Tuesday, November 10, 2009 5:24 PM
CI Financial in talks to sell rest of Blackmont Capital Markets
CI Financial Corp. CIX-T has sold the retail brokerage side of its Blackmont Capital Markets division, but is taking time to give up the capital markets side.
"We would like to give the employees the opportunity to form some type of partnership where they have most of the ownership in the business," CI Financial's chief executive officer Bill Holland told analysts Tuesday during a conference call. "We are in discussions with them right now to do so. "
"Have we had interest from buyers who want to pick up the capital markets [side]? A ton of them."
But "it makes more sense, and those businesses are most productive is if they are run as partnerships," Mr. Holland said.
Last month, CI Financial sold the retail brokerage operations of Blackmont Capital to Macquarie Group. "We will not have any business that loses money," Mr. Holland said. "When we found out that we couldn't make money, and we couldn't make this a scaleable business, we decided it was time to pass on."
He said that times have changed since it acquired Blackmont in 2007 for $251-milion as part of an acquistion that gave it ownership of institutional money manager KBSH Capital Management. There was the meltdown in stock markets last year, and "banks are far more aggressive in trying to keep their brokers," he said.
Mr. Holland also said the sales of segregated funds, which are part of CI's business through partnerships with mostly Sun Life Financial Corp. and Manulife Financial Corp., is in a declining trending now that stock markets have been rallying, and the fear factor is not as strong.
"You are seeing a pretty signficant decline in seg fund sales," he said."What is driving net sales today is much more the traditional business of financial planners and brokers coming into the market - allbeit in a far less aggressive way than they were before. The seg fund business really started to tail off in early September."
Mr. Holland made the comments after CI reported a significant drop in third-quarter profit, but boosted its monthly dividend. See blog.
