IGM Financial (OTCPK:IGIF.F) FY Conference Transcript

Summary of IGM Financial FY Conference Call Company Overview - Company: IGM Financial (OTCPK:IGIF.F) - Date of Conference: September 25, 2025 - Key Speaker: Keith Potter, EVP and CFO Core Industry and Company Insights Financial Performance - IGM Financial is on track to achieve its medium-term targets of 9% earnings growth, with 7% from core business and 15% from strategic investments [2][63] - Adjusted earnings per share (EPS) growth for 2024 was reported at just over 11%, with year-to-date growth exceeding 10% [3][64] - Q2 earnings EPS growth reached 15% compared to the previous year, marking a record performance [4][65] Market Conditions - The company experienced a cautious outlook at the beginning of the year due to geopolitical tensions and unstable financial markets, but saw a recovery in investor confidence and market performance as the year progressed [4][65] - IGM Financial noted that while they cannot control market conditions, they are focused on executing their strategic priorities effectively [6][66] Net Flows and Investment Strategies Net Flows - Positive net flows were observed in the second quarter, reversing a trend of record industry outflows from 2022 to 2024 [8][68] - IG Wealth reported a twelve-month trailing net sales rate of approximately 1.3%, with a net sales rate of 1.8% in their core strategy targeting high net worth and mass affluent segments [8][68] - Mackenzie also reported positive momentum, with investment fund net flows just under $200 million and success in retail flows driven by smaller boutiques and quantitative equity strategies [9][69][10][70] ETF Strategy - IGM Financial has seen net flows from their active ETF business, particularly in quantitative equity products, and views ETFs and mutual funds as interchangeable in terms of management fees [12][73] - The ETF business is expected to play a significant role in Mackenzie's growth moving forward [13][74] Fee Structure and Margin Analysis Fee Pressure - Advisory fees at IG Wealth have remained stable, although there has been a mix shift towards high net worth clients, leading to a decline in advisory fee rates [19][20] - The EBITDA margin for IG Wealth Management is reported in the high 30s, while Mackenzie operates in the mid-40s range [23][30] Strategic Investments Overview of Strategic Investments - The value of IGM's strategic investments is approximately $6.6 billion, with a market cap of GBP 12 billion [38] - Wealthsimple has shown rapid growth, targeting $100 billion in assets by 2028, with current assets at $85 billion [41][42] - China AMC has grown its assets under management (AUM) by about 25% over the past five years, despite facing fee pressure and challenging equity markets [50][52] - Northleaf has been successful in diversifying into private equity, infrastructure, and private credit, with significant fundraising success [54][56] Future Outlook - IGM Financial aims to demonstrate the value of its strategic investments while focusing on earnings growth targets of 9% from core business and 15% from strategic investments [60][61] - The company plans to continue share repurchases and return capital to shareholders, with a focus on maintaining a strong financial position [35][36] Conclusion - IGM Financial is positioned for growth with a focus on high net worth and mass affluent clients, strategic investments, and a robust ETF strategy, while navigating market challenges and maintaining stable fee structures.