Pension plans are very familiar with working with outside asset managers, but the Montreal-based Walter Group of companies wants to give them the opportunity to invest in the asset management business as well.
“This opportunity is unique for institutional investors,” says Rene Fournier, president and chief investment officer of Walter Financial Inc. With its new fund, investors need not only be managers’ clients but can also benefit from the commercial success of multiple firms as well.
The Walter Group is seeking out smaller Canadian asset management firms both to co-invest with on private equity projects and to create a platform where multiple managers can share their expertise under one umbrella, says Fournier.
The platform is inviting capital from both institutional and private investors to reach its goal of a minimum of $100 million, with $40 million already coming from the Walter Group and private funds from Sylvain Brosseau, who will be heading up the platform as president and chief executive officer of Walter Asset Management.
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“We want the asset managers in our platform to continue to be nimble and entrepreneurial,” says Fournier.
“If they decide to join us, it’s because they feel they can benefit from what we have to offer.”
One area where the Walter platform intends to help the firms that join it is on the administrative side. “Small asset managers are very good at the science of adding value,” says Fournier, noting their leaders need to be able to focus on the companies they invest in rather than on smaller operational details.
As well, new technological capabilities can help make operations more efficient, which is another area where the Walter Group intends to boost firms’ capabilities, says Fournier.”We want to have an ecosystem of companies that will benefit from shared knowledge.”
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The niche expertise smaller firms can sometimes offer are a way for pension plans to gain exposure to specific areas of the financial services business, says Fournier.
One niche Walters is looking to capture in the private equity business is the rising need for solutions for the family office industry, which Fournier describes as growing at a rapid clip.
“Family offices are looking more and more like small pension funds. They are a second element of institutional investors, and the entire financial industry doesn’t capture that well. They aren’t just people. They are organizations with large amounts of capital,” says Fournier, noting that tailoring strategies to the specific needs of family offices is a growing opportunity in the asset management world that the Walter Group is looking to capture.
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