DundeeWealth grabs 60% of Aurion

Date: Monday, May 5, 2008
Author: Tara Perkins, Globe and Mail

DundeeWealth Inc. said Monday it has struck a deal to buy 60 per cent of Toronto-based institutional money manager Aurion Capital Management Inc.

Financial terms of the cash and share deal were not disclosed, but a portion of the price will not be paid for three years and will depend on key Aurion employees staying with the company. Aurion employees will continue to own 40 per cent of the firm.

The deal is another example of activity in Canada's consolidating asset and wealth management space, where few targets remain. In February, Royal Bank of Canada scooped up what was one of the last remaining independent money managers, Vancouver-based Phillips Hager & North Investment Management Ltd., in a $1.36-billion deal that closed last week. And DundeeWealth itself has recently fended off interested acquirers, including CI Financial Income Fund. DundeeWealth, which owns Dynamic Mutual Funds, sold an 18 per cent stake to Bank of Nova Scotia last year.

“Our investment in Aurion represents a long-term strategic investment that broadens our wealth management platform while at the same time supporting our expansion into the institutional market,” stated David Goodman, chief executive officer of DundeeWealth.

Aurion is a 12-year-old money manager with more than $4.5-billion in assets under management and 24 employees. In comparison, PH&N has about $69-billion under management and 300 staff.

Both of those independent money managers said they decided to sell after a strategic review identified the need for them to offer clients broader product options, at the same time as they received their respective offers.

Aurion also said its review identified the need to provide “stronger incentives to its investment professionals.”

“Aurion Capital will continue to operate under its current name at the same location, with no changes in management, staff, products and investment philosophy and process,” stated Neil Jacoby, the company's president and chief investment officer. “At the same time, we are now supported by the financial resources and distribution capabilities of a respected partner.”