CI Financial Corp. feels like it has something to brag about. Assets under management at the end of January hit $73.7-billion, which is a month-end record for the firm.
The strong performance comes on the heels of a positive 2010, which saw AUM about 8 per cent year over year. The growth might even give reason for a Canadian bank, say CIBC, to buy the asset manager. There's a catch, though. Net sales are now reported quarterly, so it's hard to determine how much of that growth comes from a rising equity market, and how much comes from more sales.
But the real story isn’t so much CI’s performance -- it’s the strength relative to a dwindling AGF, which TD analyst Doug Young pointed out in a note to clients this week. AGF’s latest quarterly earnings were in line with expectations, but TD is worried about its retail outflows. While both CI and IGM had 8 per cent growth in AUM in 2010, AGF declined 2 per cent year over year.
Mr. Young noted that fund investors' preference for fixed-income products is hurting AGF. “A shift in industry flows back into equity from fixed-income/balanced funds would help – 71 per cent of AGF’s AUM is in equity funds.”
However, AGF did just buy Acuity and that combination could be a catalyst that helps the firm turn the tide.
CI also made an acquisition of its own late in 2010, scooping up Hartford Investments Canada Corp. Although that purchase might skew some of CI’s AUM figures, the company reported that even net of the deal, AUM grew by 15 per cent from January 2010 to January 2011.
Still, this growth hasn’t done much for CI’s stock, which has been stagnant since mid-October.