Power Financial

Power Financial is a Canadian financial-services holding company established in 1984 as part of the Power Corporation of Canada group. Its principal purpose has been to own and develop substantial interests in financial institutions rather than to operate as a consumer-facing product brand. The company has historically held controlling or significant positions in businesses serving insurance, retirement savings, investment management, wealth management and other financial-services markets. Its core Canadian exposure has centered on Great-West Lifeco and IGM Financial. Great-West Lifeco is an insurance and financial-services group with businesses spanning life and health insurance, retirement and investment services, and related employee-benefit activities. IGM Financial is associated with investment management, financial planning and wealth-management businesses. Through these holdings, Power Financial has participated in the Canadian financial-services sector at an institutional level, with exposure to both insurance and investment distribution. Power Financial has also had international exposure. Through its investment in Pargesa, it held interests in a portfolio of European-based global companies. The group’s broader financial interests have included businesses connected with Canada Life, Great-West Life, London Life, Mackenzie Financial, Putnam Investments and other investment and insurance operations, although the precise ownership structure and portfolio have changed over time. Power Financial’s role has therefore been that of a long-term holding and capital-allocation company, with value derived from the performance, governance and strategic development of its major investee businesses. The company has additionally participated in financial-technology investing. Power Financial and IGM Financial have been anchor investors, together with Great-West Lifeco, in funds managed by Portag3 Ventures, an affiliated investment platform focused on financial-services companies and funds. The referenced company material states that Portag3 Ventures had invested in more than 45 fintech companies and investment funds. Power Financial, IGM Financial and Portag3 also held interests in Wealthsimple, a Canadian digital-investing and financial-services company. These activities extended the group’s exposure beyond traditional insurance and asset management into technology-enabled financial services. In December 2019, Power Corporation announced a reorganization under which each common share of Power Financial would be exchanged for 1.05 subordinate voting shares of Power Corporation plus C$0.01 in cash. The transaction was completed on February 13, 2020, making Power Corporation the holder of all Power Financial common shares. Power Financial common shares were delisted from the Toronto Stock Exchange at the close of trading on February 18, 2020. The restructuring simplified the corporate arrangement and reduced the separation between the parent company and its principal financial-services holdings. Power Financial continued as a Canadian reporting issuer, but no longer operated as a separately publicly traded vehicle. Power Financial’s historical identity is closely tied to the transformation of Power Corporation from an organization originally associated with electric-utility holdings into a diversified group with a major concentration in financial services. Its significance lies primarily in ownership, governance and investment strategy rather than in a standalone retail brand. The company is best understood as an institutional financial-services holding entity within the Power Corporation group.

Power Financial Corporation was founded in 1984 with the objective of creating an integrated financial-services group within the Power Corporation of Canada organization. Its development reflected the broader transformation of Power Corporation. Although Power Corporation had originally been established as an electric-utility holding company, it increasingly evolved into a diversified conglomerate with major interests in financial services and asset management. Power Financial’s strategy was based on building and maintaining important positions in financial institutions rather than assembling a conventional consumer brand portfolio. Its principal holdings included Great-West Lifeco and IGM Financial. Great-West Lifeco provided exposure to insurance, employee benefits, retirement services and related financial products, while IGM Financial provided exposure to investment management, financial planning and wealth management. Through these businesses, Power Financial became connected to major Canadian savings, insurance and investment markets. The group also developed international reach. Its investment in Pargesa gave it significant holdings in a portfolio of global companies based in Europe. Power Corporation’s broader financial-services interests during the 2000s included the parent company of La Presse, Mackenzie Financial, London Life Insurance, Canada Life Assurance, Great-West Life and Putnam Investments. These holdings and affiliations changed over time, but they illustrate the breadth of the group’s historical financial and investment activities. Leadership continuity was an important feature of the company. James William Burns served as the first president from 1984 to 1986, followed by Paul Desmarais Jr. from 1986 to 1989 and Robert Gratton from 1989 to 2005. R. Jeffrey Orr became president and chief executive officer in 2005. Paul Desmarais Jr. served as chairman during two periods, including the final period before the 2020 restructuring, while André Desmarais served as deputy chairman during that later period. Power Financial also became involved in the development of newer financial-services businesses. Together with IGM Financial and Great-West Lifeco, it served as an anchor investor in Portag3 Ventures, an affiliated investment platform dedicated to financial-technology companies and investment funds. The referenced company material reports that Portag3 Ventures had invested in more than 45 fintech companies and investment funds. Power Financial and related group entities also held interests in Wealthsimple, a Canadian digital-investing company. These investments gave the group a presence in the shift toward online investing and technology-enabled financial services. The decisive corporate event in Power Financial’s later history was the reorganization announced by Power Corporation on December 13, 2019. Under the proposal, each Power Financial common share would be exchanged for 1.05 subordinate voting shares of Power Corporation and C$0.01 in cash. The transaction was completed on February 13, 2020, after which Power Corporation held all Power Financial common shares. The shares were delisted from the Toronto Stock Exchange at the close of business on February 18, 2020. The reorganization was presented as a simplification of the group’s structure. The stated expected benefits included lower operating expenses, lower financial charges, a more focused emphasis on financial services and an increase in Power Corporation’s quarterly dividend. The cited materials described expected annual reductions of C$50 million in operating expenses and C$15 million in financial charges, as well as a 10 percent increase in the quarterly dividend. Power Financial remained a reporting issuer in Canada after the transaction, but ceased to be a separately listed public company. Today, Power Financial is best understood as an institutional holding entity within Power Corporation of Canada. Its historical importance comes from its ownership interests, governance role and long-term investment strategy in insurance, wealth management, asset management and fintech, rather than from direct retail operations under the Power Financial name.

• 2020

  Reorganization and delisting

  [1]Power Financialen.wikipedia.org

  Power Corporation becomes the owner of all Power Financial common shares, and Power Financial shares are delisted from the Toronto Stock Exchange in February.

• 2019

  Parent announces corporate reorganization

  [1]Power Financialen.wikipedia.org

  Power Corporation announces a transaction to exchange Power Financial common shares for Power Corporation shares and cash.

• 2005

  R. Jeffrey Orr becomes chief executive

  [1]Power Financialen.wikipedia.org

  R. Jeffrey Orr is appointed president and chief executive officer of Power Financial.

• 1984

  Power Financial is founded

  [1]Power Financialen.wikipedia.org

  Power Financial Corporation is established to develop an integrated financial-services holding group within Power Corporation of Canada.

A long-term institutional holding company focused on financial services, asset management and strategic investments, operating within the Power Corporation of Canada group.

• Insurance and financial services

  Great-West Lifeco interests

  Power Financial’s interests in Great-West Lifeco have provided exposure to life and health insurance, employee benefits, retirement services and investment-related financial activities. This is a strategic ownership interest rather than a product sold directly by Power Financial under its own consumer label.

• Wealth and investment management

  IGM Financial interests

  The company’s interests in IGM Financial connect Power Financial with investment management, financial planning, mutual-fund distribution and wealth-management activities. IGM functions as an operating financial-services group, while Power Financial has historically acted as an ownership and governance vehicle.

• International strategic investments

  Pargesa portfolio

  Through Pargesa, Power Financial held significant interests in a portfolio of global companies based in Europe. The portfolio represented the international investment component of Power Financial’s historical holding-company strategy.

• Financial-technology investment

  Portag3 Ventures investments

  Power Financial has participated with IGM Financial and Great-West Lifeco as an anchor investor in Portag3 Ventures, an affiliated investment platform focused on financial-technology companies and investment funds. The platform has also been associated with investment exposure to Wealthsimple.

• 2020

  Completion of Power Corporation share exchangeM&A

  Background

  The announced reorganization required the exchange of Power Financial common shares and the consolidation of ownership by Power Corporation.

  Action taken

  The exchange was completed on February 13, 2020, and Power Corporation held all Power Financial common shares. The shares were delisted from the Toronto Stock Exchange on February 18, 2020.

  Aftermath

  Power Financial ceased to be a separately listed company while remaining a Canadian reporting issuer.

  Source

• 2019

  Proposed simplification of the Power Financial structureStrategy

  Background

  Power Corporation sought to consolidate its ownership structure and remove the separate public-company layer represented by Power Financial.

  Action taken

  Power Corporation proposed exchanging each Power Financial common share for 1.05 Power Corporation subordinate voting shares and C$0.01 in cash.

  Aftermath

  The transaction was completed in February 2020. The stated expected benefits included lower operating and financial costs, a more focused financial-services strategy and a higher quarterly dividend.

  Expected annual operating-expense reduction; expected annual financial-charge reduction; quarterly dividend increase. C$50 million lower operating expenses; C$15 million lower financial charges; 10% higher quarterly dividend (Expected benefits announced with the 2019 reorganization)

  Source

1. 1Power Financialen.wikipedia.org