In a move to strengthen its presence in English Canada, Quebec-based Industrial Alliance Insurance and Financial Services has entered into an agreement to acquire FundTrade Financial, an independent mutual fund dealer based in Oakville, Ontario. The transaction is pending regulatory approval.
“With the acquisition of FundTrade, we immediately expand and strengthen our distribution platform, becoming a dominant force in the independent advisor channel serving the industry’s top financial advisors and their clients,” Industrial Alliance Executive Vice President Normand Pépin said in a press release.
Financial terms were not disclosed, but IA says FundTrade will be merged with FundEX Investments, in which Industrial Alliance holds a 91.75% stake. The combined operations will support more than 450 representatives with approximately $9 billion in assets.
“This transaction will bring greater scale, scope and stability to both broker-dealer and mutual fund dealer businesses while providing significant synergies,” Pépin said. “We intend to make FundEX/FundTrade the new standard for back-office and compliance services and are committed to helping independent financial advisors thrive.”
FundTrade currently manages over $3.5 billion in assets on behalf of over 45,000 investors.
“The combination of FundEX and FundTrade creates a powerful organization that will be able to deliver significant benefits to the industry’s top financial advisors and their clients,” said Michael Greer, president of FundEX.
“FundEX and FundTrade are similar both in terms of fee structure and advisor type and quality,” says Dan Hallet, president of Hallett and Associates. “It’s a good fit and makes sense because you need scale on the distribution side, and for that purpose this is a significant acquisition.”
In the fall of 2005, Industrial Alliance made a bid for fund producer Clarington Funds, which was launched by CI. The bidding war ended on December 12, when CI formally withdrew its offer, and IA closed its purchase offer on January 10, 2006.
Clarington has since been renamed “IA Clarington” and severed ties with Seamark, one of its external managers, as part of its integration into IA’s corporate structure.
As of March 31, 2006, Industrial Alliance managed approximately $6.0 billion in mutual fund assets through its subsidiaries, Industrial Alliance Fund Management Inc. and Clarington Corporation.
The company also manages an additional $1.5 billion in securities through its Industrial Alliance Securities division and $11.1 billion in mutual funds through its Investia and FundEX subsidiaries. The company also has approximately $8.0 billion in segregated fund assets.
Submitted by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com
(27/06/06)
