Deal raises GWO’s risk

Article Excerpt

GREAT-WEST LIFECO, $29.66, is still a hold. The insurer (Toronto symbol GWO; shares outstanding: 926.3 million; Market cap: $28.2 billion; TSINetwork Rating: Above Average; Dividend yield: 5.9%; www.greatwestlifeco.com), is Canada’s second-largest life insurer, after Manulife Financial. Great-West, along with Mackenzie Financial, a subsidiary of IGM Financial (Toronto symbol IGM), will pay $245 million for 70% economic interest (including a 49.9% non-voting stake) in private equity firm Northleaf Capital Partners. Northleaf focuses on global private equity, private credit and infrastructure investments. Mackenzie will own 80% of this joint venture, with Great-West holding 20%. Together, they will also invest $700 million in Northleaf products over the next two years. This is the latest in a series of acquisitions by Great-West this year meant to diversify its operations. The purchase nonetheless add risk. Great-West Lifeco is still a hold. hold…