Paul Desmarais & Sagard Acquire Stake In Performance Equity Management
In a significant move in the world of asset management, Sagard, a global multi-strategy alternative asset management firm, has announced the acquisition of a strategic stake in Performance Equity Management (PEM), a prominent private equity firm. This acquisition marks a substantial expansion in Sagard’s investment capabilities, particularly in the area of private equity funds of funds, secondary, and co-investment platforms.
PEM, with over $8.9 billion in assets under management, has established itself as a leader in venture capital and private equity strategies, offering a range of investment services through both commingled funds and Separately Managed Accounts (SMAs). With this new partnership, PEM brings two decades of successful investment experience to the table, complementing Sagard’s rapidly growing alternative investment offerings and its extensive global network.
John Clark, President of PEM, expressed enthusiasm about the partnership with Sagard. He highlighted Sagard’s impressive growth and global network as key factors in PEM’s decision to enter this agreement. Clark is confident that the partnership will yield significant strategic benefits while allowing PEM’s investment team to continue their record of strong performance.
Paul Desmarais III, Chairman & CEO of Sagard(pictured above), commented on the acquisition, noting PEM’s outstanding investment track record and established relationships in the industry. Furthermore, Desmarais emphasized the potential for leveraging their combined capabilities to scale PEM’s existing business and explore new strategic avenues.
“PEM has an impressive investment track record, high-quality team, and trusted long-term GP relationships. We look forward to leveraging our complementary capabilities to scale PEM’s existing business and to enter adjacent strategies. Our acquisition of a strategic stake in PEM will enable Sagard to accelerate the development of its product offering to retail networks, wealth management firms, and family offices.”
The agreement between Sagard and PEM also outlines a plan for Sagard to potentially acquire the remaining equity in PEM by December 31, 2028. This move is in line with Sagard’s strategy to expand its suite of alternative investment products and provide its investors with access to top-performing managers.
The senior management team at PEM will continue to lead the firm, ensuring the continuity of its successful investment strategy and the management of its current fund programs. This partnership is expected to enhance PEM’s operational capabilities and facilitate the expansion of its client base, which includes institutional clients and wealth management platforms.
This transaction, anticipated to close in the first quarter of 2024, subject to regulatory approvals, will be financed with Sagard’s cash reserves. Furthermore, represents a significant milestone in Sagard’s journey to become a leading global alternative investment management firm. By adding fund of funds and co-investment capabilities to its portfolio, Sagard is positioning itself to offer a more comprehensive range of alternative investment options to its clients.
Lastly, the acquisition is a testament to the evolving landscape of the asset management industry, where strategic collaborations are becoming increasingly important for firms looking to diversify and strengthen their investment offerings in a competitive market.
Paul’s family, the Desmarais family is a prominent Canadian family, well-known for their substantial influence in the business and political spheres of Canada. Most notably associated with Power Corporation of Canada. Moreover, a diversified international management and holding company with interests in a variety of industries including financial services, asset management, sustainable and renewable energy, and communications.
