Canadian asset manager CI Financial Corp. is selling a 20% stake in its U.S. wealth management unit to a group of investors including Bain Capital and Abu Dhabi Investment Authority.
The $1 billion cash injection gives the business an enterprise value of about $5.3 billion, CI said in a statement that also named Ares Management Corp. and the state of Wisconsin as members of the investor group. The deal was reported first by the Wall Street Journal.
For CI, the transaction means immediate financial relief, allowing it to pay down some of the debt it accumulated when it acquired dozens of wealth management offices across the U.S. as part of a new growth strategy by Chief Executive Kurt MacAlpine. CI announced an offer to purchase its bonds due in 2024, 2025 and 2027.
The Canadian financial firm announced plans last year to take the U.S. division public, but has shelved the IPO for now.
“We capitalized on an opportunity to accomplish in the private markets the objectives we sought in the IPO — value creation for our shareholders, an infusion of capital to materially deleverage, and the opportunity to build relationships with leading long-term investors,” MacAlpine said in the statement.
CI’s net leverage ratio will fall to 2.7 times from 4 times, the company said. The firm’s stock market value, including both its U.S. business and its profitable Canadian fund management arm, was just C$2.3 billion ($1.7 billion) as of Wednesday’s close, according to data compiled by Bloomberg. It has been buying back shares, but executives have expressed frustration at the company’s low valuation as the market has grown more concerned about the debt.
“The CI board is thrilled by the outcome of this transaction, which creates substantial value for our shareholders and represents an attractive alternative to an IPO of CI US,” Chairman Bill Holland said. “We have retained majority ownership of CI US while partnering with world-class investors and adding new directors at CI US.”
New research reveals rising expenses, forced early exits, and a widening gap between how long people live and how long their money lasts.
Firms continue their quest to attract and retain the best advisor teams.
A survey from TacticalMind AI found 69% of advisors say a high-quality AI platform that makes investment recommendations and constructs portfolios is worth $500 monthly, while research-only tools are valued closer to $250.
The alts tech provider's latest integration lets advisors query fund data and surface portfolio insights without leaving their primary workspace.
The regulator is scrutinizing how some firms oversee concentrated positions in complex "worst-of" notes – and wants answers.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
