DundeeWealth goes shopping

By Steven Lamb | May 5, 2008 | Last updated on May 5, 2008
2 min read

The hunted has become the hunter in the Canadian asset management industry, as DundeeWealth announces a deal to buy a controlling interest in institutional money manager, Aurion Capital Management Inc.

Dundee is taking a 60% stake in the firm for a combination of cash and common shares in Dundee, with the remaining 40% held by Aurion employees.

The purchase is the result of Aurion seeking “to broaden and diversify its product offerings.” The firm also wanted to enhance the incentive package for its team of investment managers. While reviewing its options, the firm was approached by Dundee.

“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,” said DundeeWealth president and CEO David Goodman, in a press release. “It complements the award-winning team of portfolio managers at Dynamic Funds and Goodman Private Wealth that has made DundeeWealth such a significant and successful player in Canada’s independent investment management industry.”

Aurion currently manages more than $4.5 billion in assets, with about $3.3 billion in pension-segregated funds, and about $700 million in real estate assets for an insurance company.

“I think what DundeeWealth wanted was access to the institutional business through our client base, so our primary focus is on serving the existing client base,” says James Clark, Aurion’s vice-president of business development. “We’re going to be in conversation about how we can help each other build our businesses — nothing in that sense is predefined, though.”

Aurion was spun off from the Shell Canada pension fund at the end of 1996, and currently serves 15 clients. The firm specializes in active management of Canadian equities, making up 58% of total assets; and real estate holdings, accounting for 18% of assets.

While its focus is on the institutional space, Aurion does offer a retail investment fund — the Aurion II Equity Fund — which Clark defines as a “quasi-high-alpha/hedge fund” with about $40 million in assets. The firm also sub-advises on “a couple of wrap-type packaged products.”

“This agreement provides significant benefits to our current and future clients,” said Neil Jacoby, president and CIO of Aurion. “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. At the same time, we are now supported by the financial resources and distribution capabilities of a respected partner.”

The transaction is expected to close by mid-June 2008, subject to customary conditions, including regulatory approvals. The purchase price was not disclosed.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com


Steven Lamb