CI Financial cashes in big with sale of stake in Boston RIA

CI Financial, which has been one of the most aggressive buyers of RIAs over the past few years, is cleaning up its balance sheet in preparation for the spinoff and public stock offering of CI Private Wealth.

The Toronto-based financial conglomerate, which has its U.S. headquarters in Miami, announced this week the sale of its minority ownership stake in Boston-based Congress Wealth Management to Audax Private Equity.

“CI’s investment in Congress was made almost three years ago, prior to the establishment of the CI Private Wealth differentiated private partnership model,” said CI Chief Executive Kurt MacAlpine.

While MacAlpine described Congress as a “great firm and partnership,” he explained that partial ownerships don’t fit the developing CIPW model.

“CI and Congress believe that minority ownership is not the best structure to maximize the client and employee experience, and that Audax will be an excellent partner to support the next chapter of growth for Congress," MacAlpine said.

Congress Wealth Management has $6.3 billion under management, and company president Paul Lonergan said the firm benefited from the three-year relationship with CI.

"The investment from CI was extremely productive and we are exiting on the best of terms," he said. "In addition to finding a solution that works for our ownership, we are also eager to pursue additional M&A opportunities thanks to the backing from Audax Group."

The sale, which is expected to close in May, will provide CI with an investment return that's approximately three times its initial investment. The proceeds will be used to pay down debt.

Founded in 1965, CI Financial has grown into a $289 billion financial conglomerate with three divisions; CI Global Asset Management, Canadian Wealth Management and U.S. Wealth Management, which includes CI Private Wealth.

CI first entered the U.S. market in late 2019 and has since acquired dozens of registered investment advisory firms.

In addition to listing its shares on the New York Stock Exchange and establishing a U.S. headquarters in Miami, CI Private Wealth has filed for an initial public offering slated for some time this year.