CI Financial Corp.

Good morning, ladies and gentlemen. At this time, I would like to welcome everyone to the CI Financial 2021 Second Quarter Results Webcast. All lines are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star two. Please take note of the cautionary language regarding forward-looking statements and non-IFRS measures in the second page of the presentation. I would now like to turn the call over to Mr. Kurt McAlpine, CEO of CI Financial. Mr. McAlpine, you may begin.

Good morning, everyone, and welcome to CI Financial's second quarter earnings call. Joining me on today's call is our new CFO, Amit Meuni, who officially started on June 1st. During the call, we will cover the following topics. A discussion of the highlights of the quarter, a review of our financial performance during the quarter, and update on the execution of select items of our corporate strategy, then we will take your questions. Q2 was a record quarter for CI. Growing contributions from wealth management, a return to net inflows in asset management, and strong operational discipline helped drive a number of record metrics, including record-adjusted EPS of 75 cents per share. Building on continued M&A success, and strong organic growth, our wealth management assets surpassed our assets under management for the first time in the firm's history. This is an important milestone as it positions CI as a much more balanced and diverse company. We continue to take a dynamic approach to capital allocation. During the quarter, we spent $132 million to repurchase 6 million shares. We also took advantage of the attractive U.S. environment to lock in low-cost, long-term capital by raising $900 million U.S. in what was the largest-ever 30-year bond offering by an asset manager globally. The Board also declared an $0.18 per share dividend consistent with prior quarters. Asset management net sales turned positive for the first time in nearly four years led by the strongest Canadian retail results in nearly six years. This turnaround in net flows can be directly attributed to the strategic changes we've made to our business. In wealth management, we continue to generate strong organic growth with net flows of $4 billion in the first half of 2021 across our global platform. While we don't plan to disclose wealth management flows on a regular basis, I wanted to provide some insight into the strong organic growth in that part of our business. Since we've entered the USRA marketplace, we've been the clear market leader in M&A. But more importantly, where we are really standing out is with the quality of firms that have selected CI to be their strategic partner. This is reflected in the robust net flows that we've experienced post-closing of our acquisitions. On the M&A front, strategic momentum continued in the second quarter. In Q2, we closed five U.S. acquisitions, adding $50 billion of client assets, more than doubling the size of our U.S. platform. We announced RA acquisitions of Philadelphia-area-based Radnor and just this morning Columbus, Ohio-based BRR, both of which should close this quarter and be very valuable additions to our wealth management platform. In Canada, Asante ranked highest in overall investor satisfaction among full-service investment firms in the J.D. Power Study. We take considerable pride in being recognized for the high level of service Asante provided clients during such a disruptive year. Now, Amit will review the financial results for the quarter.

Thank you, Kurt, and good morning, everyone. Turning to slide four, starting with the chart on the left, Our global assets under management increased to $304 billion at the end of June. Our asset management business AUM increased 4%. Our Canadian wealth management assets increased 7%. And our U.S. wealth management assets increased 16% before taking into account the $50 billion from acquisitions during the quarter. These increases were from a combination of strong markets and positive flows. These top line operating results translated into revenues increasing to $653 million, adjusted EBITDA reaching a record $242 million, and adjusted net income of $153 million, or $0.75 per share, for the quarter. Turning to the next slide, we can take a deeper dive into revenue and expense changes. Total adjusted revenues increased by $33 million as compared to the first quarter. Management fees, which are driven by our asset management business, increased by 16 million due to a combination of positive market movement and positive net inflows. Wealth management fees increased by 26 million, primarily due to the acquisitions during the quarter. Other income declined 10 million. In the first quarter, we recognized higher seasonal income from our Australian business. On the chart on the right, you can see the change in our adjusted expenses. On a comparative basis, before additional SG&A expenses from our acquisitions this quarter, total expenses increased approximately 2%. SG&A increased $5 million primarily due to the full quarter effect of compensation changes made during the first quarter, additional fund operating costs from higher average AUM, and expenses related to the launch of our crypto ETFs. Interest expense increased $3 million due to the additional capital we raised in June partially offset by lower amortization of previous debt transaction costs. Dealer costs declined due to lower levels of spending, and other expenses declined due to higher seasonal expenses incurred during the first quarter. We had $19 million of additional SG&A expenses from acquisitions this quarter. We remained disciplined on cost balanced with investing in the right areas to support our strategic initiatives. On the next slide, we can review our capital priorities. We generated strong free cash flows of $164 million for the quarter. We deployed $132 million for buybacks and $37 million for dividends. Our operating model allows us the benefit of generating strong cash flows, which we are able to both invest back into our business to support our strategic initiatives as well as returning excess capital to shareholders through dividends and buybacks. On the next slide, we can review our debt statistics. In June, we added additional capital to support our strategic initiatives around M&A with the U.S. dollar 900 million 30-year debt offering. As Kurt mentioned earlier, this was the largest amount raised in the asset management space, and we believe this response from the fixed income market supports investors' positive views on our strategy. Importantly, there is no change to our credit ratings or outlook from the rating agencies. As of June, we had approximately $3.4 billion of debt outstanding on a gross basis or $2.5 billion on a net basis, and our net leverage is two and a half times based on our annualized second quarter results. Thank you. Let me now turn the call back to Kurt to give you an update on the progress we've made on our strategic priorities.