Power Corp. of Canada, the holding company of Canada’s billionaire Desmarais family, increased the estimated value of its Sagard Holdings alternative investments unit after closing a deal to sell a minority stake in it.
The sale to Bank of Montreal and Abu Dhabi’s sovereign wealth fund, ADQ, helped revalue Power’s stake in Sagard to C$1.24 billion ($903 million), according the company’s third-quarter financial statements. That was 28% higher than at the end of June.
The deal, announced in July, diluted Power’s direct ownership of Sagard to 54.5%. Bank of Montreal, ADQ and Great-West Lifeco Inc. collectively own 29%, and the remaining economic interest is owned by management.
Sagard, led by Paul Desmarais III, invests in a broad array of strategies including venture capital, private equity and private credit. Financial technology companies such as retail investment platform Wealthsimple constitute the majority of its portfolio.
Sagard and its sister company, Power Sustainable, raised C$1.2 billion in the third quarter. “That’s important in what is a pretty challenging fundraising environment,” Power Chief Executive Officer Jeffrey Orr told analysts Tuesday.
Power shares rose as much as 4% in Toronto, the most intraday since May 2022.
Combined, Sagard and Power Sustainable reported a small loss of C$11 million during the quarter. “We’re going to build stronger, more valuable businesses over time if we enhance the suite of products,” Orr said. “That delays the break-even point.”
The two firms’ assets under management totaled C$23.6 billion during the quarter, up 18% from the previous year.
The alternative investment platforms represent a small chunk of Montreal-based Power, which derives most of its value from its control of two Canadian public companies, Great-West Lifeco and mutual fund and wealth management firm IGM Financial Inc.
The company’s adjusted net asset value reached C$31.8 billion during the quarter. That was equal to C$48.26 per share, up 15% from the start of the year.
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