Q4 2024 Power Corp of Canada Earnings Call
Mr. Jeffrey: I would now like to turn the conference over to Mr. Jeffrey or President and Chief Executive Officer of Power Corporation. Please go ahead.
Speaker Change: Thank you operator and welcome everyone. Thanks for joining us for our Q4 2024 results. It's our first call of 2025 and on the cover page you'll notice our logo has got a little change to it we're actually celebrating our 100th anniversary of power Corporation in 2025 and.
Mr. Jeffrey: So fun to be here for that.
Mr. Jeffrey: So it will move through the presentation, you got silver pages, two and three standard cautionary infill.
Mr. Jeffrey: Information, our disclaimer I should say regarding forward looking information and non-GAAP measures.
Page four joined here with.
Speaker Change: Jake Lawrence for today's call and we will both be sharing the presentation as well as answering questions and with that I'm going to move right along to page six which is the opening.
Mr. Jeffrey: At page thank you.
Mr. Jeffrey: And so just.
Mr. Jeffrey: Really pleased about another strong quarter.
Mr. Jeffrey: At power and for the group in a strong year right across the year was very strong results.
Mr. Jeffrey: Strong earnings and double digit earnings growth at each show so great West life and I G M from a quarterly basis that on a yearly basis. What are the key drivers on our earnings of course those are the main contributors to our earnings we had good growth in net asset value across the quarter and into the first.
Mr. Jeffrey: A 2025.
Mr. Jeffrey: With the release of Great well life's earnings in early February that really drove performance at life co in <unk>. So continued strong performance.
Mr. Jeffrey: The first quarter based on the 'twenty 'twenty four results are.
Mr. Jeffrey: Good development and continued development at our alternative asset management platforms and.
Mr. Jeffrey: And we announced a 9% dividend growth of our funded already through the strong the 10% dividend growth that came through at great West Lifeco, So really a strong quarter and looking forward to talking about developments.
Mr. Jeffrey: Pass it over to a J Kerr and walk through the results themselves Jacob great. Thanks, Jeff and good morning, everyone. Joining us today I'm going to start on slide number seven and before I get into a bit more detail on the high level numbers, Jeff just shared I just want to provide some color on a definitional change that we made to our reporting this quarter.
Mr. Jeffrey: This quarter, we expanded the definition of adjusted net earnings to apply it to G. B L. Our stand alone businesses and all of our investing activities as well.
Mr. Jeffrey: We also modified the definition to capture market rent related remeasurement that occur that had been creating some accounting volatility in our numbers. We believe this new definition its going to better reflect the ongoing operating performance of the businesses.
Mr. Jeffrey: And with that I'm going to turn to some of the numbers reporting on this basis. So in Q4, our adjusted net earnings from continuing operations were 829 million, that's up a very strong 20% compared to the same quarter last year and on a per share basis, it's slightly higher with a $1 28 or up 21% compared to Q4 2023.
Mr. Jeffrey: As Jeff noted the results really reflect strong performances coming from our main earnings drivers, which are great west an AGM financial.
Mr. Jeffrey: Both of whom again reported the double digit earnings growth the Jetblue did to.
Mr. Jeffrey: Our Q4 net earnings also include a gain on sale from our investment in peak and that's partially offset by some items that I'm in a detail in a moment.
Mr. Jeffrey: The NAV story, Jeff just gave a picture answer of $60.44 at the end of the quarter and that was up 4% in the quarter versus Q3, where we really saw a good move as Jeff noted was that as we move through the end of the quarter.
Mr. Jeffrey: And where we find ourselves today after reporting Q4 results from great West an AGM earlier in February were up an additional 8% now to 65 10 on an NAV basis.
Mr. Jeffrey: Other factors contributing to the NAV I'd say, both in Q4 and throughout the year was our buyback activity and we bought in excess of 400 million shares during the year in excess of $120 million during the quarter and it's obviously reduced the share count and added about 70 cents to the adjusted NAV year over year.
Mr. Jeffrey: And then as Jeff noted a good increase in the dividend now at 61.25 cents per share that 9% increase putting us at about a 5% yield at last night's close.
Speaker Change: Turning to slide eight to provide a bit more of a breakdown on our earnings great West delivered those strong quarterly base earnings we talked about it exceeded $1 1 billion and that's up 15% year over year, we did see good growth across all four segments at great West and it marks the sixth consecutive quarter of base earnings growth that the company, which is quite impressive.
Speaker Change: And it's the third consecutive quarter, where great West as reported earnings in excess of $1 billion and I think that really reflects some of the actions in recent years taken by great west to support and accelerate its growth strategies, particularly in the U S, which is now the largest segment, but also in Canada.
Speaker Change: As a result of its earnings momentum and capital position, we did see great West increase a 10% dividend and announced a 10% dividend increase in the quarter and in addition to that they've also announced intention to repurchase up to 500 million shares through there and CIB.
Speaker Change: I G. M also reported strong year over year quarterly earnings growth our share of their earnings were up 23%. We had increased contributions from there to for businesses I G wealth N Mckenzie as they both reported record quarter end assets I Gm's performance was also augmented by its for strategic investments all of whom delivered record high client assets <unk>.
Speaker Change: <unk> significant inflows across all of their businesses.
Speaker Change: G B L contribution to Power's adjusted net earnings did decline year over year as G. B L share of losses from the portfolio companies that consolidates did increase on an adjusted basis. This was partially offset by fair value gains on some investment funds that are accounted accounted through at fair value in the P&L.
Speaker Change: Moving to the alternative investment platforms, which Jeff referred to they do continue to develop the guard reported fee related earnings of $5 million and fair value increases on its investments in private equity and venture capital funds.
Speaker Change: Power sustainable as results were comprised of fee related losses, consistent with the prior year and power share of losses on a consolidated on its consolidated energy assets to guard and power sustainable continued to develop their platforms in 24, they launch new products. They acquired some stakes in G. P. Then they partnered with capital allocators in a year that was.
Speaker Change: Marked by headwinds for alternative asset manager fund raising.
Speaker Change: In Q4, the contribution from our Standalone businesses to adjusted earnings does consist of our share of L. N. P. G losses, and there are some other items related to standalone businesses that are reflected in the adjustment segment.
Speaker Change: These adjustments do include the gain on sale of our investment in peak, which was $279 million.
Speaker Change: We did write down our investment in Leon to nil that reflects the company entering C. C. Double a protection and then we had a noncash impairment charge of 87 million at El N. P. G. As the company continued to face an uncertain business and macroeconomic environment.
Speaker Change: Overall, we are pleased with a strong quarter in Q4 as well as strong 'twenty 'twenty four results. We believe it's a reflection of the meaningful changes that have been undertaken in our group of businesses and reinforces the future growth potential in our companies.
Speaker Change: Moving quickly to the NAV on the on slide nine we do break down that a year end December 31st value as we noted growth in NAV was driven by strong share price performance at both great Western I G. M. The alternative asset platforms also continued with some NAV growth in the quarter seed capital investments were made to support new store.
Speaker Change: <unk>. We also had some fair value increases in private equity venture cap and energy assets that led to roughly a 300 million increase.
Speaker Change: The decrease in NAV for a standalone businesses was driven by the monetization of peak.
Speaker Change: That's obviously moved over into the cash balance on our balance sheet.
Speaker Change: As well as the noncash impairment L. M. P. G charge, I mentioned and the write off of Lion to nil.
Speaker Change: Getting back to our cash balance we sit at year end at 1.6 billion.
Speaker Change: That's quite a strong position that was partially offset AR in the quarter by the 120 million in buybacks I referred to.
Speaker Change: As we continue to increase efforts to return capital to shareholders and of the $1 6 billion. We consider 1.3 to be available after factoring in dividends declared by power and AGM, but not yet paid or received.
Speaker Change: So with that review of financials, I'll turn it back over to Jeff to go into a bit more detail. Okay. Great. Thank you.
Speaker Change: I'll move along to page 10.
Speaker Change: And just a few comments on great West life, Jake has already covered the earnings. So I won't go there I will also just make a few points. However in addition to our earnings has been a steady increase in the return on equity at Great West life and.
Speaker Change: And over 'twenty 'twenty four they achieved 18% Roe.
Speaker Change: I'm going to show up in another slide in a second I'll show the progression of that very strong cash generation across the businesses of great West Lifeco, which is something that they are endeavoring to explain more clearly to the market. The cash generation. So at the end of the quarter. They had $2 billion up the life co level, which was a strong increase in cash.
Speaker Change: Cash and maintain very strong capital ratios at the regulated entity level.
Speaker Change: And so that was part of the earnings drove the the dividend increase but also the announcement of buybacks and the increased buybacks is also a reflection of the very strong capital and cash generation capability at lifestyle.
Speaker Change: Just a bit of a page 11, just a bit of a historic perspective, great questions. Obviously really repositioned this business over the last five years you see it we can look at either side, but if you go on the left side base earnings over the last five years, you really see a rebalancing of the portfolio. The strong one obviously is the emergence of the U S with the <unk>.
Speaker Change: <unk> of empower both organically and through acquisitions.
Speaker Change: Barry balanced portfolio across geographies and business lines and I'd say also by currency or if you look at this.
Canada earnings are obviously Canadian dollars U S. As U S. Dollar is Europe is a mix of Sterling and euros and then.
Speaker Change: Capital and risk solutions, which is the reinsurance business is multi currency, but it's it's it's all U S dollars a little bit of Canadian dollars. Its a mix in there so you've got diversification by geography by business line and by currency across our across great West Lifeco.
Speaker Change: Another way of looking at Great West is to go back and say.
Speaker Change: In early 'twenty, one just about four years ago.
Speaker Change: They came out with medium term objectives on earnings per share Roe.
Speaker Change: And our dividend payout ratio.
Speaker Change: And you see what they have done in the four years since they made those announcements.
Speaker Change: Told the market they thought they could grow EPS base EPS by eight to 10 actually delivered 12% compounded over that period, there or are we at the time was 13 I mentioned earlier they hit 18 in 'twenty 'twenty four about half of that increase is from the switch from <unk> four.
Speaker Change: F. R. S 17, but the other half is based on is actually improvement in capital efficiency in <unk> and higher earnings and then.
Speaker Change: We were at Great West was at a payout ratio that was running.
Speaker Change: Running around the high ease of what happened to be a 61 in 2020, but it was up around 60, the highest six season, they announced they were going to move that to a target range of 45 to 55.
Speaker Change: And over that period that basically have moved the payout ratio notwithstanding the growth in dividends down to right in the middle of that range, So really good performance and being and coming out and saying what they're going to do and then and then delivering.
Great West life does have an investor day, I think it's April 2nd class Jacob Yes, and so looking forward to hearing that and if you have an interest in power and in great West that's something I'd encourage you to tune into.
Speaker Change: Okay moving forward on page 13, a couple of comments on I G. M. As we mentioned really strong growth in the two core businesses I G wealth within the wealth management and Mackenzie within the asset management businesses, driven by strong growth in AUM in a way.
Speaker Change: Earnings in the quarter over quarter were up 22%.
Speaker Change: And then our net adjusted earnings per share and then adjusted earnings are up about 11, and a half on an EPS basis, I think it's up 12% year over year.
Speaker Change: That's been in an environment, where you're ready for the last two three years, the Canadian individual market, whereas the bulk of both I G wealth and Mackenzie have their assets has been in outflows.
Speaker Change: Typically in inflows of about 2% is what we figure is the right number but with inflation hitting mortgage rates going up interest rates pulling money into deposits as opposed away from funds. The industry has been in outflows by the at the end of the year. It started to come back to just about even so theres some improving.
Speaker Change: <unk> zero, which is good but to my point isn't Mckenzie or as you all have not benefited from organic growth over the last few years, it's been what they've been doing in the businesses plus plus growth in market. Obviously has been a key driver who knows whats going forward, there's a little bit of risk out there in the world. We were we were getting quite optimistic about our about the flows coming in but.
Speaker Change: It's difficult to make predictions at this point given all that's happening around the world for you're all aware of.
Speaker Change: Moving to 14, the strategic investments don't drive a lot of earnings, but they're performing really well well simple in the upper left hand corner you see the year over year growth in a way of over 100% are really.
Speaker Change: Really knocking the cover off the ball and in the fourth quarter that grew up by $12 billion. So terrific performance at well simple upper right hand side Rockefeller, 24% growth in client assets as both organic market as well as continuing to build their team of advisors, So really strong growth at rock.
Speaker Change: Further.
Speaker Change: Down in the lower left China a M C.
Speaker Change: There are headwinds in China and that the regulator mandated reductions in fees, but China AMC has offset that by very strong growth in our in assets in a U M.
Speaker Change: And that's both from the industry, having good flows, but they're also gaining share there the number two market player. So they have offset the decrease in fees with growth in assets and then normally we talk about what a difficult environment is.
Speaker Change: In all management of land for raising capital if you're not one of the very very large players are $4 nine.
Speaker Change: Billion dollars and 24 in a in new commitments and very strong growth in AUM and earthquake. So the whole portfolio there is performing really well.
Speaker Change: Page 15, just to remind everyone that in December of 2023.
Speaker Change: IGN also came out with with five year EPS growth targets of 9% over the next five years, obviously in the short term I, Jim runs bumps up and down a little bit with market levels are much more sensitive and great west life, but over a five year period. They are very confident that they can under normal market conditions create 9% earnings.
Speaker Change: Growth.
Speaker Change: With the base business is the core business is driving seven and the strategic investments driving 15 that gives you your nine and by the way they delivered a 12% earnings growth and EPS in the first year after hitting their targets.
Speaker Change: Comment on G. B L. Then moving to page 16.
Speaker Change: A lot of action going on at a G. B L. They continue to dispose of public assets.
Speaker Change: They sold.
Speaker Change: Big chunk of Adidas in 'twenty 'twenty four you see $1 7 billion euros. They sold 800 point 800.800 billion I think is the way to say it of euros in March of 'twenty five of S. G. S. A and the money that goes out of their selling of the public portfolios is basically half as going into returned to shareholders and half is <unk>.
Speaker Change: Being invested in private assets and they continue to aggressively pursue the strategy.
Speaker Change: Of importance in the upper right hand corner. They did as an Investor day strategy update day in November 2024, and they're now of our three main op codes. All three now have gone public with goals for what they're trying to achieve with their shareholders and they have announced they believe or the medium term. They can create double digit total shareholder return.
Speaker Change: That's much higher than what they've done in the last few years for those who view will followed that had some some headwinds but they are committed to.
Speaker Change: Increasing value for shareholders, creating T S ours and returning cash at all at the same time you saw of course of the last quarter. They increased their dividends by 80% for the dividend that will be paid in 2025, that's part of that strategy of returning cash to shareholders.
Speaker Change: Page 17 asset management activities, just a bit of a five year view here, we said that we would be growing.
Speaker Change: The assets under management of our platforms and be using party capital other than power Corp, 's will recycle our capital you see the growth over the five years, you've seen in the dark blue there the power Corp capital the $2 1 billion to $2 seven is not because of a lot of net investment is actually growth in value.
Speaker Change: And so that they continue to grow their businesses.
Speaker Change: They're not at the point, where they're creating.
Speaker Change: Profitable contributions to us per se at the asset management.
Speaker Change: Set manager level, which is different from saying, we're not creating value there, but they're not creating earnings. We have however on the seed capital been creating value and also been creating cash and which we have been able to use for different activities. So I will then turn to page 18 and on that $2 7 billion.
You see in total we think overtime that based on the target irr's that we should be able to create 10% plus across that portfolio, which again is a source of value creation and ultimately cash for power Corp.
Speaker Change: Cigar did enter into on page 19, the just announced this week over the past week.
Speaker Change: G B L.
Speaker Change: Is going to acquire a 5% minority interest in the manager at the GP level as part of an ongoing partnership they have participated in cigar funds in the past and they committed 250 million euros as part of that over the next five years to cigars products. So that just continues cigars.
Speaker Change: Strategy of not only fundraising I think they did $2 7 billion in 2024, but or entering into partnerships with lunate or formerly of Abu Dhabi.
Speaker Change: Investment.
Speaker Change: <unk>. Thank you.
Speaker Change: Lunate Bank of Montreal, Canada life, and now G. B L are all partners and and participating in and funding our strategy. So it's a multifaceted strategy. The cigar is using to get to scale and grow their business.
Speaker Change: I'm not sure I have much to add on page 20, I think.
Jake Lawrence: Jake you've covered this so well.
Jake Lawrence: Thank you mentioned on peak that we although the peak sale within the market.
Jake Lawrence: Prior to Q4, the announcement of it closed in Q4, and so we did receive $468 million in the quarter I mean again at $280 million or a three X multiple.
Jake Lawrence: So that's been a good experience for the group and then I think you are you addressed the lion and the aluminum mills.
Jake Lawrence: So now I'm going to turn to returning capital to shareholders power did returned $2 billion in 2024 between our dividends and the buyback activity got lots of room for further buybacks and thats very much part of our playbook. We've got cash of a 1 billion six and when you net out our dividends payable we got 1 billion three of available cash.
Jake Lawrence: It gives us lots of room to continue buybacks and as I mentioned, we got lots of other sources to continue that as a core part of our strategy to add.
Jake Lawrence: A point or two to our return that we get from our underlying investments. We think that this is an additional driver of values.
Jake Lawrence: Our value.
Jake Lawrence: I'm going to make a couple of comments and ill turn to.
Jake Lawrence:
Jake Lawrence: A few other elements onboard on buybacks on page 22.
Jake Lawrence: Five year view this as part of the source of our cash, but even though if you look at that.
Jake Lawrence: The non great.
Jake Lawrence: Great West life.
Speaker Change: M G B L portfolio the portfolio of the seed capital with that alone businesses. When you look at the entire portfolio or five years, you don't see a lot of change in the value that we have there but that belies. The fact that there's been massive activities not the same value that it was five years ago and here's one illustration that we actually sold $3 6 billion.
Jake Lawrence: So of investments out of that portfolio over the five years you see it on the left hand side.
Jake Lawrence: While it's always difficult to trace cash because it's fungible cash is fungible, but we did do a 1 billion Ada buybacks over that period, we invested 1 billion for the seed capital under underpinning cigar and power sustainable.
Jake Lawrence: And we also as part of the transaction with Great West life invested $553 million in great West Lifeco shares back at the time, we sold the China asset management to Archie M. So lots going on in the portfolio has kind of stayed pretty static as a percentage of the or or in terms of dollar values I should say not exactly.
Jake Lawrence: Lots of activity going underneath over the last five years.
Jake Lawrence: I'm going to kind of make a few comments to close here with a.
Jake Lawrence: A bit of perspective, and then a little bit of looking towards the future strategy.
Jake Lawrence: The strategy on <unk>.
Jake Lawrence: Page 23, it was announced as part of the reorganization five years ago, we're still on that strategy.
Jake Lawrence: It's working and we're pleased with it and we are not changing that right now we're driving forward on it one of the elements page 24 that we talked about that we were we're hopeful that it could be a driver of value is our net asset value discount.
Jake Lawrence: It has averaged 24% since the reward which was.
Jake Lawrence: Lower than the the double discount between power Corp, and power financial of 34% that was in the period up to the end of 18, it's been up and down but it's still around 24% is that an opportunity I think it's an opportunity I believe it is a it either comes down or weak, but in the meantime, we're continuing to take advantage of it if that's where the if that's where it is.
Jake Lawrence: We'll continue to try and evolve our portfolio.
Jake Lawrence: And and narrowed because we think it should be narrower but in the meantime.
Jake Lawrence: We're selling in liquidating assets and we're buying shares back at a at a 24% discount we're taking advantage of it to increase our our earnings per share our dividends per share and our net asset value for sure. So let's look at what's happened on page 25 through different time lenses on the returns that powers created go back on the <unk>.
Jake Lawrence: Right hand side here to December 31, 19 that was up about two or three weeks after.
Jake Lawrence: The reorganization announced we've delivered.
Jake Lawrence: 14% compounded total shareholder returns to shareholders I think you add a little bit if you went back to the date of the reorder.
Jake Lawrence: Somewhere closer to 15, if you go back.
Jake Lawrence: And you gotta be at any given period, you're going to be a little careful with their endpoint and a start point and point sensitive like the last five years is.
Jake Lawrence: 25%, that's an overstated number that was the start point there was a month after COVID-19 hit. So that's I don't think we're expecting to create a 26% returns going forward, but you know 14%.
Jake Lawrence: That's that's probably a reasonable expectation of a of what we think that we can create without any reevaluation of our underlying subs or the discount moving and I'm going to get to that in a second but we have importantly through most measures you're going to look at beaten our core benchmarks.
Jake Lawrence: The T S X T S X financials, which is a mix of different companies.
Jake Lawrence: We've done well relative to the banks over the period and the overall benchmarks. So we're pleased with that let me turn to page 26.
Jake Lawrence: And then try and I'll end on this patient is just give you a few thoughts on how we look at the future.
Jake Lawrence: Value creation I've already mentioned, we're not changing the strategy.
Jake Lawrence: And I've mentioned that over the last five years, depending on the end date start date, we've created kind of mid teens returns to shareholders through growth in N V and dividend yield without the discount having moved and without great West life and AGM, having changed their multiples there multiples were.
Jake Lawrence: If I go back five years, great Western is G. M. On a forward looking basis based on street estimates were in the tens on their p/e multiple and if we look at Yesterdays close based on the street estimates they're trading in the mid tens there's been no change in the valuation of great West life, and Iga I'm on a multiple basis, there's been no change on the valuation of power on our NAV.
Jake Lawrence: Discount basis, but we've created 14% returns. So that's kind of interesting in that it hasnt been through valuation has been through growth in earnings and growth in value.
Jake Lawrence: So as we look forward I would look at it the following way and I'm on page 26 here, great West life, and AGM or 83% of our gross asset value and they're obviously the overwhelming majority of our of our earnings because that's the way they're based they have each got at targeted EPS growth is in our guidance.
Jake Lawrence: That centers on 9% and in Great West Life case, they've had four years of experience, where they've exceeded that AGM has got a one year, where they have exceeded that.
Jake Lawrence: If you if you assume for the moment they hit that over a three to five year period, which I believe they're confident in but again, that's not a forecast theres lots of risk out there it depends on normal markets, but let's just assume for the moment they continue to hit that.
Jake Lawrence: We are also providing yield on top of that of our 4.7% at great West based on Yesterdays close Chris Great West has been increasing their dividend every year. So if you thought about the next 345 years you might expect of earnings grown you would expect given they've set a payout ratio of 50% that you'd get some some uptick in that yield and <unk> got a 5%.
Jake Lawrence: Current yield they've been holding that flat you're going to get to those two if that if that happens in their valuation doesn't change and they grow with those earnings and the dividends are maintained youre going to get <unk>.
Jake Lawrence: 14% return at that at the at the center point of some range, it's not going to be exactly that but that's the center point of the range that would be a reasonable T S or we will get from that 83% of the portfolio. The rest of the portfolio well. We showed you the slide the bulk of what we have in our asset managers and the and the proprietary capital and we've got.
Jake Lawrence: We've got a targeted return of 10%, which we're confident under normal market conditions. We can return on that and I mentioned GB else targeting double digit returns I've just covered the portfolio. There so you're going to get if you get those kind of growth in our underlying portfolio in our discount doesn't change we're gonna be able.
Jake Lawrence: To create returns that are in the 13, 14, and 15% range, it's going to not be that every quarter not be that every year is going to have a range and lots of assumptions that the world carries on in a normal way and so.
Jake Lawrence: So what else so that's not a forecast, but when we think about it and when we talk to our board and when I talk to investors. That's the way we think about it we're not dependent on a change in valuation here. We just continue to execute the strategy and we're confident that we can continue to create very attractive returns so with that I am.
Jake Lawrence: I'll stop operator, and I will open the floor up to questions from those on the line.
Speaker Change: We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
Speaker Change: You'll hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press star and then two.
Doug Young: Our first question comes from Doug Young with desk Jordans capital markets. Please go ahead.
Doug Young: Hey, good morning, I guess, Jeff.
Doug Young: Roughly five years ago, I guess, it's been roughly five years since yet folded in our financial you've done a lot to clean up the structure and I kind of get what you were talking about on slide 26, and it feels like a lot of heavy lifting has been done at the holdco level, but I'd just be curious.
Doug Young: With you in your discussions with the board and internally I mean, what's next and I guess, what other levers can you pull to have really materially helped.
Doug Young: Help clean up the story, perhaps or and I know the discount to NAV you talked about that like help materially potentially push that down like what do you think needs to be done.
Doug Young: And again I get the operating companies of great West and IGN, but I'm talking more up top of the house.
Doug Young: Yes. Thank you Doug asked good question and.
Doug Young: There has been heavy lifting at power Corp. So I'm going to pick up before I answer your question and just go Tee off one of the things you said, there's been heavy lifting at power Corp. It's been heavy lifting at great West life and there has been heavy lifting at AGM both in their core businesses, but also in.
Doug Young: At at AGM in terms of building up the strategic portfolio.
Doug Young: So there has been heavy lifting and I want to say going forward. If we didn't do a lot of heavy lifting going forward my comments, where we're not as dependent on it going forward. As we were five years ago. I think we have to do a lot of that heavy lifting and I think if we I'm not going to say put it on autopilot that the facility comment, but I think we don't have to do as much heavy lifting to occur.
Doug Young: Create attractive returns.
Doug Young: So that's question number one question a point number one point.
Doug Young: Number two.
Doug Young: Is I think one of the issues. We continue to face is that while we have invested in things like Rockefeller.
Doug Young: Well simple, although we as you know we have negative investment and while simple, but we did initially put 300 million intuit.
Doug Young: As we have got our portfolio of seed capital supporting the Alt managers.
We're not getting valuation for that in my view, that's I can.
Doug Young: You can never prove that how do I go out and get in the minds of all of the people that buy and sell our shares. So this is okay.
Doug Young: My view and having talked to a lot of investors they view us as an earnings driver and.
Doug Young: The value of our earnings the value of our dividend growth and the and it's interesting that we have all this other stuff, but you know I'll talk to me when it turns into cash.
Doug Young: We're not we're long term oriented where we think that investing in things like well simple Rockefeller they could be.
Doug Young: Massive parts of the franchise 510, 15 years out so we're not going to give up on that but at the margin. We can move to more earnings growth and we have to be disciplined in the amount of appetite that we have for that kind of investment.
Doug Young: And so you will note that.
Doug Young: The change that great Western AGM, which drive the earnings are 83% of the gross asset value and they were 76. If you go back five years and it's not only because they've been growing but also as we as we take money out of the non.
Doug Young: Earnings growth portfolio, non I G M and we buy shares back where actually you do the math on that we're actually migrating the portfolio to more towards more earnings growth and that I think will help with our value creation, if you're going to ask me a question what else can we do a major structural.
Speaker Change: I'm not going to speculate on that because it obviously gets into if youre going to do something like that is there are there more transactions you can do and what would they be and that's really hard Doug for me to get into a discussion on on that kind of things, but I'll.
Doug Young: I was just and that's final and I'll turn it back over to you.
Speaker Change: We talk about that stuff all the time, we have all of the deals that have gone into power. All the deals are great West life, all the stuff I G. M. Obviously, we're always talking about transactions in and that is part of our DNA and we will continue to see what else. We can do to add additional value hope that covers the waterfront for you.
Speaker Change: Yes, no I appreciate the color I guess, maybe the second question one thing just it's obvious and curious what the strategy is around power sustainable and it just seems like and it can you talk a bit about what it looks like the drag on adjusted earnings has increased I think it's 2% to 3% of your NAV.
Speaker Change: That's part of that franchise, but can you talk a bit about what what's going on what what's been the drag on adjusted earnings and what's the strategy around power sustainable because I know.
Speaker Change: <unk> got rid of.
Speaker Change: And that's the investment side in China, and all that stuff, but okay.
Speaker Change: If you can kind of delve a little bit more please.
Speaker Change: Yes, a couple of comments. Good question. So first of all I'm going to go to.
Speaker Change: To the seed capital part of the losses on the energy seed capital is just the nature of our investment in the infrastructure fund, which is producing really good earnings and is going to produce good carry and good cash flow, but because we consolidate that we end up taking the amortization of the asset through when we show net losses, but cash flow what's going on.
Speaker Change: Generating positive cash that we have to do a better job of telling that story. So the seed is part of it but if I go to the manager itself the asset manager.
Speaker Change: Power symbol manager is not at scale at this point. So you can say well what can you do to.
Speaker Change: Obvious questions can you combine it with this combined but that these businesses are all different cultures different groups, where we are focused on is there are four strategies within power sustainable manager and.
Speaker Change: We are we think they're good strategies and we think we can get the underlying strategies to far greater profitability over the next year or two with fundraising that is ongoing so power sustainable.
Speaker Change: Yes.
Speaker Change: Our infrastructure fund in Canada. The U S infrastructure debt fund. These are great teams, great great investors and if we can get those strategies to contribute greater scale and contribution at the fund level, we have a lot more optionality either to carry than power sustainable gets much more profitable and at that point, you've got greater optionality to go.
Speaker Change: Open either.
Speaker Change: I'll leave it as power leave it as it is do something else, but we're so we're focused on.
Speaker Change: Getting the underlying funds to far greater contribution to the GP and that will give us lots of different options and in the meantime, it's a rounding error in terms of our of our P&L and the value uptick from doing it is way more than the small losses. We're incurring. So you know that's that's why we're steady as she goes right now.
Speaker Change: Even though it looks like were kind of a just enduring ongoing losses, we see a way through it here in the next year or two.
Speaker Change: Okay, and just lastly, Ken Jacobs don't know if you can give us some detail, but the value that sag the value for <unk> that was part of the deal with GPL can you talk about.
Speaker Change: And if you can't give numbers if you can talk about it relative to the deal with BMO.
Speaker Change: <unk>.
No happy to we we actually go through an independent valuation activity around cigar with some level of frequency in the last quarter. So Q3, we marked it up to U S $600 million and our interest. It's just below 50% now after the latest transactions. So JBL comes in for 5% at that U S. Six 600.
Speaker Change: Million valuation I think the good note around that Doug is.
Speaker Change: I don't have the precise number in front of me, but with a take half of the 600 call. It Canadian 400, roughly that's our stake.
Speaker Change: Our investment would be less than Canadian $50 million upfront. So one of the ways. These platforms can create value is also through the value of the GP. So I think that transactions good validation of.
The economic positivity that.
Speaker Change: The guards, creating for the broader group and then the 80 Q and the BMO deal.
Speaker Change: I don't have I don't have the value in my head, we can get that to it but this has been a nice story yes.
Jake Lawrence: As Jake mentioned cigar the the underlying value of the GP, even though it is not creating a lot of earnings right now it's got a lot of revenue.
Speaker Change: Even before the even for the.
Speaker Change: The performance equity transaction and the Halsey point CLO transaction, they had a run rate of about $200 million U S.
Speaker Change: So that's getting to be a really really big number in Canadian dollars.
Speaker Change: Our fees of ongoing fees, but they've got lots of strategies in there and they are playing for the long term and continuing to grow and launch strategies. So.
Speaker Change: So we haven't seen it through the earnings but the value of our stake in the G. P. As we said it's around $400 million Canadian right now and that's a really good return on.
Speaker Change: On the money, we will get the number.
Speaker Change: We can get the number for where it was done but I don't have it handy here, but theres been growth in values for sure over the last few years.
Speaker Change: Doug.
Doug Young: Appreciate the color. Thank you.
Speaker Change: Okay. Thanks very much.
Tom Mackinnon: And the next question comes from Tom Mackinnon with BMO capital. Please go ahead.
Tom Mackinnon: Yeah. Thanks, two questions, one kind of more detail the numbers and second some more strategy I'll start with a detailed one.
Tom Mackinnon: On page 31.
Tom Mackinnon: You mentioned per Se guard, there that you've got some some fintech investments that would.
Tom Mackinnon: We'd be making a contribution here in terms of the venture capital per Se garden, it's $8 million in the quarter and it notes that this is some some of that include your share of losses of earnings or losses on wealth simple.
Tom Mackinnon: Lake.
Tom Mackinnon: Well simple treatment at IGN is fair value through OCI. So it has no earnings coming in.
Tom Mackinnon: <unk>.
Tom Mackinnon: Do you treat this different do you account for well simple differently at power then at IGN.
Tom Mackinnon: What was the.
Tom Mackinnon: Well simple earnings and.
Tom Mackinnon: In the quarter and if you do account for a different at power than ITM why do you do that.
Tom Mackinnon: So George J, Yes, so Tom will come back to you offline just on the two different accounting methodologies I want to confirm something down it down to the AGM. While simple is just a small portion of the loss in that that footnote that are that you're referring to and in terms of the question around their profitability in the quarter I don't believe they currently disclose it I think they noted pub.
Tom Mackinnon: <unk> in an interview that they've turned profitable, but I don't think we're at the stage, where we are disclosing the amount I think the key number around well simple over the course of the year is the revaluation of the company up to about $5 billion, but.
Tom Mackinnon: But we do consolidate well simple at the power level and IGN does not so there's very different accounting and it's not because we choose to do that that's the way it works.
Tom Mackinnon: We can we can sell it.
Tom Mackinnon: Alright.
Tom Mackinnon: And maybe question just with respect to buybacks here.
Tom Mackinnon: And how do you balance.
Tom Mackinnon: The.
Tom Mackinnon: How are you going to approach buybacks it seems to be are.
Scott: It's Scott.
Scott: You know almost a billion here in terms of kind of dry powder.
Scott: And what do you.
Scott: Do you think it's better to buy back stock.
Scott: Or do you think it's better to.
Scott: Do.
Scott: Contributions into say guard empower sustainable in order to increase increase perhaps there.
Scott: Profitable contribution at the asset management level like cat.
Scott: Point, Jeff like people don't see value for the alts until they can turn into earnings is there anything you can do in terms of this dry powder to get better earnings out of those.
Scott: Cigar and power sustainable.
Scott: As opposed to just trying to buy back stock and increase the NAV per share.
Scott: That's a very good question and I think it's a balanced approach that we take to it.
Scott: We think about buybacks as something that we.
Scott: We want to do on an ongoing basis, so even though we've got a lot of cash.
Scott: I wanted to just.
Scott: Character way or at least tell you the way, we think about cash even though we've got a.
Scott: 1 billion six on the balance sheet, we do like to keep around 800 million around that's been something we've done for a long time, we could question that from time to time, but we do and then we've got dividends payable. So it's not quite that much but we can fund buybacks for quite a long time here are certainly well through the next year or at the pace. We've been at just based on that.
Scott: Our definition of excess cash.
Scott: So we want to be in the market doing buybacks on a consistent basis and not jump in and do a kind of all at once just because of the discount gap. So obviously when the discount gaps out it's more attractive, but we try and we want to be in the market on a consistent basis.
Scott: We I mentioned that we've got a tradeoff that we're trying to build businesses part of that is creating and investing in businesses that are increasing in N. A V. But the market in the short term won't pay for it until we've turned it into either something that grows earnings or something we can turn into cash and there is how I'm going to go a little bit to how the two get linked.
Scott: Over the last five years, we've been taking cash out of that portfolio I mentioned, the $3 6 billion of acquisitions or sales that we did but we also took had returns cash returns from the underlying seed capital and in some cases sold our position in some of those and when we use that to buy shares back.
Scott: <unk>.
Scott: We actually are turning the returns from the <unk> portfolio into earnings and its just it sounds silly, but it's a tool to do it you take take $100 million or a $1 billion over a period of time that you return from those than a V portfolios, whether it produced earnings or not and you buy shares back and you should.
Scott: Your share base and you've increased your EPS and you've increased your ability to pay dividends per share and that's that's an indirect tool doesn't show up in our navy, but in effect is going on we're using we're using cash flow from those portfolios and so it's a balance where we're using those the cash and we're trying to do balance we got to put some more money.
And to keep being in the strategies and supporting them, we're taking some money off the table as they grow in value to do buybacks.
Scott: And we're doing a balance so that we are able to continue to support the growth of the businesses, while still increasing our earnings.
Speaker Change: So happy to watch its approach yeah, how much.
Scott: How much.
Scott: If youre going to spend 100 and by if you have 100 and kind of free free cash here, how much would you put into buybacks and how much would you put into the alts in order to get them to the position, where hey, they're going to have some more.
Scott: It doesn't the asset management level.
Scott: It's not an algorithm so you're sitting there and all of a sudden you know you.
Scott: You decide you're going to take your money out of China, and you've got $500 million on the table right. Okay, and then and then all of a sudden we've just launched a new fund and.
Scott: And they need to go out and in the fund in the U S. R. R.
Scott: S infrastructure debt fund with Tom Murry, It's a fantastic team we have there trying to get the strategy launched and they need initial seed capital to get there first investments down and they need 100 million $150 million to do it over the next three months. So it's not you're not you're not on we're not driving a Tesla here you know we're not you don't put it on auto pilot it's actually.
Speaker Change: Always different stuff coming at you you get cash in all of a sudden you got a big demand for cash and Youre trying to be steady with your buybacks and not be in and out and not so it's just I can't tell you.
Speaker Change: <unk> all the way through depending on what the circumstances are that's the only way I can answer the question because that's what we do.
Speaker Change: And the and what drives money going into the alts is really more initial seed.
Speaker Change: Is that what you view as or is there anything else you can do to get them to more profitability on the asset management level other than just this initial seed.
Speaker Change: Yeah. The initial seed doing all of the partnerships that cigars done.
Speaker Change: Power Sandal did with kind of life as well to get more scale into the strategies as I was when I was answering doug's question. The more strategies that are up and profitable and running the more contribution you have and ultimately you get more profitability with the asset managers.
Speaker Change: But I, but I do think can.
Speaker Change: Can I can I say something you know.
Speaker Change: Five years ago.
Speaker Change: When we came out the strategy I was talking about hey, we're going to get Alt managers.
Speaker Change: Up to profitability and I wasn't going to love it because it's going to create all kinds of contribution well you know five years later, they're not creating any contribution so when I as much as I talked about the last five years, having we've done a lot of stuff. We've had lots of success that portion of what we advertise to the street and to you Hasnt played out the way we thought it would and we just have to recognize that it's been a longer build.
Speaker Change: It's been a tougher fundraising environment and the businesses to get to scale to continue to throw new strategies, so they're investing and so that the gp's per se are not creating ongoing profitability. So that we go okay. We didn't get that one right. When we talked about our goals, but that doesn't mean, we're not creating value through it.
Speaker Change: Like we're going to do that if we're if we're creating 8% returns over time, because we can't do it and you might say boy, we don't we actually can't afford to do this so it's this judgment.
Speaker Change: Appreciate the color. Thanks.
Tom: Okay, Tom Thank you.
Jane: And the next question comes from Jane <unk> with National Bank Financial. Please go ahead.
Jane: Yes. Thanks.
Jane: First question just going back to I believe it was slide 26, the three bullets of looking ahead. The third one is that continuing to monetize assets.
Jane: It seems like most of that is done is you've kind of said the heavy lifting is done so what.
Jane: What might you be referring to.
Jane: When you when you use when you make that statement.
Jane: Yeah, Great question so.
Jane: So let me rephrase it what could fund our buybacks.
Jane: We are sitting on a lot of cash let's start there within the portfolio.
Jane: Of our proprietary capital.
Jane: We have assets that can still be monetized.
Jane: Some of it is seed capital as I said that will produce returns we get cash back from it occasionally we sell a position we put.
Jane: The previous seed discussion if you were at listening to it with about 100 million in on our seed capital three years later, the fund is up and running the seed capitals worth 150, and somebody wants to buy a secondary position and we sell 75 million. So we get we occasionally sell positions we get returns of capital on the seed we got some assets in the energy portfolio that are actually not.
Jane: And the funds are there kind of retained energy and wind assets that are are going to be sold. So we got that source of cash at G. B L is creating cash for us they bumped our dividend that wasn't floating through they did.
Jane: 80 million dollar I think as was our Canadian dollar share at the time of the increase such as our course for 2025. The Euro has been strong gifts gained dollar. So we didnt flow that through there is another source of cash we've got lots of tools here to fund buybacks for the years to come lots of tools in the toolkit I think we probably over focused.
Jane: Are you in the market on the Standalone businesses as being the source, but in fact, the rest of the portfolio away from life co and IGN was creating cash and we think it will continue to do so in the years to come to a to fund the strategy.
Jane: Jamie if you look at slide 22, which shows US the last five years and monetization that Jeff walked through $3 6 billion 1.8 went to share buybacks a portion at one place where I went to see if you were to look at that list of items I'm not sure what items five years ago, you would have picked out as being obvious sources of capital right, but theres. So many leave.
Jane: Bruce here, you, probably would've said those standalone the peak, yes, that's probably gone, but some of the other items are well simple secondary some of the sale of an LP interest in cigar in Europe funds. They may not be as obvious on the surface just looking at our statements, but there's many levers as Jeff noted to fund buybacks over the next couple of years and that doesn't include return of capital from.
Jane: From the seed from the investments itself, we really should do a more thorough a kind of a reconciliation of what we've done over the last five years to show the different sources because this is part of it.
Jane: Because we get lots of questions on this.
Jane: And and if we're getting questions on it we're not being clear enough on it but the answer to your question is we are we.
Jane: We have lots of sources here for the ensuing years to keep the buyback program going.
Jane: Yes, yes, understood and then I guess related to that.
Jane: In terms of the proprietary capital now two point some billion is that like how do you. How do you view that as I sort of like a steady steady state level or do you see it materially increasing is continuing to grow.
Jane: The funds.
Jane: Or winding down from here like Where's, what's how should we think about the direction of proprietary capital at work.
Jane: Yes in terms of our commitments were trying to keep it hasn't even level and part of that growth was through markup in the value.
Jane: Well simple.
Jane: Power stake is in there because it's managed by cigar and it gets caught up in the in the definition there and so you've got some value accretion in there and again, we can present it with it with that broken out of it.
Jane: But I think the way to think about it is we are our message to both cigar and two power sustainable is that we will support their seed capital, but we have to recycle it because we're not looking to increase our overall commitment to it and we've been true to that over the last five years, but the value of what it's showing that it will.
Jane: Jump up and down a little bit as I was answering too I think it was Tom's question.
Jane: All of a sudden we got to put in a $100 million in a fund and then we get to going at the same time and it jumped a little bit, but we're trying to keep our commitments.
Jane: Level over time and that means we got to be taking money out and we gotta be selling positions from time to time to be harvesting cash as well.
Jane: And net net that's been positive we actually so we've kept the commitments at the same levels, but we've been taking cash net net cash off the table over the last five years.
Speaker Change: Great and then in terms of the staggered ownership is this.
Speaker Change: Are you at a satisfied level right now in terms of the the power order shipped in say garters or is there.
Speaker Change: Opportunities to bring in more partners.
Speaker Change: And then is the is the power sustainable structure similar in terms of power ownership versus others or is there an opportunity there as well.
Speaker Change: Okay. So.
Speaker Change: I'd love to own as much cigar as we possibly can but were.
Speaker Change: Prepared to own a smaller chunk of a larger more successful company.
Speaker Change: And we've made that decision by allowing now the fourth outside partners. So we've got we've got management is a significant partner.
Speaker Change: Got.
Speaker Change: We've got Canada life, BMO 80, Hugh and G. B L and then power so.
Speaker Change: We just dipped below the 50% Mark here with the G. P L transaction and our share as Jake mentioned at current values booked 400, Canadian 300 U S. On the Mark and I said, it's about 400 Canadian up from not very much five years ago, we're going to continue to do that because I think the most important thing.
Speaker Change: For cigar is to continue to grow and they have they have I think the ability to become much larger more successful they've got the team and the management to do it and we're not we're not going to stand in their way by saying.
Speaker Change: To do that bring in partners is fantastic like bringing in partners brings distributions brings capital. It brings relationships. So theyre going to continue to press on that as they have also been using they were using every tool in the box and the kit and they're also doing M&A as you've seen and they've been out doing fundraising. So they're doing everything they can to grow and we're not going to get in the way of that.
Speaker Change: But quite frankly like owning the position, we're doing really well on our G. P stake.
Speaker Change: Our signable measure as I said is at a different stage. We're at an early stage of trying to get.
Speaker Change: The strategies that are in place right now to a much greater level of contribution and profitability at the strategy level. You launched your first fund you typically don't make any money you get on to your second find you start to make money in a given strategy.
Speaker Change: They've been disciplined like we Werent getting we got China five years ago, we're going to get lots of money into it werent getting any traction took all the capital out of that we.
Speaker Change: We had a U K strategy, we were going to launch.
Speaker Change: We dropped that so we are looking at the existing strategies that are in place that we think have a real chance of creating profitability and we're focusing on getting scale there.
Speaker Change: But they they did do a transaction with Canada life, who came in last year to the G. P and we diluted there and that was kind of life had a very high interest in some of their strategies, including the U S debt fund.
Speaker Change: That they wanted to seed so.
Speaker Change: Same strategy very different stage of development.
Speaker Change: Alright, great.
Last one maybe just for Jake your dividend and increased.
Speaker Change: 9%, maybe a little bit bigger.
Speaker Change: Then I had previously expected but.
Speaker Change: How should we think about that in terms of payout ratio on.
Speaker Change: Is it adjusted EPS the core.
Speaker Change: The core metric or free cash flow.
Speaker Change: If I kind of use micro cash flow calculations were kind of almost close to 100% payout ratio but.
Speaker Change: Maybe just refresh how we're thinking about that.
Speaker Change: On a go forward basis.
Speaker Change: Sure, Yes, I think Jeff alluded too much of the recurring earnings come.
Come from obviously, great Western and AGM and so on the dividend side, when we see an increase at great great West we're looking to essentially flow as much of that through as we think is reasonable and so it's essentially a flow through so don't necessarily look at it on an earnings basis I'd take Q from from what's happening with dividend growth sustainable dividend growth happening at the underlying companies.
Speaker Change: I'll just add to that.
Speaker Change: Yeah. So we don't think of it as a payout ratio with the power Corp level, great West well, yes Ni G M will but not us so we take their dividends and we deduct our operating expenses and our and our financing charges and you end up with a net cash flow.
Speaker Change: And we.
Speaker Change: We then want to positive cash flow balance and we're at a point, where we flow it through but we have a small amount of positive cash flow that comes net net and that's as I mentioned earlier, we're not including the recent jump in the G. B L.
Speaker Change: Our dividend, which will yeah. So we have positive cash flow at that level not a massive amount, but we have positive cash flow and then we have the rest of the portfolio that is as I've mentioned four or five times in the call here generating positive cash flow through the activities that we're doing.
Speaker Change: You could think of is primarily funding the buybacks.
Speaker Change: From that part of the portfolio.
Speaker Change: That is the way we think.
Speaker Change: Okay very good thank you.
Kim: Thank you Kim.
Speaker Change: And the next question comes from Michael Mchugh with TD Cowen. Please go ahead.
Michael McHugh: Hi, good morning.
Michael McHugh: Just wondering if you could provide some visibility on the fund raising the level of fund raising on the old platform, both in the quarter and for 2024 as a whole.
Michael McHugh: Yes.
Michael McHugh: For the quarter I don't have it.
Michael McHugh: And these things can be but $2 7 billion at cigar.
Michael McHugh: 200 million at power sustainable I think power sustainable you've got a lot we're expecting.
Michael McHugh: Better better respecting some things that were worked on through 2020, Florida result in some.
Michael McHugh: Much more material funding in 2025, so it makes it sound like there wasn't anything happening in fact.
Speaker Change: They're on their on their two biggest or on the on the two infrastructure from the debt and equity we are expecting some big fundings in 2025, if they're successful and then the <unk> fund is just getting going and that will be fundraising in 2025, but $2 9 billion across the platform do we have yes. That's the full year number that's what yes, that's all your numbers.
Speaker Change: And the $1 billion in Q4, and it's really a tale of two halves Michael to be clear. The first half was quite anemic. There was a lot of headwinds and challenges I would say two thirds of that that 3 billion was raised in the second half of the year. So we've seen good momentum as we move into 'twenty five and as Jeff noted there are several strategies and market now that we're hoping to have stronger fundraising.
Speaker Change: In 2025.
Speaker Change: Great. Thank you for that visibility and then just one more for me.
Speaker Change: So youre targeting a 10% return on the $2 7 billion over that proprietary capital are you able to provide some visibility on the sort of IRR that that's been generating in the last five years I know you guys talked about.
Speaker Change: Putting money and take them to come out, but just in terms of our internal return last five years, what that looks like.
Speaker Change: Yeah, we Havent got we haven't.
Speaker Change: I don't think we've done that in a clearer way you'll find some of that in the MD&A.
Speaker Change: But.
Speaker Change: If you go there.
We will give you a week and a half you can call back and we can oh.
Speaker Change: There's a lot of detail there.
Speaker Change: We actually do we need to do a better we need to pull that together and do and present that in a simpler way. So the answer is I don't have a quick answer for you here, but it's a good question, Michael and we will endeavor to provide that to you and to others.
Michael: Michael maybe just on.
Michael: Unlike what you see on page 18 is the forward at 10 plus percent on the proprietary capital that's based off with the funds had put in there they're offering documents. So that's not always based off what the historical performance has been as we all know on the investments days past performance won't be an indicator of future results. But this is this is not us.
Michael: <unk> historical in all instances this is us leveraging with the the funds of marketed as their target IRR.
Speaker Change: Right. Okay, great. Thanks, that's all for me I appreciate it.
Thank you Michael.
Speaker Change: The next question comes from Nik Priebe with CIBC capital markets. Please go ahead.
Nik Priebe: Thanks, I just wanted to ask a question about excess liquidity.
Speaker Change: It's conceivable that IBM double down on their interest in Rockefeller at some point in time and when they made that initial investment IPC was sold to great West. So this is hypothetical but IGF one.
Speaker Change: Crist in Gws and of course, well simple too. So my question is number one would it be possible if IGN pursues an additional stake in Rockefeller that you might consider consolidating powers ownership in one of those businesses and then number two if that is a possibility does that make you want to carry on excess cash buffer relative.
Speaker Change: To that two times fixed charge ratio to retain a bit of flexibility too.
Speaker Change: Accommodate a transaction like that I. Appreciate these are what if scenarios, but I am just wondering how those considerations might inform your desire to hold a bit of a buffer in terms of excess cash.
Speaker Change: Yeah. So look it's a good question.
Speaker Change: The excess cashes, we're creating a lot of cash and where.
Speaker Change: As I mentioned re buyouts not trying to go out and.
Speaker Change: Kind of blow it all at once if I can put it that way, but we also.
Speaker Change: As I've also said, Nick we're always look at it we always have M&A opportunities.
Speaker Change: Sometimes we're looking at a bunch, sometimes we're looking at one but we're all and if we're not looking at a live when we're thinking about well what else can we do so it's just a little bit of the DNA here and then when we do that we are looking at all the ways that we can fund it. So if I G. M. We're looking at an acquisition it would be looking at well what can we what could we sell.
Speaker Change: What could we do to fund can we borrow money, what's your leverage capability, what's our cash.
Speaker Change: <unk>.
Speaker Change: And so those are all yes, yes, yes, yes, yes, those are all the tools in the tool box that we have and then you balance them against earnings and how much of the portfolio was N E. All of the things we've been talking about through this so I can't I can just say those are all the tools and tool kit and we consider them all and.
Speaker Change: <unk>.
Speaker Change: It's true great West life at the GM level is a bit of a historical artifact that goes back 2025 years.
Speaker Change: And I'll spell <unk>.
Speaker Change: And they Havent hesitated, when we were deciding to consolidate the CMA sea position Whoops do we lose the call at 930 now are you still there Nick.
Nick: So here yet.
Nick: Sorry, we I heard something drop off when they did they did decide to unload some great west life when they wanted to consolidate the CMA sea position, both they did and we did in one spot and they use that as a tool and we were happy to buy great West because we are huge believers in the future great West So you've seen that in the past we consider that.
Nick: If there was a need for capital in the future I think that would be on the list of things that we think about but as to what we'd actually do and what decisions, we would make that be in the future. So I can't comment on that.
Nick: Yes, no that's fair enough.
Nick: Okay. That's all I had thank you.
Nick: Thanks, Nick.
Nick: There are no greater quit.
Nick: There are no further questions I would like to turn the conference back over to Mr. Jeffrey <unk> for any closing remarks.
Mr. Jeffrey: Well my closing remarks are just to say thanks for joining us and have a good day, everybody. We look forward to talking to you in the future. Thank you.
Nick: Okay.
Speaker Change: Ladies and gentlemen, this concludes your conference call for today. Thank you for participating and you may now disconnect your lines.