- Adjusted EPS1 reaches record levels of $0.71 for Q4 and
$2.45 for 2020
- Repurchased 1.8 million shares in Q4 for $29.8 million, and
14.0 million shares in 2020 for $258 million
- Paid quarterly dividend of $0.18 a share, totalling $37.8
million in Q4 and $155.3 million in 2020
- Continued expansion of North American wealth management
platform through six acquisitions with $25 billion in assets in Q4;
total of 14 acquisitions in 2020 almost doubles wealth assets to
$96 billion
- Total assets increased 19% in Q4 and 27% in 2020 to $231.5
billion
- Acquisition announced after quarter-end expected to increase
U.S. assets to $58 billion, total assets to $261 billion
- Significantly diversified investor base through NYSE listing
(ticker CIXX), successful U.S. debt issue that raised US$960
million
- Completed corporate rebranding which included the rollout of
CI Global Asset Management and alignment of in-house investment
teams
All financial amounts in Canadian dollars unless otherwise
stated.
CI Financial Corp. (“CI”) (TSX: CIX, NYSE: CIXX) today released
financial results for the quarter and year ended December 31,
2020.
“We delivered a very successful fourth quarter, capping a
transformative year for CI,” said Kurt MacAlpine, CI Chief
Executive Officer. “In 2020, we made great progress in executing on
our strategic priorities of modernizing asset management, expanding
wealth management, and globalizing the firm. While we are still in
the early stages of executing our strategy, CI is a fundamentally
different company than it was just a year ago.
“We have almost doubled the size of our wealth management
business, reaching $96 billion at the end of the year, and quickly
built a significant presence in the United States,” Mr. MacAlpine
said. “Our assets in the U.S. alone are nearing $60 billion with
the completion of five acquisitions in the fourth quarter and an
agreement this January to acquire Segall Bryant & Hamill, LLC
of Chicago. The U.S. wealth management firms we acquired operate at
strong margins and generated aggregate organic net new asset growth
of 9% in 2020. These businesses are making important contributions
to our results and we are committed to building on this progress in
the coming year.
“We have diversified our investor base by listing on the New
York Stock Exchange in November and issuing debt in the United
States in December,” said Mr. MacAlpine. “With the re-opening of
that offering in January, we have issued US$960 million in notes,
demonstrating a high level of investor interest and confidence in
CI and our strategy. While CI had no U.S. debt just two months ago,
today over 50% of our bonds are issued in the U.S.
“In asset management, we have kept up the pace of enhancements
to the business, rebranding CI Investments to CI Global Asset
Management, and building on our leadership in alternative
investments with the launch of the CI Galaxy Bitcoin Fund and, in
January, launching a private equity product with Adams Street
Partners for accredited investors,” Mr. MacAlpine said.
CI is the market leader in liquid alternatives in Canada, with
$3.2 billion in assets under management in this category as at
December 31, 2020, offered in both mutual fund and exchange-traded
fund structures.
“We’re making these substantial investments in CI’s growth while
achieving strong financial results, paying a quarterly dividend of
$0.18 a share and continuing our share repurchase program,” Mr.
MacAlpine said.
“As a result of growing wealth management revenues and prudent
cost management, our earnings per share, on an adjusted basis1,
were $0.71 for the fourth quarter, the highest in the company’s
history. For the year, adjusted earnings were $2.45, also a record
high for the company.”
Financial results
CI reported earnings per share of $0.50 for the fourth quarter
of 2020, compared to $0.62 in the previous quarter and $0.66 in the
fourth quarter of 2019. Adjusted earnings per share1 for the fourth
quarter were $0.71. This compares to adjusted earnings per share of
$0.62 for the third quarter of 2020 and $0.66 for the same quarter
a year ago. Adjusted earnings exclude a provision of $42.6 million
($55.8 million before tax) in the fourth quarter of 2020 for
non-recurring items, including legal and restructuring charges,
investment write-downs and losses from the early redemption of
bonds.
For the year ended December 31, 2020, CI reported record
adjusted earnings per share of $2.45, versus $2.41 for fiscal 2019.
Adjusted earnings exclude provisions taken in the first and fourth
quarters of 2020 and in the second quarter of 2019.
SG&A expenses for the fourth quarter were $116.7 million, up
from $108.8 million in the prior quarter and $113.8 million in the
same quarter of 2019. The change reflects the inclusion of results
of acquired companies in the fourth quarter of 2020, partially
offset by continued cost reduction in other areas of the
business.
CI generated $150.2 million in free cash flow1 during the fourth
quarter, an increase of 4% from $143.9 million in the third quarter
and a decrease from $168.3 million in the same quarter a year
ago.
At December 31, 2020, total ending assets under management were
$135.1 billion, representing an increase of 5% from September 30,
2020 and 3% from December 31, 2019. Core assets under management,
which consists of assets managed by CI’s Canadian and Australian
subsidiaries, were $129.6 billion at December 31, 2020, an increase
of 5% from the previous quarter-end and a decline of 2% year over
year. During the fourth quarter, U.S. assets under management grew
by 16% to $5.5 billion.
Total average assets under management were $131.2 billion for
the fourth quarter, up 2% from the third quarter and up 1% from the
fourth quarter of 2019. Core average assets under management were
$126.2 billion in the fourth quarter, compared to $124.6 billion
for the previous quarter and $130.5 billion for the year-ago
quarter.
Total wealth management assets as at December 31, 2020 were
$96.5 billion, which represents an all-time year-end high for CI
and an increase of $30.4 billion or 46% over September 30, 2020 and
an increase of $46.0 billion or 91% year over year.
Canadian wealth management assets, at $67.3 billion, increased
$16.1 billion or 31% during the quarter, reflecting net sales,
market growth and the acquisition of Aligned Capital Partners Inc.
in October 2020. Year over year, Canadian wealth management assets
increased by 33%. This category also includes the assets of CI
Assante Wealth Management (Assante Wealth Management (Canada)
Limited), CI Private Counsel LP, CI Direct Investing (WealthBar
Financial Services Inc.) and Virtual Brokers.
U.S. wealth management assets were $29.2 billion at December 31,
2020, up 96% from $14.9 billion over the quarter. The change
reflects the addition during the quarter of five U.S. RIA firms:
RGT Wealth Advisors, LLC, The Roosevelt Investment Group, LLC,
Doyle Wealth Management, LLC, Stavis & Cohen Private Wealth,
LLC and Bowling Portfolio Management LLC. CI’s U.S. wealth
management assets also include assets of Balasa Dinverno Foltz LLC,
The Cabana Group, LLC, Congress Wealth Management, LLC, One Capital
Management, LLC and Surevest, LLC.
CI posted $2.1 billion in overall net redemptions for the fourth
quarter of 2020. CI’s Canadian retail business, excluding products
closed to new investors, had $1.3 billion in net redemptions for
the fourth quarter of 2020, an improvement of $0.2 billion from the
third quarter of 2020 but an increase from $0.4 billion in net
redemptions for the fourth quarter of 2019. CI’s Canadian
institutional business had net redemptions of $0.9 billion for the
fourth quarter of 2020, representing an improvement of $0.5 billion
over the same quarter a year ago. Sales at GSFM were relatively
flat, and CI’s U.S. RIA business had $0.3 billion in net sales.
CI’s closed business, comprised primarily of segregated fund
contracts that are no longer available for sale, had $0.2 billion
in net redemptions for the quarter.
Capital allocation
In the fourth quarter of 2020, CI repurchased 1.8 million shares
at a cost of $29.8 million (average cost of $16.96 per share) and
paid $37.8 million in dividends at a rate of $0.18 a share.
The Board of Directors declared a quarterly dividend of $0.18
per share, payable on July 15, 2021 to shareholders of record on
June 30, 2021. The annual dividend rate of $0.72 per share
represented a yield of 4.2% on CI’s closing share price of $17.33
on February 10, 2021.
Fourth quarter business highlights
- CI made significant progress in expanding its U.S. wealth
management business, completing the acquisition of five U.S. RIAs:
RGT Wealth Advisors of Dallas, with approximately $6.1 billion in
assets; New York-based The Roosevelt Investment Group, with
approximately $3.8 billion in assets; Doyle Wealth Management of
St. Petersburg, FL, with approximately $1.6 billion in assets;
Texas-based Stavis & Cohen Private Wealth of Houston, with
approximately $0.8 billion in assets; and Bowling Portfolio
Management, with approximately $0.6 billion in assets under
management.3
- CI also completed the acquisition of Burlington, Ontario-based
Aligned Capital, a full-service investment advisory firm with
approximately $12.2 billion in assets and about 200 advisors across
Canada.3
- CI listed its common shares on the New York Stock Exchange as
part of its strategy to globalize the company. CI expects the
listing to enhance its corporate profile in the U.S., broaden its
investor base and make CI’s shares more attractive to sellers as
purchase consideration when making acquisitions in the U.S.
- CI completed a US$700 million public offering of 3.200% notes
due 2030. The offering allowed for the early redemption of the
company’s $200-million principal amount of 2.775% debentures due
November 2021, which was completed in January 2021. Also in January
2021, CI announced the US$260 million re-opening of the 3.200%
notes, along with its intention to redeem the outstanding C$325
million aggregate principal amount of its 3.520% debentures due
July 20, 2023.
- CI expanded its partnership with d1g1t Inc. as part of CI’s
strategy to modernize its technology platforms. The partnership is
allowing CI to further develop advanced discretionary capabilities
within its Assante Wealth Management business and is expected to
help facilitate the integration of CI’s acquired U.S.-based RIAs
firms by providing them access to the d1g1t platform.
- CI continued to implement its corporate branding initiative,
with the rebranding of CI Investments to CI Global Asset Management
(“CI GAM”). As part of the rebranding, all legacy in-house
investment management boutique brands are being phased out.
Additionally, CI GAM has removed the compliance barriers between
the in-house teams, allowing for increased collaboration and
information sharing across the firm and allowing investors to
benefit from the full spectrum of capabilities within CI GAM.
- Recent product launches included CI Galaxy Bitcoin Fund in the
fourth quarter and a private equity product with Adams Street
Partners in early January 2021, available to accredited investors.
The two funds, both offering innovative access to alternative
investments, reflect one aspect of CI GAM’s drive to modernize its
business.
- Investment funds managed by CI GAM continued to receive
industry recognition for risk-adjusted performance, receiving nine
Canada Lipper Fund Awards from Refinitiv and 35 FundGrade A+®
Awards for 2020 performance.
Following quarter-end:
- CI announced an agreement to acquire Segall Bryant &
Hamill, LLC a leading high-net-worth-focused registered investment
advisor and multi-office institutional investment management firm
with US$23 Billion in assets, headquartered in Chicago. Once
completed, the transaction is expected to double CI’s total
U.S.-based assets to approximately $58 billion (US$46
billion)4.
Analysts’ conference call
CI will hold a conference call with analysts today at 9:00 a.m.
Eastern Time, led by Chief Executive Officer Kurt MacAlpine and
Chief Financial Officer Douglas Jamieson. The call and a slide
presentation will be accessible through a webcast, which can also
be reached through the Events section of the Investor Relations
page on www.cifinancial.com. Alternatively, investors may listen to
the discussion by calling 1-866-248-8441 or 647-792-1241 (Passcode:
6228002). A replay of the call will be available for one year
following the presentation (Passcode: 6228002). The webcast will be
archived in the Financials section of www.cifinancial.com.
Financial highlights
As at and for the quarters
ended
Change (%)
[millions of dollars, except share
amounts]
Dec. 31, 2020
Sep. 30, 2020
Dec. 31, 2019
QoQ
YoY
Core assets under management (Canada and
Australia)
129,591
123,605
131,741
5
(2)
U.S. assets under management
5,461
4,707
-
16
n/a
Total assets under management
135,052
128,312
131,741
5
3
Canadian wealth management
67,257
51,189
50,505
31
33
U.S. wealth management
29,230
14,937
-
96
n/a
Total wealth management assets
96,487
66,127
50,505
46
91
Total assets
231,539
194,438
182,246
19
27
Core average assets under management
126,233
124,626
130,542
1
(3)
Total average assets under management
131,246
129,021
130,542
2
1
Net income attributable to
shareholders
105.0
130.6
147.5
(20)
(29)
Adjusted net income1
147.6
130.6
147.5
13
-
Basic earnings per share
0.50
0.62
0.66
(19)
(24)
Diluted earnings per share
0.50
0.61
0.65
(18)
(23)
Adjusted earnings per share1
0.71
0.62
0.66
15
8
Free cash flow1
150.2
143.9
168.3
4
(11)
Return on equity2
34.6%
34.9%
37.8%
Dividends paid per share
0.18
0.18
0.18
-
-
Dividend yield
4.6%
4.3%
3.3%
Average shares outstanding
209,347,760
211,347,613
224,961,509
(1)
(7)
Share price – High
18.27
19.68
22.24
(7)
(18)
Share price – Low
15.40
16.80
18.26
(8)
(16)
Share price – Close
15.78
16.89
21.71
(7)
(27)
Change in share price
(6.6%)
(2.2%)
12.3%
Total shareholder return
(5.5%)
(1.2%)
13.2%
Market capitalization
3,319
3,542
4,815
(6)
(31)
P/E ratio2
6.4
7.0
9.0
(9)
(29)
Long term debt (including current
portion)
2,456
1,962
1,604
25
53
Net debt1
1,872
1,669
1,383
12
35
Net debt to adjusted EBITDA1
2.06
2.05
1.56
-
32
1 Free cash flow, net debt, adjusted net income, adjusted
earnings per share and adjusted EBITDA are not standardized
earnings measures prescribed by IFRS. Descriptions of these
measures, as well as others, and reconciliations to the nearest
IFRS measures, where necessary, are included in Management’s
Discussion and Analysis available at www.cifinancial.com.
2 Trailing 12 months, calculated using adjusted net income.
3 All asset levels as at December 31, 2020.
4 Based on assets for Segall Bryant & Hamill, LLC and CI as
at December 31, 2020.
About CI Financial
CI Financial Corp. is an independent company offering global
asset management and wealth management advisory services. CI’s
primary asset management businesses are CI Global Asset Management
(CI Investments Inc.) and GSFM Pty Ltd., and it operates in
Canadian wealth management through Assante Wealth Management
(Canada) Ltd., CI Private Counsel LP, Aligned Capital Partners
Inc., CI Direct Investing (WealthBar Financial Services Inc.), and
CI Investment Services Inc.
CI’s U.S. wealth management businesses consist of Balasa
Dinverno Foltz LLC, Bowling Portfolio Management LLC, The Cabana
Group, LLC, Congress Wealth Management, LLC, Doyle Wealth
Management, LLC, One Capital Management, LLC, The Roosevelt
Investment Group, LLC, RGT Wealth Advisors, LLC, Stavis & Cohen
Private Wealth, LLC and Surevest LLC.
CI is listed on the Toronto Stock Exchange under CIX and on the
New York Stock Exchange under CIXX. Further information is
available at www.cifinancial.com.
This press release contains forward-looking statements
concerning anticipated future events, results, circumstances,
performance or expectations with respect to CI Financial Corp.
(“CI”) and its products and services, including its business
operations, strategy and financial performance and condition.
Forward-looking statements are typically identified by words such
as “believe”, “expect”, “foresee”, “forecast”, “anticipate”,
“intend”, “estimate”, “goal”, “plan” and “project” and similar
references to future periods, or conditional verbs such as “will”,
“may”, “should”, “could” or “would”. These statements are not
historical facts but instead represent management beliefs regarding
future events, many of which by their nature are inherently
uncertain and beyond management’s control. Although management
believes that the expectations reflected in such forward-looking
statements are based on reasonable assumptions, such statements
involve risks and uncertainties. The material factors and
assumptions applied in reaching the conclusions contained in these
forward-looking statements include that the acquisition of Segall
Bryant & Hamill, LLC will be completed and its asset levels
will remain stable, that the investment fund industry will remain
stable and that interest rates will remain relatively stable.
Factors that could cause actual results to differ materially from
expectations include, among other things, general economic and
market conditions, including interest and foreign exchange rates,
global financial markets, changes in government regulations or in
tax laws, industry competition, technological developments and
other factors described or discussed in CI’s disclosure materials
filed with applicable securities regulatory authorities from time
to time. The foregoing list is not exhaustive and the reader is
cautioned to consider these and other factors carefully and not to
place undue reliance on forward- looking statements. Other than as
specifically required by applicable law, CI undertakes no
obligation to update or alter any forward-looking statement after
the date on which it is made, whether to reflect new information,
future events or otherwise.
CI Global Asset Management is a registered business name of CI
Investments Inc.
This communication is provided as a general source of
information and should not be considered personal, legal,
accounting, tax or investment advice, or construed as an
endorsement or recommendation of any entity or security discussed.
Individuals should seek the advice of professionals, as
appropriate, regarding any particular investment. Investors should
consult their professional advisors prior to implementing any
changes to their investment strategies.
This announcement is not an offer of securities for sale into
the United States. Securities of CI Galaxy Bitcoin Fund have not
been and will not be registered under the U.S. Securities Act of
1933, as amended, and may not be offered or sold in the United
States, except pursuant to an applicable exemption from
registration. No public offering of securities is being made in the
United States.
FundGrade A+® is used with permission from Fundata Canada Inc.,
all rights reserved. The annual FundGrade A+® Awards are presented
by Fundata Canada Inc. to recognize the “best of the best” among
Canadian investment funds. The FundGrade A+® calculation is
supplemental to the monthly FundGrade ratings and is calculated at
the end of each calendar year. The FundGrade rating system
evaluates funds based on their risk-adjusted performance, measured
by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score
for each ratio is calculated individually, covering all time
periods from 2 to 10 years. The scores are then weighted equally in
calculating a monthly FundGrade. The top 10% of funds earn an A
Grade; the next 20% of funds earn a B Grade; the next 40% of funds
earn a C Grade; the next 20% of funds receive a D Grade; and the
lowest 10% of funds receive an E Grade. To be eligible, a fund must
have received a FundGrade rating every month in the previous year.
The FundGrade A+® uses a GPA-style calculation, where each monthly
FundGrade from “A” to “E” receives a score from 4 to 0,
respectively. A fund’s average score for the year determines its
GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade
A+® Award. For more information, see www.FundGradeAwards.com.
The Refinitiv Lipper Fund Awards, granted annually, highlight
funds and fund companies that have excelled in delivering
consistently strong risk-adjusted performance relative to their
peers. The Refinitiv Lipper Fund Awards are based on the Lipper
Leader for Consistent Return rating, which is a risk-adjusted
performance measure calculated over 36, 60 and 120 months. The fund
with the highest Lipper Leader for Consistent Return (Effective
Return) value in each eligible classification wins the Refinitiv
Lipper Fund Award. For more information, see
lipperfundawards.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210211005316/en/
Investor Relations Jason Weyeneth, CFA Vice-President,
Investor Relations & Strategy 416-681-8779 jweyeneth@ci.com
Media Canada Murray Oxby Vice-President, Communications
416-681-3254 moxby@ci.com
United States Trevor Davis, Gregory FCA for CI Financial
443-248-0359 cifinancial@gregoryfca.com
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