• Diluted EPS of $0.08, adjusted EPS¹ of $0.73
• EBITDA of $117.1 million, adjusted EBITDA¹ of $237.5 million
• Operating cash flow of $64.8 million, free cash flow¹ of $151.5 million
• Total assets of $338.0 billion, up 1.3% over Q2 and up 7.9% year-over-year
• Repurchased 5.6 million shares for $79.8 million
• Paid quarterly dividend of $0.18 a share, totalling $34.6 million
• Acquired two RIAs in October, adding $17.9 billion in assets and increasing U.S. wealth management assets to approximately $167.8 billion

All financial amounts in Canadian dollars at September 30, 2022, unless stated otherwise. Financial amounts for the quarter are unaudited.

CI Financial Corp. (“CI”) (TSX: CIX, NYSE: CIXX) today released financial results for the quarter ended September 30, 2022.

“CI continues to produce exceptional results in the face of difficult and turbulent market conditions,” said Kurt MacAlpine, CI Chief Executive Officer. “This performance is a result of CI’s transformation over the last three years into a larger, more diversified firm with more resilient and stable revenues and earnings power. At the same time, we continue to be disciplined in managing expenses, with comparable selling, general and administrative expenses declining from the previous quarter despite heightened inflationary pressures.

“In asset management, CI’s Canadian retail businesses had net sales of $0.6 billion – an impressive achievement given the challenging markets,” Mr. MacAlpine said. “This compares to net redemptions of $11.8 billion for the overall Canadian investment fund industry.

“This strength stems from the meaningful changes we have made to our asset management business, including transitioning from a legacy multi-boutique investment team model to a single, fully integrated modern asset management platform, significantly improving relative investment performance, building a more robust and diverse product lineup, and changing our approach to distribution and marketing.

“Our Canadian wealth management business continues to experience strong net flows, reflecting the quality of our advisory businesses and illustrating how investors seek out the most qualified and credible advisors during challenging market and economic environments,” Mr. MacAlpine said. “We have made a major investment in building out capacity at CI Investor Services and are on track to convert over $14 billion in client assets to the CIIS custody platform in the first half of next year, enhancing the service experience for our advisors and driving revenue growth at the firm.

“The growth and development of CI Private Wealth US continues at a robust pace. We recently completed the acquisitions of two high-quality, established RIAs, adding a combined US$13.0 billion in assets to our firm and significantly expanding our presence in the ultra-high-net-worth market in the Northeast. CIPW has hired a highly experienced chief operating officer in Lennie Gullan, who will lead the development of a harmonized operating platform with expanded capabilities and services across our U.S. business.

“We continue to prepare for an IPO of the U.S. wealth management business and will submit a Form S-1 to the Securities and Exchange Commission this month,” Mr. MacAlpine said.

CI also announced that it intends to delist its shares from the New York Stock Exchange at, or prior to, the IPO of the U.S. wealth management business such that it will trade exclusively on the Toronto Stock Exchange, while the U.S. business will trade exclusively on a U.S. exchange. The decision aligns the listings with the primary operational location of each business.

Operating and financial data highlights

1. Free cash flow, net debt, adjusted net income, adjusted earnings per share and adjusted EBITDA are not standardized earnings measures prescribed by IFRS. For further information, see “Non-IFRS Measures” note below.

Financial highlights

Net income declined to $14.9 million in the quarter from $156.2 million in the second quarter. Excluding non-operating items, adjusted net income declined to $135.9 million in the quarter from $149.1 million in the second quarter of 2022 due to lower revenues as a result of the decline in global financial asset values.

Third quarter total net revenues declined 9.4% to $513.6 million in the quarter from $566.7 million in the second quarter of 2022. Excluding non-operating items, adjusted total net revenue fell 1.8% to $587.5 million, primarily driven by lower revenues from the Asset Management segment due to lower average AUM.

Third quarter total expenses increased 36.9% to $475.8 million in the quarter from $347.7 million in the second quarter of 2022. Excluding non-operating items, adjusted total expenses were up 0.6% to $388.2 million, reflecting disciplined cost controls in a challenging operating environment, offset by the full quarter impact of acquisitions that closed during the second quarter.

Capital allocation

In the third quarter of 2022, CI repurchased 5.6 million shares at a cost of $79.8 million, for an average cost of $14.21 per share, and paid $34.6 million in dividends at a rate of $0.18 per share.

The Board of Directors declared a quarterly dividend of $0.18 per share, payable on April 14, 2023 to shareholders of record on March 31, 2023. The annual dividend rate of $0.72 per share represented a yield of 5.3% on CI’s closing share price of $13.55 on November 9, 2022.

Third quarter business highlights

• CI entered into a long-term strategic partnership with CGI, one of the world’s largest business and IT consulting firms, under which CGI will transform CI’s Canadian investment fund transfer agency operations into an industry-leading platform with enhanced capabilities. Under the agreement, CGI has assumed responsibility for managing CI’s proprietary transfer agency platform and related technology, operations and client services functions. As part of the partnership, CGI retained members of CI’s IT, operations and client services groups, who continue to support CI’s business at CGI.
• Reflecting CI’s strategic priority of modernizing its asset management business, CI Global Asset Management (“CI GAM”) continued its active pace of product innovation and development. CI GAM launched four new mandates during the third quarter focused on areas with high growth potential, including real assets, alternatives, and ESG. The new mandates were CI Auspice Broad Commodity ETF, CI Alternative Multi-Strategy Fund, CI Global Sustainable Infrastructure Fund and CI Global Green Bond Fund, with the latter two offered in both mutual fund and ETF series.

Following quarter-end:

• CI completed the acquisitions of two registered investment advisor (“RIA”) firms in October, adding a combined total of approximately $17.9 billion in assets to CI Private Wealth US and increasing CI’s total U.S. wealth management assets to approximately $167.8 billion. They included:
  • The Boston-based team and assets of Eaton Vance WaterOak Advisors (formerly Eaton Vance Investment Counsel). The team, which has been named CI Eaton Private Wealth, oversees $13.2 billion in client assets, primarily focused on serving ultra-high-net-worth families in New England with comprehensive wealth planning and investment management services.
  • Inverness Counsel, LLC, a New York City-based RIA managing $4.8 billion and specializing in holistic financial and estate planning and investment advisory for a client base comprised of ultra-high-net-worth families. The firm has been rebranded CI Inverness Private Wealth.
• Leonard “Lennie” Gullan joined CI Private Wealth US as Executive Vice President and Chief Operating Officer, effective October 1, 2022. In this role, Mr. Gullan oversees the U.S. business’s daily operations, trading and technology, and leads the firm’s initiatives to integrate and transform operations, platforms and technologies across the CIPW businesses. He also assists in developing the firm’s strategic direction and identifying and evaluating acquisition opportunities. Mr. Gullan joins CIPW from Citadel, where he was a Managing Director and held a variety of senior leadership positions, including COO of Global Equities, and Chief Technology Officer and COO of Core Engineering. Most recently, he was responsible for leading Citadel’s strategic and transformational objectives. Prior to Citadel, he worked at McKinsey & Company, where he consulted for asset and wealth managers on a variety of strategic and M&A related topics. He is a graduate of the University of North Carolina at Chapel Hill and holds an MBA from the University of Chicago Booth School of Business.
• Several CI financial advisors in the United States and Canada were recognized in prestigious industry rankings:
  • Seven CIPW US advisory teams were named to the Barron’s 2022 list of Top 100 RIA Firms. They included: CI BDF Private Wealth, CI Eaton Private Wealth, Dowling & Yahnke Wealth Advisors, Gofen and Glossberg, RegentAtlantic, RGT Wealth Advisors, and CI Segall Bryant & Hamill Private Wealth. In addition, Daniel Roe of Budros Ruhlin Roe was named to the Barron’s list of Top 100 Independent Advisors.
  • Three advisory teams were named to the 2022 Forbes/SHOOK list of Top RIAs: CI Barrett Private Wealth, CI BDF Private Wealth, and RGT Wealth Advisors.
  • Two advisors with CI Assante Wealth Management were named to the Globe and Mail’s list of Canada’s Top Wealth Advisors for 2022, a ranking developed by SHOOK Research, LLC. The advisors are Peter Pomponio of Dorval, Quebec, and Rob McClelland of Thornhill, Ontario.
• On November 1, 2002, CI GAM introduced two new global fixed-income mandates, providing Canadian investors with additional options for income and diversification: CI Global Investment Grade ETF and CI Global Bond Currency Neutral Fund, available in both mutual fund and ETF series.

Analysts’ conference call

CI will hold a conference call with analysts today at 9:00 a.m. EST, led by Chief Executive Officer Kurt MacAlpine and Chief Financial Officer Amit Muni. A live webcast of the call and slide presentation can be accessed here, or through the Investor Relations section of CI’s website.

Alternatively, investors may listen to the discussion through the following numbers (access code: 442598):

• Canada toll-free: 1-833-950-0062
• United States toll-free: 1-844-200-6205
• United States (New York local): 1-646-904-5544
• All other locations: 1-929-526-1599.

A recording of the webcast will be archived on CI’s Investor Relations site.

About CI Financial

CI Financial Corp. is a diversified global asset and wealth management company operating primarily in Canada, the United States and Australia. Founded in 1965, CI has developed world-class portfolio management talent, extensive capabilities in all aspects of wealth planning, and a comprehensive product suite.

CI operates in three segments:

• Asset Management, which includes the operations of CI Global Asset Management and Australia-based GSFM Pty Ltd.
• Canadian Wealth Management, which includes the operations of CI Assante Wealth Management, Aligned Capital Partners, CI Private Wealth (Canada), Northwood Family Office, CI Direct Investing and CI Investment Services.
• U.S. Wealth Management, which includes CI Private Wealth US, a national network of best-in-class wealth management teams.

CI is headquartered in Toronto and listed on the Toronto Stock Exchange (TSX: CIX) and the New York Stock Exchange (NYSE: CIXX). To learn more, visit CI’s website or LinkedIn page.

Barron’s publishes the Top RIA Firms and Top 100 Independent Advisors rankings every year. Advisors who wish to be ranked fill out a 102-question survey about their practice. Barron’s applies its rankings formula to the data to generate a ranking. The formula features three major categories of calculations: (1) Assets (2) Revenue (3) Quality of practice. In each of those categories, Barron’s does multiple subcalculations. Barron’s also considers a wide range of qualitative factors, including the advisors’ experience, their advanced degrees and industry designations, the size, shape, and diversity of their teams, their charitable and philanthropic work and, of course, their compliance records. For more information, visit Barron’s.

The Forbes ranking of America’s Top RIA Firms, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone, virtual and in-person due diligence interviews, and quantitative data. The algorithm weighs factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices and approach to working with clients. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Neither Forbes nor SHOOK receive a fee in exchange for rankings. A full description of SHOOK’s methodology is available here.

The Globe and Mail’s ranking of Canada’s Top Wealth Advisors was developed by SHOOK Research. Advisors are ranked based on the results of data provided during the nomination and research periods. The algorithm is based on a methodology that includes qualitative elements such as in-person, virtual and telephone due-diligence meetings that measure best practices, plus a review of compliance records. It also includes quantitative measures, such as client retention, industry experience and growth rates. Investment performance is not a criterion because client objectives and risk tolerance vary, and advisors rarely have audited performance reports. Advisors are nominated by their firms. Firms do not have any influence or impact on if or where advisors are ranked in Canada’s Top Wealth Advisors program. Neither the Globe and Mail nor SHOOK Research receive compensation in exchange for placement on the ranking. This year’s nomination and research periods took place between February and July 2022. For more information, please see www.SHOOKresearch.com. SHOOK is a registered trademark of SHOOK Research, LLC.

Commissions, trailing commissions, management fees and expenses all may be associated with an investment in mutual funds and exchange-traded funds (ETFs). Please read the prospectus before investing. Important information about mutual funds and ETFs is contained in their respective prospectus. Mutual funds and ETFs are not guaranteed; their values change frequently, and past performance may not be repeated. You will usually pay brokerage fees to your dealer if you purchase or sell units of an ETF on recognized Canadian exchanges. If the units are purchased or sold on these Canadian exchanges, investors may pay more than the current net asset value when buying units of the ETF and may receive less than the current net asset value when selling them.

This press release contains forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to CI Financial Corp. (“CI”) and its products and services, including its business operations, strategy and financial performance and condition and its intention to conduct an IPO of its US wealth management business. Forward-looking statements are typically identified by words such as “believe”, “expect”, “foresee”, “forecast”, “anticipate”, “intend”, “estimate”, “goal”, “plan” and “project” and similar references to future periods, or conditional verbs such as “will”, “may”, “should”, “could” or “would”. These statements are not historical facts but instead represent management beliefs regarding future events, many of which by their nature are inherently uncertain and beyond management’s control. Although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements involve risks and uncertainties. The material factors and assumptions applied in reaching the conclusions contained in these forward-looking statements include that CI will proceed with the IPO, that all outstanding acquisitions will be completed and their asset levels will remain stable, that the investment fund industry will remain stable and that interest rates will remain relatively stable. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market conditions, including interest and foreign exchange rates, global financial markets, the risk that the IPO may not occur in its expected timeframe or at all, changes in government regulations or in tax laws, industry competition, technological developments and other factors described or discussed in CI’s disclosure materials filed with applicable securities regulatory authorities from time to time. The foregoing list is not exhaustive and the reader is cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. Other than as specifically required by applicable law, CI undertakes no obligation to update or alter any forward-looking statement after the date on which it is made, whether to reflect new information, future events or otherwise.

This communication is provided as a general source of information and should not be considered personal, legal, accounting, tax or investment advice, or construed as an endorsement or recommendation of any entity or security discussed. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies.

CI Global Asset Management is a registered business name of CI Investments Inc.

NON-IFRS MEASURES

In an effort to provide additional information regarding our results as determined by IFRS, we also disclose certain non-IFRS information which we believe provides useful and meaningful information. Our management reviews these non-IFRS financial measurements when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-IFRS measurements so as to share this perspective of management. Non-IFRS measurements do not have any standardized meaning, do not replace nor are superior to IFRS financial measurements and may not be comparable to similar measures presented by other companies. The non-IFRS financial measurements include:

• Adjusted net income and adjusted basic and diluted earnings per share
• Adjusted EBITDA and adjusted EBITDA margin
• Free cash flow
• Net debt.

These non-IFRS measurements exclude the following revenues and expenses which we believe allows investors a consistent way to analyze our financial performance, allows for better analysis of core operating income and business trends and permits comparisons of companies within the industry, normalizing for different financing methods and levels of taxation:

• gains or losses related to foreign currency fluctuations on our cash balances
• costs related to our acquisitions including:
  • amortization of intangible assets
  • change in fair value of contingent consideration
  • related advisory fees
  • contingent consideration classified as compensation per IFRS
• restructuring charges including organizational expenses for the establishment of CIPW
• legal provisions for a class action related to market timing
• certain gains or losses in assets and investments
• costs related to issuing or retiring debt obligations
• expenses associated with CIPW redeemable units.

Further explanations of these Non-IFRS measures can be found in the “Non-IFRS Measures” section of Management’s Discussion and Analysis dated November 10, 2022 available on SEDAR at www.sedar.com or at www.cifinancial.com.

1. Adjustment effects on income statement line items: bond redemption costs are included in other expense, CIPW adjustments and contingent consideration recorded as compensation are included in SG&A, amortization of intangible assets from acquisitions, change in fair value of contingent consideration, FX (gains)/losses, other (gains)/losses, and bond redemption costs are included in the line items of the same description.