Q1 2024 Power Corp of Canada Earnings Call

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Speaker Change: Good morning, ladies and gentlemen, and welcome to the Power Corporation Q1, 'twenty 'twenty four earnings conference call.

Operator: Good morning, ladies and gentlemen, and welcome to the Power Corporation Q1 2024 Earnings Conference Call. At this time, all lines are in listen-only mode.

Operator: Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for a question. If anyone has any difficulties hearing the conference, please press star then zero for operator assistance at any time. I would like to remind everyone that this call is being recorded on Thursday, May 9th, 2024. I would now like to turn the conference over to Mr. Geoffrey Orr, President and Chief Executive Officer of Power Corporation. Please go ahead, sir.

At this time all lines are in a listen only mode.

Following the presentation, we will conduct a question and answer session.

Instructions will be provided at that time for you to queue up for questions.

If anyone has any difficulties hearing the conference. Please press Star then zero for operator assistance at any time.

Speaker Change: I would like to remind everyone that this call is being recorded on Thursday may nine 2024, I would now like to turn the conference over to Mr. Jeffrey or President and Chief Executive Officer of Power Corporation. Please go ahead Sir.

Geoffrey Orr: Thank you, operator, and welcome, everyone. Thanks for joining us for our quarterly results call this morning, and I'll kick it right off. We've got our title page here, and I'm going to move into the most exciting part of the presentation, the disclaimers on forward-looking information and non-IFRS information on the first couple of pages. Joining me today in his first official capacity on his first call as CFO is Jake Lawrence, and Jake, welcome to the call. Thanks, Geoff.

Jeffrey: Thank you operator, and welcome everyone. Thanks for joining us for our quarterly results call. This morning.

Jeffrey: And I'll kick it right off we've got our title page here and I'm going to move them to the most exciting part of the presentation. The disclaimers on forward looking information and non <unk> information on the first couple of pages.

Jeffrey: Joining me today in his first official capacity on his first call as our CFO, Jake Lawrence and and Jake welcome to the call. Thanks, Jeff and good day everyone.

Jake P. Lawrence: And good morning, everyone. Before we get into the results, and I turn it back over to Geoff, I just want to take a moment to express how fortunate and how honored I am to be the CFO of PowerCorp. It's a fantastic job I've learned in my past eight weeks, and I also want to acknowledge the great groundwork that was laid by my predecessor, Greg Tretiak. Greg had a very impressive 40-year career at the Power Group, the last 10 as CFO of PowerCorp. So I obviously wish Greg, and the rest of the team wishes him as well, in his continued recovery.

Jake P. Lawrence: Before we get into the results and then turn it back over Jeff I, just wanted to take a moment to express how how fortunate and how honored I am to be the CFO of power Corp.

Jake P. Lawrence: It's a fantastic job I've learned in my past eight weeks and I also want to acknowledge the great groundwork thats been laid by my predecessor, Greg Trepp, Jack Greg had a very impressive 40 year career at the power group. The last 10 as CFO at Power Corp.

Jake P. Lawrence: We wish with Greg and the rest of it and the rest of the team wishes, Greg as well as continued recovery.

Jake P. Lawrence: Looking ahead, as I've shared with many of you, I'm very excited about the opportunities that I see for power. I look forward to bringing my experience and skill set to both complement and partner with Geoff, as well as the broader Power Corp team and group of companies, to help create further value for our shareholders in the coming years. Since I started back in March, I've had the opportunity to meet and speak with many of the investors that are on this call today. And as we move forward on this journey, I look forward to further engaging with you.

Speaker Change: Looking ahead as I've shared with many of you I'm very excited about the opportunities that I see for power I look forward to bringing my experience and skill set to both complement and partner with Jeff as well as the broader power Corp team and group of companies to help create further value for our shareholders in the coming years. Since I started back in March I've had the opportunity to meet and speak with many of you.

Geoffrey Orr: Great. Thank you, Jake.

Jake P. Lawrence: The investors that are on the call today and as we move forward in this journey I look forward to further engaging with all of you.

Geoffrey Orr: We're all looking forward to it. So with that, we'll turn to the results, and I will flip you forward through page 6, which is information on our companies and different sources from recent presentations that have been made, and then I'll move it over to page 7 and just kind of give the overall introductory comments. They're executing on those strategies. The environment is pretty good. I wouldn't say it's a perfect environment, but it is

Speaker Change: Okay, great. Thank you Jake but we're all looking forward to it so with that I will turn to our to the results.

Speaker Change: And I will flip you forward through page six switches information on our companies and different sources have recently from different presentations that have been made and then I'll move over to page seven and just kind of give the overall introductory comments.

Speaker Change: A strong quarter, we're feeling good about the momentum that we have across our businesses. We're feeling good about the positioning that our companies are in.

Speaker Change: The businesses that are greater crossing the three public companies to our alternative asset management platforms. All of the businesses have very clearly defined strategies, they're executing on those strategies by the environment is pretty good I wouldn't say, it's the perfect environment. We've got some areas, where we've got some headwinds out there in the macro world, but it's not a bad <unk>.

Geoffrey Orr: We've got some areas where we've got some headwinds out there in the macro world, but it's not a bad environment. But now, withstanding that, we're moving forward, growing earnings, growing businesses, and so that leads us to feel good about what is happening. That's a big step.

Speaker Change: <unk>, but notwithstanding that we're moving forward growing earnings growing the businesses and so that leads us to feel.

Speaker Change: Good about what what is happening.

Speaker Change: In this particular quarter I'll, let Jay address the earnings went in in a few pages here.

Speaker Change: The highlights of the quarter. The empower integration of Prudential was essentially compete complete at March 31, all of the defined contribution recordkeeping.

Jay: Participants had been.

Jay: Ill put onto the empower systems are a couple of smaller blocks of business that we're getting cleaned up this quarter.

Jay: So that's a that's a big step and Putnam calls this quarter, so that really does mark a oh.

Jay: Really complete re transitioning to the U S business over a five year period, and I'll talk a little bit more about that as we go through the presentation a lot of activity on the alternative asset management platforms.

Geoffrey Orr: Putnam closed this quarter, so that really does mark a complete retransitioning of the U.S. business over a five-year period. I'll talk a little bit more about that as we go through the presentation. There's a lot of activity on the alternative asset management platforms. There's fundraising going on, but a lot of use of partnerships and transactions to grow scale, as that continues to be a big focus. That's all I'll really say in terms of my opening highlights, and then I'm going to pass it over to Jake to talk about the financial results. Okay?

Jay: Theres fundraising going on but a lot of use of partnerships and transactions to grow scale as that continues to be a big focus. So that's all already say in terms of my opening highlights and then I'm going to pass.

Jay: Pass it over to Jay to talk about the financial results.

Jake P. Lawrence: Great. Thanks, Jeff. Picking it up on slide 8, Power Corp reported strong earnings off contributions, as you noted, from the momentum in our main operating companies, and I'd say particularly Great West and IGM Financial. Recall that these two companies generally drive the entirety of our recurring earnings. Adjusted net earnings from continuing operations was $727 million, that's up $139 million from $588 in the same quarter last year. On a per share basis, which is really relevant given our buyback activity, adjusted net earnings in Q1 were $1.12, that compares with $0.88 in the same quarter last year. I'll address the breakdown of earnings shortly. Adjusted NAV was $53.10 per share at March 31st.

Jay: Great. Thanks, Jeff picking it up on slide eight power Corp reported strong earnings contributions as he noted from the momentum in our main operating companies and I'd say, particularly great West and AGM financial.

Jay: Recall that these two companies generally drive the entirety of our recurring earnings.

Jay: Adjusted net earnings from continuing operations was 727 million, that's up 139 million from 588 in the same quarter last year.

Jay: On a per share basis, which is really relevant given our buyback activity. Adjusted net earnings in Q1 was $1 12 that compares with 88 fence in the same quarter last year I'll address the breakdowns of breakdown of earnings shortly.

Jay: Adjusted NAV with $53 10 per share at March 31.

Jake P. Lawrence: That compared to $53.53 per share at December 31st. The slight change in NAV quarter over quarter was primarily due to share price performance at Great West, while IGM shares stayed relatively flat. As of yesterday's market close, Power's NAV had increased to $53.43, reflecting strong share price performance at IGM following their Q1 earnings last week. Finally, the Board of Directors declared a quarterly dividend of $0.5625 per share in line with last quarter, and that's up 7.1% from Q1 2023.

Jay: That compared to $53 53 per share at December 31.

Jay: The change in NAV quarter over quarter, and slight change was primarily due to share price performance at great West well I G. M. Scheurer stayed relatively flat as of yesterday's market close powers now I've had increased to $53 43, reflecting strong share price performance at IGN. Following their Q1 earnings last week.

Jay: Finally, the board of directors declared a quarterly dividend of 56.25 cents per share in line with last quarter and that's up seven 1% from Q1 2023.

Jay: Turning to slide nine to break down the earnings Great West delivered record earnings with strong contributions to growth from each of its segments, including empower. This marked the first quarter were great West base earnings exceeded $1 billion. These results reflect the deliberate strategic actions the great West has taken in recent years and it's produced.

Jake P. Lawrence: Turning to slide nine to break down the earnings, Great West delivered record earnings with strong contributions to growth from each of its segments, including Empower. This marked the first quarter where Great West's base earnings exceeded $1 billion.

Jake P. Lawrence: These results reflect the deliberate strategic actions that Great West has taken in recent years, and it's producing results. IGM also reported strong earnings driven by both of the operating segments. Recall that it's Wealth and Asset Management. Average AUM and A grew year over year despite challenging flows in the market. IGM also saw strong growth in its strategic growth investments. That includes Rockefeller, Wealthsimple, and China AMC. In Q1, IGM wrote up its investment in WellSimple by 19%.

Jay: Results.

Jay: IGN also reported strong earnings driven by both of the operating segments recall that its wealth and asset management.

Jay: Average AUM and a grew year over year, despite challenging flows in the market.

Jay: <unk> also saw strong growth in its strategic growth investments that includes Rockefeller, well simple and China AMC.

Jay: In Q1, IGN wrote up its investment in well simple by 19%, that's reflecting the strong business performance, we saw in well simple revised revenue expectations for the business.

Jake P. Lawrence: That's reflecting the strong business performance we saw in WellSimple, revised revenue expectations for the business, and an increase in public market peer valuation. Power Group's combined investment in Wealthsimple is now valued at $1.3 billion; that's up from $1.1 billion in Q4. Of that $1.3 billion, Power's share is $490 million, up from $413 million just last quarter.

Jay: And an increase in public market peer valuations.

Jay: Power groups combined investment and while simple is now valued at $1 3 billion, that's up from $1 1 billion at Q4.

Jay: Of that $1 3 billion Powershares $490 million up from 413 430 million excuse me just last quarter.

Jay: Moving to our net asset value focused businesses. This quarter GBS results benefited from the shift from public to private and alternative investments G.

Jake P. Lawrence: Moving to our net asset value focused businesses, this quarter, GBL's results benefited from their shift from public to private and alternative investments. GBL's results included positive contributions from fair value increases in its private equity portfolio, as well as a gain on sale of a private investment during the quarter.

Jay: <unk> results included positive contributions from fair value increases in the private equity portfolio as well as the gain on sale of a private investment during the quarter.

Jake P. Lawrence: Also, I'd note that the comparative quarter included expenses related to the revaluation of WebHelp's Put Right Liabilities, an item that no longer exists following its merger with Concentric. Moving to our alternative investment platforms, Cigard contributed positive earnings this quarter, driven primarily by Performance Empower's investment in Cigard's credit and royalty funds. Power Sustainable's contribution to earnings remained flat year-over-year.

Jay: Also I'd note that the comparative quarter included expenses related to the revaluation of web helps put right liabilities and item that no longer exists following its merger with Concentrix.

Jay: Moving to our alternative investment platforms.

Jay: <unk> contributed positive earnings this quarter, driven primarily by performance in Power's investment into guards credit and royalty funds.

Jay: Power sustainable contribution to earnings remained flat year over year, both said garden power sustainable managers continue to make strong progress building their platforms, despite market headwinds impacting fundraising and capital deployment.

Jake P. Lawrence: Both CIGARD and Power Sustainable managers continue to make strong progress, building their platforms despite market headwinds impacting fundraising and capital deployment. However, during the quarter, we took a non-cash impairment charge on one of our stand-alone businesses, resulting in a negative contribution in that line item compared with Q1 of last year. Finally, you'll recall that in prior quarters, the impact of revaluating non-controlling interest liabilities related to Power Sustainable's infrastructure fund produced a meaningful amount of noise as it generated expenses to power every time the fair value of the fund increased. After reviewing this item, we decided to modify the definition of adjustments to include this impact.

Jay: During the quarter, we took a noncash impairment charge on one of our Standalone businesses, resulting in a negative contribution in that line item compared with Q1 of last year.

Jay: Finally, you'll recall that in prior quarters, the impact of reevaluating noncontrolling interests liabilities related to power sustainable infrastructure fund produced a meaningful amount of noise as it generated expenses to power every time the fair value of the fund increased after reviewing this item we've decided to modify the death.

Jay: Munition of adjustments to include this impact we believe that this will result in an adjusted earnings metric that better reflects the underlying operating performance and the economic reality of our financial performance.

Jake P. Lawrence: We believe that this will result in an adjusted earnings metric that better reflects the underlying operating performance and economic reality of our financial system. Turning to slide 10, we break down the $53.10 net asset value per share as at March 31st, which is now relatively flat compared to December 31st. As mentioned earlier, the slight decrease is mainly attributable to Great West, whose shares traded down slightly during the quarter, while IGM shares stayed relatively flat. In Q1, Power Sustainable made the strategic decision to wind down its public equities fund and reallocate those resources to other strategies that have been raising third-party funds.

Jay: Turning to slide 10.

Jay: We break down to $53 10, net asset value per share as at March 31.

Jay: Our NAV remained relatively flat compared to December 31st.

Jay: As mentioned earlier the slight decrease is mainly attributable to great west whose shares traded down slightly during the quarter will by GM share stayed relatively flat.

Jay: In Q1 power sustainable made this strategic decision to wind down its public equities fund and reallocate those resources to other strategies that had been raising third party funds.

Jake P. Lawrence: As part of this wind-down, Power repatriated cash, which is reflected as a decrease in its NAB line. As a result, Power's cash and cash equivalents grew to $1.6 billion at March 31. This further demonstrated our ability to generate liquidity from different sources at different points at different rates. I'll note that we spent close to $100 million on share buybacks during the quarter, which is reflected in the decrease in our shares outstanding. As I mentioned earlier, Power's NAB increased to $53.43 as of yesterday's market close, reflecting the strong share price performance of IGM last week. With that, I'll turn it back to Geoff.

Jay: Part of this wind down power repatriated cash, which is reflected as a decrease in power sustainable Nab line.

Jay: As a result, power's cash and cash equivalents grew to $1 6 billion at March 31.

Jay: This further demonstrated our ability to generate liquidity from different sources at different points.

Jay: Velocities ill note that we spent close to 100 million on share buybacks during the quarter, which is reflected in the decrease in our shares outstanding as.

Jay: As I mentioned earlier Power's Nab has increased to $53 43 as of yesterday's market close reflecting that strong share price performance of AGM last week with that I'll turn it back to Jeff.

Geoffrey Orr: Okay, thank you, Jake, and we'll move forward to the next page here. This is just a list of our transactional activity. We continue to be very active, with the focus over the last few quarters, in particular, on building out the scale of our alternative asset management platform. And I'll then roll forward to the next slide.

Jeff: Thank you Jake and we'll move forward to the next page here and that's just a list of our transactional activity, we continue to be very active with.

Jeff: With the focus over the last few quarters in particular on building out the scale of our alternative asset management.

Jeff: Platforms.

Jeff: I will then roll forward to the next slides.

Geoffrey Orr: You've seen the format of this slide before. I guess I'm going to make an observation that, you know, there are some past tenses on this slide. We used to be filled with future tenses. We were talking about all the things we're going to do, and all of a sudden, we got, like, repositioned in the past tense.

Jeff: You've seen the format of this slide before I guess you are make an observation that.

Jeff: There's some past tenses on this slide we used to be filled with future tense as we were talking about all the things we're going to do them and all of a sudden we got repositioned in the past had so it's just to reflect that.

Geoffrey Orr: And it's just to reflect that, you know, four and a half years into the strategy, five years into really, as I've described, getting back on our front foot, we have really repositioned the businesses in a material way. And in terms of the alternative asset management platforms that we have, you know, strong progress, but still a work in progress, still a lot of work to do there, but we're very focused on that, as hopefully you can see.

Jeff: Four and a half years into the strategy five years into really as I've described getting back on our front foot. We have really repositioned the business is in a material way great West life is significantly repositioned.

Jeff: With obviously, a big driver of growth in the U S. But each of the businesses are in stronger our position and are experiencing stronger growth.

Jeff: <unk> has not only continued to strengthen I G. Welcome Mackenzie, but it's got a group of businesses in each of wealth management and asset management, which represent.

Jeff: Very good prospects for enhanced future growth and could be meaningful parts of the IGN franchise in the future and in terms of the.

Jeff: Stengel are the alternative asset management platforms that we have strong progress, but still a work in progress still lots of work to do there, but we're very focused on that as hopefully you see.

Geoffrey Orr: I'll flip over to the page. I was going to say I'll promise this is the last time I'll show this slide, but I don't want to. I want to commit to things that I'm not sure I can do.

Jeff: I'll flip over to page eight.

Jeff: I was going to sell promise. This is the last time I will show the slide but I don't want to I don't want to commit to things that I'm not sure I can do.

Geoffrey Orr: But as I said, the Putnam acquisition is essentially the all of the synergies have been, or the reintegrations have been completed. The synergies will start to flow in completely in the next quarter, but this really looks back on a period when this business has been substantially repositioned from three businesses into one business. The U.S. business now, Great West, is emerging as the largest contributor to Great West life. It wasn't quite there in the first quarter, but it was close.

Jeff: As I said the Putnam has been closed this quarter the Prudential acquisition is essentially either.

Jeff: All of the the synergies have been.

Jeff: The integrations have been completed the synergies will start to flow in completely in the next quarter.

Jeff: Look back over a period, where this business has been substantially repositioned from three businesses.

Jeff: The one business in the U S business now great West is emerging as the largest contributor to great West life of local quite there in the first quarter, but it was close and given the growth prospects that are great western investigated for empower that should continue to grow and share so really.

Geoffrey Orr: And given the growth prospects that Great West is enunciated for in power, that should continue to grow and share. So really, that's a very meaningful transition. And I will then move on.

Speaker Change: That's a very meaningful transition and I will then move on.

Geoffrey Orr: I'm going to spend a few minutes in this presentation talking about IGM. IGM has gone through, as I mentioned a few minutes ago, a lot of changes. They did focus on a few things in December. As you know, they have re-segmented their business into wealth management and asset management in order to give investors a better understanding of how they think about the businesses. They've also come out with earnings guidelines, and IG Wealth and McKenzie have got solid growth.

Jeff: Spend a few minutes in this presentation talking about our AGM.

Jeff: <unk> has gone through as I mentioned, a few minutes ago, a lot of change we did in December.

Jeff: Focus on a few things as you know they have re segmented their business in the wealth management and asset management in order to give investors a better understanding of how they think about the businesses.

Jeff: Also come out with earnings guidelines in wealth and Mackenzie.

Jeff: <unk> got solid growth the investments in those businesses have continued their well positioned as you know the environment is not great.

Geoffrey Orr: The investments in those businesses have continued. They're well positioned. As you know, the environment is not great for either IG Wealth or McKenzie with what's going on with interest rates and mortgage rates. You've got part of the client base under pressure in terms of their own financial affairs, going from savings to potentially pulling money out.

Jeff: For either Archie welfare Mckenzie with what's going on with interest rates mortgage rates.

Jeff: You've got a part of the client base under pressure.

Jeff: In terms of their own financial.

Jeff: There is not going from savings to pretentiously pulling money out you've got and this kind of a micro environment with higher rates, you got money going into Cds and other products.

Geoffrey Orr: You've got in this kind of environment with high rates, you've got money going into CDs and other products. When I've looked over the past decades when wealth management or asset management goes into outflows, typically, it's because there's fear in the market. There's a different phenomenon this time.

Jeff: When I looked over the past decades, when wealth management or asset management goes into outflows typically it's because there's fear in the market was a different phenomenon at this time, it's not like the market is full up here you just got a lot of people under stress and you've got alternative investments, but those positions those businesses confident theyre going to grow at solid earnings rates.

Geoffrey Orr: It's not like the market is full of fear. You've just got a lot of people under stress, and you've got alternative investments. But those businesses are confident they're going to grow at solid earnings rates. As I mentioned and as IGM has put out, there's a lot higher growth in earnings that is going to come from the other franchises that they have in those buckets. I'm going to touch on three of them here.

Jeff: And then as I mentioned and as our AGM has put out fully theres a lot higher growth in earnings.

Jeff: Come from.

Jeff: There are franchises that they have in those buckets.

Geoffrey Orr: On page 15 of the presentation, Rockefeller, a little over a year after we announced this transaction, is growing really well along the lines that we had anticipated. You see here strong client asset growth in AUA and strong advisor growth. The AUA is coming from organic growth, inorganic growth, meaning advisors who are joining, and then market growth. So, terrific progress at Rockefeller. Wealthsimple, Jake already mentioned, as did the IGM on their call, that you've written up the value of Wealthsimple.

Jeff: Just touch on three of them here.

Jeff: So on page 15 of the presentation Rockefeller.

Jeff: Little over a year after we announced this transaction growing really really well along the lines that we had anticipated you see here strong client asset growth and a UA.

Jeff: And strong advisor growth.

Jeff: <unk> is coming from organic growth inorganic growth, meaning meaning advisers, who are joining and then market growth. So terrific progress to Rockefeller well simple Jake already mentioned vested.

Jeff: I G M on their call that you've written up the value well simple I think thats a second write up over the last few quarters.

Geoffrey Orr: I think that's the second right up over the last few quarters, and that's just because the business continues to perform exceptionally well. Very high growth. You look at the client count on this slide, 2.36 million Canadians now. Our clients at Wealthsimple are across a myriad of different services and products. When you get in the under-40 age group, the penetration is quite meaningful.

Jeff: And that's just because the business continues to perform exceptionally well very high growth Youll look at the client count on this slide to $3 6 million Canadians now.

Jeff: Our clients are well, it's simple it's across a myriad of different services and products.

Jeff: And then you get into the under 40 age group the penetration is quite meaningful.

Geoffrey Orr: Mike and his team are doing a great job, and we're thrilled with the performance of Wealthsimple. And then China AMC. And it just continues to perform really well. The management team there is doing a great job. First, on the left of this slide, you'll see that China AMC's AUM is growing. Those bars are just going back to the start of 21.

Jeff: Mike and his team are doing a great job and we're thrilled with the performance of well simple.

Jeff: And then China AMC.

Jeff: It just continues to perform really well the management team there is doing a great job first on the left this slide youll see that the Giants.

Jeff: China Amc's AUM has grown those bars are just going back to the start of 'twenty, one that's quarter quarterly growth not annual growth.

Geoffrey Orr: That's quarterly growth, not annual growth. The industry is growing, but China AMC is growing faster than the industry. You can see its position on the right side.

Jeff: The industry is growing with China, AMC is growing faster than the industry you see its position on the REIT side, It's got a five 6% market share of the Chinese market, that's up a full percentage point from a year ago and the second bullet point there you see.

Geoffrey Orr: It's got a 5.6% market share in the Chinese market, and that's up a full percentage point from a year ago. And the second bullet point there, you see on the individual side of the market, the share is growing from 4.3% to 5%. They've moved into a number two position when it comes to individual funds. So continued strong growth. The overall industry here is benefiting from some of the difficulties that the economy is facing in China and their real estate sector. So real estate has been a big focus of Chinese savers for many decades.

Jeff: On the individual side of the market share has grown from four 3% to 5% they've moved into a number two position when it comes to individual funds.

Jeff: So continued strong growth.

Jeff: Overall industry here is benefiting from.

Jeff: Some of the difficulties that the economy is facing in China and their real estate sector. So real estate, it's been a big.

Jeff: Focus of Chinese favors for many decades some of that money is now flowing into the funds industry savings rate is continuing to be very high in the industry in China AMC in particular is benefiting so I think it goes back to 2011, if im not mistaken when we made our first investment in China AMC. This has been a great.

Geoffrey Orr: Some of that money is now flowing into the funds industry. Savings rates are continuing to be very high, and the industry in China, AMC in particular, is benefiting. So I think it goes back to 2011, if I'm not mistaken, when we made our first investment in China. This has been a great investment for the grid, and we continue to be very optimistic about the future prospects.

Jeff: A great investment for the group and will continue to be very optimistic about the future prospects.

Geoffrey Orr: I'm going to then make a couple of comments on our alternative asset management businesses. As I mentioned earlier, in a difficult funding environment, both Cigar and Power Sustainable Capital are turning to other means of growing their scale. Cigar did the partnership that they announced last year with Lunate and with BMO, and then you saw that Power Sustainable Capital announced earlier this week its partnership with Great Life Co. In addition, Cigar has done a couple of acquisitions.

Jeff: Okay, I'm going to spend a couple of comments on our alternative asset management businesses.

Jeff: Mentioned earlier in a difficult funding environment.

Jeff: Both cigar and power sustainable capital are turning to other means of growing their scale cigar into the partnership that they announced last year with the illuminate and with BMO and then you saw that.

Jeff: <unk> capital announced earlier this week its partnership with Great West Lifeco and addition, cigars down a couple of acquisitions in particular on this point when you see the funded AUM slide on the right of this slide you see it's jumped up quite dramatically to $27 billion from I think it was around 15, if im not mistaken on this slide.

Geoffrey Orr: In particular, at this point, when you see the funded AUM slide on the right of this slide, you see it's jumped up quite dramatically to $27 billion from, I think it was around $15 billion, if I'm not mistaken, on this slide last quarter. In the performance equity acquisition, which was the fund-to-fund and secondaries platform that was announced by Cigar, the position that Cigar has in that is 38% ownership with a hard option for it to get over 50%.

Jeff: Last quarter.

Jeff: In the performance equity acquisition, which was the fund to fund and secondaries platform that.

Jeff: Was announced by cigar.

Jeff: Positioning the power of at cigar hasn't that it's I think it's 38% ownership with a hard option that FERC to get over 50%.

Jeff: We've determined where we need to consolidate that both for financial purposes, but also here you see the.

Geoffrey Orr: We've determined we need to consolidate that, both for financial purposes, but also, here you see the AUM is included in Cigar's numbers, so that adds at least about $9 billion US in assets. In fact, it adds about $12 billion. You see the growth in the management and the assets under management of our platforms going back to the first quarter of 2020. Obviously, very strong growth, and it's all been done through third-party funding, a huge growth in third-party funding, which was exactly the strategy that we announced.

Jeff: AUM is included in cigar numbers. So that adds it was about 9 billion U S and assets it adds about $12 billion and you'll see the growth in the management and the <unk>.

Jeff: Assets under management of our platforms going back to the first quarter 2020, and obviously, a very strong growth and it's all been done through third party funding huge growth in third party funding, which was exactly the strategy that we announced.

Geoffrey Orr: Then, you'll see the power capital steady at $2.1 billion. You know, we're gonna spend some more time, I think going forward, getting into that a little bit more. That $2.1 billion is actually not the same $2.1 billion it was at the start. There's a lot of velocity to that business. That numbering has changed because we have taken capital out and we've had returns on that capital. We've reinvested the capital. We've managed to make it flat, but that doesn't mean it's just sitting there inactive.

Jeff: Youll see the powers capital steady at $2 1 billion.

Jeff: We're going to spend some more time I think going forward. It's.

Jeff: Getting into that a little bit more of that $2 1 billion actually is not the same $2 1 billion. It was at the start there's a lot of velocity to that business.

Jeff: That number has changed because we have taken capital out we've had returns on the capital we've reinvested the capital we've managed it to be flat, but it doesn't mean, it's just sitting there inactive it's actually there's been a lot of activity in that and as Jake mentioned some of that capital on some of the earnings come out and provide funding that we can use for different <unk>.

Geoffrey Orr: It's actually, there's been a lot of activity in that. And as Jake mentioned, some of that capital or some of the earnings come out and provide funding that we can use for different purposes, including share buybacks. Okay, and then as we move to the P&L, I think Jake actually commented pretty well on the P&L, you've got, well, don't think I'll add too much, you've got the numbers here, and if you want to come back on questions, you can do so.

Jeff: <unk>, including share buybacks.

Jeff: Okay, and then as we move through the P&L.

Jeff: Jake actually commented pretty well on the P&L, you've got I don't think I'll add too much you got the members here and if you want to come back on questions. We can do so.

Geoffrey Orr: Last one on the platforms is just the partnership this week that was announced by Power Sustainable and Great West. You know, Great West is able, in working with Power Sustainable and Cigar, to tailor some of the strategies that they launched to meet their own needs and get a position where they can provide seed and put capital to work, and that's certainly been true in past strategies. So that has now been formalized into an agreement where Power Sustainable will have Great West as a partner. You've seen that elsewhere at Northleaf.

Jeff: Last one on the platforms as just the partnership this week that was announced by power stable and great West.

Jeff: Great West as Abel and working with power stable and cigar to tailor some of the strategies that they launched to meet their own needs and get a position where they can provide seed and put capital to work.

Jeff: And that's certainly been true in past strategies.

Jeff: So that has been formalized now into an agreement where power sustainable.

Jeff: We will have great West is a partner you have seen that elsewhere at north leaf great West has got 20% stake I think in the north leaf <unk> got a great west life with us.

Geoffrey Orr: Great West has got a 20% stake. I think in Northleaf, you've got Great West Life with, again, a stake in Cigar. The stake is just slightly below 20%, and it works for Great West. They get to put capital to work, have influence on what's being done, who's being hired, and get their capital deployed in areas that they're looking to deploy it. And obviously, our platform benefits because we get committed capital, and we get more growth in the platform.

Jeff: Again, a stake in cigar mistake is just slightly below 20%.

Jeff: And it works for great West they get to put capital to work have influence on on what's being done who's being hired.

Jeff: Well.

Jeff: Well.

Jeff: And get their capital deployed in areas that they're looking to deploy it and obviously, our platform's benefits because we get committed capital and we get and we get more growth in the platform. So a win win for everybody and we're thrilled about that.

Geoffrey Orr: So a win-win for everybody, and we're thrilled about that. Page 21, I'm going to go down here and see if there are any points that Jake didn't pick up and that I think you've picked up on in terms of the return of capital and the growth in cash to $1.6 billion. So I think you've got all that covered.

Jeff: Page 21.

Jeff: When I go down here and see if there's any points that Jake didn't pick up and that I think you've picked it up in terms of the return of capital and the growth in cash to $1 billion six.

Geoffrey Orr: And then I'll move forward to 22. We track our TSRs pretty quickly, pretty closely. They jump around.

Jeff: So I think he's got all of that covered and then I'll move forward to 'twenty. Two we track our tsi is pretty quickly or pretty closely they jump around.

Geoffrey Orr: You drop off a quarter of performance, and you add a quarter of performance. For those of you who are on the line managing funds, you know what that's all about. These numbers are end-date sensitive.

Jeff: You drop off a quarter of performance and you add a quarter of performance for those of you who are on the line managing funds you know what that's all about.

Geoffrey Orr: We continue to be very focused on returns to shareholders, and we're also a competitive bunch and like to watch how we're doing against our key peers. We're feeling good about the performance, and we'll continue to be focused on shareholder returns. The last few slides just speak to our discount on page 26, which we continue to monitor.

Jeff: These numbers are <unk> sensitive or we continue to be.

Jeff: Very focused on returns to shareholders and we're also a competitive bunch and like to watch how we're doing against our key peers. We're feeling good about the performance and will continue to be focused on shareholder returns.

Jeff: The last few slides just speak to our discount on page 26, which we continue to.

Jeff: Monitor and we flip we conclude on 24 with an overall statement that just says we're still executing on the strategy.

Geoffrey Orr: And we conclude on 24 with an overall statement that just says, yeah, we're still executing on the strategy. We're not in the late innings here. We're still in the early to mid innings. There's still lots of opportunity to execute going forward. We're feeling good about the direction. And with that, I'm going to stop my comments, operator, and I will invite you to open up the lines for questions.

Speaker Change: We're not we're not in the late innings here, we're still in early to mid innings, there's still lots of opportunity to execute going forward. We're feeling good about the direction and with that I'm going to start my comments, operator, and I will invite you to open up the lines for questions.

Speaker Change: Thank you.

Operator: We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad; you will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any key. To withdraw your question, please press star then two. We'll pause for a moment as callers join the queue. The first question comes from Geoff Kwan of RBC Capital Markets. Please go ahead.

Speaker Change: We'll now begin the question and answer session.

Speaker Change: And the question queue you May Press Star then one on your telephone keypad, you'll hear it Tony acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any teeth.

Speaker Change: Is it drawing a question. Please press Star then two.

Speaker Change: Posture and a woman is college trying to queue.

Speaker Change: First question comes from Geoff Kwan of RBC capital markets. Please go ahead.

Geoffrey Kwan: Hi, good morning.

Geoffrey Kwan: Hi, good morning. My first question was, are there any other opportunities to bring in third-party capital into the ALTS platform, whether or not at the GP level, or ways that they can come in at the LP level that would allow you to reduce the amount of money that you're kind of investing in the various strategies so it can free up capital that you can do things like, for example, more share buybacks?

Geoffrey Kwan: Well My first question was is.

Geoffrey Kwan: Is there any other opportunities to bring in third party capital into the <unk> platform, where they're not at the GP level.

Geoffrey Kwan: Or ways that they can come in at the LP level that would allow you to reduce the amount of money that you're kind of investing in the various strategies that we can free up capital that you can do.

Geoffrey Kwan: A few things like for example, more share buybacks.

Geoffrey Orr: Hi, hi, Geoff. Thanks for your question. You've seen two of those transactions in the past few quarters. And there are other parties that are always kind of in conversation, but I wouldn't. So you're asking if there are other opportunities to bring in other GPs? I guess the answer is yes.

Speaker Change: Hi, Hi, Jeff Thanks for your question.

Jeff: You've seen two of those transactions in the past few quarters.

Speaker Change: And there is other parties that are always kind of in the conversation, but I wouldn't so you're asking if there's other opportunities to bring in other GP I guess the answer is yes, but I don't want to leave anyone with the impression that we've decided we're going to do more transactions when.

Jeff: Those would be evaluated first and foremost by the cigar and power sustainable capital teams and then we obviously get involved because because it changes our percentage ownership, but I don't want to leave the impression that yes, we're about to do a bunch of others. There's a lot of conversations that go on with the tool.

Geoffrey Orr: But I don't want to leave anyone with the impression that we're going to do more transactions when, you know, those will be evaluated first and foremost by the Cigar and Power Sustainable Capital teams, and then we, obviously, get involved because it changes our percentage ownership. But I don't want to leave the impression that, you know, yes, we're about to do a bunch of others. There are a lot of conversations that go on. It's just a tool.

Jeff: The expectations there.

Jeff: It may or may not happen.

Jeff: We are being really careful and ensuring that we rotate the capital that we have that's underpinning these strategies.

Jeff: We're not necessarily mayors have.

Jeff: Susan or are trying to reduce it.

Jeff: Those are those are decisions, we make actively based on the opportunities.

Geoffrey Orr: Expectations there that may or may not happen. So, for example, we've got some strategies, particularly Power Sustainable Capital, which is focusing, as we've said from the beginning, for over four years. And we're going to put our money where we can get third parties to fund the growth. Power Sustainable Capital has got some ideas and some strategies it thinks it's going to be able to launch where we can really fund them with third parties.

Jeff: So for example, we've got some strategies, particularly power Standalone capital, which is focusing as we've said from the beginning.

Jeff: Since.

Jeff: Over four years, and we're going to put our money, where we can get third parties to fund the growth are sustainable capital has got some.

Jeff: Ideas.

Jeff: And some strategy that thinks it's going to be able to launch where we can really fund them with third parties, but we will put capital into those strategy. We've got some ceded.

Geoffrey Orr: But we'll put capital into those strategies to get them seeded. So what am I saying there? I'm saying, yeah, I guess there are opportunities, but we're kind of happy with the approach we've been on, which is to recycle the capital we have, take out some of the returns we've had on it, and just continue to see the platforms grow. That's still the main strategy, Jeff.

Jeff: So what am I, what am I, saying, there I am saying, yes, I guess theres opportunities, but we're kind of happy with the approach we've been on which is to is to recycle the capital we have take out some of the.

Jeff: Some of the returns we've had on it and just continue to see the platform's growth. That's that's still remain in strategy Jeff.

Geoffrey Orr: And Geoff, were you also wondering if that opportunity existed down at the local level?

Jeff: And Jeff were you also wondering if that opportunity exists down at the LP level.

Geoffrey Orr: Yeah, just I mean for the capital is there instead of having instead of maybe taking an X percent stake in the fund. You know, have a lower amount and, therefore, like I said, a little bit more capital to allocate elsewhere.

Jeff: Yes does that mean for the capital that is there instead of having instead of maybe taking an X percent stake in the fund.

Speaker Change: Thank you.

Jeff: Have a lower amount in and therefore like I said kind of a little more capital to allocate elsewhere.

Geoffrey Orr: Yes, so let me comment on that. It's very strategy-specific. So if you are launching a brand new product, the LPs are going to expect that the sponsor, being Power in this case, or it could be Great West, is, if they have an appetite for the product, is going to take a big chunk of the initial fund. And if you're on your second or third strategy and you've had successful returns, then the LPs will not require as much seed capital from the sponsor.

Jeff: Yes, So let me comment on that.

Jeff: It's very strategic strategy specific so if you are launching a brand new product.

Jeff: The Lps are going to expect that the sponsor being power.

Jeff: In this case or it could be great west.

Jeff: Is if they have an appetite for the product is going to take a big chunk of the initial fund.

Jeff: And if you're on your second or third strategy and its been successful returns than the Lps will not require as much seed capital from the sponsor. So that's a hard one to answer because obviously, we would all like to be adding second and third funds because you scale the business as you scale. The teams the economics get better and you don't.

Geoffrey Orr: So, you know, that's a hard one to answer because, obviously, we'd all like to be adding second and third funds because you scale the businesses, you scale the teams, the economics get better, and you don't have to put as much seed capital in. So that's kind of nirvana.

Jeff: I have to put as much seed capital and so that's kind of Nirvana, but we're also at a stage, where we still have to launch and create some breath in the portfolio to get products that are giving traction. So that's the dynamic at play and we don't have a hard and fast rule book, that's kind of where it is opportunity in the market niche.

Geoffrey Orr: But we're also at a stage where we still have to launch and create some breadth in the portfolio to get products that are giving traction. So that's the dynamic at play. And we don't have a hard and fast rulebook. It's kind of, where does opportunity in the market meet our need and our ability to grow and put teams in place? And that's why it jumps around a little bit from fund to fund. I don't know if that answers your question.

Jeff: Our need and our ability to grow and put teams in place and Thats why it jumped so it'll it jumps around a little bit from quantified I don't know if that answered your question John.

Geoffrey Orr: It does. And just my second question was for the three non-core assets you've talked about looking to, you know, realize or crystallize value at some point in order to monetize those investments. How much of it is just wanting to have better financial performance or improvements in the balance sheet versus needing more favorable market conditions.

John: It does.

Speaker Change: And just my second question was for the three noncore assets, you've talked about looking to realize or crystallize value at some point.

Speaker Change: And in order to monetize those investments how much of it is just wanting to have.

Speaker Change: Better financial performance or improvements in the balance sheet.

Speaker Change: Versus needing more favorable market conditions.

Geoffrey Orr: I think it would be more favorable market conditions if you'd underline that, obviously, we're not going to give away the assets for something that's less than their market value, but I think it is really whether there's liquidity and whether there's enough opportunity in the market and not kind of getting in the way of the company's team's own plans and needs for capital. You know, you could look at Lion in that way, and I'll just, it's an obvious one that we could comment on, but Lion's been out looking for capital themselves, and we haven't been trying to compete with that in terms of our own ambitions.

Speaker Change: I think it would be more favorable market conditions would be.

Speaker Change: Underlying that.

Speaker Change: Obviously, we're not going to give away the assets, it's something that's less than their market value.

Speaker Change: But I think it is really whether there's.

Speaker Change: Liquidity and whether there is enough opportunity in the market.

Speaker Change: And not kind of getting in the way of the company's team own plans and needs for capital.

Speaker Change: You could look at lion in that way and I'll, just it's an obvious one.

Speaker Change: You could comment on but.

Speaker Change: <unk> has been out looking for capital themselves and we haven't been trying to compete with that.

Speaker Change: In terms of our own ambitions.

Geoffrey Orr: So we're not getting in the way of their own company development, and being a negative for them is a perspective on that. We've tried to be supportive, as I said from the beginning. We changed our strategy.

Speaker Change: We're not getting in the way of their own company development being a negative for them as a perspective on that we've tried to be supportive as I said from the beginning we changed our strategy. These three companies are not financial services, but we've tried to do that in a way that we we really.

Geoffrey Orr: These three companies are not financial services, but we've tried to do that in a way that we really protect our reputation of being a great partner, of honoring our commitments. And at the same time, I would point out that the buybacks and the freeing up of capital, you know, I guess it hasn't come from the standalone businesses. That's a future opportunity, which we'll get to, but we've managed to do a lot of buybacks because of the things I've talked about, you know, rotating the capital, creating returns on the seed capital, doing other transactions, and raising a lot of capital without having really dented that portfolio in a very serious way yet. Okay, thank you.

Speaker Change: Sure.

Speaker Change: Protect our reputation of being a great partner of honoring our commitments and at the same time I would point out that the buybacks and the freeing up of capital.

Speaker Change: I guess it.

Speaker Change: It hasnt come from from the from the Standalone businesses that the future opportunity, which will get to.

Speaker Change: But we managed to do a lot of buybacks because of the things I've talked about.

Speaker Change: Rotating the capital creating returns on seed capital.

Speaker Change: Other transactions and raised a lot of capital without having really dented that portfolio in a very serious way yet.

Speaker Change: Okay. Thank you okay. Thank you.

Speaker Change: The next question comes from Graham Ryding of TD Securities. Please go ahead.

Graham Ryding: The next question comes from Graham Ryding.

Graham Ryding: Hi, good morning.

Graham Ryding: Hi, good morning. My first question is just on the capital that you've received from Great West for this 20% stake in Power Sustainable. What's the plan? How do you plan to use that capital? The capital will go into the treasury of Power Sustainable Capital, and they'll use it for their own operations at this point. So that wasn't a secondary that we did; they actually put capital in.

Graham Ryding: My first question is just on the.

Graham Ryding: The capital that you've received from great West for this 20% stake in power sustainable Whats the plan, how do you plan to use that capital.

Graham Ryding: The capital will go into the Treasury of power sustainable capital and they'll use it for their own operations at this point.

Graham Ryding: Yes.

Speaker Change: It's not it wasn't a secondary that we did they actually put capital in.

Speaker Change: You have the financials on power sustainable capital.

Graham Ryding: You have the financials on Power Sustainable Capital. So you can derive from that that, I think we announced the numbers when Cigar brought in outside capital, that Cigar is a bigger company and has a lot more revenues and a lot more mature stage of development. So, you know, this is a smaller business, the numbers are less material overall, but the capital that came in went into treasury. I don't know, Graham, if that fits your question or not. Yeah, so just to fund operations going forward. Okay, that makes sense. [inaudible] And then what level of AUM commitment can you disclose, like what Great West has committed?

Speaker Change: So you can you can.

Speaker Change: Derived from that that I think we announced the numbers when we when cigar brought in outside capital with regards to the bigger.

Speaker Change: Company and is a lot.

Speaker Change: A lot more revenues and a lot more mature stage of development. So.

Speaker Change: This is a smaller business the numbers are less material overall, but capital that came in went into treasury I don't know Graham if I get your.

Speaker Change: Your question or not.

Graham Ryding: Yes, so just to fund operations going forward, Okay that makes sense.

Graham Ryding:

Speaker Change: And then what level of AUM commitment can you disclose like what great Western is committed to going forward I think.

Geoffrey Orr: Great Western's committed to going forward. I think they have.

Speaker Change: Invested already a $1 billion into power sustainable can you disclose what they are committing to going forward.

Geoffrey Orr: They've already invested a billion into power sustainability. Can you disclose what they're committing to going forward? No, I can't, and I'm not even sure that was an explicit commitment in the agreement.

Speaker Change: No I cant and I'm not even sure that was an explicit commitment in the agreement.

Speaker Change: And they are.

Geoffrey Orr: And they are committed to a billion, as you know. They're in the Infra Fund, and they've got a little bit in the Leo's Fund. The strategy that Power Single Capital has launched in terms of the Infra Debt Fund, which is a US-based global fund led by Tom Murray and his team, they've committed a fair bit of capital to that strategy, which is really, I think, right up their alley in terms of the kind of assets that they're looking for.

Speaker Change: We are committed to 1 billion as you know they are in the infra funds they've got a little bit in the <unk> fund the strategy that the.

Speaker Change: Comparison of what capital is launched in terms of the inferred that fund, which is a U S. Based global fund led by Tom Murray and his team.

Speaker Change: They've committed a fair bit of capital to that strategy, which is really a I think right up their alley in terms of the.

Speaker Change: Kind of assets that they are looking for and we're pretty optimistic that that strategy.

Geoffrey Orr: And we're pretty optimistic that that strategy, once it's got a few investments done, is going to get some really good traction with third-party investors. We'll see how that goes, but we're optimistic. That's kind of the main one that they've done so far. And as I said, they have the ability, working with Power Single Capital, to say, this is something else we'd be looking for and work with Power Sustainable Capital to help them go out and actually develop strategies and look for teams. So it's more than just coming in and saying, you know, we'll spend this much money. It's actually kind of a working partnership here that helps Power Sustainable Capital.

Speaker Change: Once it's got a few investments done is going to it's going to get some really good traction with third party investors, we will see how that goes but we're optimistic that's kind of the main ones that we've done so far and.

Speaker Change: As I said they are.

Speaker Change: They have an ability in working with our single capital to say this is something else would be looking for and work with power sustainable capital to help them go out and actually can see strategies and look for teams. So it's more than just coming in and saying we will spend as much money is actually none of them are working partnership here that helps power sustainable capital.

Speaker Change: And great West.

Jake P. Lawrence: I do think, Graham, it's Jake here. I do think their interests are aligned, right? When you become a, call it, approximately 20% owner of the business, your interest is to obviously invest in the business. So, no explicit number commitment to share at this point, but I don't think they became a partner in the GP not to influence or participate at the LP level.

Speaker Change: I do think Graham it's Jake here I do think their interests are aligned right. When you become a call. It approximately 20% owner of the business. Your interest is to obviously invest in the business. So.

Jake P. Lawrence: No explicit number commitment to share at this point, but I don't think they became a partner in the GP not to not to influence or participate at the LP level.

Speaker Change: Yes, okay.

Graham Ryding: Yeah, okay. It makes sense. And my last question would just be sort of in line with your decision.

Speaker Change: It makes sense and my last question would just be sort of in line with your decision here to wind down.

Operator: Transcribed by https://otter.ai

Jake P. Lawrence: The public equities platform in China are there are there other areas still within your platform, where you see.

Operator: Platform in China. Are there other areas still within your platform where you see opportunities for further simplification? I think that most of the strategies that are currently in the alternative platforms are either being primarily funded by third-party capital, or we are optimistic they will. I just mentioned the U.S. Infra Debt Fund, where it's currently not, but we're optimistic it will. That would be my quick summary of the various portfolios. I don't want to preclude that in any asset manager they're always opening new funds and making decisions to close other funds over time, so I don't want to say we'd never do any of that, but there's nothing at this point that comes to mind. Okay, that's it for me. Thank you.

Jake P. Lawrence: <unk> opportunities for further simplification.

Jake P. Lawrence: I think that most of the strategies that are currently in the alternative plan.

Jake P. Lawrence: Firms are either being primarily funded by third party capital or we are optimistic they will I just mentioned in the U S and for that fund where it is currently not but we're optimistic it will be my my quick summary on the on the ports on the various portfolios I don't want to preclude in any asset manager there.

Jake P. Lawrence: We're always opening new funds and making decisions to close other funds over time, so I don't want to say, we'd never do any of that but there's nothing at this point that comes to mind.

Speaker Change: Okay. That's it for me thank you.

Speaker Change: Thank you.

Speaker Change: The next question comes from James <unk> of National Bank Financial. Please go ahead.

Jaeme Gloyn: The next question comes from Jaeme Gloyn of National Bank Financial. Please go ahead.

James: Yes, thanks, and good morning.

Jaeme Gloyn: Yeah, thanks. Good morning.

James: Good morning first question just wanted to drill into the let's say guard asset management activities profitability.

Jaeme Gloyn: First question: just wanted to drill into the SAG-ARD asset management activities profitability. And so we see management fees stepping up quarter over quarter, but also exactly in line with the investment platform expenses, quarter over quarter as well. So just, you know, trying to get a sense as to whether there's any sort of one-time drivers in there, obviously, PEM is included. And, and was PEM sort of operating at full profitability for the quarter? Or were there some other factors that were at play here?

James: And so we see management fee stepping up quarter over quarter, but also exactly in line with the investment platform expenses quarter over quarter as well so just.

James: Trying to get a sense as to.

James: Or whether there's any sort of onetime drivers in there obviously perm is included.

James: And and was perm sort of operating at like full profitability for the quarter.

James: Or were there some other factors that were at play here.

Geoffrey Orr: Do you want to take that? Yeah, you go ahead. Then you can jump in, Jake.

Speaker Change: Sure I'll take that.

Speaker Change: I'll go ahead, and then you can jump in Jake.

Jake P. Lawrence: Good question. Thank you. So yes, I think by memory here at 55 million of expense was $51 million of fees. So a slight loss there is a little bit of a.

Geoffrey Orr: So, yeah, I think by memory here, 55 million in expenses, 51 million in fees, so a slight loss. There is a little bit of a catch-up that was not in the quarter on a fund that was expected to close. So that probably overstates a little bit the run rate profitability of CIGAR. It's probably not quite break-even right now, but that gap is overstated because of some funds we expect to get in. PEM came in, and in specific answer to your question, it is above break-even, not contributing a lot, but it is making money. So it was not a further drag.

Speaker Change: A catch up that was not in the quarter on a fund that was expected to close.

Jake P. Lawrence: So that probably overstates, the a little bit the run rate.

Jake P. Lawrence: The ability of cigar is probably not quite a breakeven right now, but it's not so that gap is overstated because some some funds we expect to get in.

Speaker Change: <unk> came in in specific answer to your question. It is above breakeven not contributing a lot, but it is making money. So it was not a further drag it would have contributed a little more revenue than expenses.

Jake P. Lawrence: It would have contributed a little more revenue than expenses. The overall statement I would have, and I invite Jake to add anything else, is that CIGAR has been growing, adding strategies, and adding staff. The fundraising environment in 2023 slowed quite a bit. They actually took action and reduced their expenses by headcount, but they grew their expenses through the year, and revenues have grown in a comparable fashion, but not to the point where the fee-related earnings jumped to a positive.

Speaker Change: The overall statement I would have and then invite Jay to add anything else is that cigar has been growing adding strategies, adding staff.

Speaker Change: The fund raising environment in 2023 slowed quite a bit.

Jay: Actually took an action and reduce their expenses and head count but they.

Jay: <unk> grew their expenses through the year and revenues have grown.

Jay: In.

Jay: Our comparable fashion, but not to the point where.

Speaker Change: The fee related earnings jumped into a positive. So there are just under breakeven right now I'd step back and look at the forest instead of the trees, let's say they've got a run rate fee of over $200 million Canadian from where they are standing today and that the business really didn't exist four years ago. So it's been an incredible growth.

Jake P. Lawrence: So they're just under break-even right now. I'd stop back and look at the forest instead of the trees and say they've got a run rate fee of over 200 million Canadian dollars from where they're standing today, and that business really didn't exist four years ago. So there's been incredible growth in breadth and in depth. But the current environment has been a challenging one, and that's reflected in the time at which they get positive contributions. Jake, I don't know if you want to add to that. No, the only other favorable option.

Speaker Change: And breadth and in and.

Speaker Change: And in depth.

Speaker Change: But that's the current environment has been a challenging one and that's reflective in the.

Speaker Change: The time at which they get to positive contributions Jason I know, if you want to add to that the only other favorable variance I'd highlight is the venture capital line, which ties into some of the discussion we've had around well simple where.

Jaeme Gloyn: Now, the only other favorable variance I'd highlight is the venture capital line, which ties into some of the discussion we've had around Wealthsimple, where it had a favorable variance quarter over quarter of around $7 million, and that's largely related to the performance within that Wealthsimple franchise.

Speaker Change: It had a favorable variance quarter over quarter around $7 million and that's largely related to the performance within that well simple franchise.

Speaker Change: Okay great.

Geoffrey Orr: Okay, great. Stay and stay in this lane here with the acquisition of PEM. Can you maybe just refresh us on, what were the key drivers of that acquisition, or I guess like the key benefits of bringing in PEM? And I guess what gaps did it fill? And then related to that, what other gaps do you see that you would seek to fill through acquisition in the asset management business?

Speaker Change: <unk>.

Speaker Change: As seen in this lane here with with the acquisition of Pam.

Speaker Change:

Speaker Change: Can you maybe just refresh us on.

Speaker Change: Unlike what were the key drivers of that acquisition I guess like key benefits from bringing in Pam.

Speaker Change: And what I guess, what gaps do that Phil and then related to that what.

Speaker Change: What other gaps do you see that that you would seek to fill through acquisition in the asset management business.

Geoffrey Orr: So, PEM is primarily a fund-to-fund and secondaries player, and fund-to-fund is effectively going out and buying a whole bunch of different strategies from different managers, and secondaries, of course, is buying the same thing, but from LPs that are selling. And what that does, that product suite is very well suited to family offices, smaller family offices, and even getting into the democratization of retail accounts. Why?

Speaker Change: So Pam this primarily trying to fund and secondaries player.

Speaker Change: And fund that fund.

Speaker Change: Effectively going out and buying a whole bunch of different strategies from different managers and <unk>.

Speaker Change: Secondary is of course is buying the same thing, but from Lps that are selling and what that does that product suite is very well suited to family office and smaller family office and even getting into the demand.

Speaker Change: Retail accounts.

Geoffrey Orr: Because you have diversification, and two, you don't have the... Imagine if you go in to buy a private equity funding institution, and we say, great, $50 million or $200 million, and then we'll come back to you 18 times in the next four years and draw down your money as we invest it. And then we'll send you checks over the next, you know, five years as we sell off the assets.

Speaker Change: Because you have diversification and to.

Speaker Change: Have the Jade.

Speaker Change: Imagine if you go into by a private equity funded institution.

Speaker Change: Great <unk>.

Speaker Change: <unk> million dollars or over 200 million compared then we'll come back to you 18 times in the next four years and draw down your money as we invested in Yunlin safety checks over the next five years as we divest of it that for.

Geoffrey Orr: That, for an individual investor or family office, is really a very, very difficult thing. So the fund-to-fund business is your diversification, and it doesn't have this long investment period, typically. You're invested almost right away.

Speaker Change: An individual investor a family office is really very very difficult things. So so.

Speaker Change: Fund of fund business diversification and it doesn't have this long investment periods typically youre invested almost.

Speaker Change: Almost right away so it broadens out the product suite and the distribution.

Geoffrey Orr: So it broadens the product suite and the distribution that CIGAR has, and that is particularly relevant, given that institutional investors are, you know, they've grown a lot in the last 20 years, and the growth rate's probably going to come more from other parts. By saying that, I do not want to say that there are no institutional investors in secondaries. And they also, investors, institutional investors might go into a secondary to fill in part of their portfolio where they don't have the team themselves.

Speaker Change: <unk> has.

Speaker Change: That is particularly relevant given that institutional investors are.

Speaker Change: They've grown a lot in the last 20 years and all.

Speaker Change: The growth rate is probably going to come more from other parts by saying that I do not want to say that there are no institutional investors in secondary and.

Speaker Change: They also investors institutional investors might go into a secondary to fill in part of their portfolio, where they're they don't have the team themselves as a secondary or a fund to fund type strategy to fill in their portfolio.

Geoffrey Orr: They'll use a secondary or a fund-to-fund type strategy to fill in their portfolio. But it gets, so it opens up all those doors for CIGAR, and that's why it's highly strategic for them. I hope that answers the question, Jaeme.

Speaker Change: So it opens up all those doors for cigar and Thats why highly strategic for them.

Speaker Change: Hope that answers the question Jamie.

Geoffrey Orr: Yeah, it answered the PEM part, and then the second part was, you know, what else could you be looking at in terms of M&A to help drive that asset management platform?

Jamie: Yes, it answered the Perm part and then the second part was.

Jamie: What else could you be looking at in terms of M&A to help drive that asset management platform.

Geoffrey Orr: Yeah, I mean, I'm not going to comment there. The lead on, like... The Cigar team and the Power Stable Capital team will be out hunting and in discussions with people all the time, and then when we've got something that they're interested in, they bring it forward, and we end up having discussions. So you know, I don't want to avoid the question, but I'm not sure I can give you anything that you can put your hat on.

Speaker Change: Yeah, I mean, I'm not going to comment there the lead on.

Speaker Change: Right.

Speaker Change: The cigar team in Paris tangible capital team will be out hunting and in discussions with people. All the time and then we've got something that they are interested in bringing it forward and we ended up getting into discussion so.

Speaker Change: I don't want to avoid the question, but I'm not sure I can give you anything that you can hang your hat on.

Geoffrey Orr: Maybe I can word it differently, in the sense of, as we're thinking about asset management, reaching break even, and turning into a profitable business, like how much in your strategic outlook is that driven by organic drivers versus inorganic? Is that maybe a better way to ask it? Okay, yeah, that depends on the environment.

Speaker Change: Maybe maybe I can worded differently.

Speaker Change: In a sense of as we're thinking about asset management, reaching.

Speaker Change: Breakeven and turn it into a profitable business like how much.

Speaker Change: In your strategic outlook is that driven by organic.

Speaker Change: Drivers versus inorganic is that maybe a better way to ask it.

Geoffrey Orr: Okay, yeah, that depends on the environment, and hopefully it's both over time. You know, it's like you're you, these things get actively managed, and you have a lot of tools in your toolbox. And if you're in an environment of bad fundraising, you're using one tool more than you're using another; if we get back into an environment where there's lots of fundraising, the team's going to quite naturally spend more of their time focusing on organic growth. That's just that, that's what my answer is. It's We have a toolbox, and we use the ones that are most appropriate at the time. Okay, I'll turn it over from here. Thanks.

Speaker Change: Okay, yes that depends on the environment and hopefully as both overtime.

Speaker Change: Like your.

Speaker Change: These things get actively managed U you have a lot of tools in your toolbox and if youre in an environment of bad fundraising youre using one tool more than youre using another if we get back into their environment, but there's lots of fundraising the team is going to quite naturally spend more of their time focusing on organic growth.

Speaker Change: Let's see.

Speaker Change: We've got a toolbox and we use the ones that are most appropriate at the time.

Speaker Change: Okay.

Speaker Change: I'll turn it over from here. Thanks.

Speaker Change: Thanks, Jamie.

Speaker Change: The next question comes from Phil <unk> from Scotiabank. Please go ahead.

Phil Harve: The next question comes from Phil Harve of Scotiabank. Please go ahead.

Phil: Hey, good morning.

Geoffrey Orr: I want to start off with a big picture question and kind of revisit a theme, but if you look back at the slide deck and you consider, I guess, all the changes across the power group in the last five or so years, what do you think we're at now in terms of maximizing some of the operational synergies across that broader group? It feels like quarter to quarter; there are new transactions, new strategic agreements. What do you think is ahead of us?

Phil: Hey, Phil.

Phil: I want to start off maybe a big picture question and kind of revisit the theme.

Phil: If you look back to the slide deck and you consider I guess all the changes across the power group in the last five or so years.

Phil: What any now do you think we're at in terms of maximizing some of the operational synergies across that broader group feels at quarter to quarter. This new transactions new strategic agreements.

Phil: What do you think is ahead of us.

Geoffrey Orr: Boy, that's a tough question to ask. I think I'll first look in the rear view mirror. A number of the transactions that we did between the group were to kind of put things in their right place, and it wasn't because it was necessarily an error in the first place, but just the market had developed. Examples of that would be if you look at the sale of Great West Life's asset management business, GLC, to McKinsey.

Speaker Change: Alright, Thats a tough question to ask I think let me first look in the rearview mirror a number of the transactions that we did between the group works to kind of put things in the right place.

Speaker Change: And it wasn't because it was necessarily an error in the first place, but just the market has developed.

Phil: Examples of that would be.

Phil: If you look at the sale of Great West life asset management business GLC to Mackenzie.

Geoffrey Orr: That would have been a strategy for Great West Life Co. and Canada Life for a long time, but the scale required and the scale that they had in asset management were not being optimized, whereas McKinsey was in a better position to utilize the scale, provide better performance, et cetera. So that was an obvious one.

Phil: Been a strategy for great West Lifeco, and Canada life for a long time, but the scale required and the scale that they had in asset management.

Phil: It was not being optimized, whereas Mackenzie was in a better position to utilize the scale provide better performance et cetera. So that was an obvious one China AMC with another one we didn't start off with a view that we should have the asset in two places I think I've told this story before we actually wished when CMA sea.

Geoffrey Orr: China AMC was another one. We didn't start off with the view that we should have the asset in two places. I think I've told this story before.

Geoffrey Orr: We actually wished when CMAC first came in 2011 that we could have had IGM be the buyer, but it was within the fund and asset management business, and that didn't work out because of regulations. And we weren't able to buy it there, so it had to go into Power Corp. And then when IGM was able to buy it, we ended up having it in two places. So there was a, you know, what are we doing with this asset in two places? Let's simplify it, put it all in one place. So a lot of the transactions were of that nature. Are there any of those left?

Phil: First came in 2011 that we could've had <unk> the buyer it was.

Phil: Within the fund and asset management business and that didn't work out because of regulations and we weren't able to buy it there. So I'd have to go into power Corp, and then when IGN was able to buy we ended up having it in two places so there was.

Phil: What are we doing with this asset in two places like simplify it put it in one place. So a lot of the transactions were of that nature are there any of those left yeah I would say there probably is.

Geoffrey Orr: Yeah, I would say there probably is. You know, if you look at the way Well Simple is positioned, it's in two places. That was because it started off as part of our fintech strategy that we were driving at Power Financial. And as we got into subsequent rounds of funding, it was clear that this company was going to become something real, and maybe it belonged more in our operating businesses and at Power Corp. So there's an example of, you know, we're in two places. Does that ever get moved?

Phil: If we are if you look at the way while simple is positioned its in two places that was because it started off as part of our Fintech strategy that we were driving at our financial and as we got into subsequent rounds of funding. It was clear that this company was going to become something real.

Phil: And maybe that belong more in our operating businesses.

Phil: At Power Corp. So there's an example of where in two places does that ever get moved.

Phil: Do not want to create and speculation that we're about to announce that pleased in answering your question, but there is we still got some opportunities for those kinds.

Geoffrey Orr: I do not want to create speculation that we're about to announce that, please, in answering your question, but we've still got some opportunities for those kinds of transactions. The second kind of transaction is the synergistic ones where, you know, the companies have an ability to work together, either by providing their product through the distribution of the other organization, and they cooperate. And there continues to be a lot of opportunity to basically take the distribution we have at IGM and the distribution that we have at Great West Life and see where there are opportunities to distribute each other's products.

Phil: Second kind of transaction or the synergistic ones were.

Phil: But that the companies have an ability to work together either by providing their product through the distribution of the other organization or in the.

Phil: Cooperate and that there continues to be a lot of opportunity to basically take the distribution we have.

Phil: IGN and the distribution that we have at great West life, and see where there's opportunities to distribute each other's products and then between our platforms and the need the great West life and the needs of the clients of our AGM.

Geoffrey Orr: And then between our ALT platforms and the needs of Great West Life and the needs of the clients of IGM, there's lots of synergies there that we're going to continue to, you know, continue to try and monetize for the benefit of everybody, clients and the shareholders of all the groups. So that's my summary of what we did, and I want to keep going forward, Bill.

Geoffrey Orr: There's lots of synergies there that we're going to continue to.

Phil: I'll continue to try and monetize for the benefit of everybody clients and the shareholders of all of the group.

Phil: That's my summary of what we've done and what I see going ahead.

Geoffrey Orr: Sure.

Speaker Change: Excellent great color, maybe one that one follow on.

Phil Harve: Excellent. A great caller.

Phil Harve: Maybe one follow-on. I think a number of the questions we've had this morning are more what we'll call near-term capital priorities and thoughts. And same thing, I just want to keep this big picture and mid- to longer-term theme, but can you talk about what we'll call mid- to longer-term capital rebalancing? Again, you know, how you'd kind of look at balancing between investing in new growth at power, either retiring press, buybacks, increasing, or decreasing stakes in Great West and IGM. Again, more in the context of kind of three to five years out. So how does this look in the midterm?

Speaker Change: Remember the question because I had this morning or more I'll call. It near term capital priorities and kind of thought the same thing I just want to keep in this big picture mid to longer term theme that can you talk about.

Speaker Change: Call it mid to longer term capital rebalancing again, how you kind of look at balancing between investing in new growth at power.

Speaker Change: Retiring kratz buybacks, increasing decreasing stakes in great West and IGN again more in the context of kind of three to five years out how does this how does this look.

Speaker Change: In the midterm.

Speaker Change: Yeah, so yeah.

Geoffrey Orr: Yeah, so yeah, good question. I'll say, in the short term, we're balancing buying shares back, we're trading at a 26, 27% discount, that is clearly creating benefits for shareholders. I think I mentioned on the last call that if you just looked at the buybacks over the last few years, most of which came in the last two years, because during COVID, we just kind of suspended the buyback activity.

Geoffrey Orr: Good question I'll say.

Speaker Change: Let me answer the question that you didn't ask which is in the short term we're balancing.

Geoffrey Orr: Buying shares back we are trading at a 26, 27% discount that is clearly creating benefits for shareholders. I think I mentioned on the last call that if you just looked at the buybacks.

Speaker Change: Over the last few years, mostly most of which came in the last two years because during COVID-19. We just kind of suspended the buyback activity I think I made the comment we've done the math that we had $72 million additional cash flow.

Geoffrey Orr: I think I made the comment, we've done the math that we had $72 million in additional cash flow that would not have been there had we not bought the shares back. And that was available to and contributed to the increase in dividends that we're able to comfortably fund at the power plant level. That would also be true in terms of buybacks for increasing earnings per share, and then buybacks, obviously increasing the NEV because there's an arbitrage going on when we take cash at NEV and we buy shares back at 75 cents on the dollar. You bump your NEV.

Speaker Change: That would not have been there had we not bought the shares back and that was available to contributed to the increase in dividends that we are able to comfortably fund at the Powerpoint level that would also be true in terms of buybacks, increasing our earnings per share and then buybacks, obviously, increasing NAV because there is an arb.

Speaker Change: <unk> going on when we take cash at any.

Speaker Change: And we buy shares back at 70.

Speaker Change: <unk> on the dollar.

Speaker Change: You've upped your enemy so lots of benefits to buybacks, but we're not planning on the growth of the business simply to.

Geoffrey Orr: So lots of benefits to buybacks, but we're not planning on the growth of the business simply to return all the capital to shareholders and buy it back. We're in the business of trying to also build businesses that can create, firstly, earnings, second, excuse me, excuse me, first and foremost, value growth, second, earnings come, and then third, cash flow comes, kind of in that order. And we are very much looking to balance the power corp by building businesses that can do that, create value, ultimately earnings, and create cash flow.

Speaker Change: Return all the capital to shareholders and buy it back we are in the business of trying to also build businesses that can create firstly earnings second excuse me excuse me first and foremost value growth second earnings come and then third cash flow becomes kind of the sequence and we are very much looking at the <unk>.

Geoffrey Orr: <unk> Power Corp building businesses that can do that create value create ultimately earnings and create cash flow your question about.

Speaker Change: <unk>, great West are buying less of IGN and that's a lot harder one to kind of answer on the fly so I mean I think.

Geoffrey Orr: Your question about, you know, buying more of Great West or buying less of IGM, that's a lot harder one to kind of answer on the fly. So I mean, typically, when you're making those changes, it's because of some opportunity that exists in the market. We love our position in Great West; we love our position in IGM. And whether we would increase or decrease, I think those will be decisions we'll make in the future, depending on what opportunity might exist; it may be some M&A transaction or some other opportunity that would make the decision at the time.

Geoffrey Orr: Typically when you are making those changes just because of some opportunity that exists in the market, we love our position with great West, We love our position and IGN.

Speaker Change: And whether we would increase or decrease I think will be decisions, we will make in the future depending on what opportunity might exist. It maybe some M&A transaction or some other opportunity that would make the decision at the time, but they are both long term holds for our group.

Geoffrey Orr: But we're both long-term holds for our group, and we're happy with our ownership. But I think about as far as I want to go in terms of the longer-term nature of your question. I'll stop there. All right, well, that's a great caller.

Geoffrey Orr: And we're happy with our ownership I think about as far as I want to go in terms of your the longer term nature of your question I'll stop there.

Phil Harve: All right. Well, that's a great caller. Thank you.

Speaker Change: Alright, Thats great color. Thank you.

Speaker Change: Okay, well thank you.

Phil Harve: The next question comes from Tom Mackinnon with BMO. Please go ahead.

Tom MacKinnon: The next question comes from Tom MacKinnon of BMO. Please go ahead.

Tom MacKinnon: Yes, thanks, and good morning jumped on the call late so hopefully this question wasn't asked apologies if it was but with respect to power sustainable it looks like some some money was moved out of power sustainable and into cash.

Tom MacKinnon: Yeah, thanks and good morning. Jumped on the call late, so hopefully this question wasn't asked. Apologies if it was. But with respect to Power Sustainable, it looks like some money was moved out of Power Sustainable and into cash. What was the driver of that? Was that not funding some other mandates, taking some money off the table with respect to Power Sustainable? uh... put money into cash and try to buy back stock

Tom MacKinnon: What was the driver of that was that a.

Tom MacKinnon: Not funding some other mandates are taking some money off the table with respect to.

Tom MacKinnon: Power sustainable and how do you juggle then they need to I guess invest in these platforms seed money into these platforms versus.

Speaker Change: Put money into cash and try to buy back stock.

Speaker Change: So yeah.

Geoffrey Orr: Yeah, good. Hi, Tom. Thanks for joining us.

Speaker Change: Yeah sure. Thanks.

Speaker Change: Hi, Tom and thanks for joining us.

Speaker Change: So the strategy there.

Geoffrey Orr: We're putting our capital in a cigar.

Geoffrey Orr: Cigar empower Samuel and strategies that can fund themselves through third parties.

Speaker Change: And there were questions on that earlier, so we've taken money out of one strategy, but it's really not get going places in terms of getting third party funding.

Speaker Change: And it's gone into cash right now about 400.

Geoffrey Orr: Yeah, so the strategy there was, we're putting our capital in cigar and carcinal in strategies that can fund themselves for third parties. And there were questions on that earlier. So we've taken money out of one strategy that is really not get going places in terms of getting third party funding. And it's gone into cash right now, about $400 million. John Aiken, Robert Orr, Andr Desmarais, Gregory Tretiak, Unknown Attendee, Jaeme Gloyn, Douglas Priebe, Tom MacKinnon, Doug Young, Geoffrey Kwan, Stphane Lemay, Denis Vasseur, Power Corporation of Canada John Aiken, Robert Orr, Andr Desmarais, Gregory Tretiak, Unknown Attendee, Jaeme Gloyn, Douglas Priebe, Tom MacKinnon, Doug Young, Geoffrey Kwan, Stphane Lemay, Jake Lawrence, Denis Vasseur, Power Corporation of Canada

Geoffrey Orr: $50 million somewhere around there were 35.

Geoffrey Orr: The number I think our net.

Geoffrey Orr: On that basis, we've taken that out of a strategy. It's currently sitting in cash as I mentioned earlier on the call Paris Tunable capital has got other.

Geoffrey Orr: Other strategies that we are planning to launch some of that capital is going to support new strategy, where do we think we can be getting third party funding.

Geoffrey Orr: And as the primary driver, we've said that we've been saying that for 21 quarters in a row. That's what we're about we're going to try and take the capital we have at least cycles you missed the comment the $2 1 billion.

Geoffrey Orr: Power capital under these strategies is actually recycled a lot and we're going to try and come forward with some information on that and we've taken money out of through returns, but we're basically trying to grow the platform and we have been using third party capital that strategy wasn't wasn't getting there.

Geoffrey Orr: We are redeploying it some of it can be used for buybacks and we're going to redeploy some of it in supporting the business.

Geoffrey Orr: Our platforms going forward and we've got some product launches that are we're anticipating here in the near future.

Speaker Change: Okay that answers it.

Tom MacKinnon: Okay, yeah, that's great. And how do you juggle the need to, are you just recycling capital and power sustainable and cigar? Or are you in a position where they would, for lack of a better word, kind of remit capital back into cash?

Speaker Change: Yeah, that's great.

Speaker Change: And how do we how do you juggled the need to Oh, you just recycling capital and power sustainable and cigar or are you in a.

Speaker Change: In a position where they would for lack of a better word kind of remit capital back into cash.

Geoffrey Orr: Yeah, a good question. A really good question.

Speaker Change: Yes. Good question a really good question.

Speaker Change: The VA there.

Speaker Change: <unk> GPS they run their GPS the managers and Theres, a little bit of cash in there.

Geoffrey Orr: Their GPs, they run their GPs, the managers, and there's a little bit of cash in there. I guess Cigar has some from the ADQ, the Lunaid, and the BMO transaction they've been using for acquisitions. But this capital that I'm talking about, the $2.1 billion that we always talk about, is not managed by Cigar or by Power Stable Capital. It's managed by Power.

Geoffrey Orr: I guess cigar has some from the 80 Q.

Geoffrey Orr: And the BMO transaction, they've been using for acquisitions, but this capital that I'm talking about the $2 1 billion that we always talked about is not managed by cigar.

Geoffrey Orr: We're an LP, if you will. We own the GPs, but we're also a limited partner. And so we will invest in their strategies, typically as a seed investor. As I was saying earlier, on a new fund, we might take a bigger share to get a new fund going. On a second fund that's been launched, we might take less. So we're getting returns. Sometimes we're selling our interest in those LPs after a period of time.

Geoffrey Orr: Power single capital is masked by power, where an LTE. If you will we own the GPS, but we're also a limited partner and so we will invest in their strategies typically as a seed investor.

Geoffrey Orr: As I was saying earlier on a new fund we might take a bigger share to get a new fund going on a second fund was launched we might take less so we're getting a return sometimes we're selling our interest in those Lps. After a period of time, we're getting money back its recycling and we manage that portfolio and then we're in discussions with them.

Geoffrey Orr: You know, we're getting money back, it's recycling, and we manage that portfolio. And then we have discussions with them. Power Stable Capital will come and say, we want to launch a new fund. We think we have a team that's going to join us. We think we can raise, you know, $500 million to a billion, but we need Power Corp to put $100 million or $150 million in to get the thing going.

Geoffrey Orr: Our stable capital will come and say, we want to launch a new fund. We think we have a team that's going to join US. We think we can raise $500 million going to $1 billion, but we need to put a $100 million and $150 million and to get the thing going and then we have those discussions renegotiate with our GPS and we make a decision okay. We're going to support that that's the process.

Geoffrey Orr: And then we have those discussions, we negotiate with our GPs, and we make a decision, okay, we're going to support that. That's the process. Power Corp, the folks around this table, and our folks here at Power, we manage the LP with support and in discussions with Cigar and Power Stable Capital. And we manage that by pocket. That's clear. Does that help you?

Geoffrey Orr: Power Corp, the folks around this table and our folks here at power, we manage the LP in support and in discussions whether with cigar in carcinoma capital and we manage it we manage that bucket.

Geoffrey Orr: That's clear is that help you.

Tom MacKinnon: Yeah, that's a wholesome response, thanks. All right, okay.

Speaker Change: That's a fulsome response thanks.

Tom MacKinnon: Great. Okay, Tom, thank you.

Speaker Change: Great Okay, Tom Thank you.

Tom MacKinnon: The next question comes from John Aiken of Jefferies. Please go ahead.

John Aiken: The next question comes from John Aiken of Jefferson. Please go ahead.

John Aiken: Hello, John are you there.

Operator: Hello John, are you there?

John Aiken: John you may be on mute.

John Aiken: John, you may be on mute.

Operator: Yeah, sorry, it's me and technology; my apologies. I just wanted to follow along from Jaeme's line of questioning in terms of Great West's investment in Power Sustainable. With the injection of capital and their investment in funds and presumably bringing in third-party funds for their distribution channels, does this materially change the timeline to break even for the platform?

John Aiken: Yeah, sorry, it's me and technology My apologies.

Operator: Okay. Just wanted to follow along from Jamie's line of questioning in terms of great West's investment in power sustainable.

Operator: With the injection of capital and your investment funds and presumably bringing in third party funds through their distribution channels does this materially change the timeline to breakeven for the platform.

Operator:

Geoffrey Orr: You know, I think that it advances it, but I'd hate to make a prediction. Exactly.

Operator: I think that it advances it.

Geoffrey Orr: But I'd hate to make a prediction exactly.

Geoffrey Orr: That's clearly something that we're focused on we've got cigar to over $200 million in fees.

Geoffrey Orr: And we're not quite a breakeven but.

Geoffrey Orr: That's clearly something we're focused on. We've got it to over 200 million in fees. And we're not quite breakeven, but we're very, very close from a FRE point of view. We're not there yet with Power Stainable Capital. We need more scale in Power Stainable Capital, but we have products that are very ripe for the market and in high demand. We've got good teams, and we have the potential to raise a bunch of capital here.

Geoffrey Orr: We're very close from a <unk> point of view.

Geoffrey Orr: We're not there yet with Carson what capital we need more scale in Paris tangible capital, but we have the products that are very ripe for the market and in high demand. We've got good teams and we have the potential to raise a bunch of capital here, bringing in great West life as a partner are getting more more commitments from them.

Geoffrey Orr: Bringing in Great West Life as a partner by getting more commitments from them is going to help that, but I want to stop short of saying when it is going to break even. I'll just say we're putting a lot of energy and effort into making sure that it gains scale. And I also mentioned, and what they did is consistent with, kind of the playbook of the last few quarters, which is that in a difficult funding environment, we're using partnerships, and we're using M&A to try and get more revenue and spread the cost over, you know, a broader base. But that's part of the playbook as well.

Geoffrey Orr: Kind of help that but I want to stop short of saying when is it going to breakeven and I'll, just say, we're putting a lot of energy and effort into.

Geoffrey Orr: Making sure that it gains scale.

Geoffrey Orr: And I also mentioned.

Geoffrey Orr: And what they did is consistent with.

Geoffrey Orr: Kind of the playbook over the last few quarters, which is that in a difficult funding environment.

Geoffrey Orr: We're using partnerships, we're using M&A to try and and get more revenue and spread the cost over a broader base, but that's part of the playbook as well so all of those and we're not we don't have anything else. We're about to announce here, but all of those are part of the playbook. In addition to launching good products to get this business to scale.

Geoffrey Orr: So all of those, and we're not, we don't have anything else we're about to announce here, but all of those are part of the playbook in addition to launching good products to get this business to scale.

Speaker Change: Gotcha, Thanks and Jake.

Jake P. Lawrence: And Jake, well, first off, congratulations on the move. I know you basically just stepped in the door.

Jake: First off congratulations on the move I know you basically just stepped in the door.

Speaker Change: Completely understand the change.

Jake P. Lawrence: Adjusted earnings from the non accrual.

Jake P. Lawrence: Non controlling interest in sustainable but is there anything else in the works that that may be coming down the pipeline a similar change like this I mean I know the focus of power on these are actually net asset value, but there are implications in terms of your EPS.

John Aiken: I completely understand the change for adjusted earnings from the non-controlling interest and sustainable, but is there anything else in the works that may be coming down the pipeline, a similar change like this? I mean, I know the focus of power on these is actually net asset value, but there are implications in terms of UPS, as you obviously know. Yeah, no, nothing complicated at this time. And the change that we did elect to make here, John, and it ties in a bit with your last question, is that we really want to show the economic performance of these businesses, including Power Sustainable.

John Aiken: You, obviously illustrated with this change.

John Aiken: So we felt it made sense, made sense to make the change at this time. It also was a bit reflective of some of the questions we had internally around its treatment of it, as well as feedback from the investment community. So I think it was a good exchange from the investment community that helped us realize that that probably doesn't represent the economic performance of the platform most appropriately. So that's why the change was made. And as we look forward, there's nothing, there's nothing imminent on the forefront to change net adjusted earnings. Fantastic. I'll leave it there. Thank you.

John Aiken: Yes, no nothing complicated at this time and the change that we did elect to make here John and it ties a bit with your last question is we really want to represent the economic performance of these businesses, including power sustainable. So we felt it makes sense. It made sense to make the change at the time. It also was a bit reflective of some of the questions. We had thought internally.

John Aiken: Around the treatment of it as well as feedback from the investment community. So I think it was a good exchange from the investment community that helped us realize that that probably doesn't represent the economic performance of the platform. Most appropriately. So that's why the change was made and as we look forward. There's nothing there's nothing imminent on the on the forefront to change net adjusted earnings.

John Aiken: Fantastic I'll leave it there thank you.

John Aiken: Okay, John. Thank you.

Speaker Change: Okay, John Thank you.

John Aiken: Okay.

John Aiken: As there are no further questions I would like to turn the conference back over to Mr. Jeffrey Osborne for any closing remarks.

Operator: There are no further questions. I would like to turn the conference back over to Mr. Geoffrey Orr for any closing remarks.

Geoffrey Orr: Thank you, Operator. No closing remarks. I'd like to thank all of you for being with us today. We look forward to talking to you in the weeks and months ahead, and I wish you all a good day. Thank you very much.

Geoffrey Orr: Thank you operator, no no closing remarks, I do want to thank all of you for being with US today, we look forward to talking to you in the weeks and months ahead and I wish you all a good day. Thank you very much.

Geoffrey Orr: Yeah.

Speaker Change: Ladies and gentlemen, this concludes your conference call for today. Thank you for participating and you may now disconnect your line.

Operator: Ladies and gentlemen, this concludes your conference call for today. Thank you for participating, and you may now disconnect your line.

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Operator: Yeah.

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