Administration October 8, 2004

CI Goes on Canadian Fund Shopping Spree

August 22, 2003 (PLANSPONSOR.com) - Things were heating up north of the border Friday, as CI Fund Management Inc. went on a shopping spree of some C$1 billion ($700 million), on its way to becoming the second-largest mutual fund manager in Canada.

Reported by

Nevin E. Adams

CI Fund announced two cash and stock deals Friday, including the Canadian operations of financial planner Assante Corp. for C$846 million, and another C$116 million on privately-held Synergy Asset Management. Those acquisitions on top of Thursday’s acquisition of fund manager Skylon Capital Corp. (for C$32 million in cash and shares), would leave Toronto-based CI as Canada’s second-largest mutual fund manager, with total managed mutual fund assets of C$38.5 billion at the end of July (CI Fund Management had C$35.1 billion in fee-earning assets as of that date).

Investors Group Inc, which also owns Mackenzie Financial, is Canada’s largest mutual fund manager with more than C$70 billion in mutual fund assets under management.

The Synergy and Assante transactions will increase CI’s mutual and segregated funds under management by 28% to $38.5 billion. CI has another $5.3 billion in assets in institutional accounts, labor-sponsored and other funds.

Under the agreement, CI will purchase Assante’s Canadian operations, consisting of an investment management business with $7 billion in assets under management and one of the country’s largest networks of financial advisers, with 1,000 advisers administering $17 billion in assets. CI said it will run Winnipeg-based financial planner Assante Canada as a separate entity. Assante, which confirmed in June that it was in preliminary talks with several parties, said it will spin off its US operations to shareholders by way of a return of capital, and CI will purchase the shares of Assante following the spin-off.

Synergy’s founder, president and chief executive Joseph Canavan, who CI’s president and chief executive officer William Holland described as his “single best competitor”, will run Assante. Synergy, founded in 1997, has assets of approximately C$1.4 billion in 24 funds. Sun Life Financial Inc. will maintain its current 34% stake in CI Fund Management by subscribing for additional common shares in both deals.

The deals are subject to approval from regulators and from Assante shareholders.