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Streetwise newsletter: The week’s best reads: OSFI, CPPIB, Manulife

A Bay Street sign hangs in front of the CN Tower in the financial district in Toronto.

Mark Blinch/Globe and Mail

Finance launches consultation on 'bank' branding, freezing OSFI crackdown

The Department of Finance is suspending a crackdown by the Office of the Superintendent of Financial Institutions (OSFI) on the use of the words "bank," "banker" and "banking" by credit unions and other smaller financial institutions and launching a consultation on the use of such terms. Story

CPPIB carves out deals in competitive markets

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With record amounts of capital seeking investments around the world, the Canada Pension Plan Investment Board still found ways to invest billions of dollars in recent months. Story

Manulife softens spinoff speculation amid leadership transition

Manulife Financial Corp.'s CEO is on his way out, but the insurer's United States-based business may not follow him through the door. Story

Sun Life grapples with insurance bills for high-cost prescription drugs

One person. One year's drug prescription. One massive bill for $8-million (U.S.) to Sun Life Financial Inc. in 2016. The mounting costs of specialty drugs that treat rare conditions have been adding up for insurers across North America in recent years and Toronto-based Sun Life is no exception. Story

CI Financial strikes $780-million deal to buy Sentry Investments

CI Financial Corp. has struck a deal to acquire Sentry Investments Corp., valued at $780-million in cash and stock, merging two of the country's largest independent asset managers. Story

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This is the daily Streetwise newsletter with stories chosen by Globe financial services editor Rita Trichur. If you're reading this on the Web or someone forwarded this e-mail newsletter to you, you can sign up for the Streetwise newsletter and all Globe newsletters here.

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From the analysts

Count Desjardins Securities Inc. analyst Gary Ho among those skeptical of CI Financial Corp.'s deal to buy Sentry Investments Corp. for $780-million in cash and stock.

In a research note, Mr. Ho writes that Sentry has $19.1-billion of assets under management as of July, meaning the purchase price equates to 4.1 per cent of AUM. "In our view, the success of the transaction will be based on CI's ability to realize cost synergies and retaining assets," he wrote. "While the acquisition adds scale, is accretive to management's estimates and CI has had success with in-footprint acquisitions in the past, we have a few concerns. First, at 4.1% of AUM, we believe CI paid full value. Second, Sentry has had redemptions in the last few years and there are risks of further outflows. Third, management's pro forma [earnings per share] (which bakes in market appreciation and 50 per cent of cost synergies) suggests only 1.1 per cent accretion to consensus estimates. Lastly, we were surprised that the 20.9 million shares Sentry owners would receive have no lock-up clauses."

What we're reading

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A $1-billion equity fund aimed at filling a gap in Canada's venture capital market could help fuel the mergers and acquisitions pipeline as more small and medium-sized enterprises get off the ground and become attractive targets for acquirers. Lexpert

At the halfway point of 2017, the venture capital industry seems headed for another year of record-high valuations. Institutional Investor

CCMP Capital Advisors earned 3-times its investment in Jamieson Wellness following the vitamin maker's recent initial public offering, two sources with knowledge of the matter told PE Hub Canada. PE Hub

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