With the recent acquisition of Toronto-based retail brokerage Blackmont Capital Inc., Australia-based financial services powerhouse Macquarie Group has its sights set squarely on building a presence in the Canadian wealth-management business.

“Macquarie has been looking to take a bigger leap in the Canadian marketplace,” says Earl Evans, executive director of Sydney-based Macquarie’s full-service brokerage in Australia. “Wealth management is such a big part of the Canadian environment. And I think for us to be a serious player at the next level, we needed to enter the wealth-management space. And Blackmont was the perfect fit for us.”

Once the deal closes, Evans will relocate to Canada to take on the role of the new firm’s president. Blackmont will become part of Macquarie’s banking and financial services group and will be rebranded as Macquarie Private Wealth.

The acquisition, which is subject to regulatory approval, is expected to close in early 2010; it will see Macquarie pay $93.9 million in cash to acquire the shares of Blackmont from its current parent company, Toronto-based CI Financial Corp. CI is retaining Blackmont’s capital-markets division, which will be rebranded in April 2010.

Blackmont’s investment-dealer division offers a full range of investment services to retail clients, including equities, fixed-income, life insurance and segregated funds.

With offices in 13 cities across Canada, Blackmont houses approximately 450 employees, including a network of more than 130 advisors. Macquarie plans to keep the business running as smoothly as possible, with no major changes to the firm’s business model or locations. Macquarie does, however, plan to double the number of advi-sors to 250 over the next two to four years while maintaining a strong, independent advisor model.

“We knew we wanted a business that already had an open-architecture environment, selling the best possible product and allowing its advisors to offer their clients what is best suited for their financial needs,” Evans says. “That is how we run our business in Australia. And when we started this journey several weeks ago and sat down with [Blackmont CEO] Bruce Kagan, we realized that Blackmont had the type of culture we were looking for.”

Kagan will be CEO of the new firm. Along with Evans and Peter Maher, head of Macquarie’s banking and financial services group in Australia, Kagan set out on a cross-country tour a week after the announcement to visit advisors at each Blackmont branch and answer any questions they may have.

“Our advisors are already thrilled about the news of the acquisition,” Kagan says. “I’ve been in the business for a long time, and I have seen a lot of change. And I can honestly say I have never seen a group of advisors so excited about a merger.”

Meanwhile, Maher says, now was the time for Macquarie to make a splash and acquire a firm, as many are feeling the crunch.

“It is not surprising that there are a number of players in the market that are having a tough time,” says Maher. “For us, that is always a signal of when we should demonstrate our commitment to the market and move in and invest. We’ve been building out with our overall presence in Canada over the past couple of years, and we’re continuing to do so now.”

Upon the deal’s completion, Blackmont advisors will gain access to Macquarie’s research data as well as to the firm’s deal flow, including initial public offerings and secondary offerings — something Kagan says is one of the biggest competitive advantages the advi-sors will now have.

“We are in a very unique space compared with the bank-owned dealers and other independent firms,” he says, “and this is a substantial advantage for our advisors.”

Kagan says he has received calls from advisors at competing firms with an interest in joining Macquarie Private Wealth. Although Kagan and Evans are looking to increase the number of advisors, both are adamant that the firm will maintain its culture.

For instance, Evans says, he plans on maintaining access to management by phone. He does not want to see communication carried out via email only. “If you can no longer communicate face to face,” he adds, “then it is not the Macquarie way.”

The response Kagan says he is receiving from advisors should come as no surprise, as they have continually praised the firm’s stability under parent company CI; they should feel just as stable, Kagan adds, if not more with Macquarie taking the reins.

@page_break@For many Blackmont advisors, switching parent companies is nothing new. In May 2007, CI acquired Blackmont from its former parent, Rockwater Capital Corp. Blackmont had operated as a wholly-owned subsidiary of Rockwater. Upon the closing of the Rockwater acquisition, CI integrated Rockwater’s operating businesses, including Blackmont, as independent business subsidiaries.

Blackmont was the result of Rockwater’s amalgamation of several Canadian investment firms, starting with Toronto-based First Associates Investments Inc. in 2002 and Calgary-based Yorkton Securities Inc. in 2003. In September 2005, Rockwater rebranded its First Associates subsidiary and renamed it Blackmont.

As for Macquarie, it was founded in 1969 and entered Canada in 1998, becoming involved in specialized asset management, advi-sory and capital markets, and lending. Today, it employs 470 people across Canada, with offices in Toronto, Vancouver, Calgary, Montreal and Winnipeg.

Since making its way into Canada, Macquarie has completed numerous acquisitions. In 2006, the firm entered the Canadian mortgage industry with the acquisition of mortgage lender Toronto-based Cervus Financial Corp. , gaining $1.2 billion in assets under management and sales arrangements with 250 mortgage brokers and 3,000 agents. In 2007, Macquarie expanded its capital-markets business with the acquisition of Toronto-based Orion Securities Inc., which now operates as Macquarie Capital Markets Canada Ltd.; and in September, it enhanced its energy-related offering by purchasing Calgary-based Tristone Capital Global Inc.

Meanwhile, CI’s decision to step out of the brokerage industry was an economic one, says CEO Bill Holland: “The retail brokerage industry is definitely a business that is about scale, and we just didn’t find there to be any economic way to get to a scalable size. The banks have boosted their retention of the brokers quite a bit, and buying individual firms wasn’t an option for us, either. We realized we either had to buy, sell or merge. And, in the end, what worked out best for the brokers was to pass them on to Macquarie.”

CI will continue its presence in the retail financial advisory business through Assante Wealth Management (Canada) Ltd. IE