CI Financial is not looking to repeat its acquisition spree from 2020 and 2021, but the Canadian asset and wealth manager has expressed its interest in buying U.S. registered investment advisory firms once again. CEO Kurt MacAlpine disclosed this information during the company’s third-quarter earnings call.
A Reflection on the Past and a Promising Future
MacAlpine acknowledged that 2021 was an exceptionally busy year for CI Financial primarily due to low interest rates and favorable market conditions. However, he emphasized that this level of activity should not be considered the norm. Despite that, MacAlpine expressed optimism about the current market situation. He believes that there is a noticeable increase in activity during the second half of the year and stated, “Our pipeline for inorganic growth remains robust with a number of attractive opportunities that can further accelerate growth.”
Transformations in CI’s U.S. Wealth Unit
A Rebranding Journey for CI’s U.S. Wealth Division
During the summer, CI underwent a rebranding process for its U.S. wealth division, formerly known as CI Private Wealth. The division was renamed Corient, and all acquired registered investment advisory firms will adopt the new corporate brand. This strategic decision aims to unify the operations and enhance brand consistency throughout the organization.
CI Financial’s aspiration to resume acquiring U.S. registered investment advisory firms demonstrates its dedication to sustained growth and expansion in this market. With a solid pipeline of opportunities and an optimistic outlook, CI is poised for a promising future in the U.S. wealth management landscape.
CI’s Debt Reduction Strategy Continues to Drive Financial Success
CI, a leading wealth management company, has been implementing effective strategies to reduce its debt and strengthen its financial position. The recent partial sale of its U.S. wealth business was a significant step in this deleveraging campaign, as it aimed to generate funds to pay off accumulated debt. This ongoing effort has yielded positive results, with CI reporting a decrease in its debt-to-earnings ratio from 4.0 to 3.3 compared to the same period last year.
To further enhance shareholder value, CI has been actively repurchasing its undervalued stock, which is traded on the Toronto exchange under the ticker symbol CA:CIX. In line with this commitment, the company has recently launched a new buyback initiative to acquire up to 100 million Canadian dollars of company shares. This strategic move has already garnered positive attention, with the stock experiencing a 2.35% increase in midafternoon trading, even on a day when major U.S. stock indexes were lower.
In addition to share buybacks, CI has also prioritized rewarding its shareholders through dividend payments. In the third quarter, the company paid out C$30.5 million in dividends, equivalent to C$0.18 per share. Notably, starting from January, this dividend payout will increase to C$0.20 per share, demonstrating CI’s commitment to consistently maximize shareholder returns.
While reducing debt and enhancing shareholder value have been the primary focus for CI, the company has not neglected its growth prospects. During the third quarter, CI successfully finalized an acquisition in the U.S., adding Intercontinental Wealth Advisors based in San Antonio to its portfolio. This strategic move added US$1.7 billion to CI’s already impressive asset count. Subsequently, CI continued its expansion strategy by acquiring Windsor Wealth Management, an Indianapolis-based RIA managing nearly US$1.4 billion in assets, according to regulatory filings.
Overall, CI is well-positioned with C$421 billion in invested assets across its business lines, equivalent to US$305.5 billion. The company’s relentless dedication to debt reduction, stock repurchases, dividend payments, and strategic acquisitions has resulted in significant growth and financial stability. With a solid foundation in place, CI is poised for continued success in the wealth management industry.
CI’s U.S. Wealth Business: A Snapshot
At the close of the third quarter, CI’s U.S. wealth business boasted assets amounting to almost US$143 billion. However, it is worth noting that CI experienced a loss of US$9 million for the same period. This equates to nearly 6 cents per share.
Although facing some challenges, CI’s U.S. wealth business remains a prominent player in the industry. With its substantial asset base, it continues to navigate and adapt to market dynamics, striving for success.
