With the acquisition, CI will become the largest stakeholder in the registered investment advisor (RIA) firm

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CI Financial to acquire stake in US wealth management firm Cabana. (Credit: Pixabay/bertholdbrodersen)

Canada-based asset management and wealth management company CI Financial has entered into an agreement to acquire stake in Cabana, the parent company of Cabana Asset Management, for an undisclosed amount.

With the acquisition, CI will become the largest stakeholder in the registered investment advisor (RIA) firm, with $1.1bn in assets under management, as of 17 April 2020.

Cabana offers risk-managed portfolios to its retail clients and on a sub-advisory basis to RIAs and advisors across the US, in addition to its suite of investment management and wealth planning services.

The company offers Target Drawdown Portfolios, which are designed to minimise losses within a predetermined drawdown parameter, while actively participating in favorable market conditions.

The Target Drawdown products are said to quantify acceptable levels of risk at beginning of the investment process and are actively managed using the company’s proprietary Cyclical Asset Reallocation Algorithm (CARA).

The transaction is part of CI’s efforts to build a US wealth management business within RIA sector

The stake acquisition in Cabana is currently expected to be completed later this quarter.

Cabana currently offers its services to clients and advisor partners offices in Arkansas, Texas and Colorado.

The acquisition is part of CI’s efforts to build a US wealth management business within the RIA sector, which is said to be the fastest-growing segment in North American wealth management.

The company has also acquired a majority stake in Surevest Wealth Management of Phoenix and reached an agreement to buy a majority stake in One Capital Management of Westlake Village, California.

Cabana chief executive officer and co-founder Chadd Mason said: “Identifying a strategic partner to more widely distribute our products and services in the U.S. has always been our goal.

“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.”