IGM Financial further reduces Wealthsimple fair valuation by $433M

CPE News

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CPE News Brief (8.5.2022) – IGM Financial Inc. (TSX: IGM) has released the earnings results for the second quarter of 2022. It has further reduced the fair value of its Wealthsimple investment.

IGM Financial Inc. holds directly and indirectly a 24% interest in Wealthsimple (2021 – 23%) valued at $492 million at June 30, 2022, down from $925 million at March 31, 2022, and $1,153 million at December 31, 2021, representing a decrease of $433 million and $661 million for the three and six months ending June 30, 2022.

IGM Financial said the change in fair value is consistent with the continued decline in stock markets and public market peer valuations, and Wealthsimple focusing on its core business lines and revising revenue expectations.

IGM Financial’s investment in Wealthsimple is held through a limited partnership (Portag3) controlled by Power Corporation of Canada’s Sagard Holdings.

Based on IGM valuation, as at June 30, 2022, Wealthsimple would had still been valued at approximately $2.05 billion, but down from the high of $5.01 billion as at December 31, 2021, a loss of almost $3 billion in valuation in just six months.

Toronto based Wealthsimple Financial Corp. is a financial company that provides simple digital tools for growing and managing money.

Wealthsimple other investors include Meritech, Greylock, DST Global, Iconiq, Dragoneer, TCV, Inovia, Allianz X, Base 10, Redpoint, STEADFAST, Alkeon, TSV, Plus Capital, Two Sigma Ventures, and private investors.

EDIT:

Power Corporation of Canada (TSX: POW) released Second Quarter 2022 Financial Results on August 5, 2022.

Power Corporation reported 54.5% of total undiluted equity interest, held by Portag3 Ventures Limited Partnership (Portage I), Power Financial and IGM, or a fully diluted equity interest of 42.5% in Wealthsimple.

Total Wealthsimple stake held by Power Corporation and affiliates was valued at $0.9 billion at June 30, 2022, down from $2.1 billion at June 30, 2021.

Wealthsimple’s fully diluted valuation would be $2.12 billion.

photo credit: Wealthsimple