Industry News

CI will see its AUM increase by 16% to approximately $140 billion from $120.4 billion and maintain Sentry as a standalone brand

By IE Staff |


Toronto-based CI Financial Corp. announced on Thursday that it has reached an agreement to acquire Sentry Investments Corp., also of Toronto, combining two of Canada's largest independent active asset-management firms.

Under the agreement, CI will acquire all of the outstanding shares of Sentry and its subsidiary, Sentry Investments Inc., for a total of $780 million, payable in $230 million in cash and the balance in CI shares. The transaction is expected to close on or about Sept. 29, subject to regulatory approvals.

CI had been in discussion with Sentry for a few months about acquisition after CI was approached to participate in a "highly confidential auction process," said Sheila Murray, CI's executive vice president, general counsel and secretary, in a conference phone call following the announcement.

"We're very pleased to be adding a firm of this quality to the CI Financial group of companies as it will significantly enhance our position as a Canadian independent global asset manager," says Peter Anderson, CI's CEO, in a statement. "The combined company will enjoy greater scale, which is key to being competitive in the investment industry today."

Specifically, CI will gain a significantly larger sales force, a new brand and the ability to spread costs over a larger asset base, Anderson said in the conference call.

"We're going to have a host of new Sentry wholesalers that are going to have more products to be able to offer their advisors," he said. "We're [also] going to have a smaller, reduced size of regions so that advisors are going to be able to get more support from the CI sales team."

Sentry manages a diverse lineup of over 45 mutual funds and other investment with approximately $19.1 billion in assets under management  (AUM) as of July 31. Following the completion of the acquisition, Sentry will remain a standalone brand and will continue to provide its investment products and award-winning portfolio managers to Canadian investors.

"Sentry is excited to join the CI group of companies," says Philip Yuzpe, president and CEO of Sentry. "Sentry will remain a leading Canadian investment management firm, now benefiting from the support of CI's best-in-class investment platform."

The transaction will increase CI's AUM by 16% to approximately $140 billion from $120.4 billion as of July 31. Total AUM and assets under management and advisement will increase to approximately $180 billion.

Sentry's owners will take a large portion of the purchase price in CI shares and become significant long-term shareholders in CI.

Earlier this year, Sentry and its former CEO, Sean Driscoll, reached a $1.5-million settlement with the Ontario Securities Commission to settle allegations that it violated the mutual fund sales practices rule by sending advisors to a lavish conference in California and providing tickets to the Montreal Grand Prix.

Read: Sentry to pay $1.5 milllion in settlement with OSC

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