Mackenzie Investments and Great-West Lifeco have partnered with a global private equity firm to provide advisors and wealthy clients with greater investment options.
Mackenzie Financial Corp., an IGM Financial Inc. subsidiary, Great-West Lifeco Inc. (Lifeco) and Northleaf Capital Partners Ltd. are entering a strategic relationship to expand private market offerings across IGM’s and Lifeco’s distribution channels, the firms said in a release on Thursday.
Toronto-based Northleaf is a global private equity, private credit and infrastructure fund manager with more than 150 employees across seven offices in Canada, the U.S., the U.K. and Australia, and $17 billion in assets under management, the release said. (All figures are in Canadian dollars.)
“This transaction broadens the scope of our investment offering and enhances our asset management capabilities, particularly as our clients’ appetite for diversification continues to grow,” said Barry McInerney, president and CEO at Mackenzie Investments, in the release.
“There are many growth opportunities that Mackenzie and Northleaf are uniquely positioned to execute on, and we are looking forward to working together to develop new innovative investment products while continuing to champion the democratization of alternative investments.”
Mackenzie and Lifeco will jointly acquire a non-controlling interest in Northleaf through an acquisition vehicle 80% owned by Mackenzie and 20% owned by Lifeco, the release said.
The vehicle will acquire a a 49.9% non-controlling voting interest and 70% economic interest in Northleaf for consideration that includes a payment on closing of $245 million, as well as contingent consideration at the end of five years based on performance measures. The deal also includes provisions for future purchases of equity and voting interest in Northleaf.
The transaction is expected to close during the fourth quarter of 2020.
IGM and Lifeco together have committed to invest a minimum of $700 million in the next 18 to 24 months across a number of Northleaf’s product offerings, the release said.
The initial investment includes Lifeco balance sheet commitments, as well as allocations to client portfolios within managed solutions of IGM Financial subsidiary IG Wealth Management.
“The transaction builds on our strategic relationship with Mackenzie while also advancing our efforts to add alternative investments to the general account and increasing access to private market solutions across our businesses globally,” said Paul Mahon, president and CEO at Great-West Lifeco, in the release.
Mackenzie and Lifeco are both under the umbrella of Montreal-based Power Corp. of Canada.
In August, Lifeco announced the sale of its Canadian subsidiary GLC Asset Management Group Ltd. to Mackenzie Financial Corp.