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IGM profits jump 41% despite tumultuous markets

IGM Financial Inc. on Thursday reported a 41-per-cent jump in third-quarter profit, even as the fund giant saw nearly $1.4-billion in net redemptions amid falling stock markets.

Profit rose to $244-million, or 94 cents a share, from $173.4-million, or 66 cents a share, a year earlier. Revenue for the three months ended Sept. 30 rose to $674.2-million compared with $632.5-million in the previous period.

Total assets under management for the Winnipeg-based firm fell 4.8 per cent to $116.7-billion at Sept. 30 from $122.7-billion in the year earlier period.

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Winnipeg-based IGM owns Investors Group, which sells funds and other financial products through its own network of nearly 4,600 advisers, and Mackenzie Financial Corp., which deals with independent advisers to sell its fund offerings.

Investors Group saw net redemptions for its funds decline slightly to $162-million in the quarter from $166-million in the year-ago period.

But Mackenzie Financial, which has a big chunk of assets in global equities, reported rising net outflows to $1.20-billion in the latest quarter from $771-million a year earlier.

"We really slowed down in August and September," Charles Sims, chief executive officer for Mackenzie Financial, told analysts during a conference call. "Some of that is seasonal as you get into the vacation season of August, but the volatility in September put a lot of people on the sidelines and that has continued into October and November at this point for us."

In the quarter, Mackenzie struck a deal to sell its M.R.S. Trust Co. to B2B Trust, a unit of Laurentian Bank. The financial institution in turn also agreed to sell Mackenzie funds to its bank customers.

"We will ramp up slowly in 2012 [to sell funds in the Laurentian network]and probably mature that relationship in 2013 and beyond," he said. "With the capital that we raised [from M.R.S. Trust] it will go into general corporate purposes. Obviously, we are looking to continue to invest in the business."

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