CI Financial Corp. announced Thursday it will acquire WisdomTree Asset Management Canada Inc. in a deal expected to close in the first quarter 2020.
Through the transaction, CI Financial will add 14 Toronto Stock Exchange-listed ETFs with assets totaling C$958 million ($733 million) to bring the firm's assets managed in exchange-traded funds to C$8.9 billion, confirmed Murray Oxby, a company spokesman.
CI Financial will pay WisdomTree Investments C$7 million to C$13 million for the latter's Canadian subsidiary dependent on reaching growth targets over the three years following the acquisition. CI Financial will pay C$5 million to WisdomTree when the deal closes, a news release from CI Financial said.
"As Canadians increasingly adopt the ETF structure, the addition of WisdomTree's Canadian operations will expand our lineup of mandates and increase the scale of our ETF business … notably, this acquisition gives us additional investment management capabilities through WisdomTree's fundamentally weighted approach to indexing, which will be a strong complement" to the firm's existing ETF offerings, said Kurt MacAlpine, CEO of CI Financial, in the release.
CI Financial will not change the investment management strategies of the funds, but will rename the fund family CI WisdomTree ETFs, Mr. MacAlpine said.
WisdomTree will provide index licenses for the CI WisdomTree ETF funds and will benefit financially from the relationship as the assets managed in the funds increase, said Jessica Zaloom, a WisdomTree spokeswoman.
As of Oct. 31, CFI Financial managed a total of C$178 billion in fee-earning assets.