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CI Financial Corp. of Toronto said Tuesday that it has become the largest shareholder in Cabana Asset Management of Fayetteville, a registered investment advisor firm with $1.1 billion in assets under management.
“Identifying a strategic partner to more widely distribute our products and services in the U.S. has always been our goal,” Chadd Mason, Cabana’s CEO and co-founder, said in a news release. “CI’s financial strength, vision, expertise in asset and wealth management, and commitment to building a client-focused RIA business provide excellent support for Cabana’s next wave of growth.”
The deal is expected to close later this quarter.
In a statement, CI Financial (TSX: CIX) cited Cabana’s Target Drawdown Portfolios, which are only offered in the U.S. CI said the portfolios have “achieved strong results, with all four portfolios eligible for a rating from Morningstar Inc. receiving the top five-star overall rating.”
“The Target Drawdown Series — both recently and over the longer term — has generated strong demand and helped to fuel Cabana’s rapid growth,” Kurt MacAlpine, CI’s CEO, said. “Given current market conditions and the ongoing need for effective retirement solutions, there is a tremendous and timely opportunity to offer the Target Drawdown Series to a wider audience in both the U.S. and Canada.”
CI’s investment in Cabana comes as the corporation aims to build a U.S. wealth management business in the RIA sector, which CI said is the fastest growing segment in North American wealth management. CI also acquired a majority interest in Surevest Wealth Management of Phoenix, agreed to buy a majority stake in One Capital Management LLC of Westlake Village, California, and signed a letter of intent to purchase another RIA, which it did not name.
CI’s investment in Cabana puts its U.S. RIA business at more than $3.4 billion in total assets.
Cabana Asset Management is part of The Cabana Group LLC, which provides services to clients and advisor partners from offices in Arkansas, Texas and Colorado. Services include wealth management, portfolio construction, retirement plan solutions, tax and estate planning, business development, insurance, annuities and sub-advisory money management.
Cabana Asset Management ranked No. 6 on Arkansas Business’ most recent list of the state’s largest money managers, with reported $872.8 million under management as of August. That figure was more than double the assets it reported in March 2018.