Bank of Montreal and a United Arab Emirates investment firm are releasing tens of millions to become shareholders of Sagard, an alternative asset manager that remains under the control of Montreal financial conglomerate Power Corporation.
The existing minority stake of Great-West Life – a subsidiary of Power Corporation – in Sagard is increased in a share issue allowing Bank of Montreal and Abu Dhabi-based ADQ to acquire shares of Sagard.
According to sources familiar with the transaction, the Bank of Montreal, ADQ and Great-West Life are investing a total of 100 million US dollars for shares of Sagard.
Also according to our information, the three entities are also injecting a total of 2 billion US dollars to be deployed in Sagard’s existing and future investment strategies. Assets under management at Sagard thus increased suddenly from 14.5 to 16.5 billion US.
The capital injections must be used to stimulate the growth of Sagard, among other things through mergers or acquisitions.
Founded 18 years ago, Sagard is notably led by Paul Desmarais III. It was not possible to speak to him on Wednesday. The chairman of the board and chief executive officer of Sagard, however, indicated to La Presse by electronic communication that the new partners will be able to commit to the strategies that best align with their investment objectives.
“For example, our fintech and financial services venture capital funds, our private equity funds, as well as our private credit funds are generating interest, but also future strategies that we don’t offer. today and that we will be able to launch thanks to these partnerships”, emphasizes Paul Desmarais III.
In his view, the announced partnerships bring the organization closer to its vision of becoming one of the most respected alternative asset management companies in the world.
According to him, this operation makes it possible to attract “high-level investment teams, to launch new investment strategies, and to raise funds more quickly”.
“Our global network will be expanded, making us even stronger business partners for our portfolio companies,” he adds.
In addition to offering wealth management services, Sagard invests in many asset classes: private credit instruments, healthcare royalties, venture capital, private equity and real estate.
Over the years, Sagard has invested in companies like Wealthsimple, Dialogue, Nesto, Dorel, Lou-Tec, Borrowell, etc.
Sagard’s investment portfolio currently includes around 125 companies.
ADQ is an investment and holding company founded five years ago presenting itself as a strategic partner of the government of Abu Dhabi. Its investments include energy and utilities, food and agriculture, healthcare and life sciences, and transportation and logistics. ADQ says it is committed to accelerating the transformation of the United Arab Emirates into a globally competitive and knowledge-based economy.
Bank of Montreal management believes that the partnership with Sagard provides its clients with access to “high quality” investments in private markets.
Power Corporation stock closed Wednesday’s session relatively flat at $36.14 on the Toronto Stock Exchange.