QUEBEC INC.

Desmarais Family’s Sagard Pushes for Growth With Private Retail Funds

Derek Decloet
Fri, August 11, 2023 


(Bloomberg) -- Sagard Holdings, the alternative asset manager controlled by Canada’s billionaire Desmarais family, is working to boost sales of its private-asset funds to retail investors.

Sagard struck a deal last month to bring on Bank of Montreal and Abu Dhabi sovereign wealth fund ADQ as minority investors in the firm. When complete, the transaction will dilute Power Corp. of Canada’s ownership of Sagard to just over 50%, the company disclosed Friday. But it will mean new avenues of growth, Power Chief Executive Officer Jeffrey Orr said.

“The BMO partnership might help” with retail distribution, Orr told analysts on Friday. “I think a lot of the growth over the next decade is going to come not just from institutions, but it’s going to come from high net worth, ultra-high net worth and retail channels.”

Sagard and its sister company, Power Sustainable, offer a variety of investment strategies, including private equity, private credit, green energy and real estate funds. Sagard also has a venture capital arm that’s focused on financial-technology startups.

The two alternative managers remain a small part of Montreal-based Power, which derives the bulk of its profits from control of one of Canada’s largest insurance companies, Great-West Lifeco Inc., and from mutual fund and wealth-management firm IGM Financial Inc.

Read More: Billionaire Desmarais Family Quietly Reshapes a Financial Empire

Sagard and Power Sustainable had about C$22 billion ($16.4 billion) of assets under management, including unfunded commitments, as of June 30. It’s not large enough yet to be profitable; the firms posted a combined C$18 million operating loss in the second quarter.

But that will change as they draw in more outside investors, Orr said in response to analysts’ questions.

“We have said we are all about creating value — and, ultimately, profitability — in our investing platforms, but we were looking to do that through third-party capital,” he said.

Power shares rose as high as C$38.98 on Friday in Toronto, the highest price since April 2022.

Sagard is led by Paul Desmarais III, the grandson of the late Paul Desmarais, who took over Power more than 50 years ago and used it to gain control of Great-West, IGM and a large portfolio of financial, media and industrial assets. Power has a stock market value of about C$26 billion.

 Businessweek