AGF Administration Ltd. AGF-B-T is growing its alternative asset enterprise by getting a 51-for every-cent stake in non-public fairness fund supervisor Kensington Capital Partners for $45-million.
Toronto-primarily based AGF declared Monday that it will double the size of its private cash division by obtaining control of Kensington, an personnel-owned enterprise with $2.6-billion of money that invests in venture cash and tiny to mid-sized corporations. AGF oversees $41.8-billion of consumer assets, largely in mutual cash.
AGF, founded in 1957, started featuring consumers choice belongings such as infrastructure funds 10 decades back. Two decades ago, the enterprise employed Brookfield Asset Administration Ltd. BAM-T veteran Ash Lawrence as the head of its personal money crew, with a mandate to increase the business by obtaining fund supervisors.
“Partnering with Kensington achieves two aims for AGF,” Mr. Lawrence reported in an job interview. ”It diversifies AGF, with a next pillar alongside our standard asset management business enterprise and provides our present distribution channels obtain to a demonstrated personal fairness supervisor.”
Kensington chair and founder Tom Kennedy mentioned his business determined to promote a control stake to AGF to develop the asset manager’s distribution network and increase money for new non-public equity funds.
“AGF brings potent clients interactions across North The usa, and offers us distribution we lacked outdoors Canada,” he reported. A previous expense banker, Mr. Kennedy has relationships with AGF that date back again 40 several years: ”We’ve constantly admired AGF’s method to investing.”
AGF options to continue setting up its option asset system, with a concentrate on sectors this kind of as personal credit history and liquid option cash, which are intended to give person traders accessibility to the hedge fund procedures that traditionally had been only out there to institutions.
In 2014, AGF struck a partnership with Calgary-based mostly fund supervisor SAF Group to current market the latter’s private credit history products. SAF Team oversees close to $4-billion.
Kensington’s flagship merchandise is a $1.7-billion private fairness fund. Above the previous 10 years, the fund returned 12.3 for each cent annually, as opposed with a 7.6-for every-cent return from the benchmark S&P/TSX index. Kensington’s fund is open ended: Traders can withdraw cash at any time. Most non-public fairness funds only let redemptions after seven decades or extra.
Kensington will keep its identify and personnel will go on to have the remaining 49 for every cent of the organization. A few AGF executives – Mr. Lawrence, president Judy Goldring and chief money officer Ken Tsang, will sign up for the company’s board.
Launched in 1996, Kensington has places of work in Toronto, Vancouver and Calgary. Its 3 senior executives – Mr. Kennedy, main expense officer Eamonn McConnell and venture capital head Rick Nathan – are all continuing in their roles.
Kensington also manages a $101-million undertaking capital fund, the B.C. Tech Fund, released by the British Columbia governing administration in 2016.
The asset management field has been consolidating around its premier players for the past two a long time, in component due to the fact of the rising price of distribution and compliance. In a recent report, Deloitte reported classic asset professionals – such as AGF – are ever more focusing on substitute asset managers.
“Strong investor desire and increased anticipated returns make alternate options an appealing choice in an natural environment of very low administration expenses, small desire premiums, and increasing competition,” reported Kendra Thompson and Lisa Weatherbed, associates at the consulting organization.