IGM Financial Q1 2025 slides: Record AUM&A of $503.6B drives 6.4% EPS growth

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Introduction & Market Context

IGM Financial Inc . (TSX:IGM) presented its first quarter 2025 results on May 9, 2025, highlighting record assets under management and advisement (AUM&A) and strong earnings per share growth. The company's stock closed at $44.32 on May 8, up 1.49% ahead of the results presentation, reflecting positive investor sentiment. The presentation was led by President and CEO James O'Sullivan, along with the leadership team from IG Wealth Management and Mackenzie Investments.

The quarter saw IGM operating in a generally favorable market environment, with the company's client investment return at 0.4% in Q1 2025, following a strong 15.5% return in 2024. This performance came amid varied results across global equity markets and modest fixed income returns.

Quarterly Performance Highlights

IGM Financial (OTC:IGIFF) reported impressive results for Q1 2025, with adjusted earnings per share reaching $1.00, a 6.4% increase compared to Q1 2024. Reported EPS came in at $0.98, up 4.3% year-over-year. The company's consolidated assets under management and advisement, including strategic investments, reached a record $503.6 billion, representing a 19.1% increase from the same period last year and a 4.2% rise from the previous quarter.

As shown in the following comprehensive overview of key metrics:

The company returned $213 million to shareholders during the quarter through dividends ($134 million) and share repurchases ($79 million), demonstrating its commitment to shareholder value. Net flows across IG Wealth and Mackenzie reached $4.2 billion, reflecting strong client acquisition and retention.

IGM's strategic investments continued to deliver substantial growth, with Rockefeller up 23%, Wealthsimple up 89%, ChinaAMC up 35%, and Northleaf up 20% year-over-year. This diversified approach has strengthened IGM's market position across various wealth and asset management segments.

The following chart illustrates the growth in assets under management across IGM's business segments:

Wealth Management Segment Performance

IG Wealth Management, IGM's wealth management division, achieved record quarter-ending assets under advisement of $141.5 billion, representing a 10.6% increase year-over-year and a 0.8% rise from the previous quarter. The segment reported record gross inflows and sales of $4.2 billion and $4.9 billion respectively, with total net inflows of $718 million.

The company's strategic focus on high-net-worth and mass affluent clients continues to drive growth, with record Q1 new client gross inflows of $1.3 billion, 76% of which came from mass affluent and high-net-worth clients.

As illustrated in the following operating results chart:

IG Wealth Management's gross inflows increased by 12.6% year-over-year to $4.2 billion, while its gross outflows rate (quarterly annualized) improved from 11.2% in Q1 2024 to 9.7% in Q1 2025. The segment's investment solutions continued to perform well, with 75% rated 4 or 5 stars by Morningstar and 95% rated 3 stars or higher.

The company's success in targeting high-value client segments is clearly demonstrated in the following chart showing the growth in gross flows from newly acquired clients:

Rockefeller, one of IGM's strategic investments in the wealth management space, reported organic client asset growth of US$5.5 billion since Q1 2024 and inorganic growth of US$11.4 billion over the same period. The firm added 24 private advisors during the first quarter, bringing the total to 399.

Wealthsimple, another strategic investment, saw impressive growth with assets under advisement increasing to $73.0 billion, up 89% year-over-year and 14% sequentially. The platform now serves approximately 2.8 million clients, representing a 15% increase year-over-year.

Asset Management Segment Performance

Mackenzie Investments, IGM's asset management division, reported record quarter-ending AUM&A of $218.6 billion, up 7.3% year-over-year and 2.5% from the previous quarter. The segment's performance is summarized in the following highlights:

Mackenzie's retail mutual fund gross sales reached $2.1 billion, an 11% increase compared to Q1 2024. The company reported total net sales of $3.4 billion for the quarter, a significant improvement from net redemptions of $174 million in Q1 2024. Investment fund net redemptions were $85 million, compared to net redemptions of $194 million in the same period last year.

The company's operating results for Q1 2025 show strong institutional sales driving quarterly net sales:

ChinaAMC, a strategic investment in the asset management space, continued to strengthen its position as an industry leader in China. The firm's market share increased from 5.6% to 6.2%, maintaining its #2 ranking in the market. Investment fund AUM grew by 27% year-over-year and 7% during the quarter.

Northleaf Capital Partners (WA:CPAP), another strategic investment, reported fundraising of $1.1 billion for the quarter and $5.3 billion over the last twelve months. The firm's AUM grew by 20% year-over-year, continuing its strong growth trajectory with a 21% CAGR since 2020.

As shown in the following update on Northleaf's performance:

Financial Position & Outlook

IGM Financial maintained a strong financial position in Q1 2025, with unallocated capital increasing to $615 million as of March 31, 2025. The company's improving leverage ratio provides additional financial flexibility for future growth initiatives.

The following chart illustrates IGM's consolidated profitability:

Higher average AUM&A, up 12.1% year-over-year, supported increases in wealth and asset management revenue. However, Q1 2025 net investment income had lower seed capital gains and lower interest rates on cash balances compared to the previous year.

IGM maintained its full-year 2025 guidance for operations & support and business development expense growth at 4%, demonstrating disciplined cost management while continuing to invest in growth opportunities.

The company's wealth management segment showed strong profitability drivers, as illustrated in the following chart:

Looking ahead, IGM Financial is well-positioned to continue its growth trajectory, leveraging its diversified business model across wealth management, asset management, and strategic investments. The company's focus on high-net-worth and mass affluent client acquisition, product innovation, and strategic investments is expected to drive continued growth in assets under management and advisement, supporting long-term shareholder value creation.

Full presentation:

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