Why the Desmarais family of Canada invests in Rockefeller Capital

  • A company belonging to one of the wealthiest clans in Canada has invested $622 million in the Rockefeller company.
  • The Desmarais and Rockefeller clans have close ties and both are known in politics and philanthropy.
  • The two heirs increase their stakes in the wealth manager, bringing its valuation to $3 billion.

Two of North America’s wealthiest families have teamed up to invest in wealth management powerhouse Rockefeller Capital Management.

The Desmarais family, one of Canada’s wealthiest families, began serious negotiations in November with the five-year-old firm, which grew out of the family office of the Rockefeller heirs. But the family has known the success of Standard Oil for decades. Both are prominent in their respective home countries for their politics and philanthropy.

The Desmarais family invested $622 million through Power Corporation of Canada, the family-controlled financial services conglomerate, for a 20.5% stake in Rockefeller Capital Management. The Rockefeller family also increased its stake by an undisclosed amount in the New York-based wealth manager, which has $100 billion in client assets at the end of March.

The company, led by Wall Street veteran Greg Fleming, is now valued at $3 billion. It is still majority owned by hedge fund Viking Global Investors.

Family patriarch Paul Desmarais, who bought Winnipeg-based Power Corp. in 1968 and turned it into a sprawling investment group, has been declared the ‘most powerful francophone in the country’ for his close ties with Canadian Prime Ministers upon his death in 2013. The phrase “Rockefeller Republican” dates back to Nelson Rockefeller, who served as vice president in the Ford administration.

Son of Paul and vice president of Power Corp, André Desmarais considered the late David Rockefeller Sr. a mentor. He met David, who was the steward of the Rockefeller family fortune and managing director of the Chase Manhattan Bank, when he was 26 and they worked together through several boards, including the Chase Manhattan International Advisory Board.

Andre told Insider he’s traveled around the world with David. who introduced him to Henry Kissinger, George Shultz and several other top world leaders in the world over the years. He taught her the importance of being enthusiastic and having an active approach to her business, as well as humility.

“My brother and I both enjoy doing business with people who share our values,” said Andre, who joins the Rockefeller board of directors which includes two Rockefeller heirs. “My history with David and David Jr. and our shared family values ​​were important to all of us, but the deal also had to mean something.”

Head of André Desmarais dressed in a black suit, white shirt and cobalt blue tie.

André Desmarais joins the board of directors of Rockefeller Capital Management.

Courtesy of Rockefeller Capital Management

The Desmarais family worked with Rockefeller on big deals

Rockefeller chief executive Fleming also has a two-decade relationship with the Desmarais clan.

When he was president of Merrill Lynch, André’s brother, Paul Desmarais Jr., served on the wealth manager’s international advisory board.

Fleming became a business adviser to the Desmarais family after leaving Morgan Stanley in 2016, which he joined shortly after guiding Merill Lynch through its sale to Bank of America during the Great Financial Crisis. He got to know Andre and Power Corp. CEO Jeffrey Orr when he served on the boards of a few of the conglomerate’s companies, including US asset manager Putnam Investments and brokerage online WealthSimple.

The Desmarais family is another family with a long-term strategic vision “thinking about the arc of the horizon,” Fleming told Insider.

The Desmarais family has worked with Rockefeller for several years. The wealth management firm’s strategic advisory arm has advised on three multi-billion dollar acquisitions for Empower, a subsidiary of Power Corp., the most recent being a $2.35 billion deal for Mass Mutual in January 2021 Last May, Rockefeller partnered with Empower for a joint retirement plan offer for employers.

The Desmarais family approached Fleming and Viking Global. Rockefeller has previously turned down outside investment, including from other wealthy families, Fleming said, but echoed Andre’s statement that the two families have “shared values.”

Fleming aims to double Rockefeller’s assets with new funding

Power Corp.’s investment was made through subsidiary IGM Financial, a financial advisor and asset manager for Canada’s middle class and affluent mass.

There are currently no plans for IGM Financial or Rockefeller to collaborate or expand into each other’s markets, according to James O’Sullivan, President and CEO of IGM Financial,

“It wasn’t about synergies,” O’Sullivan said. “It was first and foremost an opportunity to enter the US market strategically and cautiously.”

The investment will fuel Rockefeller’s growth plans in the United States. The company currently spans 44 offices across the United States. Fleming has his sights set on other markets, including Orlando, Fla., and Charlotte, North Carolina, with an end goal of around 50.

Fleming aims to double assets under management to around $200 billion and double its number of wealth management teams to 200 over the next three to five years.

Recent economic volatility has not slowed the talks, Sullivan said.

“It’s not a job,” he said. “He’s a keeper.”

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