Real estate investment manager Starlight Investments is in talks to acquire Barometer Capital Management Inc., a Toronto-based asset management company with more than $1.5-billion in assets, according to several sources familiar with the situation.
Executives at both Starlight Investments and Barometer Capital declined to comment when contacted by The Globe and Mail.
Founded in 2011 by real estate entrepreneur Daniel Drimmer, Starlight manages more than $11-billion in direct real estate as well as real estate investment securities for institutional investors such as pension funds.
Mr. Drimmer, who is the firm’s president and CEO, was born in Germany and went to school at the University of Western Ontario. He previously assembled, then sold, a portfolio of commercial properties and apartment buildings under the brand name TransGlobe Property Management.
Today, Starlight has more than 200 employees with a portfolio that consists of approximately 36,000 multi-residential units across Canada and the U.S. and more than 6.2 million square feet of commercial properties.
In March, 2018, the firm created a real estate securities investment platform called Starlight Capital, headed by CEO and chief investment officer Dennis Mitchell. With an expertise in real estate securities, Mr. Mitchell is known for managing more than $3-billion in assets over the span of his career at Sentry Investments Corp. and Sprott Asset Management.
The acquisition of Barometer could lead to Starlight diversifying its portfolio beyond the real estate sector. Founded in 2001, Barometer manages investment portfolios for 400 high-net-worth families – as well as endowment funds and institutional clients. The firm is led by CEO Greg Guichon and president David Burrows, a frequent guest on the Business News Network (BNN). The company offers several mutual fund products, pooled funds and separately managed accounts.
If Barometer is sold, it will be the latest in a series of employee-controlled asset management firms to be acquired by larger players, including the banks. The factors driving consolidation include aging founders who want to cash out, buyers that want to realize economies of scale and the increasing cost of technology and regulation.
In the past year, Onex Corp. moved past its roots in private equity by acquiring money manager Gluskin Sheff + Associates Inc., which has $8-billion in assets under management. Toronto-Dominion Bank purchased Greystone Capital Management Inc., which manages $36-billion, and Bank of Nova Scotia acquired MD Financial Management and Jarislowsky, Fraser Ltd., which together hold $90-billion in assets.
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Clare O’Hara
Andrew Willis