One Capital Management is going on a practice acquisition and advisor hiring spree backed by capital infusion from one of Canada’s largest wealth management firms.
The goal is for One Capital to grow its client assets from $1.6 billion to $5 billion by the end of this year, according to Patrick Bowen, president of the Westlake Village, Calif.-based RIA.
CI Financial Corp., one of Canada’s largest independent wealth management firms, purchased a majority stake in One Capital last month.
Since that deal closed, One Capital has added three advisors it could not have hired without the Canadian funding, Bowen says.
When negotiating with potential acquisitions or new hires, Bowen highlights the benefits of his Canadian-funded purchasing power, particularly in contrast to private equity money.
The Canadian funding is “permanent capital,” he says. “They’re here to be our strategic partner. They want to grow in the U.S.”
CI has “a very different mindset” and different rates of return expectations than potential PE-driven acquirers, he adds.
That difference will help One Capital’s acquisitions or new hires meet their “obligations” to their clients, Bowen says.
Kurt MacAlpine, who took over as CEO of CI in September 2019, adds to Bowen’s reasoning.
“I feel like we’re the most appealing buyer to an RIA business just looking for a strategic partner,” MacAlpine says.
“We have a lot of capital to invest,” he adds. “We can really help capitalize these [U.S. advisory firms] and put them on a path towards organic and inorganic growth that’s very difficult to achieve on a standalone basis.”
CI reported preliminary AUM of C$132.1 billion as of the end of 2019 and total assets of C$181.9 billion. The company says it serves as the primary financial advisor for more than 300,000 Canadian families, many of whom want to do business with a U.S.-based advisor.
MacAlpine says CI can also contribute to the investment capabilities of a practice or advisor.
“We can be additive to them in the investment process both in asset allocation and portfolio management just given the sheer scale and capabilities that we have in-house in our global asset management business,” he says.
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