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Saturday, May 18, 2024

Canadian firm buying Sterling Capital from Truist

Truist Financial is selling its Sterling Capital management unit to Guardian Capital Group, a Toronto-based investment firm.

Guardian will pay “$70 million on closing to purchase 100% of the equity capital of Sterling, subject to customary purchase price adjustments, and future earn-out incentives,” according to a release.

Charlotte-based Sterling was formed in the early 1970s by Olin Nisbet III, a Davidson College graduate and Harvard MBA who previously worked at Interstate Securities in Charlotte. BB&T, a predecessor to Truist, bought a 70% stake in Sterling in 2005, when the company had about $8 billion of assets under management.

Sterling now has about $76 billion under management and advisement for institutional and individual investors. Guardian Capital managed about $42 billion of client assets as of Sept. 30, along with a proprietary portfolio of $1 billion. The company trades on the Toronto Stock Exchange with a market value of more than $1.1 billion.

Charlotte-based Truist has reorganized its operational structure and announced plans to cut $750 million in costs and make “sizable reductions” to its workforce. The company was formed through the 2019 merger of BB&T and SunTrust Banks. To boost capital, Truist sold 20% of its insurance subsidiary to private-equity firm Stone Point Capital for $1.95 billion last year and is in talks to sell the balance for at least $10 billion, according to media reports.

Guardian CEO George Mavroudis said Sterling is the third U.S. investment firm acquired by the business, which was founded in Canada in 1962. The other firms are located in Salt Lake City, Utah and Richmond, Virginia. He has been CEO for 13 years and is only the third CEO in company history.

“We’ve always been independently owned,” Mavroudis said. “We’re steeped in the industry and we understand asset management, so the cultural fit with Sterling is really good.”

Sterling CEO Scott Haenni said the deal “allows Sterling Capital to grow as an independently-managed investment management firm poised for continued long-term growth under Guardian’s strategic oversight, while continuing to partner with Truist on shared relationships and opportunities.”

Pending an expected closing by June 30, Guardian said it will operate Sterling as a standalone entity with existing management. “The brands of the companies we have acquired have more value in the local markets than our name,” Mavroudis said.

 

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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