CI Financial continues acquisition spree with purchase of Toronto wealth manager Northwood

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CI Financial Corp. CIX-T is continuing its acquisition spree of wealth managers but this time on home soil with the purchase of Toronto-based Northwood Family Office Ltd., a financial manager for ultrahigh-net-worth families.

The financial services giant, which manages about $338-billion in total assets globally, has been snapping up registered investment advisers, or RIA firms, in the United States at a furious pace, acquiring more than 23 since January, 2020.

But on Tuesday, the company announced a Canadian deal that will see Northwood add $2.2-billion in investment assets to CI’s Canadian private wealth business, which currently manages about $81-billion.

“With the addition of one of Canada’s leading family offices, CI can now seamlessly serve the entire spectrum of wealth management, from beginning investors to the nation’s wealthiest families,” CI chief executive officer Kurt MacAlpine said in a statement.

The deal is expected to close in the second quarter of 2022. Financial terms were not disclosed.

CI has not disclosed its total spending on its U.S. acquisitions. But according to securities filings, from the beginning of 2020 through Sept. 30, 2021, CI spent just over $1-billion in cash, almost $100-million in stock, and committed future payments of cash and shares to the owners of the acquired companies that it estimates are worth just under $600-million.

In Canada, wealth-management acquisitions have not been as frequent, with less than a handful of deals during the same period.

In 2020, CI purchased a majority interest in Aligned Capital Partners Inc., a Burlington, Ont.-based investment advisory firm with more than 200 advisers who manage about $10-billion in assets. During the same year, CI also scooped up the remaining 25-per-cent minority interest it did not own in online portfolio manager WealthBar Financial Services Inc.

In April, 2021, on the asset management side of the business, CI bought the remaining stake of Toronto-based Lawrence Park Asset Management. CI had first acquired a minority stake in the alternative asset manager, which manages about $600-million in assets, in 2012.

Founded in 2003 by chairman and chief executive officer Tom McCullough, Northwood manages about $9-billion of family net worth, which includes entrepreneurs, senior corporate executives, charitable and family foundations and ultrahigh-net-worth families and individuals. The company offers services in investment management, financial planning, tax and estate planning, administrative management, philanthropy, and family governance.

Canaccord analyst Scott Chan said in a research note the deal “will provide an established ultrahigh-net-worth presence in Canada, thereby addressing clients through the entire wealth management spectrum.”

Mr. Chan also noted the deal has certain similarities with select ultrahigh-net-worth RIA firms such as U.S.-based Portola Partners Group LLC and McCutchen Group LLC, which could help “potentially bring more cross-border referrals.”

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