Power Corp.’s IGM to Buy Toronto Sustainable Investing Firm

Fund manager IGM Financial Inc. is making a bet on sustainable investing by buying Greenchip Financial Corp., a Toronto-based boutique that’s focused on environmental firms.

The acquisition is being done through IGM’s Mackenzie Financial unit. Greenchip oversees more than C$485 million ($374 million) for foundations, endowments and individual investors. The companies didn’t disclose terms.

Greenchip invests exclusively in companies that make money off the transition to greener energy, including companies that focus on energy efficiency and sustainable agriculture.

“We want to meet that growing need of Canadian investors who, for a variety of reasons, want to align their personal values on the environment or climate change to their investment dollars,” Mackenzie Chief Executive Officer Barry McInerney said in an interview. “Some of these investment strategies are really smart and provide strong long-term return opportunities as well.”

For Greenchip, the acquisition will allow it to hand over back-office functions, including regulatory and compliance matters, to IGM while its team focuses on investing and takes advantage of its new parent’s larger pool of resources, Greenchip founder John Cook said. IGM is ultimately controlled by Quebec’s Desmarais family via financial conglomerate Power Corp. of Canada.

Socially responsible investing now appeals to a much broader spectrum of investors than it did when Greenchip was founded 13 years ago, Cook said.

“It’s not traditional market segmentation anymore,” Cook said in an interview. “At one point I would have thought millennials would be really attracted to this and maybe grandparents who are thinking about their grandchildren are looking at this. But to be honest, it’s right across the board now.”

The Greenchip takeover is IGM’s third deal this year, following earlier deals for GLC Asset Management Group and Northleaf Capital Partners. While IGM has resources to buy more boutique firms if opportunities arise, the company may take a pause on dealmaking for a while to digest its recent acquisitions, McInerney said.

“Right now we’re feeling pretty flush,” McInerney said.

©2020 Bloomberg L.P.

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