Q1 2025 IGM Financial Inc Earnings Call

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Operator: This is the conference operator. Welcome to the IGM Financial First Quarter 2025 Analyst Call and Webcast. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. If you need assistance during the conference call, you may signal an operator by pressing star then zero.

Welcome to the IGN financial first quarter, 2025 analyst call and webcast.

As a reminder, all participants are in a listen only mode, and the conference is being recorded.

After the presentation, there will be an opportunity to ask questions.

To join the question queue, you may press star then one on your telephone p-pads.

Stringing you to assistance during the conference call, you may signal an operator by pressing

Kyle Martens: I would now like to turn the conference over to Kyle Martens, Head of Investor Relations. Please go ahead. Thank you, Betsy. Good morning, everyone, and welcome to today's call.

Speaker Change: I would now like to turn the conference over to Kyle Martin, Head of Industrial Relations. Please go ahead.

Kyle Martens: Thank you Betsy. Good morning everyone, and welcome to today's call. Joining me here we have James OSullivan, President and CEO of IGM Financial, Damon Murchison, President and CEO of IG Wealth Management.

James O'Sullivan: Joining me here, we have James O'Sullivan, President and CEO of IGM Financial.

Damon Murchison: Damon Murchison, President and CEO of IG Wealth Management.

Luke Gould: Luke Gould, President and CEO of McKenzie Investments.

Kyle Martens: Luke Gould, President and CEO of McKenzie Investments, and Keith Potter, Executive Vice President and CFO , IGM Financial.

Keith Potter: Keith Potter, Executive Vice President and CFO, IGM Financial.

Kyle Martens: Before we get started, I would like to draw your attention to our cautions concerning forward-looking statements on slide 3 of the presentation. Slides 4 and 5 summarize non-IFRS financial measures and other financial measures used in the material, and on slide 6 we provide a list of documents available on our website related to IGM's Q1 results.

Kyle Martens: Before we get started, I would like to draw your attention to our caution concerning for looking statements on slide 3 of the presentation.

Kyle Martens: Slide 4 and 5, summarized non-Ianference financial measures and other financial measures used in the material. And on Slide 6, we provide a list of documents available on our website related to IGM's Q1 results.

James O'Sullivan: That will take us to slide 9, and I'll turn it over. All right. Thank you, Kyle.

James: That will take us to slide nine and I'll turn it over to James.

James: All right, thank you, Kyle, and good morning, everyone. I think we continue to demonstrate consistent growth during the first quarter, delivering adjusted earnings per share of $1.00, a first quarter record.

James O'Sullivan: And good morning, everyone. I think we continue to demonstrate consistent growth during the first quarter, delivering adjusted earnings per share of $1, a first quarter record. Our core businesses, IG Wealth and McKenzie, also ended the quarter with record high client assets, while each of our strategic investments delivered double-digit year-over-year growth. Including strategic investments, our client assets grew by 19% year-over-year, surpassing for the first time half a trillion dollars at the end of the quarter. As our Wealth and Asset Management businesses continue to execute on their plans. IGM financial benefits from their diversified sources of growth across multiple geographies.

James: Client Assets while each of our strategic investments delivered double-digit year-over-year growth.

James: Including strategic investments, our client assets grew by 19% year over year. Surpassing for the first time, half a trillion dollars at the end of the quarter.

Speaker Change: Hi, GM financial benefits from their diversified sources of growth.

James: Ross multiple geographies.

James O'Sullivan: We also benefit from their differentiated go-to-market strategies that are further elevated through real interconnectivity amongst businesses. This combination of diversification and growth is one dimension of our strong positioning as we navigate through today's complex economic environment and continue to execute toward our medium-term objectives.

Speaker Change: We also benefit from their differentiated go to market strategies that are further elevated through real inter connectivity amongst businesses.

Speaker Change: This combination of diversification and growth is one dimension of our strong positioning as we navigate through today's complex economic environment and continue to execute toward our medium term objectives.

James O'Sullivan: Another dimension is our balance sheet strength and financial flexibility. which is underscored by IGM's strong credit profile. Modest leverage. and a significant unallocated capital balance, which exceeded $600 million at the end of March.

Speaker Change: Another dimension is our balance sheet strength.

Speaker Change: Flexibility.

Speaker Change: Which is underscored by our Gms strong credit profile.

Speaker Change: Modest leverage.

Speaker Change: And a significant unallocated capital balance, which exceeded $600 million at the end of March.

James O'Sullivan: Turning to slide 10, and the current operating environment for our businesses, starting with recent financial market conditions. While much of the first quarter was characterized by considerable uncertainty, the financial markets, for the most part, proved resilient, until early April when we saw a spike in volatility. Despite the volatility, our businesses remain well positioned. This is a very good market for financial. Very good market for active management. And this is a very good time to have diversification in our businesses and in our client base. And importantly, the driver of recent market volatility is, at its core, solvable uncertainty.

Speaker Change: Turning to slide 10, and the current operating environment for our businesses, starting with recent financial market conditions.

Speaker Change: While much of the first quarter was characterized by considerable uncertainty in the financial markets for the most part proved resilient.

Speaker Change: Until early April when we saw a spike in volatility.

Speaker Change: Despite the volatility our businesses remain well positioned.

Speaker Change: This is a very good market for financial advice.

Speaker Change: It's a very good market for active management.

Speaker Change: And this is a very good time to have diversification in our businesses and in our client assets.

Speaker Change: And importantly, the driver of recent market market volatility is at its core solvable uncertainty.

James O'Sullivan: To the extent the underlying issues are solved, the strength of our businesses will be most evident in the near term. If the market chooses not to recognize this, we are in a very strong financial position and have the firepower to purchase more IGM shares and will.

Speaker Change: To the extent the underlying issues are solved the strength of our businesses will be most evident in the near term.

Speaker Change: If the market chooses not to recognize that we are in a very strong financial position and have the firepower to purchase more shares and will.

Speaker Change: Yeah.

James O'Sullivan: As shown on slide 11, the positive momentum we saw in the Canadian operating environment during 2024 continued into the RRSP season. By March, the uncertainty had shown signs of weighing on investor confidence. While redemption rates were stable, we saw gross sales soften slightly at the industry level.

Speaker Change: As shown on slide 11, the positive momentum we saw in the Canadian operating environment. During 2024 continued into the RRSP season.

Speaker Change: By March the uncertainty has shown signs of weighing on investor confidence.

Speaker Change: While redemption rates were stable, we saw gross sales softened slightly at the industry level.

Damon Murchison: Damon and Luke will speak to this and each of their businesses during this call. On slide 12, we present our Wealth and Asset Management Earnings results, which Keith will address shortly. And on slide 13, we see how each of the six wealth and asset management businesses contributed to IGM's strong asset growth over the course of the last year.

Speaker Change: David and Luke will speak to this in each of their businesses during this call.

Speaker Change: On slide 12, we present, our wealth and asset management earnings results, which Keith will address shortly.

Speaker Change: And on Slide 13, we see how each of the six wealth and asset management businesses contributed to <unk> strong asset growth over the course of the last year.

Damon Murchison: We remain very confident in the business that we have architected over the past several years and its ability to drive strong, medium-term earnings growth.

Speaker Change: We remain very confident in the business that we have architected over the past several years and its ability to drive strong medium term earnings growth David over to you.

Damon Murchison: Thank you, James, and good morning, everyone. Turn to Slide 15 in Wealth Management's First Quarter Highlights, including IG Wealth, Rockefeller, and Wealthsimple. During the quarter we saw record growth inflows and sales in the IGM product as well as record Q1 growth inflows from new clients. IG Wealth ended the quarter with AUA of $141.5 billion, up a solid 11% year-over-year and up 1% during the first quarter driven by financial markets and strong net flows. Gross inflows during the first quarter were $4.2 billion, while gross sales into IGM products were $4.9 billion. Net inflows for the quarter were $718 million and net sales in the IGM product was $944 million.

David: Thank you James and good morning, everyone, turning to slide 15, and wealth management's first quarter highlights, including argue wealth Rockefeller and well simple.

David: During the quarter, we saw record gross inflows and sales into IGN product as well as record Q1 gross inflows from new clients.

David: I do all ended the quarter with <unk> of $141 $5 billion up a solid 11% year over year and up 1% during the first quarter driven by financial markets and strong net flows.

David: Those inflows during the first quarter were $4 $2 billion, while gross sales into igen products were $4 9 billion.

David: Net inflows for the quarter were $718 million and net sales into IBM products with $944 million.

Damon Murchison: April saw record growth sales and continued the first quarter trend with growth in net sales and the IGM products surpassing growth in net flows as clients continue to dollar average costs into these volatile markets. Total growth inflows from newly acquired clients were $1.3 billion, with Mass Affluent and High Network clients representing 76% of these flows. Our mortgage and insurance businesses continued their momentum as we extended our partnership supporting our key industry wealth drivers in the first quarter while adding a new partner focused on philanthropy and legacy planning. For the second straight year, IG ranked number one in earned media share of voice among Canadian banks and independent wealth brands.

David: April saw record gross sales and continued the first quarter trend with gross and net sales in the IGN products are passing gross and net flows as clients continue to dollar average costs into these volatile markets.

David: Gross inflows for newly acquired clients were $1 $3 billion with mass affluent and high net worth clients, representing 76% of these flows.

David: Our mortgage insurance businesses continued their momentum as we extended our partnership supporting our key industry wealth drivers in the first quarter, while adding a new partner focus on philanthropy and legacy planning.

David: For the second straight year <unk> ranked number one in earned media share of voice among Canadian banks in the independent wealth management wealth brands and <unk>.

Damon Murchison: And for 2024, we also earned the top position of Industry Spokesperson. Both Rockefeller and Wealthsimple had strong quarters, which I'll also speak to in coming slides. Turn to slide 16. You can see IG's Q1, April, and last 12-month net flows. On the left, you can see our first quarter and April net flows.

David: For 2024, we also earned the top position of industry spokes person.

David: Both Rockefeller and well simple had strong quarters, which I'll also speak to in coming slides.

David: Turning to slide 16, you can see I, just Q1 April and last 12 months net flows.

On the left you can see our first quarter and April net flows.

Damon Murchison: While April is typically a seasonally slow month as clients focus on prepping and paying taxes, I'd like to highlight two important things. The first is this year's tax bills were higher than traditionally expected industry-wide due to clients triggering capital gains ahead of the proposed capital gains inclusion rate increase. Gross flows momentum slowed but still remained at record high levels even with this tough market backdrop. As seen on the right-hand portion of the slide, market volatility has not prevented our clients from continuing to dollar-cost average into the markets as our last 12-month net sales into IGM products continue to move closer to our total net flow.

David: April is typically a seasonally slow months as clients focus on prepping and paying taxes I'd like to highlight two important things.

David: The first is this year's tax bills were higher than traditionally expected industry wide due to quiet triggering capital gains ahead of the proposed capital gains inclusion rate increase.

David: And two.

David: Gross flows momentum slowed but still remained at record high levels, even with this tough market back backed backdrop.

David: As seen on the right hand portion of the slide market volatility has not prevented our clients from continuing to dollar cost average into the market as our last 12 month net sales into igen products continue to move closer to our total net flows.

Damon Murchison: As our clients continue to adjust to this complex economic environment, we are more confident than ever in the value of our financial planning and our advisors' ability to partner with our clients to build, quantify and preserve and distribute their wealth.

David: As our clients continue to adjust to this complex economic environment, we are more confident than ever in the value of our financial planning and our advisers ability to partner with our clients to build quantify and preserve and distribute their wealth.

Damon Murchison: Turn to slide 17, you can see our operating results which provide further insight as to the strength of this business. At the top left, you can see the year-over-year decrease in our gross outflows rate. You can also see the split of our current client assets with current cash, GIC, and HIZA balance sheets. which continue to support our clients dollar cost averaging back into the markets today and over the coming quarter.

David: Turning to slide 17, you can see our operating results, which provide further insight as to the strength of this business at the top left.

David: You can see the year over year decrease in our gross outflows right.

David: You can also see the split of our Kurt client assets with current cash GIC and hide the balance sheet.

David: Which continue to support our clients' dollar cost averaging back into the markets today and over the coming quarters.

Damon Murchison: Turn to slide 18 and our gross inflows from newly acquired clients. In the first quarter, we continue to show strong growth in new client inflows from mass affluent and high net worth clients, which grew year over year by 10% and 80% respectively. During the quarter, high net worth clients acquired accounted for over 38% of total new client inflow. This included over $160 million from three clients. And while we do not indicate that this size of client is a core focus, successful closes at this scale provide a further example of how we've transitioned this business and how we now have a firm position at the table as we vie for high net worth and even ultra high net worth clients.

David: Turning to slide 18, and our gross inflows from newly acquired clients in.

David: In the first quarter, we continue to show strong growth and new client inflows for mass affluent high net worth clients, which grew year over year by 10% and 80% respectively.

David: During the quarter high net worth clients acquired accounted for over 30, 38% of total new client inflows.

David: This included over $160 million from three clients.

David: While we do not indicate that the size of client is a core focus successful closes at this scale provide a further example of how we've transitioned this business and how we now have a firm position at the table as we buy for high net worth and even ultra high net worth clients.

Damon Murchison: Turn to slide 19, and our continued momentum in the mortgage and insurance businesses. I'll make two points here. The first is our mortgage funding was up 53% year-over-year, supported by more advisors who are collectively referring more mortgages and increased penetration across the country. Second point, our newly annualized insurance premium increased by 15% year-over-year reflecting our focus on investing in and growing this business. Q1 is traditionally a slower quarter for the insurance business given the investment focus of RSPC.

David: Turning to slide 19.

David: And our continued momentum in the mortgage and insurance businesses I'll make two points here.

David: The first is our mortgage lending was up 50, 853% year over year supported by more advisers, who are collectively referring more mortgages and increased penetration across the country.

David: Second point, our new annualized insurance premium increased by 15% year over year, reflecting our focus on investing in and growing. This business Q1 is traditionally a slower quarter for the insurance business given the investment focus of our RSP season.

Damon Murchison: The fact that this was our best insurance Q1 in first year commission since 2017 speaks to our strong momentum we have in this business.

David: The fact that this was our best insurance Q1.

David: First year Commission since 2017 speaks to our strong momentum we have in this business.

Damon Murchison: Now turn to slide 20. This slide represents another important component of our journey. Having a national voice, sharing our thought leadership across a number of dimensions, and being omnipresent. 2024, for the second year running, IG Wealth was once again recognized as the number one wealth brand amongst independent and national banks from an earned media perspective. 2024 also brought two additional births for IGM. We rank first in the Quebec market in earned media share of voice. And secondly, we took the top position for the most visible industry spokesperson. We continue to lead from the front in this country showcasing our knowledge on financial planning, insurance, tax planning, banking and investment strategy while also providing our thought leadership and speaking to our best in class advice experience.

David: Now turning to slide 20.

David: This slide represents another important component of our journey.

David: Having a national voice sharing our thought leadership across a number of dimensions and being omnipresent.

David: 2024 for the second year running argue wealth was once again recognized as the number one wealth brand.

Amongst independents and national banks from an earned media perspective too.

David: 2024 also brought two additional first for AG.

David: We ranked first in the Quebec market and earned media share of voice.

David: And secondly, we took the composition for the most visible industry spokesperson.

David: We continue to lead from the front in this country showcasing our knowledge on financial planning.

David: Insurance tax planning banking and investment strategy, while also providing our thought leadership in speaking to our best in class advice experience.

Damon Murchison: We are communicating our ability to solve complex financial problems, which is increased in lockstep with the complexity driven by today's economic backdrop.

David: We are communicating our ability to solve complex financial problems, which has increased by well in lock step with the complexity driven by today's economic backdrop.

Damon Murchison: Now turn to slide 21 and I'll provide some updates on Rockefeller's progress. Client assets were up 16% year-over-year, driven primarily by inorganic and organic growth. Over the last 12 months, organic growth has driven $5.5 billion in client assets, primarily through Rockefeller's CoreWealth platform. Rockefeller also continues to add to their private advisory network with 24 new advisors being added during the first quarter.

David: Now turning to slide 21.

David: And I'll provide some updates on rockefeller's progress.

David: Client assets were up 16% year over year, driven primarily by inorganic and organic growth.

David: Over the last 12 months organic growth has driven $5 5 billion in client assets from a primarily through rockefeller's core wealth platform.

David: Rockefeller also continues to add to their private advisory network with 24, New advisors being added during the first quarter.

Luke Gould: Turn to slide 22 and we'll...

David: Turning to slide 22, and well simple.

Luke Gould: Wealthsimple continues to deliver strong AUA growth driven by their ability to attract new clients and increase their share of wallet. Wealthsimple increased their clients served by 15% year over year and their AUA increased by $9 billion during the quarter. And this is up 89% year over year.

David: Well simple continues to deliver strong growth driven by their ability to attract new clients and increase their share of wallet.

David: Well simple increase their clients served by 15% year over year and their increased by $9 billion during the quarter.

David: And this is up 89% year over year.

Luke Gould: With that, I will turn the call over to Luke Gould. Great. Thanks, Damon. Good morning, everyone. Turn to page 24, you'll see a few highlights for McKinsey and for asset management during the quarter. Wins in the quarter with record high AUM of $219 billion at McKinsey, up 7% versus last year, and 2.5% in the quarter. Net sales of $3.4 billion during Q1 included previously announced institutional awards of $3.6 billion that funded during the quarter. During Q2, another $1 billion of these institutional awards will fund, and the size was extended around $600 million beyond what was previously announced.

Luke Gould: With that I will turn the call over to Luke Gould.

Luke Gould: Great. Thanks, David and good morning, everyone.

Speaker Change: Page 24, you'll see a few highlights for Mackenzie and for asset management during the quarter. We ended the quarter with record high AUM of 219 billion at Mackenzie up 7% versus last year and two 5% in the quarter.

Speaker Change: Net sales of $3 4 billion. During Q1 included previously announced institutional awards of $3 6 billion that funded during the quarter drew.

Speaker Change: During Q2, another $1 billion of these institutional awards will fund and the size was extended around 600 million beyond what was previously announced.

Luke Gould: Year to date, we've launched 11 new investment funds for retail, focused on areas of emerging growth and to complement our existing offerings. I'll give some color on these in a few slides. And at the bottom, both China AMC and Northleaf continue to have good growth during the quarter. China AMC's investment funds have grown by 27% year-over-year, while Northleaf delivered another consecutive quarter of $1 billion in fundraising, as they've done every quarter since our partnership began with them four years ago. Turn to page 25, you can see the trend and history of McKinsey's Q1 and April net sales.

Speaker Change: Year to date, we've launched 11, new investment funds for our retail focused on areas of emerging growth and to complement our existing offerings.

Speaker Change: I'll give some color on these in a few slides.

Speaker Change: And at the bottom both China AMC in North we've continued to have good growth during the quarter Triton EMS season investment funds have grown by 27% year over year, while north we have delivered another consecutive quarter of $1 billion in fundraising as they've done every quarter since our partnership began with them four years ago.

Speaker Change: Turning to page 25, you can see the trend and history of Mckinsey as Q1 and April net sales.

Keith Potter: On the top left, our Q1 investment fund net flows were slightly positive and up meaningfully from last year, and gross sales were up 12%. In the bottom left, you can see that in the context of a challenging market environment, our April flows were up from 2024 and are best level since 2021. I'd also note that following the launch of a range of active equity ETFs last year, we're seeing an increasing proportion of our flows come in ETF form. On page 26, at the bottom left, you can see our net sales segment between retail and institutional and by product type.

Speaker Change: On the top left our Q1 investment fund net flows were slightly positive and up meaningfully from last year and gross sales were up 12%.

Speaker Change: In the bottom left you can see that in the context of a challenging market environment. Our April flows were up from 2024, and our best level since 2021.

Speaker Change: I'd also note that following the launch of a range of active equity ETF last year, we're seeing an increasing proportion of our flows come in ETF for them.

Speaker Change: On page 26 at the bottom left you can see our net sales segmented between retail and institutional and by product type.

Keith Potter: While retail gross sales were up 11%, net redemptions were in line with last year. The improvements we're seeing in products with strong momentum have not yet offset the declines in products that had softer performance in the environment that we've just exited. And I'm going to review this trend on the next slide. And in the bottom left, you can see the Momentum and Institutional Investment Funds, as well as the Q1 Institutional Funding, which brought net sales there to $3.5 billion. At the top right you can see reduction in our share of assets in four and five-star funds.

Speaker Change: Retail gross sales were up 11% net redemptions were in line with last year.

Speaker Change: Improvements were seeing in products with strong momentum have not yet offset the declines in products that had softer performance in the environment that we just exited and I'm going to review this trend on the next slide.

Speaker Change: And in the bottom left you can see the momentum in institutional investment funds as well as the Q1 institutional fundings, which brought net sales there to $3 5 billion.

Speaker Change: At the top right you can see a reduction in our share of assets in four and five star funds.

Keith Potter: We lost March of 2020, the start of the pandemic, from our five-year track record in a few of our larger, more durable funds that had generated significant alpha at the start of the pandemic. Importantly, these same funds are now generating meaningful alpha and strong performance within the current environment that we're now in. And I'd also note that the share of assets that we have in five-star funds increased in the quarter from 7% to 11%. Turn to page 27, you can see our performance and net sales for our retail mutual funds and ETFs by the end of the month.

Speaker Change: We last March of 2020, the start of the pandemic from a five year track record in a few of our larger more durable funds that have generated significant alpha at the start of the pandemic.

Speaker Change: Importantly, these same funds are now generating meaningful alpha and strong performance within the current environment that we're now in.

Speaker Change: And I'd also note that the share of assets that we haven't five star funds increased in the quarter from 7% to 11%.

Turn to page 27, you can see our performance in net sales for our retail mutual funds and Etfs by boutique.

Keith Potter: As I spoke to on the previous slide, we've moved out of that narrow Nvidia-led environment into this moment of greater volatility and breadth of returns, and we're seeing very strong relative investment performance being put on across many of our boutiques. At the left, the third column from the left, you can see our IB franchise, with its quality focus, delivers very well in environments like this, and you can see strong near-term performance here. And as you go across to the right, you'll see that we've also seen improvements in near-term performance in Blue Water with its durable growth approach, as well as Green Shift with its focus on the environment transition.

Speaker Change: As I spoke to on the previous slide we've moved out of that narrow new video, let environment into this moment of greater volatility and breath of returns and we're seeing very strong relative investment performance being put on across many of our boutiques.

Speaker Change: At the left the third column from the left you can see our IV franchise with its quality focus delivered very well in environments. Like this and you can see strong near term performance here.

Speaker Change: And as you go across to the right you'll see that we've also seen improvements in near term performance and blue water with its durable growth approach as well as green chip with its focus on the environment transition.

Keith Potter: I'd also highlight towards the right the continuing strength in our global quant equity and global equity and income routine. You can see we've got net sales momentum here, which has been building with retail net sales of $529 million here this quarter, and this momentum is continuing to Q2.

Speaker Change: I'd also highlight towards the right the continuing strength in our global equity and global equity and income boutiques. You can see we've got net sales momentum here, which has been building with retail net sales of 529 million here this quarter and this momentum has continued into Q2.

Keith Potter: Turn to page 28. I want to take a moment to focus on one of our key priorities, product innovation and a breadth of relevance offering. We've had a very busy retail product launch program in 2024, and this is continuing into 2025, with a focus on areas with emerging growth, and ensuring that we have a comprehensive shelf with positioning in all the right places. 2024's product launch is focused on trailblazing and Kwan, as well as bringing active equity ETFs to market. Last quarter, we highlighted our Global Point Equity Boutique and their strong growth and recent business development wins, and we've updated that snapshot on the right.

Speaker Change: Turn to page 28, I want to take a moment to focus on one of our key priorities.

Speaker Change: Product innovation, and our breadth of relevant offerings.

Speaker Change: We've had a very busy retail product launch program in 2024, and this is continuing into 2025 with a focus on areas with emerging growth and ensuring that we have a comprehensive shelf with positioning in all the right places.

'twenty 'twenty forest product launches focused on trailblazer in corn as well as bringing active equity etfs to market.

Speaker Change: Last quarter, we highlighted our global point equity boutique and their strong growth and recent business development wins, and we've updated that snapshot on the right.

Keith Potter: On the left, you can see the 11 mandates that we brought to market year-to-date, and we've highlighted a few. Beyond these themes, upcoming 2025 launches will also be focused on better beta and expanding our Northleaf private offer. With the four new quant products launched this quarter and the nine launched last year, we now have a very broad quant offering of 15 different mandates, all with very compelling track records delivered by our team's holistic quant approach. You can see as you go down the schedule on the left, we've extended our active fixed income ETF offerings with target date maturity ETFs and a AAA CLO mandate that brings to retail a strong track record improvement capabilities that we've developed elsewhere.

Speaker Change: On the left you can see the 11 mandates that we brought to market year to date and we've highlighted the themes.

Speaker Change: Beyond these themes upcoming 2025 watches will also be focused on better beta and expanding our north with private offering.

Speaker Change: With the four new Quant products launched this quarter and the nine watch last year. We now have a very broad quant offerings 15 different mandates all with very compelling track record delivered by our team's holistic quant approach.

Speaker Change: You can see as you go down the schedule on the left we've extended our active fixed income ETF offerings with target date maturity Etfs and the AAA CLO mandate that brings to retail our strong track record and proven capabilities that we've developed elsewhere.

Keith Potter: We've also added to our Liquid Alts offering with two Enhanced Yield Funds that combine our flagship 5-star Global Dividend Fund with an options strategy to enhance yields. And we've also brought to the Canadian market our U.S. ALF Extension Strategy that we've been running for SDI in the United States. This is a 120-20 long-short strategy with a very strong track record that seeks to generate excess return with the same market exposure. I also do want to highlight that we brought our Asian and European equity teams to McKinsey Retail with an international all-cap equity mandate where we brought a strong track record in a space that we believe is really well positioned for the time period we're entering.

Speaker Change: We've also added to our liquid alts offering with two it has to be your funds that combine our flagship five-star global dividend fund with an option strategy to enhance yield.

Speaker Change: And we've also brought to the Canadian market, our U S. Alpha extension strategy that we've been running for <unk> in the United States.

Speaker Change: 102020 long short strategy with a very strong track record that seeks to generate excess return with the same market exposure I.

Speaker Change: I also do want to highlight that we brought our Asian and European equity teams to Mackenzie retail with an international all cap equity mandate, where we've brought a strong track record in a space that we believe is really well positioned for the time period, we're entering.

Keith Potter: And lastly, we've partnered with Putnam to bring their flagship U.S. value mandate to the Canadian marketplace, and we are seeing a renewed interest in value investment. The only other comment I have on this slide is to remind, on the right, that we do have an additional $1 billion in previously announced institutional and partnership business funding in Canada.

Speaker Change: And lastly, we've partnered with putting them to bring their flagship U S value mandates for the Canadian marketplace, and we are seeing a renewed interest in value investing.

Speaker Change: The only other color they'd have on this slide is to remind on the rate that we do have an additional $1 billion in previously announced institutional and partnership business funding in Q2.

Keith Potter: Moving on to page 29, a few comments on the Chinese investment fund industry. On the left-hand side, the industry experienced net redemptions during the first quarter, and we did have some investors redeeming following equity market recoveries during Q4. Trinium sees market share in position and remains very strong. They're the second largest in the market in long-term funding overall, and they saw their market share increase from 5.6% to 6.2% in the last year. On page 30, you can see that while China EMC's long-term fund assets declined in line with the industry in the quarter, money market and institutional assets grew very well, driven by net inflows, and total assets have now reached a record high level of 2.7 trillion yuan, or 525 billion Canadian dollars.

Speaker Change: Moving on to page 29, a few comments on the Chinese investment fund industry.

Speaker Change: On the left hand side the industry experienced net redemptions during the first quarter and we did have some investors redeeming fall in equity market recoveries during Q4.

Speaker Change: Trying to seize market share position remains very strong the second largest in the market and long term budget overall and they saw their market share increased from five 6% to six 2% in the last year.

Speaker Change: On page 30, you can see that well try and Amc's long term fund assets declined in light of the industry in the quarter money market and institutional assets grew very well driven by net inflows and total assets have now reached a record high level of $2 seven trillion won or 525 billion Canadian dollars.

Keith Potter: And turn to page 31, as mentioned, you can see another quarter of strong growth at Northleaf with 1.1 billion fundraisings in the quarter and 5.3 billion over the last 12 months.

Speaker Change: And turning to page 30, 31 as mentioned you can see another quarter of strong growth in North Sea with $1 1 billion fund raisings in the quarter and $5 3 billion over the last 12 months I'll now turn the call over to keep water.

Keith Potter: I'll now turn the call over to Keith Potter. Thank you, Luke, and good morning, everyone. On slide 33, you can see key highlights for Q1, adjusted EPS, which excludes LIFO's other items, was $1, a record Q1 high. We returned $213 million to shareholders in the quarter, including $79 million in share repurchases, and during Q1, we accelerated our repurchase to offset the heightened option exercises from Q4, and we expect the repurchases during 2025 will extend beyond the antedilutive actions as we continue to execute on our NCIB program to purchase up to 5 million shares. Our operations and support and business development expense growth was approximately 6% year over year.

Speaker Change: Thank you Luke and good morning, everyone on Slide 33, you can see key highlights for Q1, adjusted EPS, which excludes the life goes other items was one dollar a record Q1 high we returned $213 million to shareholders in the quarter, including $79 million in share repurchases. During Q1, we accelerated our repurchase.

Speaker Change: To offset the heightened auction exercises from Q4, and we expect our repurchases during 2025 will extend beyond the anti dilutive actions as we can.

Speaker Change: Continue to execute on our MTA IV program to purchase up to 5 million shares.

Speaker Change: Our operations and support business development expense growth was approximately 6% year over year.

Keith Potter: I'll speak to the business-specific seasonality for IG and McKenzie on their respective slides but reaffirm our 4% expense growth target for the full year. And finally, our unallocated capital increased to $650 million, which is a jump from $531 million last quarter, and this increase is primarily driven by retained cash earnings and a $66 million dividend from China AMC. Turning to slide 34, you can see our AUM&A and flows. As seen on the right side, Q1 asset growth was positive and ended assets up 9.1% year-over-year and 1.7% in the first quarter. April was defined by significant volatility, which is visible on the chart on the left.

Speaker Change: Speak to the business specific seasonality for IGN Mckenzie on their respective slides, but reaffirm our 4% expense growth target for the full year and finally, our unallocated capital increased to $615 million, which is up.

Speaker Change: From $531 million last quarter and this increase was primarily driven by retained cash earnings and a $66 million dividend from China AMC.

Speaker Change: Turning to slide 34, you can see <unk> and.

Speaker Change: And M&A and flows as seen on the right side Q1 asset growth was positive and ending assets up nine 1% year over year and one 7% in the first quarter.

Speaker Change: April was defined by significant volatility, which is visible on the chart on the left despite this assets were down only 2% compared to the end of March.

Keith Potter: Despite this, assets were down only 2% compared to the end of March. Turning to slide 35 on point 2, net investment income of $7.8 million was primarily reflects interest on cash balances, and this is down from prior periods due to lower interest on cash, lower seed capital gains, and FX on some U.S. cash balances. Looking forward, market volatility may impact net investment income in the coming quarters and seed capital gains. Point three, for operations and support and business development expenses, to help with seasonality in the models, we expect expenses to be slightly higher in Q2 than Q1, and are targeting Q2 expenses to be approximately $290 million.

Speaker Change: Turning to slide 35 on point to net investment income.

Speaker Change: Seven 8 million was primarily reflects interest on our cash balances and this is down from prior periods due to lower interests on cash lower seed capital gains and FX up some U S cash balances looking for market volatility may impact net investment income in the coming quarters and seed capital gains.

Speaker Change: Three for operations and support this development expenses to help with seasonality in your models.

Speaker Change: Expect expenses to be slightly higher in Q2, and Q1 and are targeting Q2 expenses to be approximately $290 million plus or minuses, there's always some uncertainty in timing of expenses.

Keith Potter: Plus or minuses, there's always some uncertainty in timing of expenses.

Keith Potter: On slide 36, we present the key profitability drivers for IG Wealth Management, and I'll highlight a few points. On the left, you can see the average AUM&A was up 2.3% over last quarter, driven by investment returns and net inflows. And on the right, the advisory fee rate and product and program fee rates are both in line with expectations, and the asset-based compensation rate is down slightly in the quarter. As we move forward through the next couple of quarters, we do expect slight upward movement in this rate. On slide 37, IG's overall earnings of $128.4 million in Q1, and I'll point one other financial planning revenue, which primarily reflects the insurance business, as well as mortgage results that were in line with our expectations, excluding fair value adjustments.

Speaker Change: On slide 36.

Speaker Change: Is that the key profitability drivers for <unk> wealth management and I'll highlight a few points on the left you can see the average eliminate was up two 3% over last quarter, driven by investment returns and net inflows and on the right. The advisory fee rate in product a program fee rates are both in line with our expectations.

Speaker Change: The base compensation rate is down slightly in the quarter as.

Speaker Change: As we move forward through the next couple of quarters, we do expect a slight upward movement and that's right.

Speaker Change: On slide 37, I, just overall earnings earnings of $128 4 million in Q1, and I'll 0.1, other financial planning revenue, primarily reflects the insurance business as well as mortgage results that were in line with our expectations, excluding fair value adjustments and looking forward, we expect to see similar results in the mortgage business.

Keith Potter: And looking forward, we expect to see similar results in the Morgan's business next quarter, again excluding the impact of fair value adjustment. And on other revenue, which is primarily comprised of insurance, but it also includes the roll-off of some of our legacy banking programs, we expect to see similar growth on a year-over-year basis in Q2 as in Q1. Also as a reminder, insurance volumes and revenues tend to be seasonally higher in Q4 relative to Q1 as Damon spoke to. On point two, IG's operations and support and business development expense growth was 2%. As we look forward, we expect seasonality for IG to be similar to 2024, so higher expenses in Q2 versus Q1 with a target of approximately $170 million for Q2.

Speaker Change: Next quarter again, excluding the impact of fair value adjustments.

Speaker Change: Other revenue, which is primarily comprised of insurance, but it also includes the roll off of some of our legacy banking programs, we expect to see similar growth on a year over year basis in Q2 as in Q1.

Speaker Change: Also as a reminder, insurance volumes and revenue tend to be seasonally higher in Q4 relative to Q1 as Damon spoke to.

Speaker Change: On 0.2, IGT operations and support business development expense growth was 2% as we look forward, we expect seasonality for it to be similar to 2024, so higher expenses in Q2 versus Q1 with a target of approximately $170 million for Q2 similar to last year, the second quarter while clue.

Keith Potter: And similar to last year, the second quarter will include higher discretionary expenses.

Speaker Change: Our discretionary spend.

Keith Potter: Moving to slide 38, we have McKenzie's AUM by client and product type, as well as net revenue rates. On the left, you can see average AUM is up 1.7%, which is supported by the onboarding of $3.6 billion in previously announced institutional land. And on the right you can see our overall third-party rate, which dropped due to mixed shift driven by both our institutional wins and the ongoing success with our wealth management partnerships. And rates were also impacted in the quarter by fewer days during the first quarter, which we commented on on our Q4 call. Looking forward.

Speaker Change: Moving to slide 38, we have Mckenzie AUM by client and product type as well as net revenue rates on the left you can see average AUM was up one 7%, which is supported by the onboarding of $3 $6 billion and previously announced institutional wins.

Speaker Change: And on the right you can see.

Speaker Change: Our overall third party rate, which dropped due to mix shift driven by both our institutional wins and the ongoing success with our wealth management partnerships and rates were also impacted in the quarter by fewer days during the first quarter, which we commented on on our Q4 call.

Speaker Change: Looking forward.

Keith Potter: The onboarding of $3.6 billion institutional wins, plus the expected $1 billion win Luke commented on, will have a further one basis point impact on the overall third party rate and a three basis point impact on the rate excluding Canada Life. And to be clear, this is a pro forma perspective once the full $4.6 billion has been onboarded for a full quarter. Turning to slide 39, you can see McKenzie's earnings of $52.6 million. On point two, I've already spoken to the change in net investment income relative to prior periods. On point three, we are maintaining our full year guidance of 6% expense growth relative to 2024.

Luke Gould: The Onboarding of $3 6 billion dollar institutional wins, plus the expected $1 billion when Luke commented on.

Luke Gould: Further one basis point impact on the overall third party right.

Luke Gould: And a three basis point impact on the rate, excluding Canada life and to be clear. This is a.

Luke Gould: Pro forma perspective, once the full $4 6 billion has been onboard for a full quarter.

Luke Gould: Turning to slide 39, you can see Mackenzie has earnings of $52 6 million.

Luke Gould: On 0.2, I've already spoken to the change in net investment income relative to prior periods on <unk>. Three we are maintaining our full year guidance of 6% expense growth relative to 2024 and to help with seasonality in your models, we are targeting expense.

Keith Potter: And to help with seasonality in your models, we are targeting expense to be approximately $120 million in Q2, slightly lower than Q1. First quarter expenses were higher than typical due to a number of items. First, McKinsey strengthened their product rep with the launch of several new products that were supported by retail and industry-issued distribution capabilities and marketing, and Luke spoke to this just a few moments ago. And McKinsey is also strengthening core capabilities with continued focus on tech delivery in middle office, back office capabilities, overall resiliency in the client experience.

Luke Gould: To be approximately $120 million in Q2 slightly lower than Q1.

Luke Gould: First quarter expenses were higher than typical due to a number of items first mckinsey strengthen their product breadth with the law.

Luke Gould: Launch of several new products that were supported by retail and institutional distribution capabilities and marketing and Luke spoke to this just a few moments ago and Mckinsey is also strengthening core capabilities with continued focus on tech delivery and middle office back office capabilities.

Luke Gould: Overall resiliency in the client experience.

Keith Potter: Slide 40 has training and seize results. First, on the left, AUM growth was strong in the quarter, increasing by approximately 8%. And on the right, you can see China AMC's earnings of $30.6 million for the first quarter, which includes $3.6 million in fair value gains. Excluding those gains results, we're in line with Q1 2024 and fill up from Q4. The quarter's results reflect China AMC's ability to grow AUM and help offset some of the changes in view rates we spoke to during our Q4 call. And on the bottom right, you can see the annual dividend received of $66 million.

Luke Gould: Slide 40 has training six results.

Luke Gould: First on the left.

Luke Gould: Growth was strong in the quarter, increasing by approximately 8%.

Luke Gould: On the right you can see trading fees earnings of $30 6 million for the first quarter, which includes a $3 6 million and fair value gains excluding those gains. The results were in line with Q1, 2024 and fill up from Q for the.

Luke Gould: The quarter's results reflect China AMC, the ability to grow AUM and help offset some of the changes in fee rates, we spoke to during our Q4 call and on the bottom right you can see the annual dividend received $66 million.

Keith Potter: Slide 41 has the earnings contribution for companies in each segment.

Luke Gould: Slide 41 is the earnings contribution for companies in each segment.

Keith Potter: A couple of comments on strategic investments. First, the Rockefeller earnings were in line with last year and we saw strong business growth in core global family office business during the quarter and earnings were down from last quarter primarily due to timing of some transactional revenue which we expect to pick up in the coming quarters. And Northleaf's first quarter earnings of $6.7 million includes strong annual incentive fees, typically paid in Q1, and earnings would have been closer to $4 million excluding these On slide 42, at the bottom right, I'll point out that at the end of Q1, our strategic investments, including unallocated capital, now represent approximately $6.5 billion in value, that's up over $1 billion versus Q1 of last year.

Luke Gould: A couple of comments on strategic investments first Rockefeller earnings were in line with last year, and we saw strong business growth in our core global family office business during the quarter and earnings were down from last quarter, primarily due to timing.

Luke Gould: Transactional revenue, which we expect to pick up in the coming quarters.

<unk> first quarter earnings of $6 7 million include strong annual incentive fees typically paid in Q1 and earnings would've been closer to $4 million. Excluding these fees.

Luke Gould: On slide 42.

Speaker Change: At the bottom right I'll point out that at the end of Q1, our strategic investments, including unallocated capital now represent approximately $6 $5 billion in value.

Speaker Change: Up over $1 billion versus Q1 of last year.

Keith Potter: Slide 43 highlights execution against our capital allocation priorities. We can see the return of capital to shareholders and decreasing leverage, and our last 12-month trailing cash-given and payout ratio of 46% is in line with last quarter.

Speaker Change: Slide 43 highlights execution against our capital allocation priorities, we can see the return of capital to shareholders and decreasing leverage and our last 12 month trailing cash dividend payout ratio of 46% and is in line with last quarter that concludes my remarks, and I'll turn it over for questions.

Unknown Executive: That concludes my remarks, and I'll turn it over for questions. We will now begin the question and answer session. To join the question queue, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue.

Speaker Change: Okay.

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

Speaker Change: Joining the question queue you May Press Star then one on your telephone keypad.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing any key.

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Speaker Change: Yeah.

Graham Ryding: The first question today comes from Graham Ryding with TD Securities. Please go ahead. Hi, good morning.

Speaker Change: The first question today comes from Graham Ryding with TD Securities. Please go ahead.

Graham Ryding: Hi, good morning.

Luke Gould: Luke, maybe I'll start with you. I just want to make sure I'm sort of getting your message correct. It sounds like you're seeing signs of improving fund performance and some of your mandates. Global Equity Quant is performing well and you're rolling out new products around that vertical. Is this what you think the pieces are that will turn flows positive? And if so, is that a 2025 dynamic? Or does it take longer to sort of turn the ship? Thanks, Graham. Yeah, absolutely.

Speaker Change: Maybe I'll start with you just wanted to make sure I'm sort of getting your message correctly. It sounds like youre seeing signs of improving fund performance and some of your mandates.

Speaker Change: Global equity Quant is performing well and you're rolling out new products around that.

Speaker Change: Medical is.

Speaker Change: Just what you think the pieces are that will turn flows positive.

Speaker Change: And if so is that a 2025 dynamic or does it take longer to sort of turn the ship.

Speaker Change: Thanks, Graham Yeah, absolutely on page 27 mm, especially look at the period from December 31st two where we're sitting right now we have a number of boutiques that really do their best work in an environment like this where things are much broader and there was some volatility so labs within quanta end to end global equity income those are stories strong and in <unk>.

Luke Gould: On page 27, especially looking at the period from December 31st to where we're sitting right now, we have a number of boutiques that really do their best work in an environment like this, where things are much broader and there is some volatility. So, within Quant and Global Equity Income, those are stories strong and just continuing, and they continue to put on strong numbers. And then, beside them, in some of the boutiques that didn't favor that narrow NVIDIA-like environment, like our Durable Growth Blue Water Boutique, our Greenship Environmental Somatic Boutique, and our Ivy Quality Boutique, those three boutiques have now really delivered a strong year-to-date performance, and you can start to see the one year, the three year, and other numbers changing favorably.

Speaker Change: Continuing and they continue to put on strong numbers, and then beside them and some of the.

Speaker Change: That would teach that didn't favor that narrow new video like environment like our durable growth bluewater boutique or green ship, the environmental somatic boutique and in our IV quality boutique those three boutiques have now really delivered a strong year to date performance and you can start to see the one year three year and other numbers changing favorably. So we feel there is a law.

Luke Gould: So, we feel there's a lot of momentum and a lot of places for us to lean in. And, to your point, we are seeing a lot of momentum in Global Equity Income and Quant, as well as in the new products that we've launched in 2024 and 2025. Will we be positive in retail in 2025? That's our hope. We're pushing with all we've got, and we certainly have a lot of things to lean into right now.

Speaker Change: A lot of momentum and a lot of police force to lean in and to your point, we are seeing a lot of momentum in global equity and income and quant as well as in the new products that we've launched in 'twenty 'twenty four and 'twenty 'twenty five we'll we'd be positive in retail in 2025 that that's that's our hope we're pushing with what we got and we certainly have a lot of things to lean into right now.

Speaker Change: Okay.

Graham Ryding: Okay, great.

Speaker Change: Okay.

Luke Gould: And then I'll stick with you for one more just on the on the private assets side.

Speaker Change: Great and then.

Speaker Change: I'll stick with you for one more just on the on the private asset side.

Luke Gould: Can you sort of give us an update on what you are focusing on either with Northleaf or other managers? And you know, what are you doing in terms of marketing these funds or looking to potentially add? So we've got our four products on the market right now across infrastructure, private equity, and private credit, and we've been focused for the last couple of years on removing every single impediment to properly including these products in retail investors' portfolios. Those impediments have included scale, and the products are scaling nicely. We're at about $500 million across the four products now.

Speaker Change: Can you sort of give us an update on what you are focusing on either with our fleets or other managers and you know what.

Speaker Change: Are you doing in terms of marketing.

Speaker Change: These funds are looking to potentially add.

Speaker Change: So we've got our four products of Mercury right now across infrastructure private equity private credit and we've been focused for the last at the last couple of years on net removing every single impediment to properly accrued in these products and retail investors portfolios.

Speaker Change: Impediments have equity scale and the products are scaling nicely, we're at about $500 million across the port products now.

Luke Gould: Things like RRSP eligibility, where we've acquired exemptive relief and now have it, make sure the products can fit in registered plans. And the other impediment has been educating advisors, making sure dealers have the right licensing to sell the products, making sure advisors are educated. And with our sales team across the country, we've been doing a good job in getting notice. So we are feeling we're at a tipping point. The last thing we've been very focused on is making sure the products are approved on all dealer shelves, and we've been making very good progress on that in the last 12 months.

Speaker Change: It seems like RFP eligibility, where we've acquired Exemptive relief and now habits to make sure that products can fit in rest of the clients and the.

Speaker Change: The other impediment has been educating advisors, making sure dealers have the right licensing to sell the products, making sure advisory educated and with our sales team across the country. We've been doing a good job in getting it getting notice. So we are feeling we're tipping point. The the last thing we've been very focused on is making sure. The products are approved on all dealer shelves and we've been net.

Speaker Change: Making very good progress on that in the last 12 months and then on promotional activities. We're at we're quite excited we havent event in London, England at the end of this month, where we have about 80, 90 advisers coming who collectively represent tens of billions of anyway.

Luke Gould: And then on promotional activities, we're quite excited. We have an event in London, England at the end of this month where we have about 89 advisors coming who collectively represent the tens of billions of AUA, and we are expecting that to provide a lot more momentum to the products. And as mentioned, we do have a fifth product coming, a multi-asset product, later in the year. So this is feeling like a tipping point moment, and yeah, these products, we call them the missing middle. They properly belong in retail investors' portfolios, and we're so excited to be one of the first leading the way on that.

Speaker Change: And we are expecting that to provide a lot more up.

Speaker Change: A lot more momentum to the products.

Speaker Change: And as mentioned, we do have a fifth product coming on multi asset product later in the year. So this is feeling like a tipping point moment and get these products, we call them the missing middle they properly belong in retail investors' portfolios and we're so excited to be one of the first leading the way on it.

Luke Gould: And is there any opportunity to sort of push on to sort of define contribution platforms with those products? Or is it more of a, like a retail financial advisor is the focus? Yeah, that's our hope for Northleaf in Canada and beyond. For any client who's got a, you know, a target date solution, where it's target date 30, target date 40, whatever the case might be, private asset classes fit very well. And we do expect that those asset classes will evolve into group platforms over the next decade. They just sit there. Okay, sounds good.

Speaker Change: And then is there any opportunity to sort of push on to sort of defined contribution platforms with those products or is it more of a.

Speaker Change: Like a retail financial adviser, it's the focus yeah. That's that's our hope it for retro nor please in Cannes and beyond for any client Who's got a target date solution, where it started day 30 targeted 40, whatever the case might be private asset classes fit very well and we do expect that said that those asset classes will evolve into group platform.

Speaker Change: So over the next decade.

Speaker Change: They just sit there.

Speaker Change: Okay.

Damon Murchison: And then, Damon, similar theme, can you just give us an update on how much of your discretionary AUM today would be in private assets and sort of how you're thinking about that vehicle and asset class from sort of the top of the house? Yeah, so if you were if you were to Take me down in terms of the total amount of assets, it would be approaching about $6 billion. When you include our real property fund, we have, our strategy is much like Luke's is.

Speaker Change: And then David similar theme can you just give us an update on how much of your discretionary discretionary AUM today would be in private assets and sort of how are you.

Speaker Change: How youre thinking about that.

Speaker Change: Vehicle and asset class from sort of the top of the house.

Speaker Change: Yeah. So if you were to if you were to.

Speaker Change: They can be down in terms of the total amount of assets it would be approaching about $6 billion.

Speaker Change: When you include our real property fund.

Speaker Change: We have our strategy is much like lucid.

Damon Murchison: We believe that private assets deserve a place in every single client's portfolio, it doesn't matter if they're mass market, massive or high net worth, or ultra high net worth. What we want to do is we want to be able to provide those solutions both in managed money solutions, but also a la carte, leveraging McKenzie's lineup through OMS. We've been able to do both of those things, and we will increase access to private assets. It's not just Northleaf, it's also through Cigar, and a number of other managers that we have access to. Okay. Excellent. Thank you.

Speaker Change: We believe that private assets deserve a place in every single clients portfolio. It doesn't matter if their mass market.

Speaker Change: Mass affluent or high net worth or ultra high net worth what we want to do is do you want to be able to provide those solutions. Both in in managed money solutions, but also a la carte leveraging Mackenzie lineup three Oh web. So we've been able to do both of those things and we will increase access to private assets, it's not just north of it but it's also through.

Speaker Change: Cigar and a number of other managers that we have access to.

Speaker Change: Yeah.

Speaker Change: Okay excellent. Thank you.

Tom Mackinnon: The next question comes from Tom MacKinnon with BMO Capital. Please go ahead. Yeah, thanks very much. Good morning. Just a question with respect to McKinsey, the impact on the net management fee rate. I think Keith already suggested what the decline would be just due to the mix by adding some institutional. Now, if I look here, ETFs is smaller as a percentage of the McKinsey assets. It's really been the growth vehicle in terms of flows or one of the big momentum there, and it's certainly on the industry front there. You mentioned these active ETFs really gaining traction.

Speaker Change: The next question comes from Tom Mackinnon with BMO capital. Please go ahead.

Tom Mackinnon: Yeah. Thanks, very much good morning, just a question with respect.

Tom Mackinnon: Spect to Mackenzie the impact on the net management fee rate I think he felt we already are.

Adjusted to what the decline would be just due to the mix by adding some institutional them now.

Tom Mackinnon: Now if I look here Etfs is albeit smaller as a percentage of the Mackenzie assets, it's really been the growth vehicle in terms of flows or one of the bigger.

Tom Mackinnon: A big momentum there and it's certainly on the industry front there.

Speaker Change: You mentioned these active etfs really gaining traction and I'm, just wondering as the mix potentially shifting to more and more active etfs does that have any impact on the net management fee rate.

Tom Mackinnon: I'm just wondering, as the mix potentially shifts to more and more active ETFs, does that have any impact on the net management fee rate?

Luke Gould: Good question, Tom. So the ETF structure, when we brought active fixed income and now active equity market in ETF form, we priced them agnostically. So whether you choose to buy the mutual fund or the ETF, generally you're paying the same price for the services that you're getting. So if someone's purchasing retail active ETFs, you can expect the margins to be very similar. It's if they start using different ETF types, like better beta will be lower down the price and continue. And of course, straight beta, cap weighted benchmarking is going to be a much lower fee.

Tom Mackinnon: Yeah. Good question talk to the UK.

Tom Mackinnon: <unk> structure, when we brought active fixed income and no active equity market and ETF form we've priced them Mad agnostic, so whether you choose to buy the mutual fund or ETF generally you're paying the same price for the services that you're getting so.

Tom Mackinnon: Someone's purchasing retail active Etfs, you can expect the margins to be very similar if they start using a different ETF types like better beta will be lower down the pricing continuing to it of course straight beta calculated benchmarking is going to be much lower fee, but for the active equity in the active fixed income they're priced in line with the mutual fund structure.

Luke Gould: But for the active equity and the active fixed income, they're priced in line with the mutual fund structure. Okay, price in line, not from a fee rate perspective, because I think you mentioned margins being similar, but price from a fee rate perspective. Yeah, from a fee rate perspective, you've got, Tom, the fees are identical for the services being provided. The only difference in fee between the mutual fund ETF tends to be administration, because there isn't the same service attached to ETFs, but the management fees are identical.

Tom Mackinnon: Okay price in mind not from them.

Speaker Change: From a fee rate perspective, because I think you mentioned margins being similar price without E rate perspective from a fee rate perspective, you've got the fees are very are the fees are identical for the services being provided the only difference in fee between the mutual fund ETF tends to be administration, because there isn't the same service attached etfs, but the management fees are identical.

Tom Mackinnon: Okay, and then I believe you said there's a billion expected in the second quarter in terms of institutional flows. I think there was something like $350 million out in April in institutional redemptions. So is this billion on top of that? What drove the redemption and what's driving the billion here? Yeah, good question. We fueled some ETFs in Hong Kong, run by our sister company, China MC Hong Kong. There was a rebalance there that led to $350 billion out in April. And the billion dollars of the awards that we announced last quarter, that will be coming in May and June.

Tom Mackinnon: Okay, and then I believe you said there was $1 billion.

Tom Mackinnon: Expected in the second quarter in terms of institutional.

Tom Mackinnon: Flows I think there was something like 350 million out in April and institutional redemptions.

Tom Mackinnon: So is this billion on top of that what drove the redemption and what's driving the 1 billion coming in yeah. Good question. We are we feel some massive etfs in Hong Kong are run by our sister company, China in Hong Kong. There was a rebalance there that led to $350 billion out in April and the $1 billion of the awards that we announced last quarter that will be.

Tom Mackinnon: Coming in May and June.

Tom Mackinnon: And we also are seeing some, I didn't mention it, we are seeing good follow on business and so we do have another award in the hundreds of billions of dollars range that should fund in Q3 as well. Okay, thank you.

Tom Mackinnon: And we also are seeing something that I didn't mentioned it we are seeing good follow on business and so we do have another award.

Tom Mackinnon: In the hundreds of billions of dollar range that should fund in Q3 as well.

Tom Mackinnon: Okay. Thank you.

Unknown Executive: As a reminder, if you would like to ask a question, please press star then 1 to join the question queue.

Speaker Change: As a reminder, if you would like to ask a question. Please press Star then one to join the question queue.

Jaeme Gloyn: The next question comes from Jaeme Gloyn with National Bank Financial. Please go ahead. Looking for a quick update on the Rockefeller. Obviously some good success since acquisition and acquiring inorganically. What does the capital position look like over there at Rockefeller? Is there still lots of capacity to continue to run at these rates or maybe a quick refresh on where we are there? Yes, James, there's the capital structure remains strong. There's there's lots of capacity, which I don't think is a surprise given the credit markets out there. There's there's lots of capacity for them. to borrow as needed to fund advisor acquisitions, and in fact, they've meaningfully increased their acquisition target for 2025 relative to 2024.

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

Jamie: Yes, just looking for a quick update on the Rockefeller obviously, some good success since acquisition and acquiring Inorganically.

What is what is the capital position looks like over there at Rockefeller is there's still lots of capacity to continue to run at these rates or.

Jamie: Maybe a quick refresh on where we are there.

Jamie: Yes, James there is the capital structure remains strong there's there's lots of capacity, which I don't think there's a surprise given the credit markets out there there's lots of capacity for them too.

Jamie: To borrow as needed to fund adviser acquisitions and in fact, they've meaningfully increased their acquisition target for 2025 relative to 2024. So the business. The business. Overall is a is going very well I mean, there's there's really no substantive change.

James O'Sullivan: So the business overall is going very well. I mean, there's really no substantive change. The Rockefeller Global Family Office business is performing. As expected, they remain a destination of choice for Wirehouse Advisors looking to leave. But I'd also acknowledge the slowness that we've spoken about in past quarters with respect to the M&A business, that continues, and growth in the asset management business is modest. So, you know, the delta to what we might have originally expected has nothing to do with the core business.

Jamie: The Rockefeller Global family Office business is performing.

Jamie: As expected.

Jamie: We remain a destination of choice for wire House advisors looking to leave.

Jamie: But I would also acknowledge the the slowness that we've spoken about in past quarters with respect to the M&A business.

Jamie: That continues and growth of the asset management business is modest so you know the delta to what we might have originally spec expected.

Jamie: Has nothing to do with the core business the core business is rock solid.

Keith Potter: The core business is rock solid, it's really related. Okay. And the profitability of the business, you know, I think when the acquisition was made, it was stated that it would replace the earnings of IPC, I believe, in 2025. Is that still the case or is there a little bit longer runway here before we turn a profit on Rockefeller?

Jamie: It's really related to M&A.

Jamie: M&A and to asset management.

Jamie: Okay, and and the profitability of the business.

Jamie: I think when that when the acquisition was made it was it was stated that it would replace the earnings.

Jamie: See I believe in.

Jamie: In 25 is that.

Jamie: Is that still the case or is there a little bit longer runway here before we turn a profit on rockefeller's yeah.

Keith Potter: Hi, Jaeme. It's Keith here. We would expect Rockefeller from our proportionate share to turn positive in the second half of the year. I'd say there's still work to do to replace IPC's earnings. As James mentioned, you know, the M&A business and the asset management business are a little bit slower, but, you know, the core business is performing well in line with expectations, but I would say it's pushed off a little bit.

Jamie: Hi, Jamie.

Speaker Change: Here, we would expect Rockefeller.

Speaker Change: Our proportionate share it turned positive in the second half of the year I would say there is still work to do to replace ICC in earnings as James mentioned M&A.

Speaker Change: M&A business and the asset management business.

Speaker Change: Or a little bit slower, but the core business is performing well in line with expectations, but I would say, it's pushed off a little bit.

Jaeme Gloyn: And just last one, since you guys called it out or Damon called it out in the IG wealth section around mortgage business and insurance, it seems like, you know, top line or, you know, KPIs are growing nicely, but we're not seeing a slow through into earnings necessarily. It's been kind of flat from a quarterly basis for a couple of years now.

Speaker Change: Okay, and then just last one.

Speaker Change: Since you asked since you guys called it out a demon called it out in the <unk>.

Speaker Change: Wall section around.

Mortgage business and insurance it seems like you have topline or <unk>.

Speaker Change: Keep your eyes are growing nicely, but it's we're not seeing a flow through into earnings and I'm, just curious to kind of flat from a quarterly basis or for a couple of years now.

Damon Murchison: Is there, should I take this, is there an active push to grow these businesses? And what do you need to do to be able to get those earnings to sort of get out of its, you know, last several quarter run rate? Yeah, Jaeme, it's Damon. I'll start and then Keith will jump in. So I'll say to you, first off, that there is 100% an active push to grow this business. We believe firmly that mortgages and the mortgage whole credit discussion is integral part of the financial planning discussion. So that's number one. Number two, it is a process here.

Speaker Change: Is there.

This is not a question to grow these businesses and what do you need to do to be able to.

Speaker Change: Get those earnings to sort of get out of it.

Speaker Change: Last several quarter run rate.

Speaker Change: Yeah, Jamie it's David I'll start and then Keith will jump in so I'll say to you first off that there is 100% inactive pushed it to grow this business, we believe firmly that mortgages and the mortgage whole credit discussion is integral part of the financial planning discussions. So that's number one number two it is it is a process here.

Keith Potter: If you remember correctly, when we got out of the National Bank relationship, our mortgage book was actually shrinking. We've been able to stabilize that business now. And now we've started to grow it. So it's more of a process than anything, but we've certainly turned the corner and I feel quite bullish on this business going forward.

Speaker Change: You remember correctly when we when we got out of the National Bank relationship. Our mortgage book was actually shrinking we've been able to stabilize that business now and now we've started to grow it. So it's more of a process than than anything but we've certainly.

Speaker Change: Turned the corner and and I feel quite bullish on this business going forward.

Keith Potter: Yeah, just to add, James, so as Damon mentioned, the Mortgage Center administration has stabilized, which is great. And so from this point, you know, growth, and then we'll see growth coming in the earnings side. I'd also highlight too, just for this quarter and the next quarter, there's some higher margin business rolling off from five years ago. And so you're seeing that this quarter, you'll see a little bit of the next quarter, but that we should see improvement from in the second half of the year. But on the mortgage business, kind of expect similar results next quarter.

Speaker Change: Yes, just to add James.

Speaker Change: As David mentioned, the mortgages under administration, it stabilized which is great.

Speaker Change: And so from this point growth and then we will see growth coming in in the earnings side I'd also highlight too just for this quarter in the next quarter.

Speaker Change: Some higher margin business rolling off from five years ago, and so youre seeing that this quarter youll see a little bit in the next quarter, but we should see improvement from up in.

Speaker Change: The second half of the year.

Speaker Change: But on the mortgage business kind of expect similar results next quarter, but great opportunity to grow and grow earnings as we grow the mortgages that are event.

Damon Murchison: But great opportunity to grow and grow earnings as we grow the Mortgage Center admin.

Unknown Executive: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Kyle Martens for any closing remarks. Thank you Betsy. I'd once again like to thank everyone who joined the call with us this morning and Betsy I think with that we can close up the call. That brings to a close today's conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.

Speaker Change: Okay. Thank you.

Speaker Change: This concludes our question answer session I would like to turn the conference back over to Martin for any closing remarks.

Speaker Change: Thank you Betsy.

Speaker Change: I'd once again like to thank everyone for joining the call with US This morning, and Betsy I think with that we can we can close out the call.

Speaker Change: That brings to a close today's conference call. You may now disconnect. Your lines. Thank you for participating and have a pleasant day.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: [music].