BMO [profile] is buying another asset manager, this time shelling out $1.2 billion for a British shop. Perhaps the new acquisition's expertise will be put to work for American mutual fund investors, among others.

The Canadian bank entered the U.S. asset management, mutual fund and retirement plan business in 2008 thanks to its purchase of Milwaukee-based M&I. Now BMO is buying F&C, a London-based asset manager. The $1.2-billion deal will expand the Toronto-based bank's wealth management division. Over the past 7 years, BMO has successfully acquired London-based Pyrford International and Hong Kong-based Lloyd George Management, which had an office in the U.K.

The Canadian market has been dominated by a few domestic financial services who face pressure to grow outside of the mature Canadian market. BMO's CEO William Downe believes that the acquisition will "support the accelerating expansion of our wealth business, and it further strengthens its our competitive position in the market" despite the 150-year-old F&C's assets shrank last year due to its institutional clients pulled funds.

Robert Sedran, world markets analyst at CIBC, however, thinks the Canadian bank is "betting F&C can grow its retail and institutional investment arm as it deals with declining revenue from so-called legacy relationships." 

Edited by: Amy Xie


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