Mr. James O'Sullivan reports

IGM FINANCIAL REPORTS FOURTH QUARTER AND 2023 EARNINGS

IGM Financial Inc. has released earnings results for the fourth quarter and the year ended Dec. 31, 2023.

IGM Financial highlights:

• Fourth quarter net earnings of $419.6-million or 176 cents per share compared with $224.7-million or 94 cents per share in 2022. Adjusted net earnings, excluding a gain on the sale of IPC of $220.7-million, were $198.9-million or 84 cents per share for the fourth quarter of 2023 compared with $224.7-million or 94 cents per share in 2022.
• Annual net earnings of $1,148.9-million or $4.82 per share compared with $867.2-million or $3.63 per share in 2022. Annual adjusted net earnings, excluding other items, were $820.7-million or $3.44 per share compared with $867.2-million or $3.63 per share in 2022.
• Assets under management and advisement were $240.2-billion, up 5.6 per cent from the prior quarter and up 7.1 per cent from the fourth quarter of 2022.
• IGM Financial's assets under management and advisement including strategic investments were $389.4-billion as at Dec. 31, 2023, compared with $372.9-billion at Sept. 30, 2023, and $288.3-billion at Dec. 31, 2022.
• Net outflows were $1.2-billion compared with net outflows of $520-million in 2022.

"Strong client returns in 2023 and our focus on managing year-over-year expense growth to less than 2 per cent were key contributors to 2023 earnings," said James O'Sullivan, president and chief executive officer of IGM Financial. "In the fourth quarter of 2023, we were pleased to announce the closing of the sale of Investment Planning Counsel for approximately $575-million resulting in a gain on sale of $221-million."

Fourth quarter earnings included a negative fair value adjustment of $9-million (pretax) associated with declining interest rates and IG Wealth Management's mortgage banking operations. The company hedges certain of its exposures to interest rates in this business.

"From time to time, an effective economic hedge will not qualify for hedge accounting under [international financial reporting standards]," said Keith Potter, executive vice-president and chief financial officer of IGM Financial. "As a result, the company will realize higher income going forward, which offsets the negative fair value adjustments."

In the fourth quarter, the company has realigned its reportable segments to better characterize and simplify the company's business lines into wealth management and asset management segments. The revised segments reflect a realignment of Rockefeller Capital Management and Wealthsimple Financial Corp. to the wealth management segment and China Asset Management Co. Ltd. and Northleaf Capital Group Ltd. to the asset management segment.

Wealth management

Wealth management reflects the activities of its core business and strategic investments that are principally focused on providing financial planning and related services. This segment includes the activities of IG Wealth Management, the company's investments in Rockefeller and Wealthsimple, and Investment Planning Counsel, which has been reclassified as discontinued operations.

Adjusted net earnings available to common shareholders in the fourth quarter of 2023 were $104.2-million, a decrease of 3.0 per cent, compared with the fourth quarter of 2022, and represented 52.4 per cent of IGM Financial's adjusted net earnings available to common shareholders.

Assets under advisement including strategic investments at Dec. 31, 2023, were $161.9-billion, an increase of 7.1 per cent from $151.2-billion at Sept. 30, 2023, and an increase of 40.5 per cent from $115.3-billion at Dec. 31, 2022.

IG Wealth Management

Assets under advisement at Dec. 31, 2023, were $121.2-billion, an increase of 6.1 per cent, from $114.2-billion at Sept. 30, 2023, and an increase of 9.4 per cent from $110.8-billion at Dec. 31, 2022.

Quarterly net client outflows were $228-million, compared with net client inflows of $429-million in the fourth quarter of 2022.

Quarterly gross client inflows were $3.1-billion, up 1.9 per cent from $3.0-billion in 2022.

Wealthsimple

The fair value of the company's investment in Wealthsimple was $607-million at Dec. 31, 2023, compared with $492-million at Sept. 30, 2023, which is largely due to a fair value increase of 20 per cent and an incremental investment in the quarter. The increase in fair value is consistent with the increase in public market peer valuations, as well as Wealthsimple's business performance and revised revenue expectations.

Asset management

Asset management reflects the activities of its core business and strategic investments primarily focused on providing investment management services. This segment includes the operations of Mackenzie Investments and the company's investments in ChinaAMC and Northleaf.

Adjusted net earnings available to common shareholders in the fourth quarter of 2023 were $76.8-million, an increase of 6.2 per cent, compared with the fourth quarter of 2022, and represented 38.6 per cent of IGM Financial's adjusted net earnings available to common shareholders.

Assets under management including strategic investments at Dec. 31, 2023, were $305.1-billion, an increase of 3.2 per cent from $295.6-billion at Sept. 30, 2023, and an increase of 23.6 per cent from $246.9-billion at Dec. 31, 2022.

Mackenzie Investments

Total assets under management were $195.7-billion, an increase of 5.0 per cent from $186.3-billion at Sept. 30, 2023, and an increase of 4.9 per cent from $186.6-billion at Dec. 31, 2022. Third party assets under management were $118.9-billion at Dec. 31, 2023, an increase of 6.2 per cent from Sept. 30, 2023, and an increase of 5.2 per cent from Dec. 31, 2022.

Investment fund net redemptions were $826-million compared with net redemptions of $832-million in the fourth quarter of 2022.

Mutual fund gross sales were $1.7-billion, up 11.4 per cent from the fourth quarter of 2022.

Exchange-traded-fund business

ETF assets under management totalled $12.9-billion at Dec. 31, 2023, up from $12.5-billion at Sept. 30, 2023, and up from $12.4-billion at Dec. 31, 2022. Excluding investment in ETFs by IGM Financial's managed products, ETF assets under management were $5.5-billion at Dec. 31, 2023, compared with $5.1-billion at Sept. 30, 2023, and $5.2-billion at Dec. 31, 2022.

ChinaAMC

The company's proportionate share of ChinaAMC's fourth quarter earnings was $23.7-million compared with $14.2-million in the fourth quarter of 2022.

On Jan. 12, 2023, the company closed the previously announced transaction to acquire Power Corp. of Canada's 13.9-per-cent interest in ChinaAMC, increasing the company's overall investment in ChinaAMC to 27.8 per cent, and to sell a portion of the company's investment in Lifeco, reducing it from 4.0 per cent to 2.4 per cent.

Corporate and other

This segment represents the investments in Great-West Lifeco Inc. and Portage Ventures LPs, as well as unallocated capital.

Lifeco

The company's proportionate share of Lifeco's fourth quarter earnings was $19.1-million compared with $40.9-million in the fourth quarter of 2022. This included an increase of $800,000 to adjust third quarter earnings to the actual earnings disclosed by Lifeco.

Dividends

The board of directors has declared a dividend of 56.25 cents per share on the company's common shares, which is payable on April 30, 2024, to shareholders of record on March 28, 2024.

Fourth quarter webcast and conference call

IGM Financial's fourth quarter 2023 results conference call and webcast will be held on Friday, Feb. 16, 2024, at 8 a.m. ET. The webcast and conference call can be viewed, respectively, through the IGM Financial website or you may register to obtain a calendar booking with your dial-in numbers, PIN and webcast. Alternatively, dial 1-800-319-4610 or 1-416-915-3239.

The most recent consolidated financial statements and management's discussion and analysis of operating results are available on IGM Financial's website.

About IGM Financial Inc.

IGM Financial is one of Canada's leading diversified wealth and asset management companies with approximately $241-billion in total assets under management and advisement at Jan. 31, 2024.

The company provides a broad range of financial planning and investment management services to help more than two million Canadians meet their financial goals. Its activities are carried out principally through IG Wealth Management and Mackenzie Investments. IGM Financial is a member of the Power Corp. group of companies.

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