All signs point to “business as usual” for First Asset Management Inc. and its affiliates following its recent acquisition by Massachusetts-based asset management firm Affiliated Managers Group Inc.

The $306-million deal, which is expected to close early in the third quarter after more than a year of negotiations, will give AMG 100% ownership of Toronto-based First Asset, including its significant equity interests in seven Canadian investment firms.

“There will be no changes to any of our affiliates in terms of how they operate their business on a daily basis,” says Michael Simonetta, president and CEO of First Asset.

First Asset has major stakes in Canadian money managers Foyston, Gordon & Payne Inc., Beutel Goodman & Co. Ltd., Montrusco Bolton Investments Inc., Deans Knight Capital Management Ltd., Triax Capital Corp., Covington Capital Corp., and First Asset Advisory Services Inc. Combined, they manage an estimated $29 billion in client assets.

Simonetta says the firm’s decision to sell to AMG lies with its known reputation for allowing its affiliates to maintain “distinct cultures and operating autonomy.”

“AMG’s operating philosophy very much parallels our own,” he says, citing the firm’s policy for allowing its affiliates to retain equity ownership. “There will be absolutely no change.”

That’s particularly true for Toronto-based Beutel Goodman, whose internal operating partners will retain majority ownership. (First Asset had a 49% minority interest in the firm.) Following the announcement of the acquisition, the company issued a statement that said, “Beutel Goodman’s relationship with AMG will be governed by the existing shareholders’ agreement with First Asset, which prevents any input into the day-to-day management of Beutel Goodman.”

First Asset Advisory Services, the Toronto-based affiliate that supplies managed account services to independent dealers, including Winnipeg-based Wellington West Capital Inc. and Laurentian Bank Securities Inc., says the deal hasn’t affected its plans to grow and expand its white label and Legacy brand managed-account products.

“We’re just as committed to our dedicated service model and overlay portfolio management as we ever were,” says Lisa Langley, president of FAAS. “If anything, we feel more comforted that if we need additional support, we have a larger organization to bring in better resources and expertise,” she says, adding that the firm will likely push through $1 billion in assets under management by the end of 2005.

First Asset clients are equally optimistic. “At first blush, this looks like a positive,” says Wellington West CEO Charlie Spiring, whose firm offers First Asset’s managed account product through the Waterfront Managed Investment Program brand. News of the acquisition came as no surprise to Spiring, who called it the “worst-kept rumour on Bay Street.” He believes AMG will bring additional horsepower to its product offering, including access to a new set of managers and enhancements to the data management systems and client statements.

“They really have the potential to upgrade, and we’re seeing this as an opportunity,” Spiring says.

Simonetta says the firm has been shopping for a buyer for more than a year, and even pondered an initial public offering before settling on an agreement with AMG, which will pay 90% in cash and the remainder in AMG stock.

“We’re owned by a number of private equity investors, and private equity investors typically have defined investment horizons,” says Simonetta. “Bringing these firms together is really a matching up of philosophies,” he says.

Prior to acquiring First Asset, which is its first Canadian acquisition, AMG has partnered with 20 mid-sized investment firms in the U.S. and Britain, which collectively manage more than US$130 billion in assets.

Simonetta, who will become the president of AMG’s Canadian office, expects First Asset Management to be re-branded as AMG Canada after the transaction is complete this year. IE