A private equity firm and a Canadian entrepreneur have bought Glass Lewis from the Ontario Teachers’ Pension Plan Board (OTPP) and Alberta Investment Management Corporation (AIMCO).
Peloton Capital Management and Stephen Smith have acquired the US-based proxy advisor and research company for an undisclosed sum.
OTPP bought Glass Lewis from China’s Xinhua Finance in 2007 and sold a 20% stake to AIMCO six years later – the terms of both deals were kept under wraps. Since then, stewardship has risen up the agenda and Glass Lewis has become one of the most influential proxy advisors in the world, telling more than 1,200 institutional investors how to vote at AGMs. It describes its client base as including “the majority of the world’s largest pension plans, mutual funds, and asset managers who collectively manage over $40tn in assets”.
It said the latest deal would enable it to expand to new markets and develop new products.
The move mirrors a similar private equity play at ISS, Glass Lewis’ main rival in the proxy advisory space. ISS has been acquired by a number of buyers since it was first sold in 2001. Owners have included Warburg Pincus, Hermes Investment Management, MSCI and Vestar. Last year, private equity firm Genstar sold ISS to Deutsche Börse in a deal which saw it more than double its money in just over three years, reflecting the growing demand for ESG and stewardship businesses.
“Capital markets participants have become increasingly focused on environmental, social, and governance factors as they build their business strategies. Glass Lewis is very well positioned to provide solutions to address the global demands generated by this shift,” said Smith in a statement.
Smith is best known for being Chairman, CEO and co-founder of Canadian mortgage lender First National Financial Corporation. He is also Chairman and co-owner of both Canada Guaranty Mortgage Insurance Company and Duo Bank of Canada; and is the largest shareholder in Equitable Bank. According to Forbes, his net worth is estimated to be $2.7bn.
In 2018, Smith teamed up with two OTPP veterans, Steve Faraone and Mike Murray, to set up Peloton. Faroane and Murray are both ex- Managing Directors at the pension fund, specialising in private equity deals in healthcare, consumer goods and financial services transactions. Smith reportedly committed $150m to the Peloton at the time, and is currently its Chairman.
So far, Peloton’s investments include Fertility Partners, P3 Veterinary Partners and 123 Dentist. In December, it became a signatory to the Principles for Responsible Investment.