Q4 2023 Onex Corp Earnings Call

February 23, 2024

To ask a question. During this session you will need to press star one on your telephone.

If your question has been answered and you'd like to remove yourself from the queue simply press Star One again as a reminder, today's program is being recorded and now I'd like to introduce your host for today's program Jill how many managing director shareholder relations and communications that Onyx. Please go ahead.

Thank you good morning, everyone and thanks for joining US we're broadcasting this call on our website hosting the call today are Bobby Le Blanc.

<unk> Executive Officer, and Chris Galvin, our Chief Financial Officer.

Earlier. This morning, we issued our fourth quarter and full year 2023 press release, MD&A and consolidated financial statements, which are available on the shareholders section of our website and have also been filed on SEDAR a supplemental information package is also available on our website.

Welcome to Onyx fourth quarter, and full year 2023 conference call and webcast. During the presentation. All participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone.

As a reminder, all references to dollar amounts on this call are in U S. Unless otherwise stated I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward looking statements contained in today's presentation and remarks.

With that I'll now turn the call over to Bobby.

Good morning, everyone.

<unk> delivered solid performance in 2023.

Driven by good investment results.

Please go ahead.

Positive deployment in realization activity and continued progress on our strategic initiatives.

Thank you good morning, everyone and thanks for joining US we're broadcasting this call on our website hosting the call today are Bobby Le Block, Chief Executive Officer, and Chris Galvin, Our Chief Financial Officer.

We capped off the year with a strong quarter of investing gains.

As investing capital per share returned 4% in Q4 and 11% for the year.

With the leadership transition came a renewed determination by our team to accelerate decision, making and streamline execution.

This includes our commitment to more disciplined expense management and a focus on profitability across all business lines.

Mental information package is also available on our website.

As a reminder, all references to dollar amounts on this call R&D U S. Unless otherwise stated I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward looking statements contained in today's presentation and remarks.

We entered 2024 with a solid operational foundation, a strong balance sheet and our commitment to grow shareholder value.

In private equity, we had a productive year.

With that I'll now turn the call over to Bobby.

As we focus on value creation within our operating companies and return of capital.

Good morning, everyone.

Honestly delivered solid performance in 2023.

Across <unk> we.

We deployed a total of $800 million in 2023, and realize a total of $1 $7 billion for on X and our limited partners.

Driven by good investment results.

Deployment and realization activity and continued progress on our strategic initiatives.

We capped off the year with a strong quarter of <unk>.

The expected completion of the ASM sale would return about another $850 million to Onyx and our Lps.

Best engage.

As investing capital per share returned 4% in Q4 and.

And 11% for the year.

With the Onyx partners, five investment and Morrison group and the pending accredited transaction, which received shareholder approval and is expected to close in Q2.

With the leadership transition came a renewed determination by our team to accelerate decision, making and streamline execution.

This includes our commitment to more disciplined expense management and a focus on profitability across all business lines.

We completed the initial investing period for <unk> five.

Concurrently, we appointed topic proper tier and Nigel right.

Two of annexes, most trusted and respected leaders as co heads of <unk> partners.

We entered 2024 with a solid operational foundation, a strong balance sheet and our commitment to grow shareholder value.

Their appointment allows me to focus more of my time on ensuring operational excellence in the execution of strategic initiatives.

In private equity, we had a productive year as we focus on value creation within our operating companies and return of capital.

On cap had a very active year in 2023, completing investing for uncapped for and securing the first two investments in non cat five.

Across PD.

We deployed a total of $800 million in 2023 and realize a total of $1 7 billion for on X and our limited partners.

The team also completed 11 add on acquisitions for on cap operating companies and its realization of Hopkins manufacturing delivered a gross <unk> of five one times in U S dollars.

The expected completion of the ASM sale would return about another.

Both op and non cat four delivered strong overall investment results last year.

Fundraising for <unk> five is proceeding well and we are making progress on a bridge fund for Onyx partners.

We expect to have updates on both next quarter.

Turning to credit we raised over $2 8 billion a.

Fee generating AUM last year and earned a 24% return on Onyx is investing capital within credit.

We issued seven new CLO in 2023, five in the U S and two in Europe.

Cielo has continued to be a valuable part of our business and the team is delivering excellent performance.

This is reflected in our top quartile rankings for both portfolio risk and diversity metrics.

We are making good progress with our ability to begin marketing, our liquid and private products within the Canadian high net worth market.

We're optimistic that we'll see a slow rebuild of our.

AUM starting later in Q2 within this channel as we ramp up our marketing efforts with our distribution partners.

As I mentioned at Investor Day.

Enhancing our marketing and fundraising expertise is a top priority.

We were pleased to welcome Peter Brown as head of client and product solutions.

Peter is an experienced leader with substantial experience in fundraising and the management of distribution teams.

His experience will be important as we begin to broaden our fund raising efforts and take a more innovative approach to developing client solutions in areas, where we have a right to compete.

As I look ahead.

My conviction and my commitment to our shareholders is to ensure all businesses operate profitably and contribute to growth in enterprise value.

This helped drive some of the decisions we made last year.

Particularly around more efficient expense management.

We are already beginning to see the benefits of those decisions.

I want to thank our shareholders again for your support of Onyx.

Last year was transformational for organization with several positive outcomes.

Pleased to begin to see that better reflected in our share price. However, it remains well below the intrinsic value of our business and our future potential.

The team is working hard to deliver on our commitments and to drive long term shareholder value.

I'll now turn it over to Chris.

Thanks, Bobby and good morning, everyone.

We ended the fourth quarter with investing capital per share of $107 82.

A return of 4% in the quarter and 11% for the year.

In Canadian dollars invested capital was over $142 per share a return of 9% year over year, reflecting a strengthening of the Canadian dollar.

Overall invested capital has provided shareholders a compound annual return of 14% over the last five years.

Onyx repurchased just over 800000 shares from the end of Q3 through mid February.

Total buybacks in 2023 amounted to three 5 million shares capturing about 225 million Canadian dollars of art.

For our continuing shareholders.

As we've indicated before share buybacks will remain part of our capital allocation plans when the shares trade at a wide discount.

We ended the year with cash and near cash of $1 5 billion Rep.

Representing 17% of invested capital.

That's an increase of approximately $400 million from year end 2022, even after deploying about $350 million across our <unk> platforms and the share buybacks during the year.

Looking forward liquidity will remain strong with the pending sale of ASM in on X partners for expected to provide net proceeds to audience of $275 million, which will more than offset our share of <unk> recent investment in the morphine group and the pending acquisition.

Accredited.

On X received just over $1 billion from PE realizations and distributions in 2023 and with market conditions, beginning to stabilize we're optimistic the environment will support further realization activity this year.

Looking at private equity.

Our PE portfolio delivered a solid fourth quarter with an overall return of 5%, which brought the full year return to 12%.

On X is private equity returns continue to be less volatile than the public markets and have also been broad based from a well diversified portfolio.

Only two operating companies represent more than 5% of our invested capital in the top 10 represent less than 40%.

Turning to credit investing.

Performance remained strong across our credit strategies with a $67 million net gain or <unk>, 8% return in Q4.

Our results were supported by a very strong leverage loan market and amplified by the structural leverage employed in our CLO.

Overall, our credit investments had a very strong year with a return of 24% in 2023.

Now, let's turn to the asset management side of the business.

<unk> ended the quarter with $33 7 billion of fee generating AUM down 1% from both Q3 and the last year end.

In 2023, our teams raised $3 7 billion of new FTA AUM.

Nominally from seven CLO and the Ryan continuation fund.

But this was offset by client redemptions from our liquid strategies related to the wind down of Gluskin sheff.

At the end of January we have over Canadian $4 billion of FTE AUM with private wealth clients.

Substantially all of which is invested in closed end alternative asset products or in the case of liquid strategies has been successfully transferred inclined and remains invested in our funds.

Q4.

Our results were supported by a very strong leverage loan market and amplified by the structural leverage employed in our CLO.

With the client transition substantially complete.

Overall, our credit investments had a very strong year with a return of 24% in 2023.

We see this as a relatively stable base from which to build.

As Bobby mentioned the team is making good progress preparing our platform to market more broadly to private wealth clients.

Now, let's turn to the asset management side of the business.

<unk> ended the quarter with $33 7 billion of fee generating AUM down 1% from both Q3 and the last year end.

And we're optimistic that new inflows will begin ramping up during the year.

The tough fundraising market for many of our products and the transition of our private wealth business in the past year has unfortunately masked a very strong year for our structured credit platform.

In 2023, our teams raised $3 7 billion of new FTA AUM predominantly from seven CLO and the Ryan continuation product.

We raised just shy of $2 7 billion of new FTA AUM in structure during 2023.

But this was offset by client redemptions from liquid strategies related to the wind down of Gluskin sheff.

Over 35% more than planned.

Those results have us entering 2024, with almost $16 billion of FCA, AUM and $65 million of run rate management fees.

At the end of January we have over Canadian $4 billion of FGA AUM with private wealth clients <unk>.

Substantially all of which is invested in closed and alternative asset products or in the case of liquid strategies has been successfully transferred inclined and remains invested in our funds.

Substantial portion of which relates to sticky and long lived CLO AUM.

And as much as we're grateful for the strong returns the cielo team delivered on our invested capital last year.

With the client transition substantially complete.

We see this as a relatively stable base from which to build.

The improvement in the CLO platform's capital efficiency since we changed leadership in 2020 has been tremendous.

As Bobby mentioned the team is making good progress preparing our platform to market more broadly to private wealth clients and we're optimistic that new inflows will begin ramping up during the year.

<unk> has gone from holding over 85% of our CLO equity to just over 50%.

Put another way FTA AUM has grown over 50% in the three plus year period, while onyx as CLO equity exposure actually decreased by 25% or over $100 million.

We raised just shy of $2 $7 billion of new FTA AUM in structure during 2023.

Our structured business is a bit of a hidden gem and as you know its value is not at all reflected in our hard NAV.

<unk>, 35% more than planned.

Turning to fee related and distributable earnings.

Those results have us entering 2024 with almost $16 billion of FCA, AUM and $65 million of run rate management fees, a very substantial portion of which relates to sticky and long lived CLO AUM.

Fourth quarter total FRE was a loss of $2 million with $3 million of positive contribution from the asset management platform.

For the year total FRE was a loss of $14 million with a positive contribution of $12 million from asset management.

And as much as we're grateful for the strong returns the cielo team delivered on our invested capital last year.

FRE in 2023 benefited from the restructuring and efficiency efforts that we undertook throughout the year and discussed at Investor Day.

The improvement in the CLO platform's capital efficiency since we changed leadership in 2020 has been tremendous.

As I mentioned last quarter, we <unk> approximately $40 million of run rate cost savings last year and continue to closely manage expenses across the firm.

<unk> has gone from holding over 85% of our CLO equity to just over 50%.

Put another way FTA AUM has grown over 50% in the three plus year period, while onyx as CLO equity exposure actually decreased by 25% or over $100 million.

We also enjoyed a timing benefit from a reduction in gluskin sheff costs that ran ahead of the reduction in revenues as we transitioned our distribution strategy.

Looking ahead to 2024, while we will continue to see the benefit of our cost reduction initiatives play out.

Our structure business is a bit of a hidden gem and as you know its value is not at all reflected in our hard NAV.

This will be more than offset by the full year impact of management fee reductions associated with the transition of our private wealth strategy and the end of <unk> commitment period.

Turning to fee related and distributable earnings.

Fourth quarter total FRE with a loss of $2 million with $3 million of positive contribution from the asset management platform.

Although this means we expect full year FRE performance to decline in 2020 for our fund raising plans should drive progress in run rate FRE over the course of the year.

For the year total FRE was a loss of $14 million with a positive contribution of $12 million from asset management.

Credit run rate management fees were $115 million at year end and reflects the new fee structure for our private wealth strategy, which is now focused on third party distribution.

FRE in 2023 benefited from the restructuring and efficiency efforts that we undertook throughout the year and discussed at Investor Day.

As I mentioned last quarter, we <unk> approximately $40 million of run rate cost savings last year and continue to closely manage expenses across the firm.

As we previously mentioned a large portion of the decrease in these revenues is offset by the lower cost of the distributions that strategy.

We also enjoyed a timing benefit from a reduction in gluskin sheff costs that ran ahead of the reduction in revenues as we transitioned our distribution strategy.

And as we raise new private wealth FGA AUM, we will leverage our existing cost base, which means it should be quite accretive.

Looking at distributable earnings we generated <unk> of $139 million in Q4, and just shy of $800 million in 2023.

Looking ahead to 2024, while we will continue to see the benefit of our cost reduction initiatives play out.

This will be more than offset by the full year impact of management fee reductions associated with the transition of our private wealth strategy and the end of <unk> commitment period.

Driven by realizations and distributions from our private equity and credit platforms.

We're really pleased with these results given the challenging realization environment in 2023.

Although this means we expect full year FRE performance to decline in 2020 for our fund raising plans should drive progress in run rate FRE over the course of the year.

Finally, an update on honest is carried interest opportunity we.

We ended the quarter with $281 million of unrealized carried interest up $41 million from Q3.

Credit run rate management fees were $115 million at year end and reflect the new fee structure for our private wealth strategy, which is now focused on third party distribution.

Most of this increase was driven by net gains within one five.

As a reminder, onyx has about $29 billion of.

Our private equity and credit AUM.

As we previously mentioned a large portion of the decrease in these revenues is offset by the lower cost of the distributions that strategy.

Subject to carry.

All in all it was another good quarter and we continue to make progress towards the objectives, we laid out at Investor day.

And as we raise new private wealth FGA AUM, we will leverage our existing cost base, which means it should be quite accretive.

Sustained compounding of our investing capital, while enhancing the profitability of our asset management platform will generate meaningful value for shareholders.

Looking at distributable earnings we generated <unk> of $139 million in Q4, and just shy of $800 million in 2023.

That concludes the prepared remarks, we'll be happy to take any questions.

Certainly and as a reminder, ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone one moment for our first question.

Driven by realizations and distributions from our private equity and credit platforms.

We're really pleased with these results given the challenging realization environment in 2023.

And.

Our first question comes from the line of Geoffrey Kwan from RBC. Your question. Please.

Finally, an update on on X is carried interest opportunity.

We ended the quarter with $281 million of unrealized carried interest up $41 million from Q3.

Hi, Good morning, My first question was.

Chris I think you mentioned last year wasn't a great year for monetization activity, although you were able to monetize some investments but.

Most of this increase was driven by net gains within one five.

As a reminder, onyx has about $29 billion of.

If we're heading into an environment, where monetization is our Lauren payable are easy to do and you use what I think is the opt in the typical hold period of private equity investments of say four to six years.

Our private equity and credit AUM.

Subject to carry.

All in all it was another good quarter and we continue to make progress towards the objectives, we laid out at Investor day.

When I look at your investment portfolio within Onyx partners, yet a fair number of companies that kind of fit within that timeframe in terms of lease how long you've owned them.

Sustained compounding of our investing capital, while enhancing the profitability of our asset management platform will generate meaningful value for shareholders.

So as the monetization scheme normalize.

That concludes the prepared remarks, we'll be happy to take any questions.

Is it fair to say that there is a good number of investments that could be in a position to be monetized and whether they actually be in a position given where your investment thesis was and where it played out so far.

Certainly and as a reminder, ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone one moment for our first question.

Hey, Jeff it's Bobby.

Look the M&A environment.

And.

He has been slower over the last 18 months or so.

Our first question comes from the line of Geoffrey Kwan from RBC. Your question. Please.

Activity seems to be picking up now.

Some of it based upon people thinking rates are stabilizing are going to begin to decrease a bit I think it'll be a little while before the pipeline.

Hi, Good morning, My first question was.

Chris I think you mentioned last year wasn't a great year for monetization activity, although you were able to monetize some investments but.

It gets full most of what <unk> been doing lately is making sure. They are trying to shore up balance sheets as rates have declined and we do have a couple of things in the pipeline that I think we will return capital.

If we're heading into an environment, where monetization is our Lord favorable are easy to do and you use what I think is the opt in the typical hold period of private equity investments of say four to six years.

The near term, but I do think.

I do think.

If rates stay where they are and the activity that I'm beginning to see.

When I look at your investment portfolio within Onyx partners, yet a fair number of companies that kind of fit within that timeframe in terms of at least how long you've owned them.

It begins to be the new norm, you shouldn't be able to see not only more.

Turning to capital, but deployment of capital.

So with the monetization scheme normalize.

Pipeline is still somewhat muted relative to the norm just like our realizations are but again I think youll see a couple of more in the near term.

Is it fair to say that there is a good number of investments that could be in a position to be monetized and whether they actually would be in a position given where your investment thesis was and where it has played out so far.

If things stay like they are we would expect it to get better as the year goes on.

Hey, Jeff it's Bobby.

Okay. Thanks for that.

Look the M&A environment.

And maybe a lot more on a specific investment looking at convex.

He has been slower over the last 18 months or so.

That was an investment and obviously thats.

Activity seems to be picking up now.

Got it.

Early stage more atypical.

Some of it based upon people thinking rates are stabilizing are going to begin to decrease a bit I think it will be a little while before the pipeline.

On X typically makes the investment bank.

Makes sense given.

Your industry experience and obviously the founders of the business. So my question would be.

It gets full most of what <unk> been doing lately is making sure theyre trying to shore up balance sheets as rates have declined and we do have a couple of things in the pipeline that I think we will return capital.

The fundamentals.

What have been senior or the industry fundamentals seem to have been favorable for the business I'm just trying to understand is.

Whenever a monetization event happens for that business.

The near term, but I do think.

I do think.

If rates stay where they are and the activity that I'm beginning to see.

Given what's been going on what I think may be going on with the happening in the industry that monetization timeline, it faster than usual or would it still take a bit kind of a normal given how early stage, we made that investment.

It begins to be the new norm, you shouldn't be able to see not only more.

Turn of capital, but deployment of capital.

Pipeline is still somewhat muted relative to the norm just like our realizations are but again I think youll see a couple of more in the near term.

Yes. So look we started convex de Novo got I guess, a little over four years ago.

If things stay like they are I would expect it to get better as the year goes on.

The company has clearly grown in.

Two its expense base, we still have more operating leverage to come but.

Okay. Thanks for that.

And maybe a lot more on a specific investment looking at convex.

But that business did.

$450 million of net income net income that EBITDA Jeff's last year and I expect.

That was an investment and obviously that was.

Got it.

Early stage more atypical when onyx typically makes the investment.

2024 to have a meaningful improvement.

Makes sense given.

Above that absent some weird things happening in the category. So I think we've got in that case, the timing of the market right and importantly legacy insurers that we.

Your industry experience and obviously the founders of the business. So my question would be.

The fundamentals.

Would've been simi or the industry fundamentals seem to have been favorable for the business I'm just trying to understand is.

We all Stephen Catlin, Paul and I all believe.

Whenever a monetization event happens for that business.

Which are under reserved where you've been taken advantage of that through.

Given what's been going on what I think may be going on with the happening in the industry could that monetization timeline it faster than usual or would it still take a bit kind of a normal given how early stage, we made that investment.

Hard rate environment, which at which helps a business like that if you get paid more incrementally each year for the same unit of risk. So just given the de novo state of that and where that business is right now I would expect there to be.

Yes. So look we started convex de Novo got I guess, a little over four years ago.

Multiple avenues of interest in that business over time.

Depending if performance continues to grow that could be IPO that could be strategic that could be dividends being paid.

The company has clearly grown in.

Two its expense base, we still have more operating leverage to come but.

It could be all kinds of different things, but risk adjusted because that business has no debt and its returns are.

But that business did.

$450 million of net income net income that EBITDA Jeff's last year and I expect.

North of 20, so far and again with the drag of the losses.

2024 to have a meaningful improvement.

In the beginning.

I'm pretty optimistic that that's going to turn out to be.

Above that absent some weird things happening in the category. So I think we've got in that case, the timing of the market right and importantly legacy insurers that we.

Very good risk adjusted return.

Timing unclear, but I think there'll be multiple paths liquidity.

Okay perfect. Thank you.

Okay.

Thank you one moment for our next question.

We all Stephen Catlin, Paul and I all believe.

Which are under reserved where you've been taken advantage of that through.

And our next question comes from the line of Graham Ryding from TD Securities. Your question. Please.

Hi, good morning.

Maybe you can just start Chris with your run rate management fees, I think you flagged $191 million.

In the slide deck is that fully reflected now of the <unk> fund.

Multiple avenues of interest in that business over time.

Depending if performance continues to grow that could be IPO that could be strategic that could be dividends being paid.

Transitioning to that investment phase and like any any notable sort of step ups or or declines from that level and that we should be expecting here.

It could be all kinds of different things, but risk adjusted because that business has no debt and its returns are.

Yes, it's fully reflects the step down in fees at <unk> five.

North of 20, so far and again with the drag of the losses.

And so theres really nothing specific on the horizon.

In the beginning.

That's going to change that run rate other than obviously.

I'm pretty optimistic that that's going to turn out to be.

Expectations around fund raising in 2024.

Very good risk adjusted return.

Timing unclear, but I think there'll be multiple paths liquidity.

But otherwise that run rate is a good number and it has all the noise associated with it.

Okay perfect. Thank you.

<unk> in the Gluskin sheff wind down out of it.

Thank you one moment for our next question.

Okay understood.

And our next question comes from the line of Graham Ryding from TD Securities. Your question. Please.

It seemed to me that the on cap.

Five <unk>.

Committed funding there was reduction in that fee 20 basis points from Q3 level is that accurate or am I misreading that.

Hi, good morning.

Maybe you can just start Chris with your run rate management fees, I think you flagged $191 million.

Im not aware that Graeme I'll have to take away from the disclosure and then you get back to you, but I'm not.

In the slide deck is that fully reflected now of the <unk> Fund <unk>.

I don't know anything that would.

Transitioning to that investment phase and like any any notable sort of step ups or or declines from that level and that we should be expecting here.

I don't think Thats accurate, but we will get we will get back to you.

I don't think Thats accurate.

Okay.

How about expenses on the private equity side, they seem to move up a little bit quarter over quarter was there anything specific you would call out that's driving that at this point.

Yes, it's fully reflects the step down in fees at op five.

And so theres really nothing specific on the horizon.

I thought after the restructuring that we're sort of going to be a lower run rate.

That's going to change that run rate other than obviously.

On the expense of the private equity side.

Expectations around fund raising in 2024.

Yes, so what youre seeing.

But otherwise that run rate is a good number and it has all the noise associated with it.

Is.

Lower costs in the on X partners platform.

<unk> in the Gluskin sheff wind down out of it.

Being offset by the final build out of the on X transportation platform and some growth at <unk>.

Okay understood.

It seemed to me that the on cap.

So there are savings in there at the Onyx partners platform, but but given changes in.

Five.

Committed fund there was reduction in that fee 20 basis points from Q3 level is that accurate or am I misreading that.

On a transportation and on cabinets and a sort of a wash.

Okay.

Got it and then maybe Bob just my last question if I could could you just sort of help us frame your expectations here for fund raising in 2024 when you are.

I mean.

Im not aware that Graeme I'll have to take away from the disclosure and then you get back to you, but I'm not.

I don't know anything that would.

I don't think Thats accurate, but we will get we will get back to you.

Looking both at your credit platform and your private equity what are you what are you sort of targeting expecting.

I don't think Thats accurate.

Okay.

Yes so.

How about expenses on the private equity side, they seem to move up a little bit quarter over quarter was there anything specific you would call out that's driving that at this point.

I'll start on the on the credit side again, Chris alluded to it.

Our ability to raise equity when we form a CLO.

I thought after the restructuring that we're sort of going to be a lower run rate.

Equity Accretively.

On the expense of the private equity side.

Gone really really well.

Over the last couple of years.

Yes, so what you're seeing is.

It is.

Maybe at a less capital intensive business for them, so that fundraising is going well on cap.

Lower costs in the on X partners platform.

Is making progress slower than we're all used to with them given their outstanding track record, but they are they are making they are making good progress.

Being offset by the final build out of the on X transportation platform and some growth at <unk>.

So there are savings in there at the Onyx partners platform, but but given changes in.

The Bridge fund as Chris mentioned also making progress we'll have an update for you.

On a transportation and on catheter that sort of a wash.

Formula update for you hopefully next quarter on that.

Okay.

Falcon Falcon is also.

Got it and then maybe Bobby just my last question if I could could you just sort of help us frame your expectations here for fundraising in 2024, when you're looking both at your credit platform and your private equity what are you what are you sort of targeting expecting.

Slower than normal.

Peter Brown, the new person that we hired to run our sales and distribution team is has told me that the average length of time in market is around 22 23 months, we're certainly feeling that.

Yes so.

Some of our some of our platforms Falcon included but again.

I will start on the <unk>.

<unk> side again, Chris alluded to it.

<unk>.

Risk adjusted returns in core top performance leaves me scratching my head a little bit but that one for sure is growing slower than we thought I would expect US go our structured credit fund to have a second fund and market in the back half of the year and like Ryan with our Cvs, which is another form of fund raising in Phoenix.

Our ability to raise equity when we form a CLO.

<unk> equity Accretively.

Gone really really well.

Over the last couple of years.

It is.

<unk> made it a less capital intensive business for them, so that fundraising is going well on cap.

And I wouldn't be surprised if you see another one coming out of the.

<unk> is making progress slower than we're all used to with them given their outstanding track record, but they are they are making they are making good progress.

The overall <unk> platform in the not too distant future.

The Bridge fund as Chris mentioned also making progress we'll have an update for you on a more formal update for you hopefully next quarter on that.

Okay excellent thanks for the color.

Thank you.

Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Bobby Le Blanc for any further remarks.

Falcon Falcon is also.

Slower than normal.

Thank you for taking the time for being with US today I Hope you all have a good weekend and I'm sure. If you have any questions reach out to Joe Chris or me and we'll be happy to meet with their chat with you. Thanks a lot.

Peter Brown, the new person that we hired to run our sales and distribution team is has told me that the average length of time in market is around 22 23 months, we're certainly feeling that.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

Some of our some of our platforms Falcon included but again.

Falcons.

Risk adjusted returns and quartile performance leaves me scratching my head a little bit but that one for sure is growing slower than we thought I would expect US go our structured credit fund to have a second fund and market in the back half of the year and like Ryan with our Cvs, which is another form of fund raising in Phoenix.

And I wouldn't be surprised if you see another one coming out of the.

The overall platform in the not too distant future.

Okay excellent thanks for the color.

Thank you.

Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Bobby Le Blanc for any further remarks.

Thank you for taking the time for being with US today I Hope you all have a good weekend and I'm sure. If you have any questions reach out to Joe Chris or me and we'll be happy to meet with you chat with you. Thanks a lot.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

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As a reminder, all references to dollar amounts on this call RMB unless otherwise stated I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward looking statements contained in today's presentation and remarks.

With that I'll now turn the call over to Bobby.

Good morning, everyone.

<unk> delivered solid performance in 2023.

Driven by good investment results.

Positive deployment in realization activity and continued progress on our strategic initiatives.

We capped off the year with a strong quarter of investing gains.

As investing capital per share returned 4% in Q4 and 11% for the year.

With the leadership transition came a renewed determination by our team to accelerate decision, making and streamline execution.

This includes our commitment to more disciplined expense management and a focus on profitability across all business lines.

We entered 2024 with a solid operational foundation, a strong balance sheet and a.

Our commitment to grow shareholder value.

In private equity, we had a productive year as we focus on value creation within our operating companies and return of capital.

Across BD we.

We deployed a total of $800 million in 2023 and realize a total of $1 7 billion for Onyx and our limited partners.

The expected completion of the ASM sale would return on about another $850 million to Onyx and our Lps.

With the Onyx partners five investment in morphine group and the pending accredited transaction, which we see as shareholder approval and is expected to close in Q2.

We completed the initial investing period for <unk>.

Concurrently, we appointed topic top tier and Nigel right.

Two of Onyx as most trusted and respected leaders as co heads of Onyx partners.

Their appointment allows me to focus more of my time on ensuring operational excellence in the execution of strategic initiatives.

On cap had a very active year in 2023, completing investing for uncapped for and securing the first two investments in on Caf II.

The team also completed 11 add on acquisitions for on cap operating companies and as realization of Hopkins manufacturing delivered a gross <unk> of five one times in U S dollars.

Both op and non cat four delivered strong overall investment results last year.

Fundraising for <unk> five is proceeding well and we are making progress on a bridge fund for Onyx partners.

We expect to have updates on both next quarter.

Turning to credit we raised over $2 8 billion a.

Fee generating AUM last year and earned a 24% return on Onyx is investing capital within credit.

We issued seven new CLO in 2023, five in the U S and two in Europe.

Cielo has continued to be a valuable part of our business and the team is delivering excellent performance.

This is reflected in our top quartile rankings for both portfolio risk and diversity metrics.

We are making good progress with our ability to begin marketing, our liquid and private products within the Canadian high net worth market.

We're optimistic that we'll see a slow rebuild of our <unk> AUM. Starting later in Q2 within this channel as we ramp up our marketing efforts with our distribution partners.

As I mentioned at Investor Day and.

Enhancing our marketing and fundraising expertise is a top priority.

We were pleased to welcome Peter Brown as head of client and product solutions.

Peter is an experienced leader with <unk>.

Substantially experienced in fundraising and the management of distribution gains.

His experience will be important as we begin to broaden our fundraising efforts and take a more innovative approach to developing client solutions in areas, where we have a right to compete.

As I look ahead.

My conviction and my commitment to our shareholders is to ensure all businesses operate profitably and contribute to growth in enterprise value.

This helped drive some of the decisions, we made last year, particularly around more efficient expense management.

We are already beginning to see.

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