Desjardins Group, North America’s largest financial services co-operative, is acquiring the assets of Canadian investment manager Hexavest, adding $5 billion in institutional funds.
The purchase is in line with the co-operative’s growth goal of targeting $100 billion in assets under management by 2024, Desjardins said in a news release. The Quebec-based asset manager had $83 billion in assets under management as of the end of March this year.
In Hexavest, Desjardins gets a Montreal-based firm with about 50 clients, mostly institutional investors in Asia, Australia and the U.S. Terms of the deal, which is expected to close September 1, weren’t disclosed.
The deal comes three months after Hexavest said it ended an eight-year partnership with Eaton Vance Corp., the global money manager recently acquired by Morgan Stanley (NYSE:MS). Eaton Vance had owned 49% of Hexavest and helped it sell services outside Canada. A holding company controlled by Hexavest employees bought out the stake in February of this year.
Hexavest’s performance has lagged benchmarks in recent years. An all-country equities strategy fund returned 7.1% annualized over the five years ended March 31, trailing the MSCI ACWI Index by more than five percentage points. A Hexavest emerging markets fund did better, returning 10.8% annualized in the same period, slightly behind the MSCI Emerging Markets Index.
