual fund manager Altamira Investment Services Inc. in a bid to enhance its wealth management arm and expand outside of Quebec.

Montreal-based National Bank, Canada's sixth-largest, said it will pay up to $314-million, partially in common stock, and assume $195.9-million of Toronto-based Altamira's debt.



Please see ROBtv clip Duration: 5.19

Along with the debt, the deal could be worth as much as $510-million. National Bank said the final price will be based on assets at closing and that it will issue no more than three million shares.

Story continues below advertisement

Speculation about the deal emerged in April, when the Globe and Mail reported that privately owned Altamira was looking for a buyer. Sources said National Bank was negotiating to purchase a small U.S. investment bank but also keeping an eye on Altamira.

Altamira has been struggling with net redemptions because of poor fund performance.

Access to Ontario market The purchase will provide National Bank, currently a leader in wealth management in Quebec, with access to a larger Canadian market. More than half of Altamira's mutual funds assets are from Ontario residents.

Irwin Michael, a portfolio manager at ABC Funds in Toronto, told globeandmail.com that in the long run, the deal will work out well. "It is not a seamless acquisition. But there will be ways to reduce duplication."

In a Tuesday statement, National Bank said the acquisition of Altamira will double its mutual funds under management to $10.4-billion. Altamira manages $6-billion in assets, including $5-billion in mutual funds for individuals.

"Our strategy is to increase our share of the wealth management market outside Quebec over the next three years. The Altamira acquisition represents a major step in that direction," National's president and chief executive officer Real Raymond said in a release.

"In addition, this transaction represents an excellent opportunity to participate in industry consolidation, where fewer and fewer opportunities of this size exist, and to achieve the necessary critical mass for further expansion."

Story continues below advertisement

The purchase is National Bank's second outside commercial banking since Mr. Raymond took over as chief executive in March.

The value of the transaction, which is expected to close Aug. 12, represents about 9.5 per cent of Altamira's risk-weighted assets under management, the companies said.

The acquisition will not affect National Bank's earnings in 2002, it said, and should add 4 cents to earnings a share in 2003 and 10 cents in 2004.

Michel Tremblay, a senior vice-president at National Bank, will become chairman of the board of Altamira. He pointed out that "Altamira is one of the great names in wealth management," something National has said it is searching for in an acquisition.

Privately owned Altamira is 39 per cent owned by Boston-based venture capital firm TA Associates Inc., 28 per cent by institutional investors and 33 per cent by Altamira managers and employees. They own common and preferred shares.

Sources have told the Globe and Mail TA Associates, which acquired its stake in 1997 and generally doesn't hold on to its investments for a long time, wants out of Altamira. The fund company's assets have declined by more than $2-billion since it filed a prospectus for an initial public offering in November, 2000. Altamira shelved its IPO because of poor market conditions. Altamira also has a $70-million principal loan repayment coming due in September.

Story continues below advertisement

Shares of National Bank, listed on the Toronto Stock Exchange, slipped 3 per cent or $1 to $31.90 on the Toronto Stock Exchange Tuesday.



Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies