In my long and arduous experience, whenever you see a group of people - a couple, a happy family or a business - the real question is, what are the simmering tensions beneath the surface that might erupt! CI Financial will soon be under the control of a private equity owner with its own agenda. The company already has considerable debt, so acquirer Mubadala Capital will presumably be more dependant on other types of value creation. Plus entrepreneurial founders might have their own ambitions. This post lists 4 businesses within the CI empire that still have their founders at the helm. Three of these businesses are in the HNW / UHNW segment.
Culture clash.
The US RIA business aka Corient
First, the US RIA consolidation play is called Corient. It's probably closer to CEO Kurt MacAlpine’s heart, since he conceived it with a blank canvas. He is based in Miami, as is that business. The RIA consolidation game is the type of thing that appeals to private equity types. You might recall that in 2023, Clayton, Dubillier & Rice (CD&R) acquired an RIA consolidator, Focus Financial. Management attention is scarce. I would think Kurt MacAlpine is more focused on Corient than CI's legacy Canadian business. Their goal with Corient is to build the leading high-net-worth and ultra-high-net-worth wealth management platform. The US advisory market is much more fragmented and thus target rich. Already this year, Corient has announced the acquisition of a US $10.4B New York-based multi-family office. That’s more than 3x the size of all the UHNW practices the Canadian arm has acquired in the past 5 years.
The Canadian business
The official position of Mubadala (as relayed to the Globe) is that “We think the Canadian business is a little bit under-appreciated by the market relative to the potential that we see. We see CI as one investment opportunity. ... Both arms have independently attractive underlying features that we believe in.” Still, could there be breakaway factions?
Aligned Capital Partners
CI acquired a majority stake in Aligned Capital in 2020 when it had $10B in assets and over 200 advisors. It now has assets over $20B. Aligned is a partner for advisors who want to go independent but want all the operational details of their business taken care of. Many financial planners use Aligned for managing clients assets, for example. The two founders, Chris Enright and Michael Greer are still involved. Chris Enright has a broader remit within CI, as he is co-head of Canadian wealth. The other head of Canadian wealth is Sean Etherington, he’s more associated with Assante. Here’s how Chris Enright pitches Aligned Capital to advisors:
My partners and I started Aligned in 2012 with enormous passion and vision, which has only grown since then. We have always believed there is a “best way” to support Advisors and, in order to do it, we had to do things differently. However, the traditional and accepted approaches of the industry are deeply rooted; our refusal to accept this created a stir that is still talked about today.
Frankly, many people expected us to fail. But we were – and continue to be – fuelled by our confidence that Advisors with the most autonomy possible would be empowered to deliver “best-in-class” financial advice. This new model resulted in our Advisors being freed from the inherent conflict of interest that exists in our industry. Our Advisors love it. We did not fail.
If you are interested in being part of the Aligned team, and if you are the “right fit” for our values and vision, then you can be assured that I — along with all of your colleagues — will do everything we can to help you succeed, and make an ongoing contribution that you can be proud of professionally and personally.
Sounds like a very entrepreneurial guy who values independence! Chris Enright owns about $28m worth of CI shares (assuming the $32 per share acquisition price.) That’s a man with options! Still, Kurt MacAlpine has earned a lot more from CI ($57m or something). Far be it for me to create dissension, but I thought entrepreneurs were supposed to be richer?
The HNW and UHNW businesses: Coriel, Northwood and Stonegate
Coriel Capital
CI acquired Montreal-based Coriel Capital in 2023. At the time, the firm managed $1.3B on behalf of only 14 clients! Founders Gisele Wilson and Alexandra Ryan are still in charge. Coriel says they are “built and led by women from institutional backgrounds.” Indeed, you have to get to the third photo of the “Administration team” to see a man, one Rafik Talbi, Senior Portfolio Administrator. Hang in there habibi, help is on the way!
Culture clash.
Northwood Wealth Management
This was a pioneer in the multi-family office space in Canada, starting in 2003. CI Financial acquired a majority stake in 2022 when the firm had $2.2B in AUM. It now has over $3B. The firm was founded by Tom McCullough and Scott Hayman. They’re still running the business today.
Stonegate Private Counsel
The original HNW business CI Financial acquired in Canada was called Stonegate Private Counsel. That has now been rebranded CI Private Wealth. How come Coriel and Northwood are still allowed to keep their names, but Stonegate had to disappear? Hmm? The key founders of Stonegate are still involved running CI Private Wealth. But in my estimation, they are way too old now to go on their own or do anything bold. They’re welcome to prove me wrong.
With due deference to Clare O’Hara, anyone can report M&A leaks, NoBull Klev is the only journalist who can provoke M&A by sowing seeds of conflict!