Vancouver-based Harbourfront Wealth Management has acquired Calgary-based Cornerstone Investment Counsel Ltd. Cornerstone is an independent portfolio management firm that serves about 500 high-net-worth families. “All employees from [Cornerstone] will be joining Harbourfront,” said Danny Popescu, founder and CEO of Harbourfront. Harbourfront’s acquisition of Cornerstone adds a “material amount” to Harbourfront’s assets under administration (AUA) and revenue, the firm in a release Thursday. Popescu declined to share Cornerstone’s or Harbourfront’s AUA. As Cornerstone’s portfolio management registration differs from Harbourfront’s investment dealer registration, Cornerstone will operate as a standalone firm, Popescu said. However, Cornerstone will share Harbourfront TechHub, Harbourfront’s back-office technology platform. Further, Cornerstone’s clients will be able to participate in Harbourfront’s private securities access vehicles. “We expect our clients will see significant benefits from joining Harbourfront,” Gary Cooper, founding partner of Cornerstone, said in the release. The acquisition “was funded purely through through excess cash flow,” Popescu said. He expects the acquisition to increase Harbourfront’s enterprise value by 8% to 10%, and anticipates achieving $10 billion in assets by the end of the year. Harbourfront had $4 billion in AUA and $1.7 billion in assets under management as of May 30, 2022, which was shortly before Boston-based Audax Private Equity invested in the wealth management company. Audax valued the wealth manager at $425 million, making Harbourfront worth roughly 10% of AUA. Harbourfront has one more acquisition planned for the coming months, and Popescu said others are at various stages of discussion. “We’re hoping for another 25% growth in our enterprise value by the end of 2024 with the other acquisition that we have in the pipeline, as well as our recruiting initiatives.” Popescu has clear criteria for those acquisitions. “We’re not going to buy entities or bring over advisors just because they have assets — that is our differentiator,” Popescu said, explaining that an acquisition must be profitable to be considered. “This speaks to our ongoing commitments to building a profitable firm and looking at profitability as a priority over assets under administration.”
