CIXX - Earnings call transcript Q4 2021

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Operator

Welcome to the CI Financial Fourth Quarter 2021 Earnings Call. My name is Emily and I will be coordinating the call today.

During the presentation, you have the opportunity to ask a question [Operator Instructions]. I'll now hand the call over to our host. Kurt MacAlpine, CEO of CI Financial, please go ahead Kurt.

Kurt Macalpine

welcome Financial and Call. quarter everyone morning to fourth CI Earnings Good

of highlights will your and update and me Adjusted for in resulting CFO, strategic our year, following all update first financial was cover EPS for tied the our morning financial the topics. we date for on take a in XXXX. $X.XX the the questions. record Muni. of over the year, which then Joining metrics. execution our quarter is of the lines, our an CI will performance Amit metrics, during this $X.XX corporate significantly and review $X.XX year, select XXXX the for year a is strategy, stronger to Together on transformation was growth the business a we major items are Discussion our earnings an of driving across of and or to increase quarter quarter the every quarter, our flow the initiatives XX% cash sales

revenues, EBITDA, We record flow. record delivered and cash record also free

We take allocation. continue capital a dynamic approach to to

we toward ten These driven M&A levels XXX the transactions. we're deployed by of across activity, factors. During heightened two quarter, million

and XXXX. million into returned of shareholders activity which million $X.XX QX, $X transact of advance to be the And We nearly regular to quarterly through pushed the $XX deal for heightened of for We U.S. continue quality potential shares changes, law preferred choice in repurchase in desire through $XX our dividend. highest entrepreneurs many the partner tax RAAs the there million to a was

credit see deployment take disconnect of advantage the record covering. strategic buybacks and and existing ratings, the transformation, we year, stock, our XXXX was For a between year asset our our also policy we for maintaining capital dividend valuation full balanced in to

the the we've first were year-over-year since a But year $X This positive time quarter. in for billion flows, result undertaking we this even since in improvements, roughly with transformation net of net been Management the business finished sales, XXXX. Asset break was the fourth XXXX. direct

Our record generated strong wealth a our billion the management organic wealth year XXXX, of of growth, $X.X flows for sides net in businesses. both businesses, contributing border, on

to our against three continue make also We progress priorities. strategic

turn fourth net U.S. made to closed alternative our the we strategic Amit During financial assets. transactions investments billion capabilities over acquisitions to have adding eight now worth added will and of expanded and quarter XX U.S. call two our clients, our RAA serving offering. the business. These review ultra-high to our in scale Deepen investments, client I results.

Amit Muni

Good Thank you, morning, Kurt. everyone.

to Turning Slide X.

Our into inflows to from December. at global increase our positive was a of increase of the segment. markets Assets combination Wealth The end and Management million $XXX net

of heading billion client In XX addition, in the of quarter. acquisition we RIAs, $XX on assets the closed

next Turning million comments a revenues slide, million. adjusted translated my $XXX $XXX growth adjusted of to I'll record focus Adjusted into adjusted $XXX on increasing reaching a the our EBITDA, income asset million. results. net and This to

from XX% per up was from quarter year. EPS the share for up quarter, QX $X.XX X% adjusted the Our last and

share year, adjusted On the income net a buybacks. billion, increased XX% results. our can $X.X the $XXX next record grew for revenues the annual to and reflecting $X adjusted benefit grew slide, to review million Adjusted we to grew EBITDA XX% billion and XX% $X.XX to EPS of

$XX [Indiscernible] fees, million, dive year-end primarily business our seed slightly Asset Management $XX Total segment. distributions quarter. capital recognition by increased $XX as Wealth million the in take by revenue into performance Turning increased Management to adjusted well the to in third the due X, of primarily Other income to from businesses funds. higher as than quarter. due by changes we a Fees increased to as revenues compared deeper and Slide million can

SG&A periods, you On On our balancing SG&A priorities. additional deployed million had owned increased in million with expenses capital the see buybacks of the acquisitions million million from changes full completed from the to quarter. remain next our adjusted not investments expenses can On in We for Management comparative expenses. slide, compensation generation We on particularly and strategic RAA business. the XXX higher before our basis U.S. flows total advertising it our our by XX acquisitions XX million, by the year-end higher from largely slightly a to generated $X Canadian costs associated Wealth a payout $XXX support free quarter. true-ups, million we for dividends. million. million revenue our reflecting to Slide fees and side by driven on increased review $XXX expenses support marketing X increased disciplined initiatives. $XX for from and stronger of Canadian can additional strong businesses. X, cash costs, We with for We Dealer

number the strategic strategy share we're commitment transactions flows our flexible. Balancing paused share our our and that priorities The remain credit allows Given we and repayment. in to year-end, at by of in debt buybacks. strong repurchases rating cash investments to management closing capital generated anticipation our business M&A with of our investment-grade our

Turning $X.X -- to we leverage. leverage can gross leverage our was $X.X a EBITDA. of net billion our X.X on approximately adjusted times review fourth quarter on or and debt in the basis, net debt next At year, end our our annualized had the of outstanding based we slide, and billion the

the on call, levels that during transactions and we increase, we leveraged expected given closed debt the our quarter. to As last number of discussed

times as looks at acquisition liability. acquired, from the leverage However, year-end. we we the is as approximately our over close Slide XX we leverage expect down a breakdown our generate time debt. we from paid and if Earnout X.X net of we recording generated liability and considerations. paid as well When XXX Currently, in expense the paid typically only on down the an stronger generally earnings to earnout. acquisition, acquisition XX have prior payments CI. to joining We from earnout show days. than Deferrals are the are growth businesses deferred

not impact are positive the financial acquisition. the yet we showing generated by However,

Lastly, or we equity. cash certain be in last settled granted quarter, for we as put transactions discussed can options that

-- of With the leaving $XXX the $XXX be the units, RAA estimate amounts CIPW of of obligations launch million. partnership, we of will of million estimate an cash settled CIPW in CIPW settlement

you would on financial like making. to we I Lastly, changes reporting update some will be

reflects Turning We more to currently the business. quarter, our will be part our our next changing being this three strategy. Asset of we reporting Canada our managed change growth Management slide. and and Canada Starting businesses an transparency segments. next Wealth U.S. into into important better provide how believe Management,

and Prior be we will allow call, new our our next statement. and now, to the we In compatibility. earnings Thank to back segments addition, XXXX will to of our changing reporting easier the Kurt. call in turn publish our results format format looking you. for income reporting

Kurt Macalpine

you, Thank Slide Amit. provides strategic corporate XX recap priorities. a of our

sales the reversal million Asset quarter XXX of of were prior representing earlier, the net in outflows from the since billion roughly positive highlighted of the year three Management breakeven the year, a for positive and XX sizable each first for As XXXX, years.

our the Looking Canadian channel, driver the of turnaround. largest at specifically which represented retail

XXXX. On over the sales the our process structural, for on the basis from grew quarter to The organic is can has undertaken sustainable of in year-over-year two development improved strategic, redemptions a initiatives outcome slide gross at of direct a industry series years changes chart innovation. of results positioned a the to tactical past the we've growth. see our a We the position and as every product fell. bottom CI and modernize platform business driver made and of You and

we million CI are of of on nearly the generated initiatives QX XXXX improvement In $X we asset a net $X.X $XXX going record from client to product of well-positioned year for aggregate and businesses. capitalize raised for billion Newer we sales all 's billion $XX And greater trends across assets, than believe forward. a billion new in gathering represented year. XXXX.

our client of our billion RAAs with and $X.X inflows, platform. U.S. from generated business wealth strong wealth Canadian contributions Our

a periods a $XXX each January large to of we the years, headline outflows provides are the Which context X not driven the redemption's. million dislocations volatility start in to ETFs, asset thematic on were has owned January from historically fact, month a RAAs. been been our strong potential was redemption's redemptions. of which As been specifically We wanted has an these slide beyond pandemic. have with driver of Canadian physical in were month in so of on gold slide. contributed it We funds front. XXXX, our and worst classes levels. compete flow CI retail for to in I excluding the asset the numbers comes only in that of the capital A by allocating million launched in investors $XXX net past the provide many in January inflow update redemption's reminder our This

million Looking improving our The $XXX show past Canadian improvements with this, flow trends continued over last to business U.S. in retail January. year-over-year by

RAA Asset with extremely year Management $XXX the net firms that quarter scale to business. and active experience as million evidenced finish as flows in an Business our an significant Leading geographic of quarter. CI USD our during to firms this the billion our RAAs XX partner, as preferred acquisitions choose close capabilities. strategic by fourth to continued the added month. U.S. continue a our we their was We The enhancing and X adding profile, fine high successful quality platform growth quarter, joined organic to expanding several strong assets, the in

capabilities I net alternative worth marketplace better national made XXX key our deliver In our U.S. call and partnership. This strategic our exceptional management is net wealth fully profitable the and nearly ultra-high With In a associated high earnings goal CI. service to culturally, the strategically, platform. unique now aligned business which our in last model CIPW ultrahigh serve worth very we RAAs high leaders enhance We're its net of for in committed and clients. on to various touched our achieving to growth worth the addition, X client and are across quarter's January, of financially the partnership and leading during building and officially differentiator launched our we investments and partners, features

just date, that While the we're about getting excited progress we made started. we've to are

strong to continue acquisitions that highest organic growth, vision. through RAAs the and our will scale quality, fastest-growing share of We

capabilities continue the integrate We to expand the driving to we revenue services. will expense and our products work to And will synergies. and clients with level highest provide both platform of

more to assets. our client fiduciary is than XXXX, of a firms, entered we As a of billion, $XXX XX-plus platform

In addition To of January, due the and on is Canada's approximately attractive XX% consolidated with organic margins. capture Northwood XX the $X the billion platform, management U.S.. be office. Private with a margin office, Northwood at a networks lower of margin assets, economics Wealth to business. is the own XX% with basis Canadian growth that over assets institutional operating family points roughly margins, on in revenue we roughly Wealth asset Combined leading to EBITDA U.S.. business solid are announced existing clear $X profile, billion. In we with acquisition multi-family our of client the household Platform averaging

country's We ourselves high are worth to wealth net the positioning worth leading and build platform. management net ultra-high

morning, Management of Including the focused Private these synergies, quarters, which run-rate does cost number generated to be Wealth. on strategic is strategy Just $XXX we quarter clear RAA, dynamic XXXX. business we deal EBITDA hoarding are In the market I This forecast. acquisition the this a this product million both asset is since billion-dollar closed now North the not or XXX any beginning and million timing Wealth XXX number at million. no closings. impact a I that QX, ultra-high net with in who any a According is interest little Capital our prior companies of Wealth growth for assumptions. at Management unannounced this fast-growing were of a XXXX, having transactions of also This current Beach sales, the It becoming management that team transactions. only segment, has Corrine's, announced partners young Korean given of Partners, include business model initiated not improvements, staying segment EBITDA, excludes clients. we includes the Newport or or larger want deals Consistent CI the with Canada announced and with end incredibly but worth planned or a adjusted of increase in

but We we give are guidance. synergy confident exist, opportunities to not that prefer meaningful

of to opening recap want moment the brief of some up milestones I Before noteworthy call to questions, a take XXXX. to the your

over business in record was our management, every across to I it metric. steps have for to earlier, taken reversal trends. major In a As XX financial led CI months net asset mentioned sales past year a the the dramatic modernize

our than times Management that the Wealth with segments. Our ended greater segments assets Asset were year Management X.X

did that business business Wealth assets. exist our Our Business, by Management U.S. largest is not single two a years ago, unit

for low a U.S. significantly up much our in development perspective, and and the U.S. a Given better strategic From rate open the in sustainable, With firm, the the to your Miami we of established different importance long-term the diversified, the in capital headquarters CI count, questions. and continued bondholder and XX oversee we basis. achieved that, business. today locked scaling the we reduced than share diversified is company fundamentally ago for shareholder profitable drive debt and growth. positioned call our we'll to a months scale

Operator

Thank very much. you

you If a question,[Operator would ask to instruction]. like

wish to the your your your queue, please ensure When Witco If likely. question, is from you change preparing that [Operator your to question mind on unmuted device instruction] ask

Lee KBW. from comes Our line first question from open. your Robert, Robert is today

Robert Lee

And the my I EBITDA X% segment profitability of taking you just a that comp mentioned have but were there Wealth go we on kind mainly bit here? with can the Great. if accruals, Thanks. and how from one, maybe for you that focusing should questions. decline. comp wondering know think whatnot, Thanks Maybe I accruals didn't Good for about just the was some of QX. of the kind out that little Management first in morning, and more flesh guys. maybe --

Amit Muni

it's probably for say, as Amit, would we a smoother mentioned, compensation fourth-quarter did performance very Rob and had better XXXX, as expect I that And prepared true-ups, will be RAAs bit little the closer the strong attractive, to forward, and got to year. remains I U.S. year-end, the the Hey in in a throughout closed And as RAAs to year number going of that increase have we XX% remarks, mentioned yes, I set very the on some, margins. a earnings and of had we profitability accrued we've business would to it. addition, deal

well. we as As enter into XXXX

it-self a in beginning it's bit think fourth next of that smooth I out just little year. quarter noise So the should

Robert Lee

the with segment, I sticking want just slide maybe Then on to I XX. thanks. Okay, sure make private wealth understood

me, be XXX million insist. Excuse the settled. anticipated So cats of cash anticipate to

So was XXX that trying settled year-end or was be just going CIPW units was for kind of of already units what about -- a million to that for accounting settled to post XXX in so

Amit Muni

Right. amount starting play deferred consideration will actions, The we estimated going That's XXX that we is units be as have well remaining estimated January will settled in to about CI understand on the be the what we're cash as on estimate predominantly, earnout XXX. [Indiscernible] the payments. Xst, that

Robert Lee

how over from of And expect flow Okay. is should that to we evenly kind there any we kind payments next usage couple should any perspective? thinking color there timing a is it years? of on spread or about be the like Is those of cash

Amit Muni

generally I'd say, XX-XXX -- from years, a it's go Earn-outs can from days. deferred over next payments months. the go XX-XX So X-X our

about So that you think can general timeframe.

Robert Lee

Great. sheet. then balance the on And maybe

so announcements, maybe fall any you term targets and you're of out, thinking the that deals. reduction buyback should targeting then mentioned a you a know we I some how where buyback deal about thinking think ratio, So obviously think deleveraging recent But you where and how intermediate the given given million. share your with of, trading, January where the recent will on trade-off interplay it deleverage leverage in you're the and with stocks debt paying particularly $XXX in made, or thoughts down how between

Amit Muni

XXXX, we December, We the bought what advantage Robert, pretty anticipating trading it's into November And these we one. buyback our price the -- disconnect that million we're responded in shares of back share see did headed and this all to closing In $XX.X of temper taking transactions. we at. as Sure. back than

have very rating, buyback net our me conscious heard scale the We credit you've through times X.X tends fund this say needs recognizing of elevated leverage. we year, and before, the that So be sensitive of and had in to part to that those to December. cash as did back continued reduction to early transactions

to balanced continue you'll to the allocation. now our capital think dynamic where us comfortable. I a we're take range in forward, Looking We're see approach and

what So guidance to time, we're while some now, think of combination a committed in continued this reasonable you I strategic I disconnect opportunities. of it. to about how we're at where taking is think do you'll which But thinking we're over delivering see advantage provides

Robert Lee

one then can wealth Okay, one partnerships. me And indulge on last thanks. you private if the

-- Coriant, the of guess the closing? RAA with deals to it -- I'm on having X maybe curious just option for Is equity So pipeline cash then And it curious they that today, they point, versus at the I an segment? of getting in year, -- how impacting much that's of slowing with this I option first -- that announced how the think not it it at is -- impact has but also it there overall down? even so really pronounce did will clearly equity? CIPW Is months getting impact? Is an the Coriant, volatility the be

Kurt Macalpine

off, first the any of [Indiscernible], you a had that delivered combination as to it Amit do, transaction and that on assumption Opportunity in What is to there's time get liabilities, is future acquisition-related well. partnership partnership for units payments for which that cash, in through closing. true we relates which is as at payments but in Sure, there's there paid individuals operator. talked an cash, units at point those an take to are at there those

both And on like the to close Coriant an which in Northwood have partners the transactions one closing their we [Indiscernible] done. and all XXXX, payments then at those we've So that transactions, as ownership QX have through, would in for becoming come truly will opportunity close. any overall, QX. I said future partnership day partners Coriant would they major increase is anticipate

last potential QX. high-quality of front moderated definitely the bit pipeline would before, mentioned to in People were into pipeline getting are year what It's but more of say anticipated, what we itself activity the robust. tax a conversations we little lot engaged I than is moment, I XXXX. changes But get seeing the through saw the of forward a it's the a in series law which than we pushed not pulled smaller year. last As or activity had at pushed smaller than is

Robert Lee

the quick, more down, does been it's move building little of things -- -- levels or I between mean, that's I a of there guess change are an may buyers? coming expectations disconnect only your Obviously market two RAA finding are you bit and a months if disconnect there's versus is but kind what a volatility

Kurt Macalpine

it seen yet. haven't We

to to very partner, I they attract plans, guess, CI. someone I think ride-out their seen if some it. we going are result our that the to from or highest to a so alignment, towards consolidation perspective, pipeline it's structural, change industry, in not do find QX But it, of long you ability wait we'll back And in structural change I quarter their want it's I pairs haven't if I a anything market a persist. back We we've and plans haven't be. in firms, trends choose timing seen think partner see it cyclical, seen think however yet. might see some The sit and changes. feel I course decision to or firms two, and mostly of short find the to QX as believe, our to a about that'll in them don't strategic volatility, potential if good result our as rethink and net a think I of that quality, but the

Robert Lee

Thanks. all Appreciate Great. my for taking it. Thanks questions.

Operator

is from your Geoffrey Markets. from line Our Geoffrey, Kwan next question RBC comes open Capital

Geoffrey Kwan

morning. good Hi,

maybe from determine U.S. can to the anything Wealth of you investors provide earnings or just that in or value On an disclosure year help to strategy, type or I'm is plans there equation provide, the this margin RAA financial you have segment? other wondering, the

Kurt Macalpine

quarter, we'll out the be Next business breaking us overall.

little We some operating of driving give that color. are segment be as will disclosing bit a We metrics that did well.

revenue talked we on margins capture. This the the talked operating about segment? We the about quarter U.S.

put mentioned will there quarter prior our at everyone so to for few will will us some points historical releasing a look much it prior So easier for next that out we the as we data information comparability. be that I giving you more make will, results to be

an that keep eye for coming the in months. out Just

Geoffrey Kwan

a not the Yeah, buying margin I difficult of as whether financial there's that opposed mix it's little what's certain mean, accretion wouldn't bit buying I just of synergy you're the obviously we the know you're driving because the to to guess that assets business extent. to a assets determine or is now

provide the be what said, qualitatively people mean, moment, I also value at there been front, can drive can the around of needs done the -- or help it talk strategy? that is you just understand you So that I and like to to can disclosed what has creation done on

Kurt Macalpine

Sure.

we the with our On delivered as contributor billion U.S. being net revenue those $X.X in Geoffrey, Wealth Business a business flows front, shared, in the of Management we've huge flows.

growth we growth. top-line achieving great So are from a perspective,

If is what you transaction had considerations Amit to number than link rate the those that anticipated numbers to had talked the acquisition-related performing and contingent the at happening. to better liabilities a earlier, prior businesses we specifically to that tied

that next there's operating think about and that perspective, around to to we're more I'll of revenue we that From proof that number our synergy services have an providing quarter additional initiatives talk points the the underway two of a I capabilities growth clients. speak overall. business there

run business U.S. And very and it faster that run and sharing We So grow equity efficiently. the can then launched value -- function. which there January it I provide as tax incentive for And year, we quarter office our of is to on for an into CI get the on last detail, we've revenues bill great clients together. highlighted economic services, family, Private is performed Wealth. CI we so our this in now, business partners everyone earnings as more partnership which same established to pay additional call, common first and in

on of this continue So different think series point, so more points to is far. we we'll even that that there I go. proof And as we've share outlined

Geoffrey Kwan

overall, on a was, side last ahead to-date much you then number over performance year, just past guess also you sales can the the about the better that had talk include trends I have my figure. Canadian sales looking net into positive the retail in which month generate just If net just But February should level and retail funds in and question confidence retail close XXXX, do have or of the your you segment? [Indiscernible] help. And

Kurt Macalpine

Sure, number don't February just entire up point as we keep in a to quarter-over-quarter thereafter but consistent, like the for we have time flows basis quarter very disclose we to a the it soon on shortly wraps at this will quarter disclose quarter.

I strategic think at there's know, I am I about as times don't for $X you As experienced because we've guidance of I turnaround is Asset to flows. that like often What guessing are you which very element billion that directly to responsible though, made Management our forward XXXX, look the the think we've give excited changes business, there. an our I in

global an that's and year-over-year So management, we compliance platform us management model, multi-boutique risk And with along been. asset believe centralized oversight, trading, to you attributable an performance a taking approach integrated mentioned Improved with it. allocation, research portfolio construction, to that considerably our on has everything basis. antiquated investment comes creating investment a

very of flows. changes, approach that new to our So like the look and it process, predictive growth when forward. to of sales taking, modeling continue whether our and incorporation into business going we're well-positioned The the changes, data is development, intelligence product feel drive which it's those been large a at the for driver I we've the marketing

Geoffrey Kwan

you. Thank Okay.

Operator

ahead. of MacKinnon line please from from Next the Capstone. Tom question comes go PAMA Tom,

Tom Mackinnon

Yeah. taking thanks Good questions. morning, for my and

And as -- or in to respect the at of forward? contingent Slide And can that share consideration, Just I'm a to us these that And follow-up, trying new talk were tempered place, to as be in some was just structure get especially you have can quarter. how we if paid if then of the much payments? consideration the since the it we a prices fourth how then be consideration? buying number buybacks number you've result of you looking were of now with should idea forward, than the fourth about that back Thanks. the in about how it may buyback got price give certainly cash a as moved thinking going been should XX, quarter perhaps lower new you going that that thing, deferred was that any because quarter, partnership the you're in have

Kurt Macalpine

Tom. sure, For

on will So fluctuate upon We'll of next make mentioned we years. three in The higher XX I over it those amounts we are earn-outs that deferred do Go means will based payments make acquisitions on you we that about as fourth look We of we -- that on of second future disclose how two the basis, that think than the performance transactions planned. And the what will. balance, ending as individual relates quarter. because payments be somewhere performing XXX a transactions. continue -- of to don't we've closed. time then number, of don't when businesses the acquisitions on some did the and make And to we so again, already [Indiscernible] defer between there Tom, months, give at particular payments better the generally deferred had here that estimated to we the paid out ahead. a the period to details of

Tom Mackinnon

in going buyback activity about with fourth just the quarter how but was that? thinking be it relates of should to there yet I how measured sort ask that's to we

Kurt Macalpine

I mean, I --

Tom Mackinnon

price. Share

Kurt Macalpine

acquisitions it as the shares executed we I made it million XX We that had to in in $XX.X a temper to made mean, the we back approach allocations. the did sense purchased XXXX. acquisitions we capital mentioned we that dynamic I or quarter. decision take pursue the

in continued the to buyback time, today. a as to which we we drive deliver used that was. the elevated us stand X.X, we few that relative weeks to And specific point result be. to to And where made of this [Indiscernible] that of from through and the first was X.X temper cash number the the year, very is So level at we'd what that's the put trade-off that a at like where a leverage

So at we're to it. going continue look to

many our that that criminal and value will As disconnect to me stock as as do think the what in CI think you've say exists, I long I heard at a a there's price of worth it's relative disconnect feel that confidence times, be have buyer. can we you

Tom Mackinnon

Yeah.

CI has do the a on question -- it's appreciate follow-up margin additional best if asset just at first Wealth is flow this my think especially the these look these business. just on you're really not to also I terms really disclosure as but to Wealth flows, I in with flows. or total getting to Management XX% Management XX% of because management, because these As

So to is would must Asset sort outflows month be as Wealth of Management quarter might month all the but to had to then January, any during you're able XXXX,and been there have in positive you tell January. the importantly, the with they sure flows fourth Because Wealth have in were disclosing respect Management Management the us how what how you net as I'm flows just do you the January,? of now idea have of that some of for

So be anything great. you additional would could there provide

Kurt Macalpine

Sure.

of impact makes here the wealth lot as disclose business, by point and it's because we'll the we XX% So pretty of taking about today management Quarter, as the generating passive us of the reflective us unique approach really margins is for we're break flows. a think firms at, of on something the this take bit mentioned space, to Wealth re-segmenting disclose sense we're economic dollar a similar look out flows If in flows, business, not a for we a don't Management perfectly flows it you a

nicely to we wealth and positive which January, in business to contributor grow XXXX. but positive haven't continues relates our it management was as Specifically a disclosed,

Tom Mackinnon

it where both in quarter fourth flows was Management it positive was they as the And -- are? well

Kurt Macalpine

fourth-quarter. Yes

Tom Mackinnon

Yeah.

forward We'll disclosure look Okay. great. additional Thanks. That's to the here.

Kurt Macalpine

Thanks, Tom.

Operator

comes Priebe your next Capital Our the is Nik Nick, question from of line from Markets. CIBC open? line

Nik Priebe

Yes. questions capital on Thanks. of structure. of the Instead, your a pair evolution

subsequent So times. you're end is X.X net quarter leverage to

pro a take assume Following leverage all basis. ratio was facility, consideration, completed cash by partial the repayment forma of that were yet close your transactions, funded - settled, debt. If incremental contingent a announced and you deferred credit We would not on all to and that but

Kurt Macalpine

Yeah.

a we say payments stuff doesn't So to all And probably funded would Nik, quite quite that's -- that debt. that are that hypothetical. by do future honestly pattern

as We are flow strong cash have very generating a -- business. we

which could, not December to what were rather the piece quarter number I was, two transactions changes. payments a which other was it would Nick, pulling where leverage, we did the that I'll sequencing something through as in And have the So a just relates on as would firms things tax into quality look as potential XX Yeah, process, fact probably snapshot accommodate unusual the XXXX. One XXXX highest I played we on of could their forward of speculate mention like. we then law result mentioned as of that XXst. out a

mentioned. which two the think environment I drive to moderated a I more structure like sequencing payments, normalized feel to more had continue we're as M&A you'll for So things then also Amit very a that in positioned XXXX, see in, well of but the

the snapshot from place. leverage given of in good combination perspective those the very those a keep should a looking things, and of we X where elements So us today, at are

Nik Priebe

like and there? contributors What mind you're Wealth Would equal one longer-term other from to for about like see a that When think ultimate earnings being from investors have received roughly a you from this is And question aspiring the endgame enough. then target is Fair earnings? in platforms that to the I time-to-time objective, you'd you perspective, is, say, strategy? the the do acquisition okay. mix see? you Yes, what you'd to to achieve Asset

Amit Muni

Yeah, and think to outcome get the specifically I looking a business of stop. certain don't we to think

closed an I management asset are million. you I that, Asset entirely Management, and think better Asset Management the I $XX to marketplace that started our that and our Management We we stood run believe $XXX geographically XXXX, XXXX business, looked business. on was of where our diversify solely manager in Management tells from to not could wealth size we as Canadian includes diversification million of sources to the had broaden earnings opportunities aperture think rates when at was was wanted from we which the percentage that to diversify our we now Wealth do what well, had January, Xst strategically be if we Canadian reliant tripled beyond a on and Wealth earnings contributing business and

and obviously different momentum fundamentally we've velocity the the very today. shift So were the the a exciting, company business that of made is in

I us So hard say. for think to it's

like Here's look to what going it's we think and stop.

goal continuous accomplish evolution to improvements. the think mean, I what I strategically. continuous and first business is but with we we're of the really we've lot, a done in inning want the

Nik Priebe

for for taking it me. my Okay. Thanks Alright, questions. that's

Amit Muni

Sure.

Operator

TD your from comes question Securities. Graham, is Graham Ryding line open. from next Our

Graham Ryding

Can partnership give incentive incentivizes CI you and model in this when structure The Wealth you morning. structure to from like examples would of what to partners model? collaborate synergies. realize that you some you Good us Private mentioned, like see area --

Kurt Macalpine

Sure.

and owning [Indiscernible] a major exist So a business the equity actually units. a actually it's between are mean, space where Management of in partnership. the same not And people difference that their model is using not as CI same Wealth collection platform a situation a this of it's private with the models common advisors all in bunch other own owner I equity in that's

how place, can't of front partnership relative are now opportunities operating do businesses market we've and what a whether I imagine, providing else transactions. as well. that synergize. it piece, synergy the some us to in whether creates we how much that's culturally aligned, differentiator This business. we're a the overall as this so stress that people strategic collaborating and platform, as taking And think strategically, our accelerate was important strategically, to freestanding exist for designed evident to this that's is together as support that everything and of growth expand of single have considerations, that's So that's quality growth was coming services the one the of we've And since those then beyond Every advantage had, performed to as businesses business, can XX or we're in even flows opportunities on to to velocity clients. these that expectations that you and been collective natural + the and one of financially we've as firms to and we've describe contingent in just operate of growth the for the the whether that seen working experienced, I CI. fully

Graham Ryding

when disclose valuation do consideration the Private CI news Wealth equity payments Understood. with use for contingent behind you RAA that. And on these a

Kurt Macalpine

disclose we that no it's where valuation excess don't, near don't CI but surprisingly, We nowhere not trading.

Graham Ryding

that determined And cash. versus are How then when what about, either when shares conditions that want in determining wealth there the do use use assumptions you CI celery it's extent we're private in the valuation to we out? work you you

Kurt Macalpine

Sure.

of the terms formulaic formula. specific with believe the in but I approach valuation, quarter, and what haven't fast this coming if drives we the scale on grow, you So the it's so valuations, business look up I touched at a last to combination have valuation. I sized how business. operate margins your you you what by But a you shared of have, out the

we're business factors perfectly So of you that as that those quantitative aligned it's of partners trying that with It's imagine can joining the we're units what that. allocating the partnership a achieve being qualitative. sure to incentive result are combination make a strategically. Anytime and our to are

a portion partnership want it's a it's of me in And -- net-worth then their meaningful to in to people and take positive huge these a of So portion meaningful particular units. lean transaction. a when

a know basis and be really because or businesses engineering a transaction, mindset criteria we is We feel partnership so the financial financial and see for the pursuing at partners development their of as have firms only But that that but if this business individual. we would would election if to on of is a lot quality do you I I partners. say growth work that learning an warrant the careers. to looking the at through do buying are elect function. the have not transaction, So what ongoing designed We're do caliber didn't navigate of people wouldn't people partner we of in being strictly wealth opportunities. point

would and through came partners. don't on an really people might said that we think it's interesting be us we medium I if that it long-term. So business, these our for We don't business. and over want worth pass as the process but just

Graham Ryding

flow minority I've interest the that? got million there's I whatever cash that I small two the And to. drove quarter-over-quarter what on sheet, lower questions assets Okay. in the of housekeeping or guess other to balance number statement additions relate $XXX then

Amit Muni

Sure.

the assets, and couple investments we quarter of So made a GLASfunds this Pacific. Columbia other

are investments. those So minority

one a our of investments We strategic pickup slight that also had in we made.

the of assets that have we don't that the that other driving we profitability that the just of. and minority of is the So XXX% a primarily interest minority that's just some in the seeing own change we're subs

Graham Ryding

Okay. me. That's it Thank for you.

Operator

Canaccord is the line open. Chan your from from comes line question Scott Scott, Next of Genuity.

Scott Chan

about answered looked you -- ago. Good was think I a business? I the talked than X U.S. lower the agreed what morning. valuation on potentially about where that on yourself years question think to And at months. Currently, value short of disconnected is of any end Based you the and it's the options that Because the on disconnect, devaluation game, being kind but last criminally game? X and a board

Kurt Macalpine

we it's great the to we've say are And the question, undervalued is rapid becoming transform trading that's nor past, even we And against it business prominent, criminally the as what into in continue run our perfectly Management we execute in a feel trade. think articulated, case heightened was that crystal strategic more businesses What more we're for the trade flexibility say a business way the what continued had looks it's growth flexibility, I lot we what our million will process whole I'd be Management ago. a credit, getting construct shift that even to XXX with Yes, ultimately do than our I we you the I details thought than rapidly given Scott. as Wealth of not a business where mean, like, without Wealth as with as over of that today. the disconnect do is EBITDA, rate for profile, lot we're of summarize you providing we U.S. do that in would today think year to our have strategy. increasingly clear business, the the

that said, I over And past we're like Certainly we've Wealth we've of Management -- so even options the the shareholder the exist. given years. -- had that lot past, growth than more seen certainly maximize the rapid a we've there's in earnings to few So what value. here

Scott Chan

something business more. it's spinning in another might Canada. talking Canada. about Ford spin-off pure few last of that see the business have what you I've weeks, in appreciates Higher looking over you seen terms dos I II-VI market then U.S.. as believe the the in out, Is the And that management probably like entertain we than lastly, U.S. of comps

Kurt Macalpine

that there's company. shareholders value. I of right strategically, in ability taking that to trade U.S. at you're our variety So terms comparable get exists mean, options. open as one I blended then look multiple, at at what the the could certainly a unlock you businesses don't of different we have we integrated would the if we U.S. value the the in at And marketplace. all think relative look business marketplace, things We, when to And an appreciate to different for pursue. trade we're we paths that to clearly

Scott Chan

maybe Okay. on thumb. And the then just rule of

into getting quarter, settled Is structured talked versus that as I think kind what with there we well. a going assumption and CIBW about you or transactions on thumb talked rule converting attractive of units the like about an structure that forward but cash you've last as since. of made maybe several being structure this is people more

Amit Muni

structure that So plus to we're we benefit to as CFA we cash now have the EDAP can any doing the now, use set of the deals PW. that pluses of up CIPW equity

incentivize the the to to and ownership spoke that it's the the want much as them nature of about. them have, so Kurt attractiveness, firms, And overall keep how business we

rule wouldn't thumb. fast I say of there's a So

as unable the of RAs, our desired one that's well. to fits is CI think needs meet that extremely I flexible, we're of the benefits

Kurt Macalpine

be order Yes, to One, to business you CI have a of member partner to Wealth nuances. contributing Scott. overall. add a In Private just one be the

don't little circumstance personal every also table because rules have point, and this we specific looks a So different guidelines but is every different. cap thumb, at

there's or the if other private all point the up of gets there the cap employees, firms So equity stuff of in capital that transaction. of retired it sources whether cleaned passive investors, sitting call table, is at

we're and is investments whether one, the what alignment on it aggregate focused level, So the really needs, rolling. is at the we're number, private and I numbers, a how look one out meaningful it's and get just looking the that aggregate CI to and think the to is they're to look the individual and the important percentage wealth medium-sized of or large individuals, personal that the ownership

Scott Chan

was disclose in up, driving average ultra-high And thought Saw XX That's terms provided in then the when worth. of net beeps. you a about of high net I more on higher. define and was you you fee it spectrum rate the past of moving is revenue is But that. it function worth

Amit Muni

Yes, exactly.

up the nuance people secondly that and is driver, why, flagged business tends to household. And work wanted So down you yes result they include which blended platform, institutional way and doesn't because I understand as billionaire XX two driving at institutional to the the as capture things XX% one in your the considered our families addition into then and serving our that, business, we've to specifically the the go versus moved of fee the markets. a

function that's So really those two things. a of

Scott Chan

think should flows, that of and low Is base. Like billion the pretty get the there that integrated push provided got year, question, is value compared you way think towards then probably right flows, low still you've I more that close Management. specifically higher. billion about $X.X QX. opportunity you've the and it? XXXX, incremental pretty but And [Indiscernible] Asset last some to over $X.X the transactions back-half for And the of disclosed to installed it's lot wall A growing the that

Kurt Macalpine

wouldn't say low. I it's

a it's business the the long it's is mentioned you're exactly We in year the I of taking for of do how growth of if Management what owned business, not have you disclose, actually that's teams snapshot I any reflective for very that do, a think we've think that's organic those of or attractive I function businesses. excludes those movement, X% year-end acquisitions, acquired will a growth client or net which new sub market few straight a just M&A, That number. said, any like very any Wealth firms and number.

Scott Chan

thank very you Okay. way put That's the to fair much.

Operator

Up Graham, Ryding your from question open. TD Graham next, Securities. a Q follow-up is have from - we line

Graham Ryding

the going results? and are Private Wealth your more interest of impact forward, the non-controlling Just CI line currency use as that you to shares on going see an consolidated on we

Kurt Macalpine

own there majority stub would periods. because of that's owned we Yes, that CIBW, future fluctuate piece and we by a be but will in RAAs the the

Graham Ryding

Okay. Thank you.

Operator

open. And your Markets, line we follow-up Jeff, from Kwan Capital from Geoffrey another have is RBC

Geoffrey Kwan

less have And like of this it Kurt, sounds if leverage. your is a then kind and in sound in or appetite of and Hi. you comforts it's active to kind sounds RAA also it the different acquisition it going have terms you that's XXXX if comments of to. you view than the kind on of just for [Indiscernible] from around be were college Yes in case See like times those. where the wanted also three year,

Kurt Macalpine

Sure.

I'll So take them order. in

acquisition I'd the the it's First appetite, off same RAA on say as XXXX.

to high-quality I XXXX. we've which we lower think is the in market, the major in differences, number XXXX of seen businesses than what saw coming

potential knowing of year. that we tax had they it and might firms forward process they've contemplating. XXXX through that be And us taken predicted this something had that conversations us of given to -- joined to anticipated, was pulled last XXXX, where this indicated So in might the changes have or they having a were have lot go we wanted and any get front to strategically that place in

compromise of things this We're comes is through all not not our I is into problem transactions one number desire at and our system. of high, say of on the year doing we problem no willing a I'd the really our firms network. just the that on year. So and of that we're quality attract transacting this appetite but to have business have focused no quality the really

As that played circumstance, as tax, normally subsequent pulled of would got the was X.X have it quarter in a the and said, quarters. to I closing say as out very would relates a But multiple unique this leverage, I transactions XX it result over forward.

and plan the a X.X settle down to X see back to get us leverage at of specific in where for today. below heightened did are we snapshot a we So very

this as that that some to pursue Going M&A capital delever, Amit, of dynamic to approach privileged highest you've heard some of the disconnect some cash forward, take quality to to it and price, our take stock allocation, to of have use we're of advantage to we'll in firms. exist the phenomenal from to And continue that going free flow. with

urgency caveat the be cash partnership sequencing circumstances. mitigated. back consideration. of M&A, extended in towards the sequencing on with has normal been Now the payments have themselves will units now And will The our reduce the we that overall active

deployed M&A as to activity would lower a think Regardless things. be same I amount the lower of result capital be those So would activity of or of

Geoffrey Kwan

net Okay. you the to funds, thematic data was the talked in in funds And of those much that slowed question thematic second impact was, added about have how January, my sales XXXX? the

Kurt Macalpine

would we what is it had exactly I'm both launch XXXs XXXX hoped of through not in these millions play the and now, what's out playing funds. was Jeff, right in sure dollars is out offhand, and but of of January, this

ourselves we funds moving for So there's an get in that. innovation. us organization, that initiated back use were And behind CI at I that we had concerned at fund hadn't for way those feel, the done forefront it front little we there's new a some strategy to as we related product product quicker investors think launches. do lumpier. to the -- as into when we competitors do business bit to we the Naturally redeemed be innovation of as I went think funds, And that a with to the we're we trying of our be is to fallen from had that of money historically, what when really and of new and an pack opportunity --

XXXX. want It I what that about thematic that funds, we're have opportunities board. you'll great it best product was product continue lineup to we strategic looks forward today, I'm feel like money across the with funds, motion tactical positioned a and see to capture detractor funds but a the all. So high-quality the in strike that between sure deterred our plans in Make products and a by us evolution with number not was we then to. lineup contributor balance in at XXXX, actually going

Geoffrey Kwan

yield for funds over core, I'm signature, of because about thematic the year, outside wondering is trying think there friends, I'm on what today strategies. the those for just just understand relative to century sort the are hardware Yes, those has Okay? those funds, flows the maybe Cambridge kind to past the those how maybe I [Indiscernible] been of -- progress the

Kurt Macalpine

mean, I improvements considerable if basis, Yes. on year-over-year a a right.

we a have for the $X the at If redemptions $X from looked chart provides document in billion. past north that of ranging three billion you years, to

of all out netted you strategics our strategic flows If some which are products, newer tactical. from are some

a would see earlier, very reduction quite the might've You improved a has been new. Performance as still And redemptions mentioned year-over-year basis. someone significant on considerably. in

very feel flows. of indicator good better future So Performance typically to performance. made changes feeding is the I we've an about

well-positioned So strategic continue to hopefully standing those make funds, to longer we're on progress

Geoffrey Kwan

yet? are, or they're there funds quite strategic those say not you Would positive flows, overall,

Kurt Macalpine

redemptions, of look growth there and purchases the from think surprising for if you way, don't in clients our I newer an in perspective, service don't go perform at of these quite thematics, but though probably newer majority coming in invested business are and them. the great a number. ESG because crypto that been some nature. initiatives, industry I the funds, our funds existence. to of currency for we isn't funds say not in liquid of forward They alternatives, the funds have a lot funds, There's just about it'd A I around things surprising lot be think to decades. if are from be they're certainly that see yet, flows would those aggregate, have by that which

Geoffrey Kwan

Perfect. Thank you.

Kurt Macalpine

Thanks.

Operator

today. for questions for time we Thanks the have

hand So any A call concluding Macalpine CEO - back the to now I'll Kurt comments. for

Kurt Macalpine

look the participation and everyone to you, call quarter. conversation next your Thank forward for we in

Operator

This you, call, your our everyone concludes joining please for disconnect today. now lines. Thank us

Robert Lee	Keefe, Bruyette & Woods, Inc.
Geoffrey Kwan	RBC Capital Markets
Tom MacKinnon	PAMA Capstone
Nik Priebe	CIBC Capital Markets
Graham Ryding	TD Securities
Scott Chan	Canaccord Genuity

CI Financial (CIXXF) 22 Feb 222021 Q4 Earnings call transcript