Bank of Montreal's acquisition of F&C Asset Management will help build a link from its money management subsidiary in North America to the other side of the Atlantic, nearly 150 years after the firms' paths first crossed.
“F&C set up the first investment trust in 1868, and one of the first investments that the trust made was in Canada Pacific Railway — which linked the east coast to the west,” said Barry McInerney, co-CEO of BMO Global Asset Management (Europe) Ltd. The lead financier on that deal, he said, was BMO Group.
Now, F&C is the latest piece of BMO Global Asset Management's aggressive expansion plans, this time targeting European distribution. “Aside from specialized boutiques in London, we didn't really have any European presence, and no manufacturing or distribution capabilities in Europe or the U.K.,” said Mr. McInerney in an interview at one of F&C's offices in west London.
Gaining F&C's £83 billion ($139.4 billion) in assets doubled BMO's assets under management to about $269 billion. It is the latest in a series of deals that have seen AUM increase fivefold over the past five years.
F&C is known for its liability-driven investment, real estate and environmental, social and governance investment capabilities — three areas BMO executives had realized were in need of development.
“We have gone through a fairly transformational period over the last five years, and we have no plans to stop yet. We have done so fairly methodically, through organic growth and acquisitions, for which we have had an "acquisitions blueprint',” said Mr. McInerney.
The acquisition in 2008 of Pyrford International Ltd., London, added more international equities expertise; Taplin, Canida & Habacht LLC, fixed-income strategies. Hong Kong-based Lloyd George Management brought Asia and emerging markets management capabilities in 2011, and the same year BMO closed a deal to acquire more fixed-income, equities and cash management expertise with the purchase of Marshall & Ilsley Corp.
F&C was next on its radar. BMO was looking for a sizable business with European and regional manufacturing and distribution capabilities. “F&C popped up a lot and early on. You could say we had "dated' for many months before the acquisition,” Mr. McInerney said. As with other acquisitions, F&C will keep its name. The team also remains unchanged.