Cartier Partners said to be entertaining several acquisition bids

(September 22, 2003) With Assante and TWC Financial now off the consolidation table, industry attention is now turning to Cartier Partners Financial Group, with several bidders said to be vying for the Montreal-based financial planning firm.

In May, the Caisse de dépôt et placement du Québec announced it was divesting its stake in Cartier. The latest rumoured suitor of Cartier is industry heavyweight Power Financial, owner of Investors Group and Mackenzie Financial.

“The rumour makes a lot of sense,” said one contributor to Advisor.ca’s Talvest Town Hall, especially considering the Quebec connection. “The Caisse bought into Cartier partially out of concern that Quebec was not fully represented in the booming mutual fund industry of the 1990s. Desmarais ownership would continue the Quebec connection, and score political points for Power in getting the Caisse off the hook.”

However, independent fund industry analyst Dan Hallett thinks a Power takeover of Cartier is unlikely.

“Power’s Investors Group is profitable because its huge distribution force drives sales of its in-house products. Cartier just wouldn’t fit,” Hallett says.

Another Town Hall participant notes that there a lot of ex-Investors Group people working at Cartier. “If [the rumour is] true, it will be a tough sell.”

Other firms linked to Cartier include Desjardins, Manulife and Dundee Wealth Management.

Hallett believes there’s a chance that Cartier will be split up, with the mutual fund, securities and insurance segments sold off in separate chunks. “However, there’s also the possibility of selling the whole thing but cutting all of the small producers loose.”

There’s been no word from Cartier about when a deal might be announced. But one contributor to the Town Hall says he expects an announcement in mid-October, noting that three companies are said to be preparing offers.

“Look for it to be a financial services company that wants to expand distribution,” the contributor wrote. “It is also likely to be someone who is willing to keep the company, for the most part, intact.”

Other industry sources suggest that although there may be offers on the table for Cartier, the Caisse may take its time and wait for a better investment climate before making a final decision.

Join the discussion about the future of Cartier in the “Free For All” forum of the Talvest Town Hall.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca