Competitive Pressures and High Debt Levels Have Made the Way Forward More Difficult for CI Financial

While CI Financial's aggressive pursuit of wealth management operations in both the US and Canada the past few years has provided the firm with a way to offset the shifting balance of power in the Canadian fund market, the company funded most of this acquisition activity with debt. Although revenue and adjusted earnings per share have risen the past several years, the high degree of leverage on the balance sheet has weighed on overall returns (as well as the company's share price) and even led Standard & Poor's to rate their debt "junk" in early May 2023, with Moody's and Morningstar/DBRS currently rating the firm's debt just one notch above noninvestment-grade.