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After the acquisition spree – Investment Executive

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CI will continue to look for acquisitions and invest in product innovation in 2022, he said, while not straying from its strategic principles.

MacAlpine said CI now offers services beyond the traditional wealth management space and can therefore materially improve its clients’ financial lives. “I think there are more opportunities for us to do so in the high- and ultra-high-net-worth space,” he said.

After taking over in September 2019, MacAlpine outlined a strategy of modernizing CI’s asset management business; expanding its wealth management platforms; and globalization, looking to turn around a firm beset by net fund redemptions and a lack of focus.

As of the third quarter of 2021, CI’s wealth management assets stood at more than $200 billion, about $50 billion more than its asset management business, historically the firm’s biggest business line. Net redemptions turned into net flows last year.

MacAlpine wouldn’t say whether CI will maintain its accelerated pace of acquisitions in the U.S. Last year the firm acquired 15 registered investment advisors (RIAs), growing its U.S. assets from US$23 billion to approximately US$115 billion.

Today, CI’s U.S. wealth management business represents the firm’s largest business, exceeding core asset management and Canadian wealth management.

MacAlpine also didn’t provide a target in terms of total assets CI is looking to acquire.

“If 2022 was just as busy as 2021, I’d be thrilled,” MacAlpine said. “If 2022 was a fraction as busy as 2021, I’d be just as thrilled, because we’re not compromising on quality.”

CI’s goal is to have the “leading high-net-worth and ultra-high-net-worth wealth management platform” in the U.S., he said.

Scott Chan, director of research for financials with Canaccord Genuity Group Inc. in Toronto, believes CI will remain active in the acquisition market, but not at the same pace. “My view is that the [RIA] consolidation is going to slow down, especially with the [equities market] volatility that we’re seeing and the number of deals CI has already closed.”

RIA valuation multiples remain high, Chan said.

CI has released few metrics related to its U.S. acquisitions so far, but Chan suggested CI faces at least a short-term risk of having overpaid for RIAs. “Transaction multiples did increase across the board, so CI would have probably participated in higher transaction multiples last year than the year before,” he said.

Daniel Gonzalez, financial analyst with California-based Javelin Strategy & Research in Toronto, agreed: “The risk for CI is paying the highest valuation in every market and then the market drops by 10%, 20% or 30%.”

However, Gonzalez said CI’s U.S. long-term strategy remains sound as the firm is positioning to take advantage of an expected wealth transfer: “Ultimately, this is a good way to increase [assets under management (AUM)], while diversifying the business model for CI.”

MacAlpine said he also sees opportunity for CI’s U.S. wealth platform to work more closely with the Canadian wealth business, particularly when providing coordinated cross-border advice and services.

“The Canadian advisor is overseeing [a client’s] Canadian assets, and the U.S. advisor is overseeing U.S. assets, and you’re collectively working together,” MacAlpine said. “Through that shared approach to planning, we see and share and incorporate best practices overall, so I think it’s just made us better.”

MacAlpine said he’s just as interested in acquiring “high-quality, dynamic, well-run” Canadian wealth firms as he is those in the U.S. However, he doesn’t anticipate CI will make as many deals in Canada.

“In the U.S., you have a highly fragmented RIA marketplace with thousands of RIAs,” MacAlpine said. “In Canada, you have a concentrated market dominated by a handful of large financial services firms.”

Nonetheless, CI announced on Jan. 11 that it had struck a deal for Toronto-based Northwood Family Office, a multi-family office firm with $2.2 billion in AUM serving ultra-wealthy clients. Northwood will be added to the firm’s CI Private Wealth platform.

The deal for Northwood represents CI’s first acquisition of a Canadian wealth management firm since it took a majority stake in Aligned Capital Partners in August 2020.

After completing the transaction for Aligned late that year, the focus shifted in 2021 to incorporating the firm into CI’s broader Canadian wealth business alongside CI Assante Wealth Management, MacAlpine said. Both Christopher Enright, president and managing director of Aligned, and Sean Etherington, president of CI Assante, sit on CI’s Canadian wealth management committee.

“The [Aligned and Assante] businesses themselves are growing very, very nicely — independently,” MacAlpine said. “Over time, you’re going to see us sharing more knowledge, resources, support. We’re going to be tapping into the collective scale of Assante and of Aligned in a way we haven’t been able to.”

One way to take advantage of CI’s increased scale is by leveraging its distribution networks to market its products.

In the second quarter of 2021, CI finally broke its stubborn multi-year streak of net redemptions, posting $356 million in net asset management flows compared to $1.9 billion in net redemptions a year earlier. In the third quarter of 2021, CI’s net flows rose to $821 million, compared to $2 billion in net redemptions in the third quarter of 2020.

However, a banner year for the Canadian fund industry “was probably the main contributor to CI returning to positive net sales,” Chan said. In 2021, Canadian mutual fund net sales were $111.8 billion, as of Nov. 30, compared to $23.6 billion in the same period in 2020. Meanwhile, ETF sales were $53 billion as of Nov. 30, compared to $37.6 billion.

Nevertheless, Chan also credits CI’s asset management turnaround to changes the firm made to the business since MacAlpine took the reins, including consolidating its myriad fund families under one CI brand umbrella and the addition of investment management capabilities.

“Kurt has done a really good job at setting up partnerships [with third-party managers], specifically on the alternative [asset management] side,” Chan said.

In November, CI announced it had taken a minority stake in Ohio-based GLAS Funds LLC, an alternative investment platform and alternative asset management firm, with a long-term option to take majority ownership. “GLAS essentially allows us to seamlessly offer alternatives to our high- and ultra-high-net-worth clients,” MacAlpine said.

MacAlpine attributes the fund sales turnaround to a combination of factors, including incorporating data and analytics into the sales and marketing process; introducing new products in categories such as cryptocurrency and environmental, social and governance (ESG) to meet evolving client demand; adding talent in-house, including hiring Marc-André Lewis as the firm’s first-ever head of investment management in September; and improving fund performance. According to CI, as of Sept. 30, 67% of its mutual fund assets were outperforming peer averages on a three-year basis, compared to 39% in 2020.

CI’s consolidation of fund names under the CI brand may have given the firm an opportunity to re-introduce itself to advisors who had given up over the years on the firm’s legacy fund families, said Dan Hallett, vice-president and principal with Oakville, Ont.-based HighView Financial Group.

“If the results aren’t there, that’s going to put people off,” Hallett said. “When you start to take some action to remedy a situation, you can gain confidence back among advisors, and that’s what translates into sales.”

MacAlpine said that CI remains in the “first inning” of implementing its asset management strategy, with plans to be “first to market and pushing new innovation” in alternatives, fixed income, ESG, cryptocurrency and other thematic products.

“If there’s a demand for clients that need it, if we can solve that particular demand and do it in a more seamless way that’s linked to the advice they’re receiving, to me that’s a great outcome,” MacAlpine said.

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Norway Oil and Gas Firms Raise 2022 Investment – Offshore Engineer

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Norway’s oil and gas companies have raised their investment forecasts for 2022 as they take advantage of high petroleum prices and tax incentives to boost activity, a national statistics office (SSB) survey showed on Friday.

The biggest business sector in Norway now expects to invest 167.2 billion Norwegian crowns ($17.57 billion) in 2022, up from a forecast of 159.5 billion crowns made in February, SSB said.  

“The upward adjustment for 2022 is driven by higher estimates within the categories field development, onshore activity, and exploration, and concept studies,” the agency said in a statement.

Preliminary predictions for 2023 project investment of 130.6 billion crowns, down from 131.4 billion crowns forecast three months ago. The forecasts, however, remain subject to large revisions as more plans are prepared in coming quarters.

“New developments will significantly increase the estimate for 2023,” SSB said.

Led by state-controlled Equinor and a range of foreign and domestic companies, the Norwegian oil industry’s overall output stands at about 4 million barrels of oil equivalent per day, making the country-western Europe’s largest producer.

In 2020 Norway’s parliament approved temporary tax incentives to support oil and gas investment in the face of a crash in petroleum demand because of the pandemic.

The incentives are due to end this year and companies need to approve new projects by this deadline to benefit from them.

“It is expected that a very high number of plans for development and operation (PDOs) will be submitted to the government this year; the vast majority of them in December,” SSB said.

The expected investments will provide a boost to the economy, underpinning the Norwegian central bank’s push for higher interest rates in the time ahead, Handelsbanken wrote in a note to clients.

“All signals so far point to a solid rebound in petroleum investments in 2023-24,” the bank said.

($1 = 9.5144 Norwegian crowns)

(Reporting by Terje Solsvik/Editing by Jan Harvey and David Goodman)

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Indian fintech Jar eyes $50 million investment – TechCrunch

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Indian fintech Jar, which closed a $32 million financing round in February this year, is in talks to raise new funding as it looks to scale its product and expand its offerings.

The Bengaluru-headquartered startup is engaging with several investors to raise about $50 million at a $350 million valuation, according to four people familiar with the matter. Asked for comment on Wednesday, Misbah Ashraf, co-founder of Jar, said it was too early to comment.

Tiger Global, an existing backer of Jar, is positioning to lead the one-year-old startup’s Series B funding, the sources said, requesting anonymity as the details are private. Folius Ventures and Paramark are also engaging to invest in the new round, the people said.

Jar, which operates an eponymous app, is helping millions of Indians begin their investment and saving journeys. The startup has amassed over 7.5 million registered users, it disclosed to investors last month.

Nearly a billion Indians have bank accounts today, but they have never made any investment. Part of the reason is confusion, explained Nishchay Ag, co-founder and chief executive of Jar, in an earlier interview with TechCrunch. “Their world is littered with ads of different financial instruments,” he told TechCrunch in an earlier interview.

For decades, banks and mutual funds have been trying to tap India masses with their products. Despite the hundreds of millions of dollars they have sunk in to win the market, they have been able to court fewer than 30 million individuals.

“Manufacturing a product is one thing and being able to sell it is another. All these institutions are good at manufacturing. For selling, you have to be aligned with the individual’s persona, idiosyncrasies, insecurities, cognitive load and the cultural significance. That’s an art and science by itself,” he said then.

Jar is tackling this by choosing a financial instrument that is familiar to most Indians: gold. For over a century, Indians have been stashing gold in their houses, treating the yellow metal as both good investment and status symbol, he said.

To say Indians, who have a private stash worth $1.5 trillion of the precious metal, would be an understatement. For generations, Indians across the socio-economic spectrum have preferred to stash their savings — or at least a part of it — in the form of gold. In fact, such is the demand for gold in India — Indians stockpile more gold than citizens in any other country — that the South Asian nation is also one of the world’s largest importers of this precious metal.

Jar fetches a tiny amount each time a user makes a transaction. It rounds up an individual’s daily spendings and puts some money aside as investment. Users’ investments in digital gold is backed by physical gold of the same amount and they can choose to withdraw that much gold or liquidate their investments at any time.

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Merck KGaA in largest single investment in manufacturing – BioPharma-Reporter.com

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Merck KGaA will invest more than €440m (US$421m) to expand its membrane and filtration manufacturing capabilities at its site in Cork, Ireland. The investment will comprise of boosting membrane manufacturing at an existing facility in Carrigtwohill and the construction of an entirely new manufacturing facility.

According to the company, the investment breaks down to a €290m expansion at the Carrigtwohill facility, which is used for the immersion casting of membranes. The membranes produced at the site will support the development of novel and gene therapies, as well as being used for virus sterilization.

The remaining €150m will be spent on constructing a filtration manufacturing facility. The two expansions taken together will create more than 370 roles by the end of 2027.

Matthias Heinzel, CEO of Merck’s Life Science business, noted that the expansion made in Cork is the biggest single location investment in the history of the division, adding that “Ireland is central to our strategy to drive long-term growth.”

Last year, the company expanded its Carrigtwohill facility with a €36m investment to meet demand for lateral flow membrane, which had soared from the impact of COVID-19. The funds were put towards a second lateral flow membrane manufacturing product line, creating 50 jobs and doubling the capacity for the product.

Fueling growth

Merck’s investments are part of an overall strategy to expand its business and group sales, with a stated aim of increasing sales to €25bn by 2025. In order to do so, the company has stated that it plans to increase capital expenditure “significantly compared with the period from 2016 to 2020.”

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