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UBS Asset Management, Chicago, will acquire institutional asset management company RT Capital, Toronto, for $230 million, or 1.2% of its $20 billion net value by Sept. 30, 2001, pending regulatory approvals.
Last year, acquirers paid between 0.8% and 2.5% of a institutional investment firms' assets in Canada. Companies that ran mutual funds garnered higher prices, between 4.5% and 9.5%. Industry sources said that UBS Asset is purchasing RT Capital for a bargain.
RT Capital isn't getting a shabby deal either. Recently, Canadian pension funds raised their foreign content limits to 30% from 20%. Plan sponsors and investors alike are now requiring managers to provide a cornucopia of U.S. and global investment capabilities. UBS Asset clearly has the leverage and resources to provide RT Capital's clients with the type of diversity they require, a spokesperson for the company said.
The Royal Bank of Canada put RT Capital on the auction block...