CI announces plan to sell part of its U.S. wealth business via IPO

CI Financial has announced its intention to sell up to 20% of its U.S. wealth business via a U.S. initial public offering (IPO) in a move expected to “unlock” the value of the business, the company announced on Thursday. The Toronto-based firm said it would submit a Form S-1 to the U.S. Securities and Exchange Commission this year.

“The growth in our U.S. wealth management business is incredible; however, in our opinion, the value we have created isn’t reflected in our share price today,” said Kurt MacAlpine, CEO of CI Financial, in a release. “After a thorough evaluation of our strategic options, we are confident that a U.S.-listed subsidiary IPO is the best route to shareholder value creation.”

CI Financial has acquired 23 U.S. RIA businesses directly since entering the U.S. market in early 2020, and has recently announced two more deals yet to be completed. The firm has acquired five other U.S. RIAs indirectly via affiliated U.S. RIAs. It has also bought minority stakes in two U.S. alternative asset managers. Once outstanding acquisitions are completed, CI Financial’s U.S. assets will reach US$133 billion, representing the firm’s largest business unit.

“The U.S. wealth management business now has sufficient scale to stand alone as a public company, creating an attractive long-term destination for clients and advisors,” MacAlpine said. “We believe this is the best path to realizing our vision of becoming the leading ultra-high-net-worth and high-net-worth business in the U.S.”

CI Financial said it intends to use the net proceeds from the IPO to pay down debt. It also said it will remain the majority shareholder of the U.S. wealth management business and currently has no intention of spinning out or otherwise divesting its remaining ownership interest in the U.S.

CI Financial trades on the Toronto Stock Exchange and, since November 2020, on the New York Stock Exchange.

Rudy Mezzetta

Rudy is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on tax, estate planning, industry news and more since 2005. Reach him at rudy@newcom.ca.