Mr. Kurt MacAlpine reports

CI FINANCIAL REPORTS FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2023

CI Financial Corp. has released financial results for the quarter ended June 30, 2023.

"The second quarter was marked by several significant accomplishments across our business lines," said Kurt MacAlpine, CI chief executive officer.

"Our U.S. wealth management segment reported exceptional results, with year-over-year adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] growth of 42 per cent for the first half of the year. Organic growth continued to be strong, with robust net flows. These results reflect the outstanding quality of the business and the progress we have made in integrating our acquired firms and leveraging our size and scale to enhance our capabilities and services.

"We continue to build on that success, acquiring three RIA [register investment adviser] firms in the past three months, adding approximately $14.2-billion in assets," Mr. MacAlpine said. "Earlier this month, we rebranded CI Private Wealth as Corient, giving us a unified brand that better reflects our integrated, national platform and our unique vision for growth.

"The U.S. investment and the sale of our minority stake in Congress Wealth Management delivered a total of $1.5-billion in cash to CI. We repaid $1-billion in debt in the quarter, meeting our goal of materially deleveraging the company, and returned another $229-million to shareholders by buying back 17 million shares, at an average cost per share of $13.51.

"Our Canadian wealth management business reached a milestone in July with the successful conversion of Aligned Capital client assets to the CI Investment Services custody platform," Mr. MacAlpine said. "This accomplishment, the culmination of 18 months of work, boosted CI Investment Services' custody assets to $25-billion and represents an important step in the development of an industry-leading, integrated Canadian wealth management platform. Additionally, our Canadian advisory businesses continue to attract strong flows, a testament to the expertise and value provided by our adviser teams."

In the asset management segment, CI's Canadian retail business had slightly positive net sales in the second quarter, representing the fourth consecutive quarter of net sales and a contrast to net redemptions of $4.7-billion for the overall Canadian industry, as reported by the Investment Funds Institute of Canada. For the first half of the year, Canadian retail had net sales of $800-million, while the asset management segment had net sales of $300,000.

Financial highlights

Second quarter net income was $51-million compared with $30-million in the first quarter of 2023. Excluding non-operating items, adjusted net income was $136-million in the second quarter, little changed from the first quarter.

Second quarter total net revenues increased 21.7 per cent to $776.1-million in the quarter from $637.8-million in the first quarter of 2023. Excluding non-operating items, adjusted total net revenues grew 2.3 per cent to $654.8-million, driven by growth in the U.S. wealth management segment due to acquisitions during the quarter, as well as from the Canadian wealth management segment due to higher average assets. Asset management segment revenues were essentially unchanged as higher average AUM (assets under management) was offset by fee rate decline due to asset mix shift.

First quarter total expenses increased 13.8 per cent to $663.6-million in the quarter from $583-million in the first quarter of 2023. Excluding non-operating items, adjusted total expenses were up 1.9 per cent to $439.9-million, reflecting higher selling, general and administrative due to U.S. segment acquisitions during the quarter as well as higher stock-based compensation.

Capital allocation

In the second quarter of 2023, CI repurchased 17 million shares at a cost of $228.8-million, for an average cost of $13.51 per share, and paid $32.9-million in dividends at a rate of 18 cents per share.

CI completed tender offers for three series of debentures, repurchasing $234,775,000 of its outstanding 3.215 per cent debentures due 2024, $370,762,000 of its outstanding 3.759 per cent debentures due 2025 and $97,531,000 of its outstanding 3.904 per cent debentures due 2027. CI also completely paid down its credit facility.

Dividend increase

The board of directors declared a two-cent increase to its quarterly dividend to 20 cents per share, payable on Jan. 15, 2024, to shareholders of record on Dec. 29, 2023.

Second quarter business highlights:

• CI completed the sale of a 20-per-cent minority investment in its U.S. wealth management business to a diversified group of leading institutional investors, including a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), Bain Capital, Flexpoint Ford, Ares Management funds, the State of Wisconsin and others for proceeds of approximately $1.34-billion ($1-billion (U.S.)).
• CI completed the acquisitions of two U.S. registered investment adviser (RIA) firms with combined assets of approximately $11.9-billion. The firms were Avalon Advisors LLC of Houston, and La Ferla Group LLC, which is based in Garden City, N.Y., and has offices in Bethesda, Maryland and Macon, Ga.
• CI sold its minority stake in Boston-based Congress Wealth Management LLC to Audax Private Equity. CI first invested in Congress in the third quarter of 2020.
• CI's U.S. subsidiary, now known as Corient, launched a South Dakota trust company, allowing it to offer a variety of corporate trustee services to clients across the country.
• CI Global Asset Management enhanced its product lineup with the launch of the CI Asset Allocation exchange-traded funds, a suite of six low-cost all-in-one portfolio solutions. The ETFs leverage CI GAM's professional management and deep expertise in asset allocation to provide portfolios meeting a range of investor profiles. CI GAM also continued to expand its alternatives offerings with the introduction of mutual fund series for CI Auspice Broad Commodity Fund, a liquid alternative fund previously available only as an ETF.

Following quarter-end:

• CI Private Wealth (U.S.) rebranded as Corient, which represents client-oriented and expresses its commitment to helping clients achieve their financial goals. The new brand better reflects Corient's capabilities as national integrated wealth management firm and clarifies for clients that they benefit from the expertise of the firm's entire network. Corient now serves as the brand for all of the company's offices, as it has discontinued co-branding with its legacy firm names. Corient is the trade name for Corient Private Wealth LLC.
• CI acquired Intercontinental Wealth Advisors LLC in July, 2023. The firm, with approximately $2.3-billion in client assets, is based in San Antonio, Tex., and has an office in Fort Lauderdale, Fla. The firm provides comprehensive wealth management services to high-net-worth and ultrahigh-net-worth clients and has developed expertise in serving those with international financial interests.
• CI reached an agreement to acquire Coriel Capital Inc., a Montreal-based wealth management firm serving ultrahigh-net-worth Canadians. The firm, founded and led by women, operates as a chief investment officer for wealthy families, and manages approximately $1.3-billion in client assets.
• The assets held by clients of Aligned Capital Partners were converted to the CI Investment Services (CIIS) custody and clearing platform. As a result, CIIS now administers over $25-billion in client assets.
• CI GAM implemented a series of changes to simplify and strengthen the competitiveness of its lineup of money market funds, including launching two money market ETFs.

Analysts' conference call

CI will hold a conference call with analysts today at 9 a.m. EDT, led by chief executive officer Mr. MacAlpine and chief financial officer Amit Muni. A live webcast of the call and slide presentation can be accessed through the investor relations section of CI's website.

Alternatively, investors may listen to the discussion through the following numbers (access code: 861639):

Canada toll-free: 1-833-950-0062

United States toll-free: 1-833-470-1428

All other locations: 1-929-526-1599

A recording of the webcast will be archived on CI's Investor Relations site.

About CI Financial Corp.

CI Financial is a diversified global asset and wealth management company operating primarily in Canada, the United States and Australia. Founded in 1965, CI has developed world-class portfolio management talent, extensive capabilities in all aspects of wealth planning and a comprehensive product suite.

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