Money managers joining forces

Hey there, time traveller!
This article was published 23/12/2020 (2097 days ago), so information in it may no longer be current.

Three independent Winnipeg money managers are joining forces to create one larger entity and the principals of all three say their clients will be the winners.

Although they all preferred not to use the word “acquisition,” technically the largest of the three, BCV Asset Management Inc., is acquiring Antares Investment Management Inc. and Nelson Portfolio Management Inc. The deal also includes Nelson Financial Planning Inc.

When the deals close at the end of 2020 or early 2021, the firm will have about $3 billion of assets under management (AUM).

Initially, the three firms will continue operating their respective brands with further consideration on more integration taking place later.

While all three portfolio managers operate very similar businesses, each of them has more particular expertise in different areas.

Tony Demarin, the founder and CEO of BCV said, “We are very excited to join together the strength of the portfolio managers and staff from Antares and Nelson. We will be a firm of 11 portfolio managers when the deals close, with three additional investment professionals in the process of completing their registration in the coming months. Clients will benefit immensely from this collective group of investment professionals.”

Dale Hawthorn, BCV’s chief operating officer, said talks have been ongoing for many months, but were shelved for some time because of the pandemic.

“What that did was to allow us to do even more due diligence and better understand the resiliency of the firms in the face of the market change,” he said.

All three firms offer separate managed accounts as well as some pooled funds with different emphasis.

“When you have three firms doing almost the identical same thing with just a different spin on investment strategies, why not do it together,” said Hawthorn.

In terms of size, BCV was $2.3 billion in AUM, Antares about $550 million and Nelson has about $110 million.

Gerry Bettig, the founder and president of Antares, said it is an exciting proposition that will serve all their clients well.

“We have probably done more work internationally outside North America and BCV has done more work on credit products,” he said. “When you bring that all together it can only enhance the experience.”

Doug Nelson, whose firm, Nelson Portfolio Management Inc., also brings a small financial planning element to the BCV platform, said they are all like-minded people.

“What is fascinating is that there is always more than one way to manage money,” Nelson said. “When we look at the similarities and also the biases that each group has we complement each other extraordinarily well.”

Tim Burt, the founder of Cardinal Capital, is the dean of the portfolio management business in Winnipeg. Cardinal which has been around since 1992 manages about $3.2 billion. Demarin used to be Burt’s second in command at Cardinal and Bettig and other BCV executives also cut their teeth at Cardinal.

“I think this makes a lot of sense,” Burt said. “The industry is consolidating and a big reason is the cost of compliance keeps going up. BCV is picking up a lot of assets in these deals.”

Portfolio managers get a major piece of their business through referrals from financial planners. Hawthorn said the fact BCV will now own a financial planning operation itself is not to say it is getting into that business.

“We don’t want the financial planners to think we now plan to mow their lawn,” he said.

But he did say that BCV has clients who were not referred by financial planning and don’t get planning service from BCV.

“Now Doug’s group (Nelson Financial Planning Inc.) can access that group who otherwise would not have received planning services,” he said. “Now they have availability if they so choose.”

Portfolio managers are different than brokerage firms in that they do not receive commission for trades but rather a fee based on assets that are managed for the client.

martin.cash@freepress.mb.ca