Fast-Growing CI Financial Notches 28th U.S. Acquisition in 2 Years

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CI Financial
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A Canadian asset and wealth management firm is back in the buyer’s seat.

On Monday, it announced a deal to acquire RegentAtlantic, a registered investment advisor based in Morristown, NJ that manages $6 billion in assets.

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Since its first foray into the US wealth management business in late 2019, CI Financial—which trades on the Toronto Stock Exchange and the New York Stock Exchange—has announced 28 deals for RIAs, a figure that includes purchases by firms. Includes sub-acquisitions. CI Financial expects its latest transaction to close later this month and bring its US assets to about $105 billion.

“This is a very important milestone for our company,” says Kurt McAlpine, chief executive of CI Financial.

Kurt McAlpine, CI Financial CEO

photo illustration by staff; dream time

The company did not disclose financial terms, but as part of the transaction, all partners in RegentAtlantic will become equity partners in CI Private Wealth, a partnership CI Financial announced during its third-quarter earnings conference call. Under this model, RIA owners exchange equity in their business for equity in CI’s US wealth management platform. McAlpine said on the call that the model is designed to create alignment across the business and provide attractive financial opportunities for existing and future advisors. “Our partnership model expands ownership opportunities and provides future generations of partners with equal or better wealth creation opportunities than a founding partner of a firm,” he said on the call.

It’s a busy market for vendors these days, especially at the high end. According to a recent Echelon report, in the third quarter, there were 51 RIAs with over $1 billion in AUM that changed hands. In contrast, there were 78 similar transactions for all of 2020. Average AUM per deal in the third quarter was $2.3 billion. That compares with an average deal size of more than $1 billion five years ago, the report said.

While CI Financial has been an active buyer, McAlpine says the firm has not engaged in a bidding war to acquire new RIAs.

He says potential takeover targets will have to align with CI’s four-pronged approach to the deal to be considered. An advisory firm must be exceptional on a stand-alone basis, must share CI Financial’s goals of being the leading platform for high-net-worth and ultra-high-net-worth, and must be a good cultural fit, According to McAlpine. Additionally, the up-and-coming firm will be interested in the private partnership model CI Financial has developed, he says.

“We are looking for the highest-quality firms that fulfill that four-pronged approach,” McAlpine says. With that in mind, he says he will be happy if 2022 is as busy as 2021 in terms of acquisitions, provided CI Financial has the opportunity to partner with similar firms this year.

If 2022 isn’t as strong in terms of deal-making because the right firms aren’t available, McAlpine says he will be just as comfortable. “We have a very specific segment of sellers that we, as a buyer, are looking at as strategic partners,” he says.

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