Wealth manager Canaccord Genuity acquires Hargreave Hale in a near £80m deal

 
Lucy White
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The merger of Toronto-listed Canaccord and Hargreave Hale will create a firm with more than £22bn in assets under management (Source: Getty)

Toronto-listed financial services group Canaccord Genuity Group has announced it will acquire wealth manager Hargreave Hale, to merge with its own UK branch.

The Canadian firm has paid an initial £52m for Hargreave Hale, and could pay up to £27.5m more over the next three years if certain goals relating to performance and retention of client assets are achieved.

The merger of Canaccord Genuity Wealth Management with Hargreave Hale, which has £8bn in assets under management, will create a wealth management firm with more than £18bn in private client assets and £4.7bn in funds under management.

"The acquisition of Hargreave Hale is an important step in our strategy of building a leading independent global wealth management business," said Dan Daviau, president and chief executive of Canaccord Genuity Group.

"We view this transaction as a significant development in our long-term strategy of transforming our business mix to grow contributions from our global wealth management businesses, and one that will deliver enhanced value for our clients and our shareholders."

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At the time of writing, Canaccord's share price was up 1.5 per cent on the previous close.

Hargreave Hale has existed since 1897, and offers discretionary investment management and stockbroking services to more than 14,000 private clients, intermediaries, corporations and charities.

Canaccord has described the two businesses as "complementary", with a strong geographic fit as Hargreave Hale expands Canaccord's national footprint in the UK.

"The strategic rationale for this acquisition is underpinned by it being complementary rather than duplicative," said David Esfandi, chief executive of Canaccord Genuity Wealth Management in the UK and Europe.

"We are committed to investing in and accelerating the growth of Hargreave Hale's fund management and private client wealth management operations."

Hargreave Hale's chief executive Giles Hargreave and the wider fund management team will remain involved in the business.

"With its similar business model, shared culture and common values, Canaccord Genuity Wealth Management in the UK represents the ideal partner to continue the successful growth and development of our business," he said.

The deal follows a number of mergers in the asset and wealth management spaces, including the Janus-Henderson and Aberdeen-Standard Life tie-ups.

The purchase of Hargreave Hale is expected to be immediately accretive to Canaccord's earnings, and will partly be funded by a £40m credit facility from National Westminster Bank and HSBC Bank.

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