Net income stable for CI in Q2

Toronto-based CI Financial Corp. reported net income of $119.8 million in the second quarter — just a touch under the $119.9 million reported in Q1, but a 7% improvement year over year.

CI reported earnings per share of $0.56, up from $0.55 in the previous quarter and $0.47 in Q2 2019, according to a release issued Wednesday.

The firm recorded net redemptions of $1.9 billion during the quarter — an improvement over the $2.7 billion in net redemptions in Q1. The release indicated that $0.8 billion in redemptions came from CI’s institutional business, which saw one institution transition $0.6 billion of its mandate to an in-house investment team.

The company’s Canadian retail business saw net redemptions of $1 billion, while the release said “international business flows were flat” for the quarter.

Total ending assets under management (AUM) for the quarter were $125.6 billion — up 13% from the previous quarter but down 3% year over year. CI reported that it has now exceeded $2 billion in AUM in liquid alternative investment products.

Wealth management AUM was at an all-time high of $53.9 billion at the end of the quarter, up 14% from a year ago. This includes the assets of Assante Wealth Management, CI Private Counsel, WealthBar and Virtual Brokers in Canada, and One Capital Management, the Cabana Group and Surevest in the United States.

During the quarter, CI took full ownership of WealthBar and completed its acquisitions of ownership stakes in U.S. registered investment advisers (RIAs) One Capital Management and the Cabana Group. CI also announced the acquisition of a strategic interest Congress Wealth Management, a deal that closed in early July.

In a conference call, CI CEO Kurt MacAlpine said he expects the firm could continue to grow in the RIA market, “at a similar rate to what we’ve experienced over the past few months” and for the “foreseeable future,” as long as the underlying market conditions remain the same.

MacAlpine said the firm plans to leverage the acquisition of Illinois-based Balasa Dinverno Foltz LLC, its biggest RIA deal to date, to launch the CI Private Wealth brand in the U.S. once the deal closes.

Despite the acquisitions, CI’s selling, general and administrative expenses were $109 million during the quarter, down 5% from the previous quarter and 14% year over year.

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