CI Financial Corp.

Good morning. Thank you for attending today's CI Financial third quarter 2023 earnings call. My name is Megan, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to Kurt McAlpine, CEO of CI Financial.

Good morning, everyone, and welcome to CI Financial's third quarter earnings call. Joining me is our CFO, Amit Meuni. Together, we will cover the following, an overview of the highlights of the quarter, a review of our financial performance during the quarter, a discussion on some of the key fundamental drivers of our business, then we'll take your questions. Our adjusted EPS of 81 cents is up 7% sequentially. reflecting the growth of our US wealth business, growing contributions from our Canadian wealth management business, and the benefits from the capital we deployed following the sale of a minority stake in our US business. This growth was partially offset by a higher non-controlling interest. Adjusted EBITDA per share, attributable to shareholders, increased 7% from Q2 to a record of $1.47 per share, while free cash flow per share increased 37% from Q2 to a record of $1.10 per share, which reflects the seasonality in our lower share count. Capital deployment remained active during the quarter. We spent $145 million to repurchase 8.8 million shares, essentially completing our normal course issuer bid. We deployed $72 million towards M&A, including deferred and earn-out payments, and we returned $31 million to our shareholders through our dividend. The Board also declared a dividend of $0.20 per share payable in April, reflecting the normal cadence of declaring dividends one quarter ahead. While there are several bright spots, the uncertain economic environment and risk-averse investor mentality dampened the flow momentum in our asset management segments. We continue to see strong demand for our high interest savings and other short duration strategies, as well as for our liquid and illiquid alternatives, which we will discuss more later in the presentation. Our wealth businesses in both Canada and the US continue to generate positive inflows in the third quarter, highlighting the resiliency of those businesses. We also continue to execute against our three strategic priorities to modernize asset management expand wealth management, and globalize the company. We launched two unique private market strategies for accredited investors, the CI Private Market Growth Fund and the CI Private Market Income Fund. The July custody conversion of Align Capital's assets to CI Investment Services went very well. This had an immediate and meaningful contribution to our bottom line, in addition to providing advisors and clients with enhanced services and a better go-forward experience. We continue to work towards onboarding the majority of our internal wealth assets, in addition to growing our asset base from external clients. In July, we also rebranded our U.S. business to Corient, which we discussed in detail last quarter. Feedback to date has been extremely positive. We completed the previously announced acquisitions of Coriel in Canada and Intercontinental Advisors in the U.S., Early in the fourth quarter, we completed the acquisition of Windsor Wealth Advisors and the Indianapolis-based high net worth focused RIA. I'll now turn the call over to Amit to discuss our financial results.

Thank you, Kirk, and good morning, everyone. Turning to slide four, our global assets ended the quarter up 3% to $421 billion due to the conversion of custody assets from Alliant Capital, positive flows in our Canadian and U.S. wealth management segments, as well as acquisitions in our U.S. segment during the quarter. Partly offsetting these increases was negative market movement. Compared to this time last year, our AUM is up 25%. Turning to our financial results on the next slide, I'll focus my comments on our adjusted results. Adjusted net income was $133 million, or $0.81 per share, for the quarter. Net revenues increased to $670 million and adjusted EBITDA was $238 million for the quarter. Prior to non-controlling interest, both adjusted net income and EBITDA increased this quarter. However, this period reflected the full quarter effect of non-controlling interest from the partial sale of our U.S. business in May. Turning to the next slide, I'll highlight the EBITDA and margins for our three segments. Asset management EBITDA was down slightly to $156 million. However, margins expanded to nearly 60%. Canada wealth EBITDA increased 24% to $230 million and margins expanded to nearly 10%, primarily due to the conversion of aligned custody assets. In the U.S., we experienced strong EBITDA growth of 55% compared to the third quarter of last year and 5% growth compared to the second quarter. U.S. margins were 42%. For purposes of modeling non-controlling interest for our U.S. segment for future quarters, we estimate non-controlling interest of 38% of U.S. adjusted EBITDA when calculating our U.S. segment's adjusted EBITDA. For purposes of modeling non-controlling interest for our U.S. segment's contribution to EPS, we estimate non-controlling interest of 32% of U.S. segment adjusted EBITDA. Turning to the next slide, I'll walk through the changes in revenue. Revenues on a comparable basis increased slightly to $660 million. Asset management revenues were essentially unchanged as lower revenue from mixed shift due to flows into lower fee short duration products were offset by an additional revenue day in the quarter. Canada and U.S. wealth revenues were up due to higher asset levels from growth and the aligned custody conversion. Our U.S. acquisitions added $10 million in additional revenues in the quarter. Turning to expenses on the next slide. On a comparable basis, total expenses increased less than 1%. SG&A increased primarily due to the full quarter effect of stock-based compensation due to the annual granting of restricted stock awards to our employees, which were done in the middle of the second quarter, as well as other higher headcount-related costs. Advisor and dealer fees increased due to higher revenue earned in our Canada wealth segment. Interest expense declined due to lower debt levels from the tender offer for our bonds last quarter. Acquisitions added $3 million in expenses in the quarter. Turning to slide nine. At the end of the quarter, our net debt was $3.3 billion. We had an outstanding balance on our credit facility of $95 million at the end of the quarter due to our buyback-related activities. In addition, that increased from non-cash foreign exchange translation of our U.S. debt. Our net leverage was 3.3 times. Using the current market value of our debt, our net leverage would be approximately 2.4 times. As you can see from the chart on the bottom of this slide, we have an attractive debt profile for our remaining debt with an average maturity of 14 years at a 4% fixed rate. We anticipate interest expense to be in the range of $40 to $42 million in the fourth quarter. Thank you. Let me turn the call back to Kurt.