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Private Equity House Buys Into Canaccord Genuity's UK Business

Tom Burroughes, Group Editor, London, 5 February 2021

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HPS said it expects to continue being a strategic and financial partner to the business on future acquisitions and growth opportunities.

New York-based private equity house HPS Investment Partners has taken a £125 million ($169.8) stake in the UK arm of Toronto-listed Canaccord Genuity Group.

There will be “no changes to the management or operations of CGWM UK,” HPS said in a statement. The stake equates to a 21.9 per cent equity interest in the business.

HPS said it expects to continue being a strategic and financial partner to the business on future acquisitions and growth opportunities.

"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," Dan Daviau, president and CEO of Canaccord Genuity Group, said. "The proceeds from this investment provide us with options and flexibility to redeploy capital towards strategies to advance our firm-wide growth, enhance our long-term profitability, and provide optimal returns for our shareholders."

David Esfandi, CEO of CGWM UK, said: "Recognising the strength and potential of our business, this significant investment enhances our ability to invest in our client offering and our people and accelerate the future growth of CGWM UK to benefit our clients' evolving needs."

The UK Financial Conduct Authority and each of the Financial Services Commissions/Authorities of Jersey, Guernsey and the Isle of Man must give approvals for this deal.

Spencer House Partners LLP and Canaccord Genuity Limited acted as financial advisors and Travers Smith LLP acted as legal advisor to Canaccord Genuity Group Inc, while Rothschild & Co acted as financial advisor to HPS in connection with the transaction.

Results
In a separate announcement, Canaccord Genuity Wealth Management reported that its UK and Europe business earned revenue of £40.7 million during the third quarter of its 2021 financial year, falling by 2.9 per cent on a year ago.

When significant items are taken out, net income was £9.3 million before tax, rising by 9.9 per cent on a year earlier. 

At 31 December 2020, Canaccord Genuity Wealth Management in the UK and Europe had client assets of £29.7 billion, rising by 5.7 per cent from the end of the third quarter of fiscal 2020.

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