Toronto-Dominion bank (TD) has acquired US asset manager Epoch Holding Corporation (EHC), for $668 million as it sets to expand its wealth management business.
The Canadian-based bank, who confirmed it had acquired EHC including its subsidiary Epoch Investment Partners for $668 million in an all-cash transaction, is hoping the deal will help attract more high net worth (HNW) clients.
Additional $24bn AuM through wealth management strategy
TD, Canada’s second biggest bank by assets, has wanted to complement its US retailing banking footprint with other services, including wealth management. The Canadian bank said it wants to be able to offer US and global equity funds to HNW clients.
"We’ve been looking for an opportunity to acquire a US asset manager to build our North American wealth business, which is a key growth area for TD," said Mike Pedersen, TD’s group head, wealth management, insurance and corporate shared services.
"This acquisition makes strategic sense for TD. It will broaden our offer for institutional and retail clients in Canada and will immediately and significantly strengthen our US Wealth business," adding the deal was filling the gap TD had in the asset management business.
Through the deal, TD adds Epoch’s $24bn in assets under management (AuM) to the $207bn AuM the asset management unit already manages.
Looking towards the US
The acquisition of the US asset management unit comes as TD focuses on growth in the US, rather than Latin America or Asia.
Unlike Scotiabank who is positioning itself in Mexico, the Caribbean, Asia and Central and Latin America or RBC turning to Asia, TD said it also had plans to hire advisers in the US, and will focus its wealth management business towards US.
Acquisition to close by mid-2013
The deal, which is subject to stockholder’s approval, regulatory approvals and satisfaction of other customary closing conditions, is expected to close in the first half of 2013.
Following the completion of the transaction, Epoch will continue to operate and serve clients under its current brand name and operating structure.
Founded in 2004 and headquartered in New York City, Epoch has 65 employees.