IGM Financial reports Q2 net fund redemptions, 12.7% earnings drop

Winnipeg-based IGM Financial Inc. reported a double-digit drop in net earnings in the second quarter, along with a 9.8% drop in assets under management and advisement.

Net earnings for the firm were $207.1 million or 87 cents per share — down 12.7% from $237.4 million in Q2 2021.

But earnings were the second highest second-quarter result in the company’s history on an adjusted earnings-per-share basis, president and CEO James O’Sullivan said in a press release.

Within wealth management, which includes IG Wealth Management and Investment Planning Counsel, Q2 net earnings of $108.8 million represented 52.5% of IGM’s net earnings and a decrease of 19.0% from $134 million in Q2 2021.

IG Wealth Management’s net client inflows of $1.9 billion in the first half of 2022 were the highest result in more than 20 years, the firm said, and up from $1.7 billion in the same period last year. Quarterly net client inflows were down to $389 million, compared to net client inflows of $670 million in Q2 2021.

“Our client flows remained solid with a strong contribution from IG Wealth Management in the context of a challenging industry environment,” O’Sullivan said in the release.

Assets under advisement in wealth management were $134.2 billion as of June 30, a decrease of 9.4% from $148 billion in the previous quarter and a decrease of 6.4% from $143 billion a year earlier.

Within asset management (Mackenzie Investments), net earnings of $51.3 million represented one-quarter of IGM’s net earnings available to common shareholders and a 9.2% decrease from a year earlier.

Investment fund net redemptions in the quarter were $819 million, compared to fund net sales of $1.3 billion in the previous quarter and fund net sales of $1.7 billion in Q2 2021.

Total net outflows in the quarter were $527 million compared to net inflows of $2.9 billion in Q2 2021. IGM said year-to-date net inflows of $1.9 billion remained strong.

For IGM as a whole, assets under management and advisement were $242.1 billion, down 9.8% from $268 billion in the previous quarter and down 7.6% from $262 billion a year earlier.

IGM also reported the fair value of its investment in Wealthsimple was $492 million as of June 30, down from $925 million at the end of Q1.

“This change in fair value is consistent with the continued decline in stock markets and public market peer valuations, and Wealthsimple focusing on its core business lines and revising revenue expectations,” the release said.

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