Partners In Planning in play

Is Partners In Planning about to be bought out? That rumour began circulating this week, naming Calgary-based Walton International Group as a potential buyer for the Saskatchewan-based mutual fund dealer.

“Nobody is supposed to know about this, but it’s the worst-kept secret this year,” said one anonymous industry insider. “It’s my understanding that there are negotiations underway and that everybody is doing their due diligence. As with any kind of deal, regulators are involved, so it takes time.”

Walton is in the “land banking” business. That means it buys up strategically located parcels of undeveloped land it identifies as being in the path of urban development. Then the company may undertake improvements to the properties, such as having them rezoned. To fund these acquisitions, Walton offers structured products to qualified investors.

“It’s a firm that has been around for years and was primarily in the far East. But they have [recently] been buying property in Alberta, Ontario and in the States,” the source says. “Financial services is also part of what they do, so they have an interest in acquiring a distribution network.”

These structured products are currently available through Partners In Planning advisors, but it has been suggested that Walton is interested in owning the distribution channel outright.

Calls to PIP’s head office in Regina were not returned, and Walton’s vice-president of strategic development, Bob Ferguson, declined comment.

“You could surmise they are at least talking to each other, if not closer than that,” says fund industry analyst Dan Hallett, president of Dan Hallett and Associates. “Presumably there’s a higher margin in product manufacturing than there is in distribution.”

One problem that such a deal could create a clash of cultures. As Hallett explains, “A lot of the actual advisors in firms like that are pretty sensitive to stuff of that nature where they become associated with a product manufacturer. They’re at firms like that because they are very independent and want to stay that way. I’ve got to think that the senior management probably recognizes that.”

But not everyone sees the deal as a threat to PIP’s advisors’ independence.

“This is a friendly takeover as far as I know,” says one source. “Partners in Planning is hoping it will be business as usual; they will just have a new corporate owner.”

Partners in Planning opened its first office in 1986 in Regina, Saskatchewan. Since then, the company has expanded to include more than 120 offices across the country and approximately 600 representatives, operating in both the mutual fund and insurance channels.

Walton has been in operation for 27 years. Aside from its headquarters in Calgary, Walton maintains offices in Edmonton, Vancouver, Toronto, Ottawa and Saskatoon. The company also has a presence in Hong Kong, Singapore, Kuala Lumpur and Kuching Malaysia, Shanghai, Jakarta, Berlin, and Phoenix, Arizona, according to the company website.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com