Ontario Teachers’ and AIMCo Have Sold Glass Lewis to a Private Equity Firm

Peloton Capital Management — founded by two ex-Ontario Teachers’ managing directors — and Stephen Smith have acquired the advisory firm.

Stephen Smith, CEO of First National Financial. (James MacDonald/Bloomberg)

Stephen Smith, CEO of First National Financial.

(James MacDonald/Bloomberg)

Private equity firm Peloton Capital Management and Canadian financial entrepreneur Stephen Smith have acquired proxy advisory and research firm Glass Lewis & Co., according to an announcement Tuesday.

Peloton and Smith bought Glass Lewis from the Ontario Teachers’ Pension Plan Board and the Alberta Investment Management Corp., known as AIMCo. Terms of the deal were not disclosed.

The acquisition comes less than six months after Deutsche Börse said it was acquiring a majority stake in a Glass Lewis competitor Institutional Shareholder Services from its private equity owner Genstar Capital.

“We see that proxy voting has become more important, as ESG topics become front and center for institutional investors,” said Peloton managing director Steve Faraone by phone on Tuesday. “We see Glass Lewis as well-positioned to serve that client base.”

Peloton has ties to Ontario Teachers’: two of its founders, Mike Murray and Faraone, were managing directors at the pension fund before they struck out on their own to start the private equity firm in 2018. Smith, who is co-founder and chief executive officer of Canada’s First National Financial Corp., launched Peloton alongside them.

In addition to investing in Glass Lewis through Peloton, Smith invested alongside the firm, as the deal was larger than one Peloton would normally execute, Faraone said.


Glass Lewis was acquired by Ontario Teachers’ in 2007. In 2013, AIMCo acquired a 20 percent stake in the proxy advisory firm, according to an announcement from Ontario Teachers’ at the time. Faraone said Peloton liked that Glass Lewis had been owned by the same investors for such a long time.

“We like that stability and see an opportunity to continue the trajectory they have been on,” he added.

A spokesperson for AIMCo said via email that the company is “proud of the role it has played since 2013” in helping the company “realize on its commitment to uphold strong corporate governance.”

“We believe our stewardship of Glass Lewis has helped contribute to the advancement of good governance practices and healthy capital markets globally,” a spokesperson for Ontario Teachers’ added via email Tuesday.

In 2019, Glass Lewis co-founder Kevin Cameron returned to the company and assumed the role of executive chair. He left his role as president in 2007, although he remained on the firm’s advisory council during his time away from leadership, an announcement from Glass Lewis at the time shows.

“He’s helped to add to the team and recruited some additional people,” Faraone said of Cameron’s return. “We’re seeing a lot of investment in the research area.”

Faraone said that this, along with Glass Lewis’s decision to open offices in London and Tokyo, made it an attractive investment option.

“Peloton Capital Management and Stephen are committed to long-term, sustainable value creation through good governance,” Cameron said in the announcement on their purchase. “This aligns strongly with the core values we have established at Glass Lewis.”

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This is Peloton’s fourth portfolio investment, and first in the financial services sector. The firm is working on another deal — one that Faraone said is going a bit more slowly than the Glass Lewis acquisition. He did not share details on the target company.

Peloton is still raising its first fund, which is targeting long-term capital. It plans to hold portfolio investments for seven to ten years, Faraone said.

“For the right businesses and time frame, this strategy can lead to less distraction for management,” Faraone said. “It allows the business to focus on growth over that time frame.”