M and A

CI Financial, Once A Big Buyer, Sells Stake In Boston-Based RIA

By Tom Burroughes and Charles Paikert 1 May 2023

CI Financial, Once A Big Buyer, Sells Stake In Boston-Based RIA

CI's spate of acquisitions has been one of the most eye-catching M&A trends in the North American wealth management sector. In the case of its minority stake, CI said the structure at Congress – the firm in this story – prevented it from fully integrating into its US wealth entity.

CI Financial, the Canada-headquartered group that has bought a raft of US wealth management firms, has gone in the other direction, agreeing to sell a minority stake in Congress Wealth Management to Audax Private Equity. 

Boston-headquartered Congress, led by president Paul Lonergan, serves clients across the US. Besides its Boston office, it has offices in six other cities.

CI, which first invested in Congress in the third quarter of 2020, holds its stake in the firm through CI Private Wealth, LLC, its US wealth management subsidiary.

CI chief executive Kurt MacAlpine described Congress as “a great firm” but said its ownership structure “precludes it from fully integrating into CIPW.” CI’s investment in Congress was made almost three years ago, MacAlpine noted, “prior to the establishment of the CI Private Wealth differentiated private partnership model.”

IPO on course?
The sale has increased industry speculation about CI’s stated intention to spin out its RIA business through an IPO. 

“CI might have missed the window a bit with an IPO,” veteran industry analyst Alois Pirker told Financial Wealth Report earlier this year. “It might be a better deal for them to sell their RIA assets to an aggregator. I think a sale is more likely than an IPO.”

The Canadian interloper stunned the American RIA business in 2020 and 2021, gobbling up over two dozen high quality advisory firms with over $175 billion in assets under management. But CI has significantly reduced its deal volume in the last 15 months and, in apparent cost cutting moves, veteran CEOs of firms it has purchased have unceremoniously exited in recent months.

Nonetheless, CI remains committed to going through with the IPO, McAlpine told analysts in an earnings' call earlier this year. “We’re working through the structural changes in the process to do that,” he said, “and we should be ready once we get through the back end of the approvals.”

According to CI, it received a return of about three times its initial investment in Congress and will use the proceeds from the transaction to pay down debt.

The transaction is expected to close in May 2023.


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