Chicago’s Loop Capital has closed a deal with a unit of Toronto-based BMO Financial Group to dramatically bolster its asset-management arm.
Loop Capital acquired Miami-based Taplin Canida & Habacht, a $6.2 billion-asset bond investment manager, from BMO Asset Management, a sister company of Chicago's BMO Harris Bank. The business will be rebranded as Loop Capital Asset Management.
The Jan. 28 deal provides scale to the asset-management business of one of Chicago’s most prominent Black-owned financial firms. Loop Capital for decades has been primarily an investment bank focused on municipal bond offerings.
It now is expanding its horizons. Terms of the deal weren’t disclosed.
Loop Capital and BMO signed a letter of intent on June 2, three weeks before Loop announced a substantial minority equity investment in the firm from another large Canadian bank, CIBC.
“Loop Capital and TCH share a decades-long working relationship, and I’m pleased that it has led to this moment,” Loop CEO Jim Reynolds said in a statement. “Our team looks forward to the value this new extension of services provides to our clients.”
Reynolds said last year that he hoped to take Loop Capital public in 2022. The firm's revenue topped $200 million in 2020, and he said at the time he hoped for a market valuation exceeding $1 billion.
Since then, though, the market for initial public offerings has cooled significantly. The deal for TCH provides more scale and diversity of revenue streams when the time comes.
Loop Capital President Kourtney Gibson said in an email that an IPO "is still in our sights." "We have a lot of exciting opportunities right now that require our attention. Our current partners appreciate that and I'm sure any future shareholders will too," she said.
BMO owned TCH since 2008, when it acquired an 80% stake in the fixed-income asset manager for $64 million in stock, according to a filing. At the time, TCH had $7.3 billion in assets under management, so that figure has declined 15% since then. BMO acquired the remaining 20% in the years following.
In November, BMO replaced TCH as a subadvisor on some of its mutual funds, including the $875 million BMO U.S. High Yield Bond fund and the $330 million Crossover Bond fund. BMO said at the time that the manager change would entail a new investment strategy for the high-yield bond fund.
“This transaction preserves the TCH investment culture and returns our firm to its roots as a boutique asset manager under the umbrella of a highly respected, minority-led firm with whom we share the same core values,” Scott Kimball, the new head of investments for Loop Capital Asset Management, said in a statement.
TCH was founded in 1985.
Its business will be far more meaningful to Loop Capital than it was to BMO, which is one of the largest banks in Canada. Before this deal, Loop Capital’s asset-management arm consisted of an infrastructure fund, launched with former NBA star Magic Johnson, that has $850 million in assets. Loop Capital plans later this year to launch a second infrastructure fund, Gibson said.
The story has been corrected. CIBC didn't provide financing for Loop Capital's infrastructure fund.
Here's what made Timothy Crane pull the trigger on the bank's biggest deal yet.
Calamos Investments filed for so-called “structured-protection” exchange-traded funds that will track a portion of the returns of the S&P 500, Nasdaq 100 and Russell 2000 while hedging 100% of the downside.
Chicago-area banks are still grappling with the fallout of the year-ago meltdowns of Silicon Valley Bank and Signature Bank. Here's how.
