By Andrew Welsch
When it comes to planning for a U.S. IPO, maybe second time is the charm for CI Financial?
On Thursday, CI Financial CEO Kurt MacAlpine said the Canadian company may resurrect its plans to take its U.S. wealth management business public in 2026. It first announced plans for a U.S. IPO in April 2022.
The company has been focused on "rapidly" expanding the U.S. wealth unit and the opportune time to separate the business will "probably" be in early to mid-2026, MacAlpine said on an earnings call with analysts.
"We've been laser-focused, heads down on driving maximum integration, maximum growth, really setting up the business to continue to scale, which we've done," he said. "But we'll continue to keep an eye on markets, see how the IPO market unfolds, and then look at the timing as it relates to all those factors."
A representative for CI Financial declined to comment further.
Last year, Toronto-based CI Financial paused plans to pursue an IPO for its U.S. wealth unit and instead sold a 20% stake in the unit to a consortium of investors that includes the Abu Dhabi Investment Authority and private-equity firm Bain Capital. CI Financial rebranded the U.S. wealth unit Corient in August 2023.
CI Financial, which operates wealth and asset management businesses north of the border, made an aggressive push into the U.S. wealth management market over the past five years by buying up U.S. registered investment advisory firms. That "ambitious strategy" in MacAlpine's words made it a sizable U.S. wealth manager. But it accumulated plenty of debt in the process. The company's third-quarter earnings report showed net debt totaled $3.6 billion Canadian dollars, up from C$3.1 billion the same period a year ago.
The company's U.S. wealth unit has grown dramatically in importance for the company, representing approximately half of its record C$518 billion in total assets, according to its earnings report. U.S. wealth management assets stood at C$251 billion, up from C$197 billion for the same period last year.
CI Financial's third-quarter adjusted diluted earnings per share beat analyst forecasts: 97 Canadian cents, eight cents higher than Wall Street expectations, according to FactSet.
CI Financial is continuing its U.S. expansion, having announced Corient had acquired two U.S. wealth management firms with combined assets of approximately $6 billion, MacAlpine said.
In October, the company bought Ensemble Capital, a San Francisco-based high- and ultra-high-net worth wealth manager, according to MacAlpine. Ensemble Capital had $1.7 billion in assets under management, according to its most recent Form ADV filed with the Securities and Exchange Commission.
Write to Andrew Welsch at andrew.welsch@barrons.com
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(END) Dow Jones Newswires
November 15, 2024 16:11 ET (21:11 GMT)
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