CI Financial Corp. is likely to increase the pace of share repurchases and will keep buying aggressively as long as the stock is at a low valuation, Chairman Bill Holland said.
The Canadian investment firm has spent about C$770 million ($587 million) buying its own shares since the beginning of 2020. It may decide to accelerate buybacks once it completes an initial public offering of as much as 20% of its US wealth-management arm, Holland said in an interview.
“We’re privatizing this business very quickly,” he said. CI’s share count has dropped by about a third in the past decade. “Once the US business is separate, we will continue, probably at a faster rate.”
CI, one of Canada’s largest independent asset management firms, has been undergoing a transformation since Chief Executive Officer Kurt MacAlpine took over three years ago. His strategy has included a series of acquisitions, a New York Stock Exchange listing and a major restructuring of the Canadian fund-management arm, which saw the company drop many well-known fund brands.
But the shares have declined 46% this year, underperforming other asset managers, amid skepticism about the company’s US plan. The company is valued at about 4.5 times this year’s estimated earnings, according to data compiled by Bloomberg.
Holland, who’s the second-largest shareholder with 5%, continues to buy stock himself, according to insider trading records. If the market believes CI Financial is only worth four and a half times earnings, he said, “then this company will be vastly more private in three or four years than it is today.”
This article was provided by Bloomberg News.