IGM reduces Wealthsimple investment carrying value by 20%

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By CPE News

CPE News Brief (5.20.2022) – IGM Financial Inc. (TSX: IGM) has reduced the fair value of its investment in Wealthsimple Financial Corp. by 20%, reporting in its Q1 2022 financial report released on May 5, 2022.

IGM Financial Inc. held directly and indirectly a 23% interest in Wealthsimple valued at $925 million at March 31, 2022, representing a decrease of $228 million or 20% compared to December 31, 2021 fair value of $1,153 million.

IGM Financial’s investment in Wealthsimple is held through a limited partnership managed by Portage Ventures and controlled by IGM parent company Power Corporation of Canada (TSX: POW).

On May 31, 2021, Wealthsimple closed a $750 million equity fundraising, at a post-money valuation of $5 billion, led by Meritech and Greylock with participation of DST Global, Sagard, Iconiq, Dragoneer, TCV, iNovia, Allianz X, Base 10, Redpoint, STEADFAST, Alkeon, TSV, Plus Capital, and others

The financing transaction consisted of a $250 million primary fundraising by Wealthsimple, and a $500 million secondary offering by Power Corporation of Canada and entities. It should be noted repeatedly that $500 million went to Power Corporation of Canada, not to Wealthsimple, a concept that Canadian venture capital “professionals” can hardly understand.

Power Corporation of Canada has 60% voting control and control of the board and 43% of economic interest in Wealthsimple.

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

photo credit: Wealthsimple Financial