A group of strategic investors are to acquire a controlling ownership interest in Canadian asset manager Front Street Capital through a new company FS Group Holdings Ltd.
The transaction is expected to close prior to 31 December, 2015, subject to approval of Canadian securities regulatory authorities. The terms of the agreement have not been disclosed.
"We are excited to make this investment, and partner with one of the most dynamic and talented management teams in the Canadian asset management industry," says Gordon McMillan, one of the principals of the Investor Group. "We intend to build upon Front Street Capital's successful Canadian mutual fund and hedge fund platform and to leverage the depth of its highly regarded portfolio management team.”
"Front Street Capital is pleased to welcome this new group as partners," says Gary Selke (pictured), Chief Executive Officer of Front Street Capital. "We are confident that with the significant experience and additional resources they provide, we can take Front Street Capital further towards its goal of being one of Canada's leading asset managers. We now have additional resources to continue our growth strategy and to develop innovative products and investment solutions in this dynamic market."
All of the individual portfolio managers at Front Street Capital are expected to remain following completion of the transactions and will all remain actively involved in the portfolio management functions at the firm. There are no anticipated changes to the current services provided to clients of the firm, including to the Jemekk group of funds, as a result of the transaction. "This is a very positive development for the firm, as a broader ownership base is an investment in the firm's future and provides not only a path for sustainable growth, but also significant opportunities for the firm's key assets-our employees," says Frank Mersch, Chief Investment Officer of Front Street Capital.