Top executives explain what comes next after $1.67 billion acquisition
Following the announcement that Desjardins Group would be acquiring Guardian Capital Group in a take-private deal for approximately $1.67 billion, the leaders of both firms highlighted the next stage of their growth goals. George Mavroudis, President & CEO of Guardian, and Nicolas Richard, President and COO of Desjardins Global Asset Management, outlined what they plan to do with the combined capacity and scale that emerges from the deal.
Both Mavroudis and Richard will function as leaders in the new organization, with Mavroudis taking on the CEO role of the combined business and Richard serving on the executive team. They explained what they plan to do with their combined scale and what advisors and the wider industry can take from this deal.
“From a guardian perspective, we're going to continue doing what we've always done for advisors, and now we have the added firepower and opportunity set that Desjardins and their network brings,” Mavroudis says.
“For us at Desjardins it’s really an opportunity to expand,” Richard adds. “Our operations and asset management are really centered in Quebec at the moment. This will allow us to gain a much greater footprint outside of Quebec within Canada and globally in the US and elsewhere.”
This deal, the leaders explained, emerged out of the 2023 acquisition of Guardian’s insurance, mutual funds, and investment distribution networks by Desjardins via Worldsource. Richard notes a degree of cultural fit an alignment that helped accelerate the current deal.
Looking ahead, Mavroudis sees this deal as powering what Guardian had set for itself as a goal: becoming a top 100 global asset manager. He emphasized the scale that comes with this acquisition in terms of technology as well as both human and financial resources. He hopes to leverage that scale to win a greater share of advisors’ wallets.
That scale, Mavroudis stressed, is essential to compete in both the Canadian and global investment landscapes. He argues that advisors are demanding more services from fewer firms and that by building and leveraging scale his firm can offer a broader array of strategies to advisors and their clients. Firms without that scale can struggle to do the necessary work to build and maintain products with a view to keeping costs and fees under control.
Both Mavroudis and Richard also highlighted Desjardins Global Asset Management’s existing capacity in the realm of private assets. Desjardins GAM, they note, have an established private infrastructure team with a track record of delivering private assets to the wealth management channel. Given the increasing importance of private assets in retail portfolios, Mavroudis and Richard sees this as a potential growth area.
With deals like these advisors and investors often face a period of some dislocation as overlapping or competing fund strategies are merged or retired. Mavroudis believes, however, that advisors will see little disruption as the new operation, which he referred to as “Guardian DGAM” will continue to operate the Guardian lineup of funds and ETFs. Desjardins mutual funds will still be operated separately, leaving little overlap in this arrangement.
This deal follows a series of significant acquisitions over recent years, in both the asset management and wealth management space. In Mavroudis’ view, this latest deal is one of many that underscore the importance of scale for any business seeking to operate in the financial services and investment management space.
“I think the industry at large is maybe behind some other more mature industries that you saw consolidation occur. The cost of doing business continues to rise. So if you want to be a best in class operator, infrastructure, the technology and all the other research that goes into building best in class, you need to spread that across a bigger organization,” Mavroudis says. “You also have an industry that is facing more fee pressure. I think you could have the successful niche investment management firm, but there are limits to what you can ultimately execute on. And I think what we're pursuing is certainly one that wants to stay competitive in the top 100 global asset management firms in the world.”
