Money manager CI Financial Inc. is continuing its aggressive and rapid U.S. expansion with a deal that will increase its assets there to more than US$11-billion.
CI has announced it will buy Illinois-based Balasa Dinverno Foltz LLC, a private wealth management firm with US$4.5-billion in assets. The companies did not reveal the terms of the transaction.
The purchase of BDF is part of chief executive Kurt MacAlpine’s plans to continue CI’s expansion outside of Canada. The Toronto-based company had just under $180-billion in assets under management at June 30 across its multiple wealth management businesses.
It’s the fifth U.S. deal and the largest CI has announced since last December, when it said it would acquire a majority stake in a Phoenix wealth manager with US$377-million in assets. Since then CI has made majority or minority investment in the other four firms, each with at least US$1-billion under management. Three wholly owned CI subsidiaries have made U.S. investments in addition to the ones that CI has made directly. The headquarters of CI’s targets have ranged from California to Arkansas to Boston.
Mr. MacAlpine said BDF is a profitable, growing company that CI believes is the single-largest registered investment advisory firm in the Chicago market.
Mr. MacAlpine, who joined CI as CEO in September, has three strategic goals – adding to the company’s wealth management business, globalizing it and modernizing it with more tech-friendly platforms such as robo-advisers. The BDF deal checks the first two of those boxes.
“I’m a huge proponent of wealth management,” Mr. MacAlpine said in an interview on Monday. “I think that people need financial advice. I think the role of the financial adviser is more important today than at any point in history. And I think that statement will be true for the next 20 years.”
While CI intends to expand throughout the United States, and it still has geographic gaps in Texas and the U.S. Southeast, “I think it would be a bit misleading to think we’re building the strategy by geography. We’re really looking for great management teams, high-quality platforms and above average growth rates.”
BDF’s founders formed the firm in 2001, joining together separate wealth-management companies. One dated back to 1986, when two of the founders left the accounting firm then known as Price Waterhouse. While the founders will remain with the firm for a time after the acquisition, the sale was part of a succession process in which they already had transferred leadership to the next generation of BDF’s executives, Mr. MacAlpine said.
Ultimately, the firms CI acquires will use the CI Private Wealth brand, Mr. MacAlpine said. “I’m trying to draw people closer to the CI brand. … What we’re trying to do is provide more consistency and clarity for a client to see.”
In May, the fund company acquired the remaining 25 per cent of robo-adviser WealthBar Financial Services Inc., in which it already held a 75-per-cent majority interest, in order to combine it with CI’s discount brokerage, Virtual Brokers, and rebranded it as CI Direct Investing.
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David Milstead