Wiki source code of Power Corporation of Canada

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4
5 = Summary =
6
7 * Power Corporation of Canada is holding company that focuses on financial services in North America, Europe and Asia.
8 * The company core holdings are leading insurance, retirement, wealth management and investment businesses, including a portfolio of alternative asset investment platforms.
9 * It's main companies include Power Financial, Great-West Lifeco, IGM Financial, Groupe Bruxelles Lambert.
10
11 [[image:POW0.jpg||height="306" width="720"]]
12
13
14 = Company Overview =
15
16 Incorporated in 1925, Power Corporation ([[TSX:POW>>https://fintel.io/s/ca/pow]]) is an international management and holding company that focuses on financial services in North America, Europe and Asia. Its core holdings are leading insurance, retirement, wealth management and investment businesses, including a portfolio of alternative asset investment platforms.{{footnote}}https://www.powercorporation.com/en/about/profile-and-mission/{{/footnote}}
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18
19 [[image:POW1.png]]
20
21
22 == Company History ==
23
24 On April 18, 1925, Power Corporation of Canada came into being.{{footnote}}https://www.powercorporationhistory.com/en/{{/footnote}}
25
26
27 |1925-1950|Power Corporation of Canada was founded on April 18, 1925, by A.J. Nesbitt and P.A. Thomson, principal partners in the Montréal investment firm Nesbitt, Thomson and Company.
28 |1951-1967|(((
29 During the 1950s, Power Corporation continued to take minority positions in power companies across Canada. Most importantly, it bought shares in Shawinigan Water and Power Company, one of the largest privately owned hydroelectric producers in the world, with massive installations in Québec. Meanwhile, its successful engineering and construction divisions were engaged in designing and building innovative power projects from British Columbia to Newfoundland.
30
31 The 1960s brought dramatic change. It was forced on Power Corporation when governments in Canada’s provinces, including Québec, pushed ahead to nationalize the hydroelectric industry as an essential public service. Between 1962 and 1964, in fact, more than 80 per cent of the value of the Corporation’s portfolio was liquidated.
32 )))
33 |1968-1980|Early in 1968, the leadership of Power Corporation passed from the sons of the founding shareholders to financier Paul Desmarais. His strategy was to increase Power Corporation’s cash flow; to consolidate its holdings into control positions in a limited number of large, diversified, long-term holdings; and to concentrate on improving their performance. By 1971, two thirds of the Corporation’s assets were in operating subsidiaries controlled by Power, as opposed to less than 40 per cent in 1968.
34 |1981-1989|(((
35 The early 1980s proved a challenging period for Canadian business. Inflation returned, interest rates soared toward 20 per cent, and the prospects for economic recovery were far from certain. Despite its solid earnings and profits, Power Corporation decided it would be prudent to restructure its capital base and lower its long-term debt.
36
37 In April 1984, to create an integrated financial services group, Power transferred its holdings in Great-West Life, Investors Group, and Montreal Trust to a new subsidiary, Power Financial Corporation, which went public a year later. Another series of transactions in 1984 and 1985 resulted in the complete elimination of Power’s long-term debt.
38 )))
39 |1990-2000|(((
40 Power Corporation entered the 1990s with a solid cash position and was debt-free. It maintained its prudent approach, especially in the face of unsettled economic conditions.
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42
43 The Corporation continued to build upon the investment it had made in 1981 in Pargesa Holding SA, a Swiss firm, when Pargesa acquired the non-French assets of Compagnie Financière de Paris et des Pays-Bas (commonly known as Paribas).
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45
46 At the same time, Great-West Life’s wholly owned subsidiary Great-West Life & Annuity Insurance Company emerged as a U.S. leader in employee benefits and retirement products. In Canada, meanwhile, Great-West Life and Investors Group became the largest companies in the Canadian domestic life and health insurance and mutual fund distribution industries, respectively.
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49 The company also expanded its investments in communications and worked at solidifying the special, ongoing relationship with China that had begun in the late 1970s.
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51
52 )))
53 |2001-Present|(((
54 The next fifteen years marked a period of continued strong earnings. It also saw one of the most tumultuous economic times in many decades, including the sudden financial crisis that rocked the global economy in 2008, a crisis the Corporation and its group companies weathered better than most of their peers.
55
56 In 2001, Investors Group Inc. (subsequently renamed IGM Financial Inc.)
57
58 In 2007, Great-West Lifeco acquired Putnam Investments, a world-class mutual fund brand based in Boston, for $4.6 billion.
59 )))
60
61 [[image:POW2.png]]
62
63 {{putFootnotes/}}
64
65 = Companies =
66
67 == Power Financial Corporation ==
68
69 Power Financial Corporation, a wholly owned subsidiary of Power Corporation of Canada, is an international management and holding company with interests in financial services and asset management businesses in Canada, the United States and Europe. It also has significant holdings in a portfolio of global companies based in Europe.
70
71
72 === Great-West Lifeco ===
73
74 Great-West Lifeco Inc. (Lifeco) is an international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses.
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76
77 Lifeco has operations in Canada, the United States and Europe through Canada Life, Irish Life, Empower Retirement, Putnam Investments and PanAgora Asset Management.
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79
80 **Canada Life**
81
82 Founded in 1847, The Canada Life Assurance Company (Canada Life) was Canada’s first domestic life insurance company. Today, the company operates in Canada, the United States, the United Kingdom, Isle of Man and Germany, and in Ireland through Irish Life. As a diversified international financial services company, Canada Life offers a wide range of insurance and wealth management products for individuals, families and businesses. The company also provides reinsurance products and operates primarily in the U.S., Barbados, Bermuda and Ireland.
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84
85 On January 1, 2020, Great-West Life, London Life and Canada Life became one company – Canada Life. Canada Life is committed to its customers and helping build stronger communities across the regions where it operates.
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87
88 **Empower Retirement**
89
90 Empower Retirement is the second-largest U.S. retirement services provider by assets and participants. It serves all segments of the employer-sponsored retirement plan market – small, mid-size and large corporate clients, government plans, non-profit entities and private-label recordkeeping clients – and offers individual retirement accounts. In 2020, Empower invested US$4.3 billion in four strategic acquisitions, including Personal Capital and the retirement business of Massachusetts Mutual Life Insurance Company.
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92
93 **Putnam Investments**
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95 Putnam Investments is a U.S.-based global asset manager, offering investment management services across a range of equity, fixed income, global asset allocation, ESG and alternative strategies, including absolute return, risk parity and hedge funds, for individuals and institutions. Putnam distributes those services largely through financial intermediaries via its offices and strategic alliances in North America, Europe and Asia.
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97
98 **PanAgora Asset Management**
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100 PanAgora Asset Management is a quantitative investment manager of distinct and innovative Equity, Multi Asset and Risk Premia strategies that are designed to address the evolving objectives of institutional investors worldwide.
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103 PanAgora builds strategies on a foundation of continuous, innovative research that integrates in‐depth fundamental insights with the breadth and discipline of sophisticated quantitative techniques.
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106 PanAgora’s process is fluid and holistic, with the flexibility required in a complex marketplace to assimilate advances in technology and address a rapidly changing investment environment.
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108
109 **Irish Life**
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111 Irish Life is one of Ireland’s leading financial services companies with over 1.3 million customers.
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114 For 80 years, Irish Life has been helping people in Ireland to look after their needs for life insurance, pensions and investments and more recently, health insurance. Its vision is to help people in Ireland to have healthier lives and to build better futures.
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117 As part of Great-West Lifeco, Irish Life has access to experience and expertise on a global scale, allowing the company to continuously enhance its leading range of products and services. This also has been independently recognized with a number of customer experience awards in recent years.
118
119
120 === IGM Financial ===
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122 IGM Financial is a leading wealth and asset management company supporting financial advisors and the clients they serve in Canada, and institutional investors throughout North America, Europe and Asia. Through its operating companies, IGM provides a broad range of financial planning and investment management services to help Canadians meet their financial goals at every stage of their lives.
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124
125 **IG Wealth Management**
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127 IG Wealth Management is a national leader in providing personalized financial solutions delivered through long-term client and advisor relationships to approximately one million individuals, families and business owners in Canada.
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129
130 **Mackenzie Investments**
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132 Mackenzie Investments is an investment management firm providing services through multiple product offerings utilizing proprietary investment research and experienced investment professionals. Mackenzie Investments distributes its products and services primarily through multiple distribution channels to both retail and institutional investors.
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134
135 **Investment Planning Counsel**
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137 Investment Planning Counsel is an integrated financial services company focused on providing Canadians with high-quality financial products, services and advice through its network of approximately 730 independent financial advisors.
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139
140 [[image:POW3.jpg]]
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142
143 === Groupe Bruxelles Lambert ===
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145 GBL is a leading investor in Europe, focused on long-term value creation and relying on a stable and supportive family shareholder base. GBL strives to maintain a diversified high-quality portfolio composed of global companies, leaders in their sector, in which it can contribute to value creation by being an active professional investor.
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148 Power Financial Europe SA, a wholly owned subsidiary of Power Financial, and the Frère Group each hold a 50% interest in Parjointco SA, a Belgium-based company. Parjointco holds a 43.2% voting interest in GBL.
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150
151 === Alternative Asset Investment Platforms ===
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153 Power Corporation, through its alternative asset investment platforms (investment platforms), is developing alternative asset management businesses which build upon the investment capabilities that have been created over many years in several high-growth asset classes. The investment platforms are focused on growing their asset management businesses through raising third-party capital and the Corporation intends to provide seed capital to the different investment products managed by each of the investment platforms.
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155
156 **Sagard**
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158 Sagard was founded in 2005 as a complement to the Corporation’s global investment activities. Today, Sagard is a multi-strategy alternative asset manager with professionals principally located in Canada, the U.S. and Europe.
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161 Sagard seeks to generate attractive returns by matching investment opportunities with flexible capital solutions and pairing entrepreneurs with teams that have deep industry knowledge. Sagard develops long-term partnerships and empowers the growth of its investments through a unique global network of portfolio companies, limited partners, advisors and other valued relationships.
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164 Sagard invests across five asset classes: private credit, healthcare royalties, venture capital, private equity and real estate, and also offers wealth management services.
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166
167 **Power Sustainable**
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169 Power Sustainable is a global multi-platform alternative asset manager with a long-term investment approach focused on sustainable strategies. It has offices in Montréal, Toronto, Shanghai, Beijing and New Jersey.
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172 Power Sustainable is comprised of two platforms: the Pacific platform invests in the China equity markets, seeking high-quality, sustainable business models with a fundamentals-based, research-driven investment process; and the Energy Infrastructure platform invests in the development, construction, and operations of renewable energy infrastructure assets in North America.
173
174
175 === Fintech Investments ===
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177 In partnership with its subsidiaries Great-West Lifeco and IGM Financial, Power Corporation has been actively participating in the emerging fintech industry. The group believes that fintech will change business models in financial services, making financial advice, insurance and investment services more accessible to consumers and available to them by the means and at the times that best suit them.
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179
180 === China AMC ===
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182 Power Corporation’s multi-generational relationships have been foundational in creating investment opportunities in China, such as through its investment in China Asset Management Co., Ltd. (China AMC), one of the largest asset managers in China.
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184
185 Founded in 1998 as one of the first fund management companies in China, China AMC has developed and maintained its position among the market leaders in China’s asset management industry. China AMC diversifies Power Corporation’s interests creating strategic opportunities with other asset managers within the Power group of companies.
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188 The investment in China AMC provides the potential to leverage the group’s global experience in wealth management and distribution. The Power group of companies benefit from the strategic relationship with China AMC which provides opportunities to work together on developing products and subadvisory relationships.
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191 Power Corporation and IGM Financial each hold interests of 13.9% in China AMC, representing a combined 27.8% interest.
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193
194 [[image:POW4.jpg]]
195
196
197 == Recent Acquisitions ==
198
199
200 **Acquisition of MassMutual retirement services business**
201
202 On December 31, 2020 Great-West Life & Annuity completed the purchase, via indemnity reinsurance, of the retirement services business of Massachusetts Mutual Life Insurance Company (MassMutual). Lifeco assumed the economics and risks associated with the reinsured business. The acquisition strengthens Lifeco’s position as a leader in the U.S. retirement market.{{footnote}}https://www.powercorporation.com/media/uploads/reports/annual/power_corporation_-_2021_annual_report-final.pdf{{/footnote}}
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205 Lifeco paid a ceding commission of $2,937 million (US$2,312 million) net of working capital adjustments to MassMutual, and funded the transaction with existing cash, short-term debt and $1,973 million (US$1,500 million) in long-term debt issued on September 17, 2020.
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207 During the year ended December 31, 2021, MassMutual contributed revenue of $2,861  million (US$2,262  million) and net earnings of $199  million (US$158 million). These amounts are included in the statements of earnings and comprehensive income for the year ended December 31, 2021.
208
209
210 **Acquisition of Personal Capital Corporation**
211
212 On August 17, 2020, Great-West Life & Annuity completed the acquisition of 100% of the equity of Personal Capital, including the 24.8% interest held by IGM prior to the completion of the transaction (approximately 21.7% after giving effect to the dilution). Upon completion of the purchase price allocation in the fourth quarter of 2020, a contingent consideration earn-out provision of $22 million was recognized, representing Lifeco’s best estimate of growth in assets under management metrics defined in the Merger Agreement. The contingent consideration provision was increased by $87 million in 2021 for a total contingent consideration provision of $109 million at December 31, 2021. The increases in 2021 were due to growth in net new assets above the amount assumed at the date of acquisition.
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214
215 The Merger Agreement allows for contingent consideration of up to $222 million (US$175 million) based on the achievement of growth in assets under management metrics, payable following measurements through December 31, 2021 and December 31, 2022. Changes in the fair value of the contingent consideration measured in accordance with the Merger Agreement subsequent to the completion of the purchase price allocation are recognized in operating and administrative expenses in the statements of earnings.
216
217
218 **Acquisition of Prudential retirement services business**
219
220 On July 21, 2021, Great-West Life & Annuity announced that it had entered into an agreement to purchase, through a share purchase and a reinsurance transaction, the full-service retirement business of Prudential Financial, Inc. The acquisition further solidifies Lifeco’s position as a leader in the U.S. retirement market. Lifeco will assume the economics and risks associated with the business, while Prudential will continue to retain the obligation to the contract holders of the reinsured portion. Lifeco will pay a total transaction value of approximately US$3,550 million and will fund the transaction with $1,500 million (US$1,193 million) of limited recourse capital notes (Note 20) and up to US$1,000 million of short-term debt, in addition to its existing resources. The transaction is expected to close in the first half of 2022, subject to regulatory and customary closing conditions. During the year ended December 31, 2021, Lifeco incurred transaction expenses of $9 million (US$7 million) which are included within operating and administrative expenses in the statements of earnings.
221
222
223 **Acquisition of Ark Life Assurance Company**
224
225 On November 1, 2021, Irish Life completed the acquisition of Ark Life Assurance Company dac (Ark Life) from Phoenix Group Holdings plc for total cash consideration of $332 million (€230 million). Ark Life is closed to new business and manages a range of pensions, savings and protection policies for its customers in the Irish market.
226
227
228 **Acquisition of ClaimSecure Inc.**
229
230 On September 1, 2021, Canada Life completed the acquisition of 100% of the equity of ClaimSecure Inc., a healthcare management firm that provides health and dental claim management services to private and public businesses in Canada.
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232
233 [[image:POW5.jpg]]
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235
236 = Financial Highlights =
237
238 **First Quarter 2022 Financial Results**
239
240 May 11, 2022; Power Corporation of Canada reported earnings results for the three months ended March 31, 2022.{{footnote}}https://www.powercorporation.com/en/news/press-releases/2022/power-corporation-reports-first-quarter-2022-financial-results-122633/{{/footnote}}
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243 Net earnings attributable to participating shareholders were $478 million or $0.71 per share, compared with $556 million or $0.82 per share in 2021.
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245
246 Adjusted net earnings attributable to participating shareholders were $515 million or $0.76 per share, compared with $786 million or $1.16 per share in 2021.
247
248
249 **Power Corporation**
250
251 The Corporation reported net earnings of $478 million or $0.71 per share for the first quarter of 2022, compared with $556 million or $0.82 per share in 2021. Adjusted net earnings were $515 million or $0.76 per share, compared with $786 million or $1.16 per share in 2021.
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254 Adjusted net asset value per share was $49.92 at March 31, 2022, compared with $52.60 at December 31, 2021. The Corporation's book value per participating share was $33.32 at March 31, 2022, compared with $34.56 at December 31, 2021.
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257 In 2022, the Corporation purchased for cancellation 7,192,900 subordinate voting shares for a total of $280 million under its normal course issuer bids.
258
259
260 **Great-West Lifeco Inc. (Lifeco)**
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262 First quarter adjusted net earnings were $809 million, up 9% compared with the first quarter of 2021.
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265 Total assets were $600 billion and assets under administration were $2.2 trillion at March 31, 2022, compared with total assets of $630 billion and assets under administration of $2.3 trillion at December 31, 2021.
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268 On April 1, 2022, Empower, a subsidiary of Lifeco, completed the acquisition of the full-service retirement services business of Prudential Financial, Inc. (Prudential). Empower's reach in the U.S. is now expanded to more than 17.1 million retirement plan participants and assets under administration to US$1.4 trillion.
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271 Canada Life was rated as the fourth most valued brand in Canada by Brand Finance, making Canada Life the first insurance company ever to jump into its top five most valuable brands in Canada.
272
273
274 **IGM Financial Inc. (IGM)**
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277 Record-high first quarter net earnings of $219.3 million, up 8% from the first quarter of 2021.
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280 Record-high first quarter assets under management and advisement of $268.3 billion, up 8% from the first quarter of 2021 and down 3% from December 31, 2021.
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283 Record-high first quarter net inflows of $2.5 billion, compared with net inflows of $2.3 billion in the first quarter of 2021.
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285
286 **Groupe Bruxelles Lambert (GBL)**
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288 GBL reported a net asset value of €21.3 billion, representing €136.10 per share, compared with €22.5 billion or €143.91 per share at December 31, 2021.
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291 In the first quarter of 2022, GBL completed €202 million of share buybacks. GBL's board of directors approved an additional buyback envelope of €500 million on May 5, 2022.
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294 GBL announced two strategic investments in the healthcare sector with majority shareholdings in private companies Affidea Group B.V. and Sanoptis AG, leaders in their sector, in April 2022.
295
296
297 **Sagard Holdings Inc. (Sagard) and Power Sustainable Capital Inc. (Power Sustainable)**
298
299 Assets under management including unfunded commitments, of the alternative asset investment platforms were $19 billion, up from $11 billion at March 31, 2021.
300
301
302 On March 30, 2022, Power Sustainable announced the launch of its North American agri-food private equity platform, Power Sustainable Lios, and its inaugural Lios Fund I. Power Sustainable Lios is a specialized agri-food private equity investment platform supporting the sustainability transformation occurring within the food system.
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305 Lifeco: contribution to net earnings increased by 8.5% and contribution to adjusted net earnings increased by 9.1%.
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308 IGM: contribution to net and adjusted net earnings increased by 8.0%.
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311 GBL: negative contribution to net earnings of $29 million. Results include the Corporation's share of a charge of $44 million in the first quarter of 2022 for losses due to an increase in the put right liability of the non-controlling interests in Webhelp Group (Webhelp) and charges related to Webhelp's employee incentive plan.
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314 Alternative asset investment platforms: net earnings include a negative contribution of $92 million from Power Sustainable mainly related to realized losses and impairments in the Power Sustainable China portfolio of $67 million and a $10 million impairment charge in its energy infrastructure platform.
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317 Standalone businesses: contribution to net and adjusted net earnings of $4 million.
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320 Corporate operations and Other: the comparative period includes an income tax expense of $38 million, primarily related to the deferred tax expense resulting from the realization of gains recorded in earnings on the sale of investments.
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323 Adjustments in the first quarter of 2022, excluded from adjusted net earnings, were a net negative impact to earnings of $37 million or $0.05 per share, mainly related to the Corporation's share of Lifeco's adjustments and the Corporation's share of an impairment charge of $10 million recognized by Power Sustainable on direct investments in energy assets. Adjustments in the first quarter of 2021 were a negative net impact to earnings of $230 million or $0.34 per share, mainly related to the Corporation's share of the charge arising from the remeasurement of the put right liability of certain of the non-controlling interests in Wealthsimple Financial Corp. (Wealthsimple) to fair value of $208 million. These were reflected in the Adjustments of the alternative and other investments and in the Effect of consolidation based on Lifeco's and IGM's respective interest.
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325
326 = References =
327
328 {{putFootnotes/}}
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