Bank of Montreal says F&C acquisition gives it greater scale in fast growing areas like SRI

Canadian giant in deal for venerable asset manager

The Bank of Montreal says its planned acquisition of UK-listed fund management firm F&C for around £708m (€856m) will give it greater scale in terms of faster growing segments such as socially responsible investing (SRI).

The deal, officially announced today, “improves prospects for winning mandates in the faster growing market segments including multi-asset, LDI [liability driven investing] and socially responsible investment products,” the Canadian giant says.

F&C will become part of Bank of Montreal’s Global Asset Management business. The group also operates a set of investment boutiques: Monegy; Taplin, Canida & Habacht: Pyrford International; and Lloyd George Management.

The latter is the Asian and ‘frontier’ markets specialist whose UK arm has been a signatory to the Principles for Responsible Investment (PRI) since 2008 and which is a signatory to the Stewardship Code.Lloyd George has an ESG policy in place and also incorporates an ESG screening matrix into its investment process. The firm was a founding member of the Association for Sustainable and Responsible Investment in Asia (ASrIA) and the Asian Corporate Governance Association (ACGA).

BMO notes in a presentation for investors about the transaction that F&C has 30 years of experience in SRI.

Socially responsible investment – along with fundamental fixed income, fundamental equities, quantitative equities, LDI, real estate and multi-asset solutions – is seen as an area where F&C can enhance BMO’s existing offering.

An F&C spokesperson told Responsible Investor that F&C’s engagement and proxy voting service for asset owner clients – Responsible Engagement Overlay (REO) – had not come up yet in discussions between the two companies, and it wasn’t brought up on a call for analysts this afternoon. It was “business as usual,” for REO, the person said.