IGM Financial Inc. and Great-West Lifeco Inc. agreed to buy a non-controlling stake in Northleaf Capital Partners Ltd. for $245 million (US$186 million), giving them access to private equity investments and product offerings.

The purchase will be made through an acquisition vehicle 80 per cent owned by IGM’s Mackenzie mutual-fund unit and 20 per cent owned by Great-West, according to a statement Thursday. The firms will get a 49.9 per cent voting interest and 70 per cent economic stake in Northleaf.

The deal will give IGM clients access to private equity investments and allows Great-West to expand alternative investments for its holdings. Northleaf gets a major infusion of capital, with IGM and Great-West agreeing to invest $700 million in Northleaf’s products in the next 18 to 24 months, in addition to the stake purchase. Toronto-based Northleaf has $17 billion in private equity, private credit and infrastructure assets under management.

IGM and Great-West aren’t the first Canadian financial firms to expand beyond their core of equity and fixed-income holdings into private equity. Earlier this year, life and health insurer Sun Life Financial Inc. bought an 80% stake in London-based InfraRed Capital Partners for $515 million and agreed to co-invest $530 million to introduce new InfraRed products.