Canadian asset manager Fiera Capital has entered into an agreement to purchase Hong-Kong based boutique Clearwater Capital Partners for a total of $21m (€17.03m), a sum that could be further adjusted.
According to the terms of the deal, Fiera Capital will pay $12m (€9.73m),in cash and will issue $9m (€7.3m)in Fiera Capital Class A subordinate voting shares.
Additional contingent payment and earnout considerations of up to $44m (€35.7m) will be paid over five years based on the achievement of financial milestones.
Clearwater operates in five offices across Asia-Pacific and the United States (Hong Kong, Singapore, Seoul, Mumbai and Connecticut) and specialises in three private credit segments: direct lending, stressed credit and distressed and special situations. The firm’s $1.4bn (€1.13bn) of assets under management will be added to Fiera Capital’s private alternative investments division.
Since launch in 2001, the boutique has invested $5.1bn (€4.13bn) over 352 positions and exited $5.8bn (€4.70bn) across 315 completed deals. Robert Petty and Amit Gupta will remain co-CEOs-CIOs of Clearwater.
The acquisition, subject to regulatory approval, is expected to close over the coming months and “to be slightly accretive to earnings in 2019,” Fiera Capital assessed.
“The transaction establishes Fiera Capital’s Asia-Pacific footprint and provides a rare opportunity to gain entry to the Asian private credit market,” said Vincent Duhamel, global president and chief operating officer of Fiera Capital.
“Combining Clearwater’s deep investment experience in Asia with Fiera Capital’s global distribution capabilities enhances our ability to meet the growing demand from clients for a full spectrum of investments in credit and special situations.”
Commenting on the acquisition, John Valentini, executive vice president, global chief financial officer and president, private alternative investments division of Fiera Capital, added: “As a leading firm in credit and special situations, Clearwater comes to Fiera Capital with a strong, culturally aligned senior leadership team that will add to the bench strength of our existing Private Alternative Investments division and provide an established platform to boost the growth and distribution of an enhanced suite of private markets strategies to clients. With a 16-year track record of solid performance, the Clearwater team has an established presence in the Asia credit space, an industry which today represents $50trn in investment opportunities.”
Co-founders of Clearwater Capital Partners, Petty and Gupta, said: “We are very excited to begin this new chapter in our business. Our partnership with Fiera Capital allows us to leverage the strength of a global network to continue delivering outstanding returns and solutions to clients worldwide.
“We are proud to choose a partner that supports our investment independence, and also celebrates our culture, entrepreneurship, risk adjusted approach to building diversified portfolios while mentoring best-in-class talent across our business. Joining Fiera Capital is the clear next step to grow our business and continue to provide profitable and innovative alternative investment solutions to even more clients around the world.”
Fiera Capital had around C$128.9bn (€81.1bn) in assets under management as of 31 December 2017.