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TFSA Investors: 1 Cheap Conglomerate With Exposure to Europe

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Power Corp. (TSX:POW) is an international management and holding company that focuses on financial services in North America, Europe and Asia. The company’s core holdings are leading insurance, retirement, wealth management and investment businesses, including a portfolio of alternative asset investment platforms.

Publicly-traded operating companies

Through the company’s wholly owned subsidiary, Power Financial, Power holds interests in financial services and asset management businesses in Canada, the U.S. and Europe, through the company’s controlling interests in IGM Financial (TSX:IGM). Through Power Financial and an indirect investment in Groupe Bruxelles Lambert (GBL), Power also has significant holdings in a portfolio of European-based global companies.

Leading financial services provider

IGM Financial is a leading wealth and asset management company, primarily providing investment advisory and related services, with $240.0 billion in assets under management. IGM Financial’s wealth management segment reflects the activities of operating companies that are principally focused on providing financial planning and related services to Canadian households.

The segment delivers personalized financial solutions to Canadians through a network of 3,304 consultants located throughout Canada, with $103.3 billion in client assets under advisement. In addition to an exclusive family of mutual funds and other investment vehicles, IGM Financial offers a wide range of insurance, securities, mortgage products and other financial services.

IGM Financial’s asset management segment reflects the activities of operating companies primarily focused on providing investment management services, and represents the operations of Mackenzie Investments, which was founded in 1967.

Investment management services are provided to a suite of investment funds that are distributed through third-party dealers and financial advisors, and through institutional advisory mandates to financial institutions, pensions and other institutional investors. IGM Financial’s strategic investments segment primarily represents the key strategic investments made by IGM Financial

European business interests

GBL is a Belgian holding company with significant interests in a portfolio of European based global companies. Power holds a 50 percent interest in Parjointco, a holding company, which in turn holds an indirect interest in GBL. The carrying value of Power’s indirect interest in GBL is about $4.22 billion.

Power holds a substantial interest in GBL along with the Frère group of Belgium. Each of the companies, Power group and the Frère group, hold a 50 per cent interest in Parjointco, governed by the laws of Belgium. An agreement was reached to achieve and maintain parity between the Power group and the Frère group with respect to their respective indirect holdings in Pargesa Holding and GBL.

Each group agreed not to acquire, hold or dispose of interests in any of those corporations, either directly or indirectly, and granted the other group a prior right, subject to certain restrictions, to acquire an interest in Pargesa Holding and GBL upon any disposition for a period of five years. The initial agreement was originally signed in 1990, and has been extended to December 31, 2029 with provision for possible further extension of the agreement.

Overall, Power owns some wonderful assets and has an excellent long-term track record. Management has significant incentive and is likely to serve in the minority shareholder’s best interests.

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