CI takes controlling stake in GSFM

31-Jan-2017

By Sarah Kendell

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Canadian funds management group CI Financial has purchased a majority stake in Grant Samuel Funds Management (GSFM), as the group looked to evolve its product suite on the back of increasing demand for new asset classes and investment structures.

Addressing a media lunch in Sydney yesterday, GSFM chief executive Andrew McKinnon said while the group had not been actively seeking a buyer, the purchase, which occurred late last year, had presented opportunities for expansion and diversification that were too good to pass up.

“We quickly realised here was an opportunity for us to align ourselves with a group that had a similar culture, similar business model, a balance sheet and an opportunity to grow our business going forward in new strategies that we haven’t really had the seeding to support previously,” McKinnon said.

“So the stars aligned for us and as we sit here today, we are very comfortable with what we’ve done and looking forward to a long-term partnership.”

Under the deal, the publicly listed Canadian company, with around C$118 billion in funds under management, has taken an 80 per cent stake in GSFM, with the group’s management to retain their equity stakes in the company and its locally based funds to transition across to CI Financial branding.

The area of listed managed funds was one both companies were keen to explore in the course of the partnership, given CI’s ownership of Canadian active exchange-traded fund (ETF) business First Asset, according to GSFM director and head of distribution Damien McIntyre.

“If you look at those forms of electronic execution, there has been a proliferation of LICs (listed investment companies) in recent years and active and factor-based ETFs are now growing in popularity, so certainly in terms of how we look at CI it’s about being able to import their direct experience in this new world for us and meet the market demand,” McIntyre said.

“As Australians rise in sophistication, which they are doing progressively and rapidly, they will demand more sophisticated products – the unit trust will live for a while and serve many investors, but the future is in other forms like ETFs.”

He also flagged infrastructure as a key asset class where GSFM would look to import the expertise of its new parent company to create new products for the Australian market.

“CI have got a large multi-asset business and within the income sleeves of that business are listed infrastructure investments, and Andrew and I are very interested in having a look at those given the commercial success of infrastructure as an asset class in this country,” he said.

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