Wealth management company PWL Capital, whose clientele includes hundreds of Shopify employees, has been acquired by a major U.S. financial services and human resource consulting firm in a move that will accelerate its expansion push, PWL’s Ottawa-based CEO says. Atlanta-based OneDigital acquired PWL earlier this month, the firms announced Thursday. Financial terms of the cash-and-share […]
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Wealth management company PWL Capital, whose clientele includes hundreds of Shopify employees, has been acquired by a major U.S. financial services and human resource consulting firm in a move that will accelerate its expansion push, PWL’s Ottawa-based CEO says.
Atlanta-based OneDigital acquired PWL earlier this month, the firms announced Thursday. Financial terms of the cash-and-share deal were not disclosed.
While PWL is headquartered in Montreal, the company has a significant presence in the nation’s capital.
Chief executive Cameron Passmore, who became majority shareholder after purchasing co-founder Anthony Layton’s stake in the company nearly four years ago, lives in Ottawa, as do many of PWL’s more than two dozen investment advisers.
In addition, PWL has carved out a lucrative niche as something of an investment broker to the stars in the National Capital Region.
The firm has a particularly loyal following among movers and shakers in Ottawa’s tech community, where it has gained popularity for its use of passive index investing that promises low fees.
About 20 per cent of its 2,300 clients work for Shopify – a connection that stretches back to 2011, when Shopify co-founder and CEO Tobi Lütke first met Passmore and signed on with PWL.
PWL’s assets under management have grown an average of 17 per cent annually over the past decade – well above the industry average of less than 10 per cent – and now sit at about $5.5 billion.
Passmore told OBJ his firm had rejected several potential suitors over the years and wasn’t actively seeking a buyer.
“We had a great business,” he said in an interview this week. “We were not looking to make any changes.”
But after a friend introduced him to OneDigital co-founder Mike Sullivan a couple of years ago, his stance shifted. The two “just hit it off,” in Passmore’s words, and the companies eventually began the “slow, deliberate, careful” process of hammering out a deal.
OneDigital is the much bigger partner in the transaction, with more than 100,000 companies using its services and a reported US$14 billion in assets under management before the deal.
PWL will eventually transition to the OneDigital brand while continuing to operate as an independent subsidiary. It’s the first acquisition of a Canadian company for the Atlanta-based firm.
“PWL brings an exceptional team with deep expertise in wealth management, making them the perfect partner as we expand our footprint internationally,” Sullivan said in a statement.
“Together, we’re poised to bring more systematic, client-first financial solutions to Canadians, marking the beginning of an exciting new chapter for OneDigital’s growth and our ability to serve clients on a global scale.”
While Passmore concedes that skeptics might view the transaction as another Canadian business being swallowed up by a much bigger U.S. counterpart, he sees many potential long-term benefits for PWL and its customers.
“They’re new to wealth, and we’re in the wealth business,” Passmore explained. “They found this engine that we’ve kind of started to figure out really interesting.
“This is about coming together to create something better than you could on your own. This is not about the outcome for shareholders at all. I’m deeply committed to this. I’m totally energized.”
PWL’s funds are designed to pick stocks, bonds and other investments by tracking and closely replicating financial indexes such as the S&P 500, often with the help of algorithms.
This type of “passive” investing helps keep fees down because it doesn’t require as much human intervention, Passmore explained in a 2021 interview with OBJ. PWL negotiates fees with clients based on the size of their portfolios, which are generally lower than the fees charged by big mutual fund managers.
Passmore told OBJ this week he sees plenty of room for PWL to make inroads in the U.S. He said more than half of the audience for his company's popular podcasts lives south of the border.
“There are all kinds of opportunities to help more people,” he said. “I know a lot of people are looking for what we do.”
