Market Losses and Outflows Mar CI Financial's Q3 Results; Expect to Lower FVE to CAD 16 Per Share

While there was little in narrow-moat CI Financial's third-quarter results that would alter our long-term view of the firm, we expect to lower our fair value estimate to CAD 16 per share from CAD 20 due primarily to our expectations for lower levels of AUM, revenue, and profitability in the near to medium term as a result of weakness in the equity and credit market, as well as our pulling out future mergers and acquisitions activity from our model as the company has suspended activity until well after its initial public offering of its U.S. wealth management business in the next several quarters. CI Financial's aggressive pursuit of wealth management operations in both the U.S. and Canada the past several years has been a big driver of growth, such that a freeze on all activity in the near term will impact valuation.