Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.
With no-moat-rated CI Financial CIX having received shareholder approval in February to accept Mubadala Capital’s all-cash purchase offer of C$32 per share, earnings results hold less meaning than they might have in the past. With the deal now expected to close before the end of the third quarter of 2025, CI Financial’s reported first-quarter 2025 results offer a parting glance at the operating results of a company that has had its struggles during the past five-plus years.
Overall, there was little in CI Financial’s first-quarter results that would alter our long-term view of the firm, and we have left our C$32 per share fair value estimate in place. The company closed out March 2025 with C$135 billion in core assets under management, down 2.0% sequentially but up 3.7% year over year. Outflows of C$645 million during the quarter were augmented by market losses of C$2.2 billion. The company’s core asset management segment accounted for 26% of total managed and advisory assets of C$510.5 billion, as well as 36% of management fees, during the March quarter.
As for the firm’s Canadian wealth management segment, which accounted for 20% of assets and 25% of management fees, AUM declined 0.1% sequentially but were up 8.8% year over year. CI Financial’s US wealth management segment, which accounted for 54% of managed assets and 39% of management fees during the March quarter, saw its assets increase by 7.3% sequentially and 23.0% year over year (with most of the growth driven by acquisitions over the past year).
First-quarter revenue increased 13.4% on an adjusted basis when compared with the prior year’s period, aided in large part by the US wealth management acquisitions made during the past year. As for profitability, first-quarter adjusted operating margins of 32.1% were 190 basis points lower year over year, primarily due to increased selling, general, and administrative expenses and higher advisor/dealer fees.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.