CIX reports Record Financial Results for 4rth Qtr of 2021 Basic EPS of $0.63 or record adjusted EPS1 of $0.87
EBITDA per share of $1.21 or record adjusted EBITDA1 per share of $1.41
Record total assets of $384.1 billion, a year-over-year increase of 65.9%
Record asset gathering of $6.6 billion in net flows across wealth and asset management in 2021
Completed eight RIA acquisitions with combined assets of $43.3 billion
Made strategic investments in two alternative asset managers, Columbia Pacific Advisors and GLAS Funds
U.S. wealth management surpassed $100 billion in assets to become CI’s largest business with $151.3 billion in assets, up from zero two years ago
Paid quarterly dividend of $0.18 a share, totalling $35.6 million
Following quarter-end, CI agreed to acquire $2.2-billion Northwood Family Office, Canada’s leading multi-family office, and Corient Capital Partners, a fast-growing California RIA with $6.4 billion in assets
All financial amounts in Canadian dollars as at December 31, 2021, unless stated otherwise. Financial amounts for the quarters and year ended 2021 are unaudited.
TORONTO, February 22, 2022--(BUSINESS WIRE)--CI Financial Corp. ("CI") (TSX: CIX, NYSE: CIXX) today released record financial results for the quarter ended December 31, 2021.
"2021 was the most successful year in the history of CI in terms of financial performance and asset gathering," said Kurt MacAlpine, CI Chief Executive Officer. "These outstanding results stem from the tremendous progress we have made in executing on our strategy and the successful transformation of the company. During the year, we added $6.6 billion of new client assets, excluding market moves and M&A. This was the result of robust growth in wealth management and our best asset management flows in six years.
"In the U.S., we significantly expanded our wealth management business by completing the acquisitions of eight registered investment advisors and taking minority stakes in two alternative asset managers in the fourth quarter alone," Mr. MacAlpine said. "At $151 billion in assets, U.S. wealth management is now our largest business line.
"In Canada, our wealth management platform posted year-over-year asset growth of 20%, reaching $80.6 billion, while AUM in our asset management segment grew by more than 11% due to strong investment performance and positive net sales. The significant turnaround in net sales stems from actions taken to modernize our asset management business, including integrating our boutique investment teams into a single global platform and introducing a broad range of innovative investment solutions."
Financial highlights
Total fourth quarter revenues grew by 15.3% as compared to the third quarter. Excluding foreign currency exchange gains and losses and a gain on an investment during the fourth quarter, total revenue grew 6.8%, primarily driven by seasonal performance fees and distributions related to seed capital investments in certain funds, higher average core assets under management, as well as by recent acquisitions and higher client asset balances.
Total expenses in the fourth quarter decreased slightly from the third quarter. Excluding adjustments related to changes in fair value for contingent consideration and amortization of intangible assets related to our acquisitions, legal and restructuring charges, and contingent consideration recorded as compensation, total expenses increased 3.5% primarily due to year-end incentive compensation adjustments and higher marketing and branding costs.
Net income grew to $123.7 million in the fourth quarter from $43.8 million in the third quarter. Excluding the adjustments noted above, fourth quarter net income was $171.0 million, which increased 7.4% from $159.2 million in the third quarter.
For the full year, revenues grew 33% to $2.7 billion, reflecting the impact of acquisitions, favorable market conditions and positive organic growth across the franchise. For the full year, expenses grew 52% to $2.1 billion, reflecting the impact of acquisitions as well as higher variable costs associated with higher asset levels. Net income was $412.4 million in 2021 as compared to $475.5 million in 2020. Adjusted net income (see non-IFRS measures) increased to $634.8 million from $528.7 million, primarily due to the impact of acquisitions and favorable market conditions.
Capital allocation
In the fourth quarter of 2021, CI repurchased 0.8 million shares at a cost of $20.9 million, for an average cost of $26.21 per share, and paid $35.6 million in dividends at a rate of $0.18 per share.
The Board of Directors declared a quarterly dividend of $0.18 per share, payable on July 15, 2022 to shareholders of record on June 30, 2022. The annual dividend rate of $0.72 per share represented a yield of 3.3% on CI’s closing share price of $21.80 on February 18, 2022.
Fourth quarter business highlights
CI completed the acquisitions of eight registered investment advisors with combined assets of approximately $43.3 billion. They are all high-quality firms focused on high-net-worth and ultra-high-net-worth clients and include:
Budros, Ruhlin & Roe, Inc., a Columbus, Ohio-based RIA managing $4.4 billion in assets.
CPWM, LLC (doing business as Columbia Pacific Wealth Management), which manages $8.6 billion from its headquarters in Seattle and an office in San Francisco.
Gofen and Glossberg, LLC, a Chicago-based RIA with $9.7 billion in assets and a history dating back to 1932.
Matrix Capital Advisors, LLC, of Chicago, which oversees $0.9 billion in assets.
McCutchen Group LLC, a Seattle-based multi-family office managing $4.7 billion.
Odyssey Wealth Management, LLC, an RIA with $0.3 billion in assets acquired by CI affiliate RGT Wealth Advisors, LLC of Dallas.
RegentAtlantic Capital, LLC, a $9.1-billion RIA based in Morristown, N.J. with an office in New York City.
R.H. Bluestein& Co., which manages $5.6 billion from offices in Birmingham, Michigan and New YorkCity.
CI acquired minority stakes in two alternative investment firms:
Columbia Pacific Advisors, LLC of Seattle, which manages approximately $4.8 billion in assets across a broad selection of institutional-caliber alternative strategies.
GLAS Funds, LLC of Cleveland, a leading tech-enabled platform providing investors with secure and streamlined digital access to alternative investments. It has $1.6 billion in combined assets under management and assets under contract.
CI Global Asset Management ("CI GAM") investment funds received extensive industry recognition for investment excellence. CI GAM received 13 Refinitiv Canada Lipper Fund Awards and 38 FundGrade A+® Awards. The FundGrade A+ winners included 16 mutual funds and exchange-traded funds and 22 segregated funds managed by the firm. The Lipper and FundGrade A+ awards were announced in November and January, respectively.
Following quarter-end:
Effective January 1, CI established CI Private Wealth US, LLC ("CIPW") to hold CI’s interests in its U.S. RIAs. CIPW is structured as a partnership in which CI is majority owner and certain employees of CIPW and its affiliates hold shares in the firm. This unique model aligns the interests of all partners and incentivizes them to collaborate, realize synergies, and drive the profitable growth of the firm as a whole.
CI agreed to acquire Corient Capital Partners, LLC, a Newport Beach, California-based RIA overseeing approximately $6.3 billion on behalf of ultra-high-net-worth individuals and families across the United States.
CI agreed to acquire Toronto-based Northwood Family Office Ltd., Canada’s leading multi-family office. It manages and co-ordinates the integrated financial, investment and personal affairs of wealthy Canadian and global families and oversees approximately $2.2 billion of investment assets.
CI continued to build on its leadership position in digital assets in Canada with the acquisition of a minority stake in Newton Crypto Ltd., a crypto asset trading platform, and the launch of the CI Galaxy Multi-Crypto ETF (TSX: CMCX).
Analysts’ conference call
CI will hold a conference call with analysts today at 10:00 a.m. EST, led by Mr. MacAlpine and Chief Financial Officer Amit Muni. A live webcast of the call and slide presentation can be accessed here, or through the Investor Relations section of CI’s website. Alternatively, investors may listen to the discussion through the following numbers (access code: 652352):
Canada toll-free: 1-833-950-0062
United States: 1-844-200-6205
United States (New York local): 1-646-904-5544.