Canada's Peloton Capital takes over proxy advisor Glass Lewis
By Jessica DiNapoli
NEW YORK, March 16 (Reuters) - Canadian buyout firm Peloton Capital Management and Stephen Smith, the CEO of First National Financial Corp FN.TO, said on Tuesday they acquired proxy advisor Glass Lewis from the Ontario Teachers' Pension Plan Board and Alberta Investment Management Corp.
The deal, whose terms were not disclosed, comes as more investors turn to proxy advisers to advise them on how to cast their votes at the annual meetings of companies on environmental, social and governance matters. Board challenges by activist hedge funds seeking the vote of shareholders are also on the rise.
Glass Lewis' main competitor, Institutional Shareholder Services Inc (ISS), was acquired last year by German stock exchange operator Deutsche Boerse AG DB1Gn.DE for $1.8 billion. nL1N2I324F
"ISS is the dominant player in the space, but we saw we had a great brand and opportunities to grow. I think there is room for both. People are looking for two views, alternate views," Smith said in an interview.
San Francisco-based Glass Lewis plans to expand to new markets and offer new products, said Debra Dobson, a partner at Peloton. It currently makes recommendations to shareholders on matters up for vote at 30,000 corporate meetings each year.
Peloton Capital will be the majority owner of Glass Lewis, Dobson said. Smith, who is also the chairman of Peloton Capital, invested alongside the private equity fund, she said.
"What Glass Lewis will do, from a growth perspective, is help issuers understand their investor base, engage with their investor base," Dobson said.
Ontario Teachers bought Glass Lewis from Xinhua Finance for $46 million in 2007. Alberta Investment Management Corp purchased a 20% stake in the firm in 2013 for an undisclosed sum.
Peloton Capital has also invested in Canadian veterinary and dental practices and fertility clinics.
(Reporting by Jessica DiNapoli in New York; editing by Richard Pullin)