{"id":772457,"date":"2026-09-16T11:40:12","date_gmt":"2026-09-16T11:40:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/772457\/"},"modified":"2026-09-16T11:40:12","modified_gmt":"2026-09-16T11:40:12","slug":"considering-a-management-buyout-of-your-wealth-firm-here-are-the-key-issues-to-weigh","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/772457\/","title":{"rendered":"Considering a management buyout of your wealth firm? Here are the key issues to weigh"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Management buyouts are becoming a more popular choice in Canada\u2019s wealth management industry.Dilok Klaisataporn\/iStockPhoto \/ Getty Images<\/p>\n

Many founders of independent wealth management firms find that the ideal buyer is someone already working within the company.<\/p>\n

When a management team buys the firm, it helps keep client relationships, company culture and independence intact. Clients keep working with familiar faces. Employees feel more secure about the company\u2019s future. Founders can step back, confident that those who helped build the business will carry it forward.<\/p>\n

That\u2019s why management buyouts, or MBOs, are becoming a more popular choice in Canada\u2019s wealth management industry.<\/p>\n

However, financing an MBO can be challenging because there\u2019s often a gap between the firm\u2019s value and what the management team can afford.<\/p>\n

According to proprietary data from Fort Capital Partners, Canadian wealth management firms often sell for nine to 11 times EBITDA (earnings before interest, taxes, depreciation and amortization), but lenders rarely finance more than three times EBITDA.<\/p>\n

Most teams don\u2019t have sufficient personal funds to cover this gap, so the options are lowering the price, management equity, seller financing, or outside investment. Each option has its pros and cons.<\/p>\n

If the seller agrees to a lower price, they may get less than what an outside buyer would pay. If the seller provides a loan, they remain financially tied to a business they no longer control. Outside investors can help with funding, but they may want more say in how the business is managed and expect certain returns or a planned exit.<\/p>\n

Taking on debt brings its own risks. Many independent wealth management firms haven\u2019t borrowed much in the past; after an MBO, the business may suddenly face large monthly loan payments. <\/p>\n

As revenue depends on assets under management (AUM), a market downturn can threaten debt repayment. And larger firms require more capital, sometimes beyond the capacity of traditional lenders unless other long-term funding is found.<\/p>\n

Recent Canadian deals show internal ownership changes in firms of varying sizes.<\/p>\n

At the larger end, a group of employees led by the management team of Montreal-based Montrusco Bolton Investments Inc. acquired majority control of the firm at the end of 2025. Private equity firm Walter Global Asset Management Inc., also based in Montreal, became a minority shareholder, while Affiliated Managers Group, Inc., and the Fonds de solidarit\u00e9 FTQ sold their interests. (Montrusco Bolton managed approximately $17.7-billion in AUM as of Dec. 31, 2025.)<\/p>\n

This deal shows how outside investors can supply capital while management and employees retain majority ownership.<\/p>\n

At a different point on the size spectrum, Edmonton-based Qube Investment Management Inc. (which disclosed in 2024 that it had surpassed $300-million in AUM) announced last month that it completed a management buyout<\/a> supported by Care Lending Group. <\/p>\n

Both cases highlight the challenge of transferring ownership to insiders when firm value exceeds what management can personally contribute.<\/p>\n

Owners and management teams should take these steps before negotiating an MBO:<\/p>\n

Establish what the business is worth. Registered firms are specialized businesses and valuation requires an understanding of recurring revenue, client concentration, advisor economics, registration structure and the prices strategic and financial buyers are prepared to pay.Determine whether an MBO works operationally, not just financially. Who will lead the firm after closing? How long will the founder(s) remain involved? How will key client relationships be transitioned? Registered firms also need continuity for regulated functions such as the ultimate designated person and chief compliance officer, which may require additional experience, training or qualifications within the next generation of leadership.Test the capital structure and the universe of potential partners before agreeing on price and payment terms.<\/p>\n

A broad range of capital providers can support these transactions, including specialized lenders, private equity firms, family offices and investors focused specifically on wealth and asset management. The Montrusco Bolton and Qube transactions illustrate two different approaches: outside equity and debt financing, respectively.<\/p>\n

But finding funding is just one step. <\/p>\n

An MBO only succeeds if the next generation takes over a strong business that\u2019s not burdened by debt. The real challenge is not finding managers who want to own the firm, but putting together the right mix of capital partners to make it happen.<\/p>\n

Joe Millott is a partner at Fort Capital Partners, an independent investment bank that specializes in wealth and asset management mergers and acquisitions, with offices in Vancouver, Calgary and Toronto.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Management buyouts are becoming a more popular choice in Canada\u2019s wealth management industry.Dilok…\n","protected":false},"author":2,"featured_media":772458,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[14370,84,4176,39721,14367,4174,4175,56,54,55],"class_list":["post-772457","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-appwebview","tag-business","tag-finance","tag-globe-advisor","tag-noastack","tag-personal-finance","tag-personalfinance","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/772457","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=772457"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/772457\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/772458"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=772457"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=772457"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=772457"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}