CI Financial and industry veterans co-launch real estate investment firm

Kurt MacAlpine, CEO of CI Financial, in downtown Toronto on December 20, 2019. Over the past 18 months, Mr. MacAlpine has grown CI rapidly through acquisitions in his wealth management business.

Tijana Martin / The Globe and the Post

CI Financial Inc. is making its first foray into the private real estate sector with a joint venture stake in Axia Real Assets LP, a newly formed alternative investment manager focused on global real estate and infrastructure.

CI announced the new company on Tuesday along with industry veterans and Axia co-founders Kelsey Boland, Darrell Shipp, Greg Stevenson and Joshua Varghese, a former CI portfolio manager.

No financial details have been released by either company, but Axia is independently operated and managed by its four partners. Prior to the deal, CI had only stepped into real wealth by giving larger institutional investors access to private real estate funds, as well as private equity and credit.

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The new company now gives retail investors access to private real estate opportunities that are usually difficult to access, said Varghese, who managed a multi-billion dollar portfolio of global real estate stocks at CI Global Asset Management for more than a decade.

Over the past 18 months, CI CEO Kurt MacAlpine has rapidly grown CI through acquisitions in its wealth management business, adding alternative exchange-traded funds, cryptocurrencies and private fixed income securities to his alternative investment arm.

“The products people buy today are very different from what they bought 10 years ago, and they will be different in five years,” MacAlpine said in an interview. “We’re trying to be relevant wherever Canadians want to invest – and that includes real assets today.”

With liquid alternative funds valued at more than USD 3.7 billion, CI offers private investors access to listed real estate investments as well as a private real estate fund for accredited investors through mutual funds and ETFs.

Mr. MacAlpine said, along with growth in CI’s wealth management business, which doubled its assets under management year-over-year, “Demand for liquid and illiquid real estate has increased from both institutional and retail investors.”

Instead of expanding through acquisitions, Mr. MacAlpine spent several months discussing the new joint venture with Mr. Varghese, who left his position at CI last November to start building Axia.

Mr. Varghese was joined by several former Slate Asset Management executives, including Mr. Stevenson, former CEO of Slate Retail real estate mutual fund, which invested in US retail real estate anchored by grocery stores.

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“Right now we see many interesting opportunities in real estate that is based on the rise of the New Economy – whether it is e-commerce warehouses, grocery stores or data centers – that are difficult to access for many by investors, both private and institutional investors “Said Stevenson in an interview.

“As investors continue to diversify their portfolios to build wealth over the long term, we believe the opportunities for global real assets are substantial.”

In addition to properties anchored in grocery stores, which include large box grocery stores, other areas of interest to the company include life science facilities, cold rooms, and single-family homes, according to Varghese.

Mr. Varghese declined to comment on the company’s initial investment capital, but expects the first investment products to be launched this summer.

“We think that because of digitization and what it will do to enable social change, we will see bigger changes in the next two decades than we have in the last two decades,” said Varghese.

“When investing in real estate – a long-term asset class – you need to have a laser focus on how and what those changes will be [the areas we are looking] will provide our investors with access to the types of properties that will benefit from the new economy. “

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