Transaction supports accelerated distribution
of innovative risk-managed investment strategies
TORONTO, April 21, 2020 /CNW/ - CI Financial Corp.
("CI") (TSX: CIX) and The Cabana Group, LLC, the parent company of
Cabana Asset Management (together "Cabana") of Fayetteville, Arkansas, today announced an
agreement under which CI will acquire a strategic interest in
Cabana, becoming the largest shareholder in the registered
investment advisor firm with US$1.1
billion in assets under management (as of April 17, 2020).
Cabana has an exceptional track record of growth, being ranked
by Financial Advisor magazine as the fastest-growing registered
investment advisor ("RIA") in the U.S. in 2018 and the second
fastest-growing RIA in 2019. In addition to providing a
comprehensive suite of investment management and wealth planning
services, Cabana offers a highly successful lineup of risk-managed
portfolios to its retail clients and on a sub-advisory basis to
RIAs and advisors across the U.S.
Cabana's Target Drawdown Portfolios, which are only offered in
the U.S., have achieved strong results, with all four portfolios
eligible for a rating from Morningstar Inc. receiving the top
five-star overall rating (as of December 31,
2019). The portfolios are designed with the goal of
minimizing losses within a predetermined drawdown parameter, while
actively participating in favorable market conditions.
"The Target Drawdown Series – both recently and over the longer
term – has generated strong demand and helped to fuel Cabana's
rapid growth," said Kurt MacAlpine,
CI Chief Executive Officer. "Given current market conditions and
the ongoing need for effective retirement solutions, there is a
tremendous and timely opportunity to offer the Target Drawdown
Series to a wider audience in both the U.S. and Canada."
"Identifying a strategic partner to more widely distribute our
products and services in the U.S. has always been our goal," said
Chadd Mason, Cabana's Chief
Executive Officer and co-founder. "CI's financial strength, vision,
expertise in asset and wealth management, and commitment to
building a client-focused RIA business provide excellent support
for Cabana's next wave of growth."
Mr. Mason noted that the Target Drawdown strategies have posted
positive net flows every month this year, including every week
since the start of the recent downturn. In addition to the firm's
signature Target Drawdown Separately Managed Account (SMA)
Portfolios, Cabana offers its unique investment strategy in the
form of Collective Investment Trusts (CITs) for use within
401k plans, as well as a hedge
fund.
All Target Drawdown products numerically quantify acceptable
levels of risk at the onset of the investment process and are
actively managed using Cabana's proprietary Cyclical Asset
Reallocation Algorithm ("CARA"). Cabana Asset Management
claims compliance with the Global Investment Performance Standards
("GIPS") and all of its portfolio composites are third-party
examined consistent with GIPS.
The Cabana transaction is part of CI's initiative to build a
U.S. wealth management business within the RIA sector,
the fastest-growing segment in North American wealth
management. The initiative supports CI's three strategic priorities
of modernizing its asset management business, expanding wealth
management and globalizing the company. CI has also acquired a
majority interest in Surevest Wealth Management of Phoenix, reached an agreement to purchase a
majority stake in One Capital Management, LLC of Westlake Village, California, and signed a
letter of intent to purchase another RIA.
"This initiative is based on our belief that the role of the
financial advisor is more important than ever, and unprecedented
recent events bear that out," Mr. MacAlpine said. "This presents
opportunities for firms like CI that can meet investors'
increasingly complex needs with a holistic approach to investing
and wealth planning.
"With a leading wealth management business in Canada, we are well placed to attract new
clients and new advisors," he said. "We continue to execute our
U.S. strategy and with our investment in Cabana we will have over
US$3.4 billion in total assets in our
U.S. RIA business."
CI's Canadian wealth management businesses are Assante Wealth
Management (Canada) Limited and CI
Private Counsel LP, which together accounted for approximately
C$43.7 billion in assets under
advisement as of March 31, 2020.
CI previously disclosed on February 14,
2020 that it had signed letters of intent to acquire two
additional RIA firms, of which Cabana is one. The Cabana
transaction is currently expected to close later this quarter.
Terms were not disclosed.
About The Cabana Group
The Cabana Group,
LLC provides a comprehensive suite of services to clients and
advisor partners from offices in Arkansas, Texas and Colorado. Its services include wealth
management, portfolio construction, retirement plan solutions, tax
and estate planning, business development, insurance, annuities and
sub-advisory money management. The company was ranked the
No. 1 fastest-growing company in Arkansas by Inc. Magazine in 2019, while
Financial Advisor magazine ranked subsidiary Cabana Asset
Management in the top two fastest-growing registered investment
advisers in 2018 and 2019. The Target Drawdown Series is
available in the United States to
individual investors and advisors through the industry's leading
custodians. For more information,
visit www.thecabanagroup.com.
About CI Financial
CI Financial Corp. (TSX: CIX) is an
independent Canadian company offering global asset management and
wealth management advisory services. CI held approximately
C$156 billion in fee-earning assets
as of March 31, 2020. Its primary
operating businesses are CI Investments Inc., Assante Wealth
Management (Canada) Ltd., CI
Private Counsel LP, GSFM Pty Ltd., WealthBar Financial Services
Inc., and BBS Securities Inc. Further information is available
at www.cifinancial.com.
This material is for informational purposes only. It is not a
recommendation, offer or solicitation to buy or sell any
securities. Past performance is no guarantee of future
results. All investment strategies have different
degrees of risk and the corresponding potential for profit or
loss. Asset allocation and diversification will not
necessarily improve returns and cannot eliminate the risk of
investment losses. "Target Drawdown" is merely a
descriptive term used to describe the general strategy and
objective of the portfolio, it is not a guarantee, nor
should it be construed to suggest safety or protection from
loss. There is no guarantee that portfolio performance will
remain consistent with the targeted drawdown
parameter. While risk tolerance and
targeted "drawdown" are identified on the front end for each
portfolio, Cabana's algorithm does not take any one client's
situation into account and there is
no guarantee that Cabana's strategies will
be suitable for any investor. Investors and advisors
should not simply rely on the name of any portfolio to determine
what is suitable.
Investment advisory services provided by Cabana LLC, an SEC
registered investment adviser. The firm only transacts business in
states where it is properly registered, or is excluded or exempted
from registration requirements. Registration as an investment
adviser is not an endorsement of the firm by securities regulators
and does not mean the adviser has achieved a specific level of
skill or ability. Cabana claims compliance with the Global
Investment Performance Standards (GIPS®). To receive a GIPS Report
and/or a list of composite descriptions please email your request
to info@thecabanagroup.com. GIPS® is a registered trademark of CFA
Institute. CFA Institute does not endorse or promote this
organization, nor does it warrant the accuracy or quality of the
content contained herein. For additional disclaimers
about Cabana, including awards and rankings, please visit
https://thecabanagroup.com/disclaimers/.
© 2020 Morningstar, Inc. All rights reserved. The information
contained herein: (1) is proprietary to Morningstar and/or its
content providers; (2) may not be copied or distributed; and (3) is
not warranted to be accurate, complete, or timely. Neither
Morningstar nor its content providers are responsible for any
damages or losses arising from any use of this information. Past
performance is no guarantee of future results. Target Drawdown
Portfolios are part of Morningstar's Tactical Allocation category,
which is made up of 326 total funds.
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
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.
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SOURCE CI Financial Corp.