CI Financial’s U.S. RIA enterprise continues to separate from Canadian mother ship

CI Financial CEO Kurt MacAlpine

The firm's stock took a beating last year but is up 15% so far this year as the company navigates its U.S. growth strategy.

Canada-based RIA aggregator CI Financial (CIXX), which trades on both the Toronto and New York stock exchanges, gave investors a glimpse of next month’s earnings report that shows solid growth in the U.S. market.

CI, which has a U.S. headquarters in Miami, announced in a preliminary report this week that it had total assets of $278.5 billion, consisting of $87.3 billion in assets under management, $57.4 billion of Canadian wealth management assets, and $133.9 billion of U.S. wealth management assets.

The total asset figure is down 2% from $285.3 billion in November, and down 1% from $278.8 billion at the end of 2021.

While CI’s Canadian asset management business is down 18.3% and the Canadian wealth management business is down 3.8% from a year ago, the U.S. wealth management business is up 19.4%.

CI’s stock price, which lost 52% last year, was hit harder than the category, which declined by less than half the amount that CI did over the period. Meanwhile, the stock is up 15.1% so far this year, which is double the industry average.

The S&P 500 Index fell by 18.2% last year and is up 2.4% so far this year.

CI announced 11 RIA deals last year, extending a push into the U.S. market that began in early 2020. There’s normally a lag between deals being announced and completed, but CI completed five transactions last year totaling $25 billion worth of acquired assets. In 2021, CI had completed 15 transactions totaling $87 billion.

All signs continue to point to a separate U.S. entity for the Canadian financial services conglomerate.

The company recently signed a lease for 50,000 square feet of office space on Park Avenue in Manhattan, which is expected to house six RIAs based in the New York metro area.

“The new space will support CI Financial’s operations and future growth,” according to a company statement. “Employees and clients of the firm will have the amenities to meet and work at the new, integrated modern office.”

“As CI Financial continues to execute its strategic priorities and objectives, it is being mindful and thoughtful about its approach to existing leases and its future office space needs. One simple, strategic synergy for our firms located in Manhattan was to lease a new space that could centralize local corporate services and operations, including back-office support, while also providing ample office and meeting spaces for clients,” the statement continued.

In addition to opening its U.S. headquarters in Miami in September 2021, CI announced last April its plans to file an initial public stock offering in the U.S.

“The plan for our business is to de-lever,” CI Chief Executive Kurt MacAlpine said during a call with analysts in November, adding that the IPO will happen “when the market conditions present themselves.”

The company filed a confidential submission of a draft registration statement for the IPO on Dec. 22.