HPS Investment Partners has agreed to back the UK wealth management business of Canada-based Canaccord Genuity Group.
As part of the transaction, HPS will acquire convertible preferred shares worth £125m (C$219m) from Canaccord Genuity Wealth Group (CGWM UK).
Go deeper with GlobalData
CGWM UK is the parent company of Canaccord’s wealth management operating subsidiaries in the UK, the Channel Islands and in the Isle of Man.
The net cash proceeds from the sale worth around £120m (C$210m) will be distributed by CGWM UK to the company and will be used for corporate purposes to optimise shareholder value.
Following the deal, HPS will become a strategic and financial partner to CGWM UK in upcoming acquisitions and growth opportunities.
The company, which manages $68bn in assets, invests in both large and small companies across a range of industries and sectors.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataCanaccord Genuity Group president and CEO Dan Daviau said: “Partnering with HPS provides us with an opportunity to build upon the exceptional growth that our UK wealth management business has achieved under David Esfandi’s leadership.
“The proceeds from this investment provide us with options and flexibility to redeploy capital towards strategies to advance our firmwide growth, enhance our long-term profitability, and provide optimal returns for our shareholders.”
CGWM UK CEO David Esfandi said that the investment expands the company’s ability to invest in client offering and accelerate the future growth of CGWM UK.
The transaction is expected to close in the first quarter of the company’s fiscal year. It awaits approval by UK Financial Conduct Authority and the Financial Services Commissions/Authorities of Jersey, Guernsey and the Isle of Man.
Q3 fiscal 2021 results
Canaccord reported its highest quarterly revenue on record in the third fiscal quarter ended 31 December 2020.
The company recorded C$533.1m in revenues in the quarter to December 2020, a 73% surge from C$308.01m a year ago.
The nine-month fiscal year-to-date revenue exceeded full fiscal year record at C$1.3bn.
When stripping off significant items, the Q3 pre-tax net income from the combined global wealth management businesses was a record $39.2m, a 110% jump on a year-over-year basis. The pre-tax profit margin grew to 21.7%, a year-over-year improvement of 7.2% points.
The segment generated a revenue of $180.5m in Q3. The total client assets in the global wealth management businesses at the end of December 2020 reached $85.2bn.
Speaking about the Q3 results, Daviau said: “In our third fiscal quarter, we earned our strongest quarterly revenue on record and set new performance records in several businesses and verticals, entrenching our position as a leading mid-market investment bank and wealth management firm in each of our geographies.”
