One of the grand old names in Canadian money management is being taken out for just $73-million.
In a deal that shows how hard it is to stay on the top of investing game from one generation to the next, Sceptre Investment Counsel is being acquired in a stock swap by Fiera Capital, a Montreal-based firm that's attempting to consolidate the sector
Founded in 1955, Sceptre used to be one of the dominant buy-side firms in a community that was focused on the domestic market, due in part to regulations that curtailed foreign investing. The fund manager held enormous sway, and was a destination employer. Scepte's IPO in 1986 blazed a trail that peers in money management followed.
However, Sceptre aged poorly. The last decade saw uneven performance, as founders retired. Recent years were marked by management turnover.
Sceptre was a $40 stock in the late 1990s. It is now changing hands at $6.75. The firm goes into this takeover with $7.4-billion of assets, a fraction of what it once ran, and Sceptre is now a bit player on the Bay Street stage.
Fiera is something of an upstart, an eight-year-old firm that is attempting to meld together money managers of various stripes, under the strong-willed direction of CEO and founder Jean-Guy Desjardins.
Mr. Desjardins is enjoying his second successful run. He co-founded TAL Global Asset Management in 1972, then sold the business to CIBC in 1994 in what's seen as one of the great trades in the history of the Street. TAL management struck a deal to keep control of the firm, and got a second payday when CIBC bought them completely in 2001.
Fiera was formed the next year, and along with the 60-something Mr. Desjardins, enjoys the personal backing of Montreal business leaders such as Jean Monty. The former BCE boss is buying an additional $5-million of equity in the company as part of the Sceptre takeover.
After this union is complete, Fiera will control 60 per cent of the new money management firm, which will have $30-billion of assets under management.
GMP Securities advised Fiera on this acquisition, while TD Securities worked with Sceptre.
"The two firms are an ideal fit for each other," said Ross Walker, chairman of the board of Sceptre and the former head of accounting firm KPMG. "This transaction is accretive to Sceptre's earnings and leverages the strengths of both companies to create a significant player in the investment management sector."