Canadian Financial Services Consolidator to Buy Investment Manager

Matthew Smith

8 January 2007

Montreal-based financial services consolidator, Power Financial Corporation, confirmed discussions with US firm Marsh & McLennan to acquire its investment management subsidiary, Putnam Investments. Marsh & McLennan, which also owns Mercer Human Resource Consulting and risk consulting company Kroll, has been rumored to be looking for a buyer for Putnam after paying more than $1 billion to settle a mix of mutual fund trading, bid-rigging and price-fixing allegations in 2003 and 2005. The announcement by Power Financial came by way of a statement on its website following media speculation the firm had already agreed to pay $3.9 billion for the investment management firm. At this time, no agreement has been reached by the participants in the process, according to the statement. Both parties were unwilling to comment on the deal when contacted by WealthBriefing. Power Financial Corporation’s strategy is to own controlling interests in financial services companies, according to the group’s website. Other subsidiaries it has already acquired include London Life Insurance in 1997 for $2.95 billion, Mackenzie in 2001 for $4.1 billion, and Canada Life Assurance Company in 2003 for $7.2 billion.