Our investment thesis for Power Corporation is built on its position as a high-quality financial holding company that offers a compelling combination of value, income, and growth. The company trades at a persistent discount to the value of its underlying assets, provides an attractive and growing dividend, and is poised for continued appreciation.
Power Corporation has been a top contributor to our MWG Income Growth Fund, with its stock price appreciating over 25% annually for the past two years. This performance was driven by earnings growth exceeding 10% in 2023 and 2024 and a significant narrowing of its discount to Net Asset Value (NAV)—from a historical average of 25% to approximately 15% today.
The company’s holdings include Great West Lifeco (GWL), one of Canada’s largest insurance companies, IGM Financial (IGM), one of Canada’s largest diversified wealth and asset management companies, and several other asset/investment related holdings.
Its 68% interest in GWL accounts for 71% of Power’s asset value, with its 62% ownership of IGM accounting for a further 13%. Its remaining holdings in other investment related assets include two alternative investment managers and a 15% interest in a public French holding company GBL.
Great-West Lifeco operates through a variety of subsidiary brands. Empower is the second largest retirement services provider in the USA and provides over 30% of GWL ‘s earnings. Canada Life is a top three player in Canada for individual life insurance, group life, health, wealth planning and retirement services and represents about 30% of GWL earnings. A further 20% of earnings comes from Europe, under the Irish Life brand, where they are the #1 in retirement and pensions in Ireland, and through Canada Life, where they are a major player in UK group benefits and retirement and are building a material business in Germany. The remaining 20% of earnings is derived from Canada Life’s Reinsurance operations in a variety of countries
IGM Financial is one of Canada’s largest financial planning and investment advisor providers through IG Wealth and has built a significant ultra-high net worth management business under the Rockefeller brand. Through its stake in Wealthsimple, IGM is building a material self-directed investment management firm. These client-facing businesses represent about 50% of IGM’s earnings. Another 40% comes from Mackenzie, a leading public asset manager with both retail and institutional products, and private equity player Northleaf. IGM also owns China AMC, a major $500 Billion Chinese asset manager.