Wellington-Altus receives $85 million investment from minority partners

Wellington-Altus Financial Inc. has received $85 million in minority growth equity investments from Winnipeg-based Jessiman Family Investments and the Utah-based Cynosure Group, the wealth management firm announced Tuesday.

Jessiman Family Investments (JFI) will be investing $45 million and Cynosure will invest $40 million.

According to Shaun Hauser, co-founder and president of Wellington-Altus, the firm established a plan at the board level about 18 months ago to actively look for minority partners that could help strengthen the company’s balance sheet and allow the firm to grow at an even quicker pace.

The new investments from JFI and Cynosure will go toward advisor incentive offers and potential acquisitions, Hauser said.

Wellington-Altus projects to grow its assets under management (AUM) for fiscal 2021 by roughly $6 billion “primarily driven through recruitment,” Hauser said. The firm currently has about $20 billion in assets under management.

“Our incentive offers are a mix of cash and shares. We think we can attract even more advisors going forward if we have more flexibility to offer more cash than shares for very large teams,” he said.

With new capital for advisor incentive offers, “we think we can actually impact our trajectory at an even greater pace,” he added.

Bringing on more advisors and increasing AUM were both reasons Wellington-Altus expanded into the Quebec market in September.

The new capital from JFI and Cynosure will also go toward potential acquisitions, Hauser said, with an eye on the investment counsel portfolio management (ICPM) segment. Hauser said Wellington-Altus “can add a lot of value to” businesses in this space.

In 2019, the firm acquired Calgary-based TriVest Wealth Counsel Ltd. and launched Wellington-Altus Private Counsel Inc., a subsidiary focused on the ICPM segment of the wealth management industry.

Portfolio managers in the ICPM space can plug into Wellington-Altus’s wealth management infrastructure and tech, receiving the same benefits as the firm’s Investment Industry Regulatory Organization of Canada advisors, Hauser said.

“You get to find 30% to 40% more time than you did before,” he said. “You get to focus on what you’re good at, which is talking to clients and finding new ones. And you get to remove the headaches.”

JFI and Cynosure will have one board member each on Wellington-Altus’s board of directors, adding “industry knowledge” and “general business knowledge” to the group, Hauser said.

He added that Cynosure has a lot of industry experience and a deep team of M&A experts that will contribute to the firm’s acquisition strategy and allow it to do “high-quality deals.”

JFI and Cynosure both pointed to Wellington-Altus’s growth and client focus as reasons for their investments.

“After many years of partnering with leading private wealth management businesses in the U.S., we know what success looks like, and Wellington-Altus’ explosive presence and reputation for outstanding client service in Canada is undeniable,” said Keith Taylor, co-founder and managing director of Cynosure, in a release.