May 12, 2009 / 5:17 PM / in 9 years

UPDATE 1-CI Financial Q1 sales, assets hit by downturn

* Sales, assets under management shrink amid downturn

* Q1 adjusted EPS C$0.20 vs EPS C$0.19 in Q4

* Shares fall 1.7 pct to C$16.90

* Sees improved profits through 2009

TORONTO, May 12 (Reuters) - CI Financial Corp CIX.TO reported on Tuesday its sales and assets under management shrank in the first quarter from the fourth quarter amid a decline in global markets, but said its profitability will improve.

CI Financial said adjusted earnings were 20 Canadian cents a share in the latest quarter, ended March 31, up 5 percent from 19 Canadian cents a share in the final three months of 2008.

This was the first period in which the fund manager reported as a corporation, after converting from an income trust on Jan. 1, and hence there are no comparable results for the first quarter of 2008.

CI said fee-earning assets fell 3 percent to C$78.0 billion from C$80.3 billion at Dec. 31, 2008, as declining markets were only partly offset by new fund sales.

For the quarter, gross sales fell 13 percent to C$2.1 billion from C$2.5 billion in the fourth quarter.

Net sales were C$178 million. Over the 12-month period ended March 31, CI’s net sales were C$1.4 billion, ranking it third for net sales among the independent mutual fund companies, the company said.

CI’s average retail assets under management in the first quarter were C$48.7 billion, a drop of 3 percent from C$50.4 billion in the prior quarter, but the company said assets under management had improved since and it expected “significant improvements” to profitability for the rest of 2009.

“Since the lows on March 9, 2009, CI has seen its assets under management increase by C$10 billion,” President Stephen MacPhail said in a statement.

“In addition, sales of CI’s funds continue to be solid, with C$82 million of net sales in long-term funds in April, and we expect that May will see further sales growth,” he added.

CI converted to a corporation from an income trust at the start of the year, saying it wanted better access to capital markets and to make it easier to pursue business deals.

The company also said it changed its dividend policy and will now pay a monthly dividend of 5 Canadian cents a share, rather than 12 Canadian cents a quarter.

Shares of Toronto-based CI Financial were down 1.7 percent at C$16.90 at midday on the Toronto Stock Exchange.

$1=$1.17 Canadian Reporting by Andrea Hopkins; editing by Rob Wilson

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