RBC buys 10% of O’Shaughnessy firm

RBC has strengthened its bond with one of its star mutual fund managers, buying a 10% stake in O’Shaughnessy Asset Management (OSAM). The bank has also acquired a brokerage in the U.S. mid-Atlantic market.

OSAM is run by Jim O’Shaughnessy, who left Bear Stearns in 2007 to start his eponymous company. He manages roughly $5.5 billion for the bank, with RBC O’Shaughnessy Canadian Equity, RBC O’Shaughnessy Int’l Equity and RBC O’Shaughnessy U.S. Value, each easily topping the $1 billion mark.

“I have developed tremendous respect for RBC in our ten-year partnership and I am pleased to welcome RBC as a shareholder in O’Shaughnessy Asset Management,” said Jim O’Shaughnessy, chairman and chief executive officer of OSAM.

“We’re excited about this opportunity to deepen our partnership with OSAM,” said Brenda Vince, president, RBC Asset Management Inc. “Jim O’Shaughnessy and his team have delivered strong performance for our unitholders over the past ten years and we look forward to continuing our relationship.”

Jonathan Hartman, vice-president of investment products, RBC, says the purchase not only “extends the strong relationship” that the bank and OSAM have had over the past decade, but gives the RBC “the opportunity to participate in the growth of a great asset manager.”

He stresses that the 10% stake simply represents a minority position in OSAM, and points out that the firm’s launch last year marked O’Shaughnessy’s return to his entrepreneurial roots. It is not, Hartman says, the first step in a takeover of OSAM.

In a separate development, RBC announced it has completed the acquisition of Ferris, Baker Watts, Inc., a Washington, D.C.-based full-service brokerage with more than 300 financial consultants.

FBW will become part of RBC Wealth Management, U.S. Division, and brings about $19 billion in assets under management to the firm.

“We believe that joining RBC, with its global resources and strong customer support capabilities, greatly expands the investment services that we will be able to provide our clients,” said Roger L. Calvert, president and CEO of Ferris, Baker Watts.

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

(06/23/08)