CI Financial making big move into U.S. wealth management

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Kurt MacAlpine has been a very busy CEO, having commandeered 16 completed and pending acquisitions in a little over a year.

Mr. MacAlpine, who joined Toronto-based CI Financial Inc. as CEO in 2019 with “a flexible mandate,” said he is particularly focused on broadening the company’s geographic reach through an expansion in wealth management in the U.S.

Among the U.S. wealth managers and registered investment advisers that CI has acquired or is in the process of buying is Segall Bryant & Hamill LLC, Chicago. Once the deal closes this quarter, Segall Bryant & Hamill will add C$29.6 billion ($23.5 billion) to CI’s coffers, said Murray Oxby, a CI spokesman, in an email.

The 13 RIA and wealth management firms acquired by CI in 2020 include Congress Wealth Management LLC, Doyle Wealth Management LLC, Stavis & Cohen Private Wealth LLC and Surevest LLC.

Except for Segall Bryant & Hamill, the 16 companies CI has acquired or is in the process of buying are U.S. regional wealth management firms primarily focused on high-net-worth individuals. Once all of the firms have been incorporated, CI’s U.S. assets under management will total C$68.5 billion, Mr. Oxby said.

Mr. MacAlpine said his focus on expanding CI’s wealth management capabilities stems from his belief that “the role of financial advisers is more important than ever before, and that will continue for the next 20 to 40 years. Investors are well aware that they need high-quality financial advice.”

CI Financial had total assets under management and advisement of C$231.8 billion as of Jan. 31. Of that, C$134.3 billion was managed by CI Global Asset Management, the firm’s money management unit.

Although Mr. MacAlpine has his sights set on building a powerful network of U.S. wealth management firms, he said in the interview that he has not turned his back on institutional investors and also seeks to increase AUM in that client segment.

The acquisition of Segall Bryant & Hamill will help to jump-start CI’s institutional growth since about 73% of assets the firm managed as of Jan. 31 were for institutions, with the balance managed for RIAs.

CI managed about C$13 billion for institutional investors as of the same date.

That said, CI is best known as Canada’s largest wealth manager with C$67.6 billion in wealth assets as of Jan. 31, Mr. MacAlpine said, stressing that the firm needs to broaden its North American investor base.

“When I joined CI, 99.9% of assets were from Canadian investors. When I was thinking about increasing our global footprint, my question was ‘where do we go from here?'”

He said “the U.S. was the obvious answer. It’s bigger and less complicated to operate in than Europe and there already is a natural connection because lots of Canadians are spending more time in the U.S. and are taking their wealth with them.”

He said that for some clients, CI is pairing up U.S. and Canadian RIAs in “a seamless crossover” to serve North American clients on both sides of the border.

CI is finding that its reputation contributes to “the incredible momentum we are experiencing because we have the ability to buy very high-quality managers,” Mr. MacAlpine said.

“CI has made a huge splash buying a high number of RIAs in a short time to gain access to the U.S. wealth management market,” said Brian R. Lauzon, a Philadelphia-based managing director at InCap Group Inc., an investment banking firm that specializes in wealth management mergers and acquisitions.

One reason Mr. Lauzon said RIA firms may be open to an offer from CI and other investment managers rather than merging with other RIAs is the tremendous growth of wirehouses.

“The wirehouse model now is so big that there aren’t really any advisory firms like RIAs that can compete effectively with them, even if they did merge together,” Mr. Lauzon said.

Broadening and modernizing the investment strategies of CI Global Asset Management to include more alternatives is another priority, Mr. MacAlpine said.

CI’s money management unit offers a variety of liquid alternative investment strategies but many high-net-worth investors are increasingly interested in illiquid alternative approaches, he said.

CI Asset Management has been working with alternative managers to develop “a framework of deeper relationships. They think of us as a single institutional client,” he said, stressing again that CI’s “reputation helps in creating partnerships” with private market managers, Mr. MacAlpine said.

In January, CI Global Asset Management launched a private equity fund for Canadian high-net-worth investors, managed by Chicago-based Adams Street Partners LLC.

The fund is Adams Street’s first offering for the high-net-worth channel.

In a Jan. 6 news release about the new private equity fund, Mr. MacAlpine said: “In partnering with Adams Street we’re expanding the availability of an entire investing category to high-net-worth investors that was previously accessible only to institutional investors.”

He added that the Adams Street fund “reflects our innovation and responsiveness to the evolving needs of investors as we modernize our wealth management platform.”