HPS Investing C$219m in Canaccord Genuity’s UK Arm

Canaccord Genuity
Photo by Vladimir Solomyani on Unsplash

Global investment firm HPS Investment Partners is investing about C$219 million in the UK wealth management division of TSX-listed financial services firm Canaccord Genuity Group.

In a statement, Canaccord (TSX:CF) said HPS will acquire convertible preferred shares to be issued by Canaccord Genuity Wealth Group Holdings (CGWM UK), the parent company of Canaccord’s wealth management operating subsidiaries in the UK, the Channel Islands, and the Isle of Man.

The net cash proceeds from the sale of the convertible preferred shares of approximately £120 million (C$210 million) will be distributed by CGWM UK to Cannacord and used by the company for corporate purposes to optimize shareholder value.

“Partnering with HPS provides us with an opportunity to build upon the exceptional growth that our UK wealth management business has achieved under David Esfandi’s leadership,” said Dan Daviau, President & CEO of Canaccord Genuity Group Inc.

HPS is a leading global investment firm that seeks to provide creative capital solutions and generate attractive risk-adjusted returns for its clients. HPS has over US$68 billion of assets under management invested in both large and small companies across a variety of industries and sectors.

“There will be no changes to the management or operations of CGWM UK as we continue to seek to expand and grow that business through both internal development and acquisitions,” the company added.

Cumulative Dividends Payable by CGWM UK

The principal value of the Convertible Preferred Shares is £125 million (C$219 million). On an as converted basis the Convertible Preferred Shares represent a 21.93 per cent equity interest in CGWM UK.

Cumulative dividends are payable by CGWM UK on the Convertible Preferred Shares at the greater of an annual 7.5 per cent coupon and the proportionate share that such shares would receive, on an as converted basis, in respect of dividends paid to the Company by CGWM UK.

Completion of the transaction will require the approval of the UK Financial Conduct Authority and each of the Financial Services Commissions/Authorities of Jersey, Guernsey, and the Isle of Man, and is
expected to occur in the first quarter of Company’s fiscal year. – BusinessNewsCanada.com