Morningstar DBRS Confirms Credit Ratings on IGM Financial Inc. at A (high); Stable Trends

DBRS Limited (Morningstar DBRS) confirmed IGM Financial Inc.'s (IGM or the Company) Issuer Rating and Unsecured Debentures credit rating at A (high). All trends are Stable.

KEY CREDIT RATING CONSIDERATIONS
The credit rating confirmations and Stable trends take into consideration IGM's strong franchise in Canada, as a leading independent investment management company, and its resilient EBITDA margins, which have helped the Company achieve consistent profitability over the years. IGM's main operating entities: Mackenzie Financial Corporation (Mackenzie) and IG Wealth Management operate nationally with diversified products, distribution channels and partnerships, that are further enhanced by IGM's strategic investments across Canada, the U.S., and Asia. The Company's assets under management and advisement (AUM&A) base has consistently grown, despite macroeconomic challenges and broader industry trends of net outflows. Morningstar DBRS views the Company's financial profile as conservative, with a strong ability to service its interest and debt obligations. The credit ratings also reflect the nature of the Company's business model, which remains vulnerable to broader
macroeconomic conditions and industry trends that continue to pressure active asset managers.

CREDIT RATING DRIVERS
A significant increase in scale, as evidenced by higher assets under management and advisement (AUM&A), combined with a material and sustained improvement in main operating entities' net flows, would result in a credit ratings upgrade.

Conversely, sustained net outflows affecting the Company's profitability or material losses related to strategic investments that significantly affect earnings and capital would result in a credit ratings downgrade.

CREDIT RATING RATIONALE
Franchise Building Block Assessment: Very Strong/Strong
IGM is one of the largest independent asset and wealth management companies in Canada with $284 billion in total AUM&A as of June 30, 2025 (not including its proportionate share of AUM&A through strategic investments), representing an increase of 13% year-over-year. The Company benefits from its diversified and expanding product suite through its main operating subsidiaries, Mackenzie and IG Wealth Management that are further enhanced with strategic investments in China Asset Management Co. Ltd., Great-West Lifeco Inc. (Great-West; rated A (high) with a Stable trend), Wealthsimple, Northleaf Capital Partners Ltd., and U.S.-based Rockefeller Capital Management (RCM). Strategic investments provide geographic and product diversification. IGM is ultimately controlled by Power Corporation of Canada (rated "A" with a Stable trend) giving it access to a broad set of business opportunities and leading risk management practices that are franchise-enhancing.

Earnings Building Block Assessment: Very Strong/Strong
IGM has been generating solid operating cash flow and profitability metrics with consistent mid-teens return on common equity for the past several years. The EBITDA margin is strong, at around 45% in the last two years. A steadily growing AUM&A and diversified product platform have contributed to revenue growth, with the large share attributable to the wealth management segment. IGM's good expense management, and a business model focusing on mass affluent and high net worth clients is expected to further drive increases in assets under advisement and have a positive impact on earnings. Net income available to shareholders has normalized relative to a particularly strong 2023 that benefitted from several one-time gains, including those related to the sale of IPC and the disposition of Great-West shares.

Risk Building Block Assessment: Strong/Good
IGM has diversified its traditional business focus by strategically investing outside of Canada and into private markets. The Company's investment in RCM furthers its strategic plan by diversifying its earnings with a presence in the U.S. hybrid registered investment advisor market and in growing its expertise in products targeted at the high-net-worth and ultra-high-net-worth market segments which is a strategic focus for the Company. Assets under management and advisement as well assets on the balance sheet are largely liquid and/or low risk, reducing market and credit risk. Most assets are redeemable with few restrictions. The Company also manages a residential mortgage portfolio, which is mostly securitized and of very high quality with sufficient liquidity backing.

Funding and Liquidity Building Block Assessment: Strong/Good
IGM has proven strong access to capital markets and has a well-managed funding and maturity profile, mostly using well-laddered long-term debt. IGM does not have refinancing requirements until 2027 which Morningstar DBRS views positively. The Company has ample cash and cash equivalents on its balance sheet, as well as committed lines of credit with major Canadian banks. Being part of the Power Corporation group of companies further enhances its financial resilience and ability to withstand a stressed environment.

Capitalization Building Block Assessment: Strong
IGM's strong EBITDA margins support sustained capital generation. The Company has a strong ability to service its interest and debt obligations with a fixed-charge ratio of 11 times (x) in 2024. Its debt-to-EBITDA ratio remained conservative at significantly less than 2x in 2024, as in many prior years. Cash flows have also remained relatively stable and predictable even during times of high market volatility in part because the financial advisory business encourages retention of clients and has lower redemptions rates overall.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025), https://dbrs.morningstar.com/research/454196.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is the Global Methodology for Rating Investment Management Companies (December 4, 2024) https://dbrs.morningstar.com/research/444102. In addition, Morningstar DBRS uses the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025; https://dbrs.morningstar.com/research/454196) in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found on the issuer page at https://dbrs.morningstar.com.

The credit ratings were initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for these credit rating actions.

Morningstar DBRS had access to the accounts, management and other relevant internal documents of the rated entity or its related entities in connection with these credit rating actions.

These are solicited credit ratings.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS' trends and credit ratings are under regular surveillance.

For more information on this credit or on this industry, visit https://dbrs.morningstar.com.

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