Buying companies controlled by Murray Edwards for cash on the books is a pretty safe strategy, and you might just make some money while you're at it.   Jovian is basically a collection of asset managers which, proforma for two recent divestitures has about $10.40 in net cash versus a share price of $11.  Conservatively speaking, the remaining business is worth about $6.50 to $10.  Eventually, I think Edwards will push them to realize this value as I suspect he did with those two recent sales.

Jovian had remarkable success with its Horizons ETF business, but management's (wise) decision to continually plow FCF into growing it masked the considerable value that was being created.  Jovian was largely ignored by institutional investors in Canada, and the mostly retail investor base was grew impatient with the lack of profits/dividends, causing the shares to trade at a wide discount to fair value. 

I could be wrong, but I suspect Edwards pushed them to sell their stake in Horizons along with a smaller business,  as CEOs don't usually like to part with their crown jewels.  FYI, he owns 29.3% today, plus some convertible debt that could up his stake to 33.9%.  If you don't know, Edwards is one of Canada's best investors.  Bruce Berkowitz called him "the Warren Buffett of the oil patch," but obviously he dabbles in other sectors as well. 

Putting some modest EV/AUM multiples on the remainder, I get an NAV as follows:

Note:  I am assuming that just about all potentially dilutive securities are eventually converted / exercised, which affects "proforma other net cash" as well as "proforma shares outstanding." 

The smaller sale (MGI Financial) was slated to close 9/30/11, so it's probably a done deal.  The larger ETF biz sale should close mid-November.  That deal has a contingency escrow of 10% of proceeds for two years.  There's also a $5M break-fee.  I'm not too worried about the deal falling apart - Jovian would pocket the $5M and could shop it again in a market that still likes ETF managers.  The current deal valued Horizons at 3.75% of AUM.  Even now, Wisdom Tree (the only public pure-play) sells at 6.0% of AUM despite being currently unprofitable (Horizons was profitable).

The remaining businesses:

Leon Frazer - founded 1939.  Manages money for HNW clients, as well as being sub-advisor on numerous mutual funds (e.g. the IA Clarington Canadian Conservative Equity Fund, which has a 50+ year track record).

T.E. Wealth - founded 1972.  Provides fee-only financial planning for employees of large international corporations, as well as to private individuals, endowments, pension plans, and Aboriginal Communities.  Basically, they help these folks pick managers for their portfolios.

Jovian funds - mostly refers to Jovian's 50% stake in Hahn Investment Stewards, which is an ETF manager founded in 2001.

MGI Securities - founded 2000.  Investment bank focusing on Canadian small caps in mining, oil & gas, and tech. 

Notes: AUA = Assets Under Administration.  FYE March 31st

Apparently Leon Frazer lost very few clients during the turmoil of late 2008-early 2009, which is nice to know considering the recent selloff in the markets.  The ETF biz is a secular grower, thus did not see much AUM loss.

Now what will they do with all that cash?  Per management, "we're looking for opportunities to incubate, and we're also looking for potential acquisitions ... we would definitely be focused on asset managers."  Management also plans to use some of that cash to reinvest in the remaining businesses.  Obviously, Edwards' involvement should help prevent any stupid spending.  Also, the CEO owns about $3.4M of stock, which is nearly 10X his annual comp.