Canaccord Genuity Group Inc. (CF), Canada’s largest non-bank brokerage, would consider small deals to build-up its U.K. wealth-management business even as it shuns larger acquisitions, Chief Executive Officer Paul Reynolds said.
“We’re not looking to make any more” large purchases, Reynolds, 50, said today at a conference in New York hosted by Keefe, Bruyette & Woods. “You will see us make small bolt-on acquisitions in our U.K. wealth-management business.”
Canaccord Genuity, based in Toronto, has expanded in the past four years through takeovers in North America, Asia and Britain, where it bought London-based Collins Stewart Hawkpoint Ltd. in March 2012. Canaccord Genuity added to that business in October 2012 with a C$20 million ($19.1 million) purchase of London-based Eden Financial Ltd.’s wealth-management unit.
“We’ll continue to do acquisitions like that,” Reynolds said.
Canaccord Genuity may need another two years before its North American wealth-management business produces consistent profits, Reynolds said. The unit has posted eight consecutive quarterly losses, according to financial statements.
“If the market doesn’t change, I think it’s going to take us another probably upwards of eight quarters to get that business toward break-even,” he said. “The worst is behind us.”
The Canadian wealth business is now at the “right size,” Reynolds said, after going through a restructuring last year that included closing 16 offices.
Canaccord Genuity’s investments over the next several years will be in the U.S. and U.K., where the firm is investing in capital markets and wealth management, Reynolds said.
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