Canada's CIBC Pushes Into US Private Wealth Sector With Atlantic Trust PWM Deal

Tom Burroughes

12 April 2013

CIBC (or Canadian Imperial Bank of Commerce) has pushed into the US private wealth market by entering an agreement to acquire Atlantic Trust Private Wealth Management from its parent company, Invesco, for $210 million, the bank has announced.

The Toronto-listed bank said the move will boost its wealth management capabilities and is consistent with other acquisitions, such as its purchase last August of the private banking assets of MFS McLean Budden in Canada. In 2011, CIBC purchased a 41-per-cent equity interest in US asset manager American Century Investments, for $848-million.

CIBC will acquire Atlantic Trust for $210 million (US dollars), in an all-cash transaction that is expected to close, subject to regulatory approval, in the second half of 2013 and will be accretive to adjusted earnings per share in fiscal 2014. At closing, the transaction is expected to reduce CIBC's Basel III Common Equity Tier 1 ratio by approximately 20 basis points on a pro forma basis as at 31 January, 2013.

Atlantic Trust manages about $20 billion in assets for clients through 12 metropolitan locations across the US. The firm serves high net worth individuals, families, foundations and endowments through a team of 235 relationship management, investment management, wealth strategies and support professionals.

"The Atlantic Trust acquisition aligns with our strategy to grow our wealth management business in North America," said CIBC President and chief executive Gerry McCaughey. "Atlantic Trust provides CIBC with an attractive entry into the US private wealth market, where HNW personal financial assets are growing 50 per cent faster than those of the average US household," said Victor Dodig, senior executive vice-president, CIBC and group head, wealth management.

"This transaction further enhances our private wealth management offering to HNW clients and is consistent with our acquisition of MFS McLean Budden in Canada," said Dodig. "It also strengthens our position in the US market where we have established a presence in asset management through our separate and strategic investment in American Century,” he said.

"CIBC and Atlantic Trust share a commitment to delivering personalised service and a high level of value to clients," said Martin Flanagan , president and CEO of Invesco. "CIBC will build on Atlantic Trust's legacy of investment excellence, strategic wealth planning and extraordinary service to further enhance the firm's ability to deliver meaningful solutions for HNW clients across the US."