Investors Group reports nine months earnings
Results reflect Mackenzie acquisition

Investors Group continued to add to its net income in the latest quarter.

In the last nine months, it has reported $275.5 million in net income, up 17.1%, prior to goodwill amortization and a restructuring charge related to the acquisition of Mackenzie Financial Corp.

Net income for the third quarter prior to good will amortization was $110.6 million compared with $76.6 million in the same period of 2000.

After accounting for a restructuring charge related to the Mackenzie acquisition taken in the second quarter of $95.6 million pretax and amortization, dropped to $174.7 million.

“Investors Group and Mackenzie are actively pursuing growth opportunities and cost-efficiencies made possible by the two companies working together,” said Jeffrey Orr, president and CEO.

James Hunter, president and CEO of Mackenzie, said, “Our first major initiative, the amalgamation of Mackenzie and MAXXUM Financial, has just been completed and we are working on a number of other fronts to realize the full potential of the transaction.”

Gross revenues for the third quarter were $502.5 million compared with $305.9 million in the prior year. Operating expenses were $886.4 million for the nine months and $311.9 million for the quarter compared with $501.6 million and $165.7 million in 2000.

Assets under management and administration at September 30, totalled $78.4 billion, compared with $48.8 billion a year ago, reflecting the increase in assets resulting from the Mackenzie acquisition.

Shareholders’ equity at September 30, was $2.6-billion compared with $1.1 billion at Dec. 31, 2000. Return on average common equity for the nine months, excluding goodwill amortization and restructuring, was 19.9% compared with 27.5% for the same period in 2000.

Mutual fund net sales for the period were $874 million compared with $858 million in the prior year. In the third quarter mutual fund net sales were $114 million compared with $87 million last year.

“Our clients have benefited from Investors Group’s strength in the preservation of wealth, in what has been a difficult year for financial markets. Within the Investors Group consultant network, net sales of mutual funds are actually up materially over last year,” said Orr. The number of Investors Group consultants was 3,460 at Sept. 30, compared with 3,483 at year-end.

In the third quarter Mackenzie’s mutual fund net sales were $29 million compared with $74 million last year. Hunter said, “Given the market environment, Mackenzie’s gross sales continue to compare well with last year’s levels, both in the past quarter and in our year-to-date figures. We are also encouraged by our strong investment performance, relative to the sharp declines in the markets. This should translate into increased sales on the equity side as we enter the upcoming RSP season.”