Investment management firms LOGiQ Asset Management Inc. and Purpose Investments Inc., both of Toronto, have entered into an agreement whereby Purpose will acquire the retail fund business of LOGiQ.
The terms of the agreement will see Purpose pay $32.9 million for LOGiQ’s retail asset management business. The deal is expected to close in December and is subject to a number of conditions including approval by LOGiQ shareholders, debenture holders and investors in the funds being sold.
Purpose currently has about $3.4 billion in assets under management, and offers 35 funds available in both mutual fund and exchange traded fund format, as well as seven closed end funds. It also offers actively managed investment solutions through wholly owned subsidiary Redwood Asset Management Inc., a boutique global investment manager.
“We are excited to acquire these high-quality, well-managed investment funds from LOGiQ,” Som Seif, president and chief executive officer of Purpose says in a news release. “Expanding and complementing our active management business continues to be an important part of our growth strategy at Purpose. This transaction will allow us to further expand our investment offerings and provide Canadians with an even broader selection of well-diversified portfolio offerings.”
LOGiQ president Joe Canavan says in a statement that the retail funds industry is undergoing massive change and consolidation, and as scale becomes more critical, a larger platform such as Purpose’s will translate into benefits for fund holders. The proceeds of the transaction will improve LOGiQ’s balance sheet and liquidity, he says. Going forward, LOGiQ will focus on growth outside the retail sector, expanding its global institutional business.
Excluding the retail assets being sold, LOGiQ has assets under management or advisement, and other fee-earning assets of about $3.5 billion including hedge funds, closed-end funds, pooled funds and institutional segregated managed accounts.
Purpose’s philosophy is to offer products focusing on risk management and reasonable fees. Seif also says in the release that he anticipates healthy growth in the funds being acquired.
“Over the next several months, we will work hard to better align the products through strategy enhancements and lower overall fees, with Purpose’s overall goals to provide accessible, intelligent solutions that help Canadians drive better portfolio outcomes,” Seif says.
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