Business & Finance
Goldman Sachs to Manage $23-Billion in IG Wealth Client Funds
IG Wealth Management, which manages savings for approximately one million Canadians, has awarded a multibillion-dollar investment mandate to Goldman Sachs Group Inc. The move is part of the Winnipeg-based firm's effort to bring institutional-style investment strategies to everyday investors.
On Tuesday, IG Wealth announced the conclusion of a year-long selection process, naming Goldman Sachs Asset Management to oversee a group of five funds known as the IG Strategic Wealth Portfolios. These portfolios currently hold $23.2-billion in client assets, representing about 15 per cent of IG Wealth's total assets under management.
Florence Narine, IG Wealth's head of investment solutions, said Goldman was selected after demonstrating it could offer sophisticated global investment strategies—spanning equities, fixed income, and alternative assets like private equity and infrastructure—to individual investors at competitive fees. The IG Strategic Wealth Portfolio lineup includes funds focused on income and growth, as well as three balanced fund options.
"Goldman proved they could deliver the best of their institutional service to our clients, and their culture fits with ours," Narine said, noting that Goldman was chosen from a shortlist of five asset managers.
IG Wealth operates as a subsidiary of IGM Financial Inc., which is part of the Power Corp. of Canada group controlled by Montreal's Desmarais family. Previously known as Investors Group, the company maintains one of Canada's largest wealth management networks, with more than 3,000 financial advisers. IGM Financial also owns Toronto-based Mackenzie Investments, which continues to manage assets for many IG Wealth clients.
According to Narine, Goldman Sachs joins more than 20 external asset managers already available to IG Wealth clients and advisers. Goldman's asset management arm oversees roughly US$4-trillion in assets, primarily serving institutional clients such as pension funds, insurance companies, and affluent families. Notably, Goldman was among the first four external managers hired by the Canada Pension Plan Investment Board when it began outsourcing asset management in 2004.
Alexandra Wilson-Elizondo, co-chief investment officer of Goldman's multi-asset solutions division, said in a statement: "We believe a modern approach to asset allocation, dynamic investment strategies, robust risk management processes and well-diversified portfolios help clients achieve their objectives across market environments. We are excited to partner with IG to bring the capabilities of our multi-asset solutions team to IG's clients across Canada."
Competition for financial advisers remains intense among asset management platforms including IG Wealth, Canada's six major banks, and independent dealers such as Canaccord Genuity Group Inc. Narine said the Goldman partnership will support IG Wealth's broader strategy for attracting and retaining advisers.
The partnership comes amid a bull market in equities and ongoing geopolitical uncertainty, conditions that have prompted clients to allocate more savings into the markets. Narine said incorporating Goldman's expertise is intended to help IG Wealth serve clients effectively throughout different market cycles.
Like other large asset managers, IG Wealth benefits financially as it grows its asset base while controlling costs. The company's assets under management increased 18 per cent to $153-billion during the 12 months ending June 30. Over the same period, earnings before interest and taxes rose 29 per cent to $264-million, according to a report published last month by RBC Capital Markets.
RBC analyst Bart Dziarski noted that parent company IGM Financial has successfully turned around both IG Wealth and Mackenzie over the past year. In his August report, Dziarski wrote that "IGM is focused on new growth opportunities driven by strategic investments."
IGM Financial also has a significant presence in direct, adviser-free investing through its 25.5-per-cent ownership stake in Wealthsimple Technologies Inc. Wealthsimple, founded in Toronto in 2014, currently manages $155-billion in assets for four million clients.