RBC Buys Vancouver Asset Manager to Boost Wealth Management

Nick Parmee

22 February 2008

Royal Bank of Canada has bought Phillips, Hager & North Investment Management, subject to regulatory approvals and other customary closing conditions; the deal is expected to complete about 30 April 2008. PH&N shareholders will receive RBC shares, with some deferred until three years after closing. The transaction is not expected to have a material impact on earnings per share in the near term. George Lewis, group head of RBC Wealth Management and currently chief executive of RBC Asset Management, said: “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.” RBC says that third party rankings and surveys position PH&N well for both performance and client service. With combined assets under management in Canada exceeding $160 billion based on RBC’s and PH&N’s respective year-ends, the two businesses will form one of the largest private sector asset managers in the country. Specifically, the transaction will create one of the largest private client investment counselling businesses in Canada and will make RBC one of the top five managers in the Canadian institutional market for defined benefit and defined contribution pension plans. John Montalbano, president of PH&N, will become chief executive of the combined organisation comprising PH&N and RBC’s asset management business. Upon closing, PH&N will become part of RBC Wealth Management. In the new organisation, Brenda Vince, the president of RBC Asset Management, will lead the combined mutual fund and high net worth businesses. Dan Chornous, currently chief investment officer of RBC Asset Management, will be the chief investment officer of both PH&N and RBC Asset Management. PH&N’s Hanif Mamdani will be head of alternative investments for both PH&N and RBC Asset Management. Damon Williams will continue to be head of institutional management at PH&N, which will remain headquartered in Vancouver.