December 23, 2022 CI Financial Corp. (OTCPK:CIFAF) Q3 2020 Earnings Call Transcript November 12, 2020 10:00 AM ETCompany ParticipantsKurt MacAlpine - Chief Executive To that end, CI is spinning out its RIA business through an IPO that will open up 20% of the division to the public markets. Mr. MacAlpine was appointed Chief Executive Officer and Director of CI Financial in September 2019. We expect the cross-listing to increase CI's corporate profile in the U.S., expand our investor base and allow us to offer U.S. dollar-denominated shares in future U.S. RIA acquisitions. Mr. Lewiss previous positions also included Senior Vice-President, Risk Management Fixed Income and Overlay Strategies at CDPQ and Senior Vice-President, Fixed Income at Natcan Investment Management, where he oversaw a team managing $16 billion in Canadian and global fixed-income assets. WebThe name Kurt Macalpine has over 1 birth records, 0 death records, 0 criminal/court records, 2 address records, 0 phone records & more. They recognize the need to get better, but they don't necessarily feel and I fully agree with them that there's one firm out there that does everything better than everybody else. Is that something that is -- well how does that prioritize for you? This copy is for your personal, non-commercial use only. And there is a few firms that fit this mold and may be called serial aggregators or something like that. Our investment professionals have full conviction that this new model will deliver better outcomes and a better experience for our clients. Thank you, Kurt. In just two years, Toronto-based CI Financial has assembled, via acquisition, a $115 billion-asset independent RIA empire in the U.S. We continue to make great strides executing our corporate strategy. I assume this is low margin. He holds a PhD in theoretical physics from Pierre and Marie Curie University (now Sorbonne University), and an M.Sc. Kurt MacAlpine Thank you, Amit. Two increasingly important categories where we are growing our market share. Or are there pieces that I'm missing in those two numbers? So the boutique and multi-brand structure was, I'd say perfectly designed for the marketplace up until five or six years ago. This number only includes our current interest in these companies and does not include any growth or market assumptions. Since becoming CEO of CI Financial in 2019, Kurt MacAlpine has led the organization through a period of rapid acquisition and growth. Thanks very much. Kurt MacAlpine has been on an eye-opening run of RIA deals -- $16 billion in managed assets-- in less than ten months, but some industry watchers say he's flying too high in an overvalued market. We are not changing portfolio managers on funds, the investment management processes they follow or our fund lineup. His diverse experience spans asset allocation, portfolio construction, risk management, public and private markets, and fundamental and quantitative strategies. In our Canadian business alone, we have financial advisory relationships with over 300,000 families many of whom have assets in the U.S. today. And then just on the RIA acquisition pipeline like how would you describe the size of it today? We are in the early stages of the strategic transformation of our sales function and our investment platform and we are confident that these actions will lead to better flows. 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How can we help you? Please try again or contact. As Executive Vice President and Chief Financial Officer, Mr. Muni overseas the companys global finance operations and investor relations teams. To read this article, please provide the information below so we can confirm that you work in the industry. Earnings per share of $0.62, was up $0.06 per share from the second quarter and up $0.02 from the third quarter last year. I will share more details on the investment platform changes in a few moments. Is there an opportunity to continue to streamline your fund lineup? But it is a different approach and I want to make sure that's coming through than the methodical approach we're taking to the wealth management space. And then on the integration of your investment management teams, it sounds like this is more about process and driving fund performance as opposed to surfacing cost synergies. So some of the deals that we are doing are part of an auction process we're participating. Financial industry executive Kurt MacAlpine will become the new CEO of independent asset management giant CI Financial Corp. MacAlpine, who takes over as chief executive from Peter Anderson on Sept. 1, was previously executive vice president and head of global distribution for WisdomTree Asset Management in New York. The velocity of deals that we're able to do is picking up. Once we started to do deals in this space we started to hit the radar of a lot of the banks that are working with these firms to help them transact. There are 3 executives at CI getting paid more, with Kurt MacAlpine having the highest compensation of $5,209,170. He has extensive experience in the global asset and wealth management industry, having previously served as Executive Vice-President and Head of Global Distribution for WisdomTree Asset Management and as a Partner and Leader of the North American Asset Management Practice at McKinsey & Company. Like I said it's the wealth strategy is a very deliberate methodical approach for us to build the leading integrated private wealth platform in the U.S. But what do you bring to the table that they don't? But what I would say is if I look at the building and the momentum of the pipeline that we've created over the past few months, I think it's truly remarkable. That's great. In the third quarter U.S. AUM grew 10% to $4.7 billion on net sales of $300 million and market performance. So I feel fantastic about the progress we've made. He has In the past 10 days, we have announced three new transactions: Stavis & Cohen, a U.S. $570 million women-owned Houston based RIA with a focus in financial planning and servicing corporate executives in the oil and gas industry; Doyle Wealth Management a U.S. $1.1 billion RIA based in the Tampa Bay Area a popular destination for Canadian retirees; and Roosevelt Investments a U.S. $2.7 billion RIA based in New York City our first acquisition in the world's largest financial market. We are confident that meaningful synergy opportunities exist, but we prefer not to give guidance. Finally Cabana Group, one of our U.S. RIAs launched $1 billion lineup of target drawdown strategy ETFs in September. Please go ahead. The size of that pool of assets, as I mentioned, is a lot smaller today than what it was before. One of the I guess, call it more minor reasons based upon interest from RIAs is the ability to take stock as part of the transaction. Thanks. Prior to that, he was a sell-side analyst covering asset and wealth managers at Piper Jaffray. Thank you. Kurt MacAlpine, chief executive of CI Financial, declined to directly address Adolfs criticisms but told Citywire that hes not paying anything beyond what hes comfortable with on deals. And I was just wondering, if you could provide an update or progress on that initiative. The $2.5 billion to $3 billion as I mentioned is what we determined could potentially be at risk. I would now like to open up the call for questions. In terms of when we choose to pass and we absolutely pass on a lot of platforms that get presented to us we're really looking for high-quality well-run businesses, great profitability and dynamic management teams that collectively feel that they will benefit and we will all benefit from working together as opposed to working independently. In this series of videos and articles, TD Wealth professionals share practical strategies that helped them build rewarding careers. And that kind of leads me to the second question, which is I think on your financial statement you disclosed the purchase price of roughly $400 million for the U.S. RIA acquisition that's closed up to September. 3% growth from a year ago. So does that include the acquisitions that are announced, but not closed such as the Roosevelt or the Doyle acquisitions that were announced earlier this week last week? Mr. Lewis has over 20 years of global investing experience and has held senior leadership positions at several organizations, including two of the worlds largest institutional investors. Think you ought to have access? On the other end of the spectrum you essentially have aggregators or integrator platforms that will do a deal with you but the terms and conditions by which they'll transact with you are that you need to change everything about your platform to fit into their platform. One would be capability expansions. So if the opportunity presents itself, it's financially attractive accretive and a great opportunity to diversify and transform the business we'll look. So through our strategic integrated collaborative approach we will naturally work our way to an integrated platform. Financial industry executive Kurt MacAlpine will become the new CEO of independent asset management giant CI Financial Corp. MacAlpine, who takes over as chief executive from Peter Anderson on Sept. 1, was previously executive vice president and head of global distribution for WisdomTree Asset Management in New York. I want to be clear that this is not a forecast. So if we're not additive to the process on the client front, we're not interested. acquisitions we have made this year were down $19.4 million, or almost 16% from the third quarter of 2019, and down $1.7 million sequentially. I mean, if a considerable improvements on a year-over-year basis, right. So I remain very optimistic. By providing your email address below, you are providing consent to CI Financial to send you the requested Investor Email Alert updates. Sure. Under the current model, the Harbour business is part of broader CI Global Asset management benefits from that scale, partnership, access to better resources and things like that. And what we're trying to do Gary and Scott, just to clarify the reason this is important is, we're obviously transforming our business relatively quickly from all of our economic profits coming from asset management to more balance. He was a member of the companys global executive management committee and sat on the boards of several of its international entities and AdvisorEngine, a digital wealth platform. It might be, it might not be. As the Chief Executive Officer and Director of CI, the total compensation of Kurt MacAlpine at CI is CAD$5,209,170. There are no executives at CI getting paid more. Wallmine is a radically better financial terminal. This new approach allows us to deliver CI's full-scale to our clients, organize ourselves by investment capability, share information more freely throughout the organization, ideally leading to better problem-solving and investment outcomes, reduce complexity in our investment organization, creating a more client-friendly platform, create consistency in our objectives address gaps in our platform holistically and align the compensation model across teams. So it depends, Gary on when you're having a conversation. That is helpful. We retired $26 million of debt, and we paid $39 million in dividends. Please contact us at, We encountered an error. Yes, thanks very much. We are making these changes while protecting the elements of our investment platform that make us unique. He has been with CI Global Asset Management for over 20 years, serving in progressively more senior roles in Information Technology. Is this happening to you frequently? And where do you see the process perhaps being a longer effort to turn the ship around? (Podcast). As for its expansion, it appears CI has no plans to slow down. View Reputation Profile. So growing and building and improving the business is critically important to our strategy. And now we're at a fascinating place where I probably get a couple of firms reaching out every week directly bypassing a bank or a process just looking to do a deal with CI specifically. At WisdomTree, a global asset manager and exchange-traded fund sponsor based in New York, Mr. MacAlpine was responsible for all client-facing functions globally, including distribution, marketing, data intelligence and strategy, business development and client solutions. REGISTRAR & TRANSFER AGENT. Before I discuss our sales for the quarter to-date, I want to provide you with a brief update on our assets for the month of October. So sorry, Tom a little bit long-winded, but we really do kind of sit in the middle of these two kind of more extreme models. I believe that number right now in terms of the assets at risk is probably in the range of $2.50 billion to $3 billion total. The revenue earned on these assets is recorded in the asset management segment. Our daily newsletter is FREE and keeps you up-to-date with the world of wealth. So that really seems to be where our institutional business has experienced the vast majority of our redemptions over the past year. On November 12, CEO Kurt MacAlpine discussed with the Globe and Mail CIs recent RIA acquisitions, and their plans to continue their rapid expansion. And I've been very pleased by how well our marketing team has embraced it to really set up and structure all of the campaigns and engagement models that we're ultimately building. As the President and Chief Operating Officer of CI, the total compensation of Darie Urbanky at CI is CAD$1,225,000. I did share some additional guidance on the institutional business in that breakdown. If we were to do a wealth deal -- sorry an asset management deal, it would either be to acquire a capability we don't have or to expand the footprint to a market that we're not currently in. Mr. Kelterborn also serves as a director of the Canadian Exchange Traded Funds Association and holds a BA from Carleton University and an LLB from the University of Ottawa, and was called to the Ontario Bar in 1992. Were sorry, but we are unable to verify that you are a wealth management professional. We are getting feedback that we are not necessarily the highest bidder on these but I think it's really our value proposition that's differentiating ourselves. If I look at just the pipeline of firms that we are having conversations with it's really increasing on an ongoing basis. When you think about M&A and wealth management versus asset management, it's really a different approach. Sure. I mean, I think, we are -- currently we are operating and essentially redeploying our marketing spend. Why? If you take Doyle Wealth Management, the greater Tampa Bay Area is one of the biggest hotbeds for Canadian retirees' period. They have a phenomenal focus on serving corporate executives in the oil and gas industry, which creates a very interesting energy corridor opportunity for us partnering with Assante. We're essentially redesigning our website to really focusing on different areas. It really depends. For the best Barrons.com experience, please update to a modern browser. You can unsubscribe to any of the investor alerts you are subscribed to by visiting the unsubscribe section below. If you experience any issues with this process, please contact us for further assistance. I'd say, it's directionally in the right direction, Gary. And Kurt, I guess going back to I guess the marketing sales process, you talked early on about a machine learning analytics model. He also oversaw the majority of the firms international businesses, which during his tenure included employees in Canada, Europe, Japan, Israel and Latin America and strategic partnerships in Asia and Australia and New Zealand. CEOs radical remake accompanied by staff exodus, higher debt, Chairman says of employee complaints: I could care less. Prior to that, he held a variety of roles in the financial technology industry at companies such as DST Systems (now IFDS). So you are right, through the legacy model we had, we naturally have a lot of overlapping and redundant capabilities which over time might clear themselves up, but that wasn't the reason we initiated this process, and it hasn't been a focus for us so far. You're around there. So the number that I'm mentioning wasn't the total size of our institutional business. Prior to joining Claymore, Mr. Kelterborn was a lawyer with law firms in Toronto and Bermuda and served as Associate General CounselCorporate at Nortel Networks. And the three transactions you announced in the last 10 days, would that be included in that number? We rolled out what we believe is Canada's first machine learning model or predictive algorithm for sales and marketing process in Canadian asset and wealth management. And we have announced 12 deals in the marketplace than it was several months ago when we were starting to build story and build that momentum from scratch. 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