Mackenzie acquires Cundill Group

Mackenzie Financial Services formalized its long-standing partnership with Cundill Investment Research Thursday when the company entered into an agreement to acquire all of the investment manager’s assets.

Managers on both sides say the deal is a natural and logical extension of the existing relationship.

The Cundill group of managers, known for their fundamental-value approach to investing, is already sub-advisor to more than $12.5-billion worth of assets in Mackenzie mutual funds. With the acquisition, Mackenzie also gains a global institutional and high- net-worth client base, with assets worth roughly $3.3 billion.

“I would say there’s going to be some good learning from each other on both sides,” says Mackenzie president, David Feather. “Those are businesses [U.S. limited partnerships, high-net-worth client service] that we have not historically been in as a firm but Cundill’s been in it for a very long time.”

In a statement, Cundill group founder, Peter Cundill, said “the transaction represents an extraordinary opportunity for our team to formalize one of the most successful partnerships in Canadian financial services to allow our investment management team to continue to focus on what we do best — selecting securities where financial returns can be realized for our clients and fund investors. Mackenzie has already proven to be an excellent fit for the Cundill Group.”

Mackenzie has no plans to mess with a good thing. Cundill will continue to manage assets out of the group’s Vancouver offices with no changes to management, portfolio advisors or investment objectives.

Lisa Pankratz, Cundill Group president, points out that the arrangement provides the added benefit of addressing some questions about succession that investors would no doubt raise soon. “I think it secures the future,” she says. “It allows Peter and his team to focus on the investment management and I think it answers some of the questions investors would’ve had. Peter’s 67 years old. What are his plans for himself and the firm? This answers all of that. It provides an orderly succession and a smooth transition for our investment team.”

However, the investment manager doesn’t appear to have plans to step down any time soon. Cundill has signed a multi-year commitment as part of the transaction, according to Pankratz . “With most investors though, they never stop investing. I expect that he will be investing forever, but he has made that commitment to Mackenzie and the team and to the clients.”

Going forward, neither group expects to encounter too many challenges integrating their firms. The group already has eight years’ history working together.

“I think it’s been a big win, particularly for investors since 1998, because a lot of them would not [be in] Cundill funds if they had not been available on a more mainstream basis. I think the key objective for us is making sure that continues. That’s really part of what motivated this transaction,” says Feather. “It’s something that everybody is pretty focused on. This investment team is really becoming a material part of the Mackenzie business. To have them as part of our firm takes that relationship even further and solidifies it.”

Filed by Kate McCaffery Advisor.ca, kate.mccaffery@advisor.rogers.com