Toronto-based Mackenzie Financial Corp. will acquire a 10% interest in Beijing-based China Asset Management Co. Ltd. (China AMC) for approximately $468 million, according to a recent announcement from Mackenzie’s parent company, Winnipeg-based IGM Financial Inc.
“This acquisition gives IGM Financial the opportunity to participate in a rapidly growing asset-management industry in the world’s second largest economy,” says Jeff Carney, president and CEO of IGM, in a statement. “It also enables us to diversify our business outside of Canada.”
China AMC was established in 1998 and was one of the first fund management companies in the country. It had $215 billion in assets under management as of June 30, 2016 and has experienced a compound annual growth rate of more than 40% since Dec. 31, 2011.
“China AMC is a well-diversified asset manager with strong investment performance across multiple asset classes,” says Carney. “The company’s controlling equity holder, CITIC Securities [International Co. Ltd. of Beijing], China’s largest securities dealer, is a strong partner that will help us create long-term value for our stakeholders.”
The deal leverages the investment that Montreal-based Power Corp. of Canada already has in China, which includes a 10% ownership in China AMC that was acquired in 2011, according to the announcement. (IGM and Mackenzie are under Power Corp.’s umbrella)
Mackenzie Investments has an option to increase its equity position in China AMC by an additional 3.9% this month.
IGM expects to finance the transaction with a combination of existing cash and the issuance of debt and/or preferred shares in the first half of 2017. The transaction is expected to close in the first half of this year and is subject to customary closing conditions, including regulatory approvals in China.
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