(The following article originally appeared in
In a share-swap deal worth more than $1 billion that will create one of the largest private sector asset managers in the country, Royal Bank of Canada is acquiring Vancouver-based money manager Phillips Hager & North Investment Management Ltd.
"Together, our vision is to be a clear leader among Canadian-based asset management companies, and to continue to grow our global capabilities in investment management for institutional, retail and high net worth clients," said George Lewis, group head of RBC wealth management and current CEO of RBC Asset Management, in a press release.
RBC will pay PH&N 27 million RBC shares — worth around $50 each late last week — in the acquisition, which will bring the bank's assets under management in Canada to more than $160 billion.
"We've chosen to join forces with RBC because of the many benefits it affords PH&N clients, especially with respect to the kinds of investment opportunities they will need to be successful over the long term," added John Montalbano, president of PH&N. "RBC has the commitment and resources to leverage our strengths with institutional, private client and mutual fund clients."
In an interview with the Prince George Citizen, Lewis said PH&N was RBC's "first and only stop" when it went shopping to increase its wealth management business. No layoffs will occur as a result of the deal, he added. Montalbano said "the majority of all the senior talent, if not all" have signed five-year non-compete agreements.
The deal still requires regulatory approval. If given the go-ahead, the current and retired employees who own the firm will receive around $1.4 billion. Part of that payout would be delayed for three years after the sale closed.
Founded in Vancouver in 1964, Phillips, Hager & North is one of Canada's oldest independent investment management firms, with assets of $69 billion. The firm has 300 workers in its Vancouver, Victoria, Calgary, Toronto and Montreal offices.
The move will make RBC one of the top five managers in the Canadian institutional market for defined benefit and defined contribution pension plans, the bank says.
(EBNC recently interviewed Patricia Croft, PH&N's vice president and chief economist. See the story
