Q1 2025 Fiera Capital Corp Earnings Call
Okay.
[music].
Yeah.
Sylvia: Good morning, My name is Sylvia and I will be your conference operator today at this time I would like to welcome everyone to see our capitals earnings call to discuss final full financial results for the first quarter of 2025. Please note that all participant lines have been placed on mute to prevent any background noise. After the speakers' prepared.
Sylvie: My name is Sylvie, and I will be your conference operator today.
Sylvie: At this time, I would like to welcome everyone to Fiera Capital's earnings call to discuss financial results for the first quarter of 2025. Please note that all participant lines have been placed on mute to prevent any background noise.
Sylvie: After the speaker's prepared remarks, there will be a question and answer period. As a reminder, this conference call is being recorded. If you would like to ask a question during the Q&A period, simply press star 1 on your telephone keypad. And if you would like to withdraw your question, please press star then 2. Thank you.
Remarks, there will be a question and answer period as a reminder, this conference call is being recorded.
Sylvia: If you would like to ask a question during the Q&A period simply press Star one on your telephone keypad and if you would like to withdraw your question. Please press Star then two thank you I.
Marie-France Gay: I would now like to turn the conference over to Ms. Marie-France Gay, Senior Vice President, Treasury and Investor Relations. Ms. Gay, you may go ahead and begin your conference.
Ms. Rykowski: I would now like to turn the conference over to mismatch Rykowski Senior Vice President Treasury and Investor Relations. Ms. Gould you May go ahead and begin your conference.
Marie-France Gay: Thank you, Sylvie.
Speaker Change: Thank you Sylvie and good morning, everyone.
Marie-France Gay: Good morning, everyone. Bonjour à tous. Bienvenue à l'appel de conférence de Fiera Capital pour discuter des résultats financiers du premier trimestre de 2021. Welcome to the Fiera Capital conference call to discuss our financial results for the first quarter.
Sylvia: I'll give it to us.
Sylvia: Yeah.
Sylvia: So she has to get done.
Sylvia: Just touching on C C.
Sylvia: Does that make sense.
Speaker Change: Welcome to the share of capital conference call to discuss our financial results for the first quarter of 2025.
Marie-France Gay: Note that today's call will be held in Before we begin, I invite you to download a copy of today's presentation which can be found in the Investor Relations section of our website at ir.fieracapital.com. Also note that comments made on today's call, including replies to certain questions, may deal with forward-looking statements which are subject to risks and uncertainty. that may cause actual results to differ from it.
Speaker Change: Note that today's call will be held in English.
Speaker Change: Before we begin I'd like you to download a copy of today's presentation, which can be found in the Investor Relations section of our website at IR, That's your capital Dot com.
Speaker Change: Also note that comments made on today's call, including replies to certain questions may deal with forward looking statements, which are subject to risks and uncertainties that may cause actual results to differ from expectations.
Marie-France Gay: I would ask you to take a moment to read the forward-looking statements on page 2 of the On today's call, we will discuss our Q1 2025 results, starting with an update on our AUM followed by highlights of our public and private markets platforms, as well as our private websites. We will then review our.
Speaker Change: I would ask you to take a moment to read the forward looking statements on page two of the presentation.
Speaker Change: On today's call, we will discuss our Q1 'twenty 'twenty five result.
Speaker Change: Starting with an update on our AUM flows followed by highlights of our public and private markets platforms.
Speaker Change: Well as a private wealth business.
Speaker Change: Well then review our financial performance.
Marie-France Gay: Our speakers today are Mr. Jean-Guy Desjardins, Chair of the Board, and Globus. and Mr. Lucas Pontillo, Executive Director and Global Director.
Speaker Change: Our speakers today are Mr. Zandi do someday chair of the board and global CEO and Mr. Lucas from to your executive director and global scale.
Marie-France Gay: Also available to answer questions following the prepared remarks will be Maxime Mnard, President and CEO of Fiera Canada and Global Private Wealth, and John Valentini, President and CEO of Fiera Capital. With that, I will now turn over.
Speaker Change: Also available to answer questions. Following their prepared remarks, we'll be maximin.
Speaker Change: President and CEO of Air, Canada, and global private wealth.
Speaker Change: And John Donahoe, Jeanie, President and CEO of private markets.
Speaker Change: With that I will now turn over the call to John.
Jean-Guy Desjardins: Thank you Marie-France, good morning everyone and thank you for joining us today as we report our results for the first quarter of 2021. Global equity markets were mixed in the first quarter of the year. Risk appetite deteriorated significantly in the last month of the quarter, as investor fears intensified that a trade war would reignite inflation and dampen growth. The S&P 500 was hit the hardest, declining nearly 5% for the quarter, while the Canadian Benchmark Index managed to eke out a modest gain, thanks to solid returns in resources. Global stocks outperformed their North American peers as Germany's fiscal spending plans boosted the outlook for European economies and corporate earnings.
Speaker Change: Thank you Amanda good answer good morning, everyone.
Speaker Change: Thank you for joining us today.
Speaker Change: We report our results for the first quarter of 2025.
Speaker Change: Global equity markets were mixed in the first quarter of the year the risk appetite deteriorated significantly in the last month of the quarter.
Speaker Change: And this their fears and densify the trade war with reignite installation and dampened growth.
Speaker Change: The S&P 500 was hit the hardest declining nearly 5% for the quarter.
Speaker Change: While the Canadian benchmark index managed to Eke out a modest gain.
Speaker Change: Thanks to solid returns in resources.
Speaker Change: Global stocks outperformed their north American peers, as Germany's fiscal spending plans boosted the outlook for European economies and corporate earnings.
Jean-Guy Desjardins: Fixed-income markets were positive in the quarter as investors fled to the safety of bonds, with investors bracing for the impacts of lingering trade tensions on growth. Speculation mounted that the Federal Reserve would soon need to pivot from worrying about sticky inflation towards fretting about a stagnating economy. Similarly, in Canada. fears about U.S. tariffs. pushed government bond yields broadly lower, even as both growth and inflation surprised to the upside.
Speaker Change: Fixed income markets were positive in the quarter.
Speaker Change: As investors fled to the safety of bonds with investors bracing for the impact of lingering trade tensions on growth.
Speaker Change: Speculation mounted.
Speaker Change: The Federal reserve would soon need to pivot from worrying about sticky insulation towards fretting about stagnating economy.
Speaker Change: Similarly in Canada.
Speaker Change: Fears about U S tariffs pushed cover government bond yields broadly Lord even as both growth and inflation surprise to the upside.
Jean-Guy Desjardins: So against this backdrop, our assets under management ended the quarter at $161.6 billion, representing a decrease of $5.5 billion for the quarter. This decrease was attributable to a previously announced outflow in assets under management sub-advised by Pinestone. We are particularly pleased that excluding We experience positive net organic growth of about 550 million in the quarter. Assets in our private markets platform grew by $1.4 billion, or 7%, to $21.1 billion during the quarter. driven by the acquisition of a controlling interest in a real estate investment platform in the United States, in the United Kingdom. which increased our assets under management by more than 900 million.
Speaker Change: So against this backdrop our.
Speaker Change: Sits under management ended the quarter at 161, 6 billion, representing a decrease of $5 5 billion for the quarter.
Speaker Change: This decrease was attributable to our previously announced at flow and assets under management sub advised pipeline stone.
Speaker Change: We are particularly pleased that excluding thin stone.
Speaker Change: We experienced positive net organic growth of about 550 million in the quarter.
Speaker Change: Assets in our private markets platform grew by $1 4 billion or 7%.
Speaker Change: $21 1 billion during the quarter driven by the acquisition of a controlling interest in a real estate investment platform in the United States in the United Kingdom.
Speaker Change: Which increased our assets under management by more than $900 million.
Jean-Guy Desjardins: Growth was also helped by positive market impact. of approximately $400 million. and more than 120 million in net organic growth. during the quarter. driven by new mandates of approximately 500 million, primarily from our agriculture and real estate strategy. Our public market's assets under management, excluding those sub-advised by Pine State. increased by 1% to more than $104 billion. during the quarter. driven by positive net organic growth of more than 400 million and market impact of approximately 300 million.
Speaker Change: Growth was also helped by positive market impact of that.
Speaker Change: Proximately $400 million.
And more than 120 million in net organic growth.
Speaker Change: During the quarter.
Speaker Change: Driven by new mandates of approximately $500 million.
Speaker Change: Primarily from our agriculture and real estate strategies.
Speaker Change: Our public markets assets under management, excluding those sub advised biplane Stone Inc.
Speaker Change: <unk> increased by 1% to more than $104 billion.
Speaker Change: During the quarter.
Speaker Change: Driven by positive net organic growth of more than $400 million and market impact of approximately $300 million.
Jean-Guy Desjardins: So I will now turn to highlights of our commercial and investment performance across our asset class. So starting with our public market platform. Excluding assets under management sub-advised by points. Public markets saw good flow activity during the quarter, reporting new mandates of $1 billion and positive net organic growth of more than 400. With respect to assets sub-advised by Pinestone, as previously announced, Canoe Financial withdrew $5.7 billion of assets and transferred them directly to Pinestone during the quarter. An additional $1.2 billion of assets, sub-advised by Pinestone, were withdrawn by clients. with which we have ongoing relations.
Speaker Change: So I will now turn to highlights of our commercial and investment performance across our asset classes.
Speaker Change: So starting with our public markets platform.
Speaker Change: Excluding assets under management sub advised by plane stone.
Speaker Change: Public markets a good flow of activity during the quarter reporting new mandates at 1 billion in positive net organic growth of more than $400 million.
Speaker Change: With respect to assets of sub advised by buying stone as previously announced could they do financial withdrew $5 7 billion of assets and transferred them directly to find stone during the quarter.
Speaker Change: An additional $1 2 billion of assets sub advised by buying stone were withdrawn by clients.
Speaker Change: With which we have ongoing relationships.
Jean-Guy Desjardins: as we announce at the end of April.
Speaker Change: As we announced at the end of April.
Jean-Guy Desjardins: We will be winding down our Keynesian equity small and micro-cap strategy. as part of our strategic decision to focus our business. on our More Scalable Strategy. These strategies represented less than 1% of both our total assets under management and total revenues for 2020.
Speaker Change: We will be winding down our Canadian equities small and micro cap strategies.
Speaker Change: As part of our strategic decision to focus our business on our more scalable strategies.
Speaker Change: These strategies represented less than 1% of both our total assets under management and total revenues for 2024.
Jean-Guy Desjardins: turning to investment performance in public markets. The macroeconomic environment has been challenging for financial markets. We have been positioned defensively since the fourth quarter of last year, driven by the re-acceleration of inflation in the second half of the year. The resilience of the U.S. economy, which was operating at an above-trend pace and a strong job market with unemployment at historic lows. As a result, most of our flagship strategies performed well and generated positive relative returns in the first quarter of the year. within Canadian fixed income, our strategic core strategy delivered strong excess returns relative to its benchmark in the quarter.
Speaker Change: Turning to investment performance in public markets.
Speaker Change: The macroeconomic environment has been challenging for financial markets.
Speaker Change: We have been positioned defensively since the fourth quarter of last year.
Driven by the re acceleration of inflation in the second half of the year.
Speaker Change: The resilience of the U S economy, which was operating at an above trend base and a strong job market with unemployment at historic lows.
Speaker Change: As a result, most of our flagship strategies performed well and generated positive relative returns in the first quarter of the year.
Speaker Change: We didn't get agents fixed income our strategic course strategy delivered strong excess returns relative to its benchmark in the quarter.
Jean-Guy Desjardins: driven by active positioning along the curve. Our Active Core and Integrated Core also outperformed benchmarks for the quarter, and all three strategies generated alpha over the one, three, and five-year period. Relative returns for the quarter were mixed for foreign fixed income strategies. The global multi-sector income strategy outperforms its benchmark by more than 70 basis points in the quarter, driven by long-term active duration across U.S. and Mexican fixed income markets and from strong security selection within emerging markets. The High Grade Core Intermediate Strategy modestly outperformed in the first quarter. while the tax-efficient core plus strategy came in below bench.
Speaker Change: Driven by active positioning along the curve.
Speaker Change: Our active CT and integrated score.
Speaker Change: So outperformed benchmarks for the quarter and all three strategies generated alpha over the one three and five year periods.
Speaker Change: Relative returns for the quarter were mixed for foreign fixed income strategies.
Speaker Change: The global multi sector income strategy outperformed its benchmark by more than 70 basis points in the quarter driven by long term active duration across U S and.
Speaker Change: And Mexican fixed income markets and from strong security selection within emerging markets.
Speaker Change: The high grade core intermediate strategy modestly outperform in the first quarter.
Speaker Change: While the tax efficient core plus strategy came in below benchmark.
Jean-Guy Desjardins: All three strategies continue to outperform benchmarks over the longer term. Our Keynesian equity strategy had top quartile performance during the quarter as it outperformed its benchmark by close to 240 basis points. Portfolio's lead over the S&P TSX widened once more. driven mainly by stock selection. An overweight position in the better-capitalized domestic banks paid off. when credit loss provisions surprised on the downside. turnover stayed below 15% and active share above 17%. underscoring a conviction-led, long-horizon approach.
All three strategies continue to outperform benchmarks over the longer term.
Speaker Change: Our Canadian equity strategy had top quartile performance during the quarter as it outperformed its benchmark by close to 240 basis points.
Speaker Change: The portfolio's lead over DSM, Dts X widened once more drill.
Speaker Change: Driven mainly by stock selection.
Speaker Change: And overweight position in the better capitalized domestic banks paid off.
Speaker Change: When credit loss provisions surprised on the downside.
Speaker Change: Doing overstayed below 15% and active share above 70% underscoring our conviction led long horizon approach.
Jean-Guy Desjardins: So that's probably the challenging quarter for the frontier market strategy. The strategy continues to deliver notably strong relative performance across all medium and long-term periods, including since inception, for which it has generated over 16.6% of value added for investors. And lastly, the Emerging Markets Select Strategy outperformed its benchmark and maintains an impressive track record, outperforming its benchmark by over 9% since inception in 2021.
Speaker Change: So despite a challenging quarter for the for the frontier market strategy.
Speaker Change: This strategy continues to deliver a notably strong relative performance across all medium and long term periods, including since inception for which it has generated over $16, 6% of value added for investors.
Speaker Change: And lastly, the emerging markets as select strategy outperformed its benchmark and maintains an impressive track record outperforming its benchmark by over 9% since inception in 2021.
Jean-Guy Desjardins: turning to our private markets platform. The private markets delivered positive net organic growth of approximately $120 million during the quarter. after returning capital of close to $140 million. growth was driven by new mandates of approximately 500. primarily from clients into our global agriculture fund and in our real estate strategy. Close to 500 million of capital was deployed in the quarter. and we maintain a robust pipeline of $1.5 billion in committed undeployed capital for future opportunities, an increase of $600 million compared to the end of the prior quarter.
Speaker Change: Turning to our private markets platform.
Speaker Change: So private markets delivered positive net organic growth of approximately 120 million during the quarter.
Speaker Change: After returning capital of close to $140 million.
Speaker Change: Growth was driven by new mandates of approximately $500 million.
Speaker Change: Primarily from clients into our global agriculture, fun, and and our real estate strategies.
Speaker Change: Yeah.
Speaker Change: Close to $500 million of capital that was deployed in the quarter.
Speaker Change: And we maintain a robust pipeline of $1 5 billion in committed under deployed capital for future opportunities and increase of 600 million compared to the end of the prior year quarter.
Speaker Change: With respect to investment performance.
Jean-Guy Desjardins: with respect to investment performance. Our private market strategies performed well in the quarter, with our key strategies all generating positive returns for the quarter and absolute returns of 5% to 12% over the one-year period. Our infrastructure strategy returned 2.3% for the quarter and nearly 9% over one year, benefiting from the long-term contracted nature of the majority of its revenues, inflationary edging, and limited revenue exposure to trade. Our private credit strategies also generated attractive returns for the quarter and one-year period. Our Infrastructure Private Debt Strategy produced a 12% absolute return over the one-year period as positive income from investments was supported by favorable movements in base payments.
Speaker Change: Markets strategies performed well in the quarter.
Speaker Change: With our key strategies, all generating positive returns for the quarter and absolute returns of 5% to 12% over the one year period.
Speaker Change: Our infrastructure strategy returned two 3% for the quarter and nearly 9% over one year.
Speaker Change: Fitting from the long term contracted nature of the majority of its revenues inflationary aging and limited revenue exposure to trade.
Speaker Change: Our private credit strategies also generated attractive returns for the quarter and one year period.
Speaker Change: Our infrastructure private debt strategy produced a 12% absolute return over the one year period as positive income from investments was supported by favorable movements in base rates.
Jean-Guy Desjardins: These underlying investments are generally well insulated from macroeconomic and geopolitical volatility. and the team is expected to deploy significant capital in the remainder of 2020.
Speaker Change: These underlying investments are generally well insulated from macroeconomic and geopolitical volatility and the team is expected to deploy significant capital in the remainder of 2025.
Jean-Guy Desjardins: within our real estate debt strategy. The void left by traditional lenders. continues to create outsized risk-adjusted return opportunities. with a lack of correlation to the brother. financial markets, and economy. Within corporate private debt, Canadian borrowers have been minimally impacted by U.S. tariffs. due to conservative loan structures and a focus on the Keynesian middle market, which primarily involves domestic customers and suppliers. The deal pipeline remains very strong, as reduced lending by Canadian banks has allowed us to access higher quality credit. while maintaining a senior secured position with stringent covenants and a focus on capital preservation. Our global agriculture strategy performed well in the quarter and generated a nearly 9% return over the one-year period.
Speaker Change: Within our real estate debt strategies.
Speaker Change: The void left by traditional lenders.
Speaker Change: Continues to create outsized risk adjusted return opportunities with a lack of correlation to the brother.
Speaker Change: Financial markets and economy.
Speaker Change: Yeah.
Speaker Change: Within corporate private debt Canadian borrowers have been minimally impacted by U S service due to conservative loan structures and a focus on the change in middle market, which primarily involves domestic customers and suppliers.
Speaker Change: The deal pipeline remains very strong.
Speaker Change: As reduced lending by Canadian banks as a lot of the us to access higher quality credit.
Speaker Change: Maintaining a senior secured position with stringent covenants and our focus on capital preservation.
Speaker Change: Our global Agriculture strategy performed well in the quarter.
Speaker Change: Generated nearly 9% return over the one year period.
Jean-Guy Desjardins: The strategy has a strong pipeline of follow-on opportunities. and new partnerships across Canada, the United States, Australia and Western Europe.
Speaker Change: This strategy has a strong pipeline of follow on opportunities.
Speaker Change: And new partnerships across Canada, the United States, Australia, and Western Europe.
Jean-Guy Desjardins: In real estate, the industry is poised to benefit more consistently from the macroeconomic tailwinds. from increasing market liquidity and central bank rate cuts. Canadian and UK real estate equity strategies produced good returns in the first quarter, which reflected this underlying positive momentum.
Speaker Change: In real estate the industry is poised to benefit more consistently from the macroeconomic tailwind from.
Speaker Change: From increasing market liquidity and central bank rate cuts.
Speaker Change: Ken Aegean in UK real estate equity strategies produced good returns in the first quarter, which reflected this underlying positive momentum.
Jean-Guy Desjardins: Now turning to private wealth. Private wealth assets under management decreased during the quarter to close at $14.2 billion. Gross new mandates were robust at approximately 400 million. the highest level of new mandates since 2020. We continue to see the benefits from the regionalized distribution model as we build deeper relationships with existing and new clients to drive sales.
Speaker Change: Now turning to private wealth.
Speaker Change: Private wealth assets under management decreased during the quarter to close at $14 2 billion.
Speaker Change: Gross new mandates were robust at approximately $400 million.
Speaker Change: Highest level of new mandates since 2022.
Speaker Change: We continue to see the benefits from their regionalize distribution model as we build deeper relationships with existing and new clients to drive sales growth.
Jean-Guy Desjardins: However, the quarter was impacted. by negative contribution. primarily from one larger withdrawal from a client out of fixed income men.
Speaker Change: However, the quarter was impacted by negative contributions.
Speaker Change: But really from one larger withdrawal from a client out of fixed income mandates.
Lucas Pontillo: So with that, I will turn it over to Lucas. for a review of our financial performance. Thank you, Jean-Guy, and good morning, everyone.
Lucas: So with that I will turn it over to Lucas.
Lucas: Review of our financial performance.
Lucas: Thank you John and good morning, everyone.
Lucas Pontillo: We'll now review the financial results for the first quarter of 2020. beginning with Total Revenue. Across our investment platforms, we generated total revenues of $163 million in the current quarter, down 3% from $168 million in the same quarter last year. as a year-over-year growth in base management fees and higher commitment and transaction fees were more than offset by lower performance fees, other revenues, and lower contribution from our joint venture. On a base, management fees grew to $155 million in the quarter, up 2% from the prior year, driven by an increase in our private market's AUM and a higher overall management fee rate.
Lucas: I will now review the financial results for the first quarter of 2025.
Lucas: Beginning with total revenues across our investment platforms, we generated total revenues of $163 million in the current quarter down 3% from $168 million in the same quarter last year.
Lucas: As of year over year growth in base management fees and higher commitment and transaction fees were more than offset by lower performance fees other revenues and lower contribution from our joint ventures.
Lucas: On a base management fees grew to $155 million in the quarter up 2% from the prior year driven by an increase in our private markets AUM and a higher overall management fee rate.
Lucas Pontillo: Turning to public market revenues, base management fees of $105 million in the quarter declined by $1 million or 1% for the same quarter last year. Largely reflecting outflows from Pinestone's sub-advised methods. This was partly offset by higher revenues from financial intermediary clients in the US and EMEA and from institutional clients in Canada and Asia. Despite outflows related to Pinestone's sub-advised mandates over the last 12 months, base management fee revenue within public markets remained resilient and our fee rate remained relatively flat year over year. Performance fees were nil during the quarter, down from fees of less than $1 million in the same quarter last year.
Lucas: Turning to public market revenues base management fees of $105 million in the quarter declined by $1 million or 1% for the same quarter last year, largely reflecting outflows from pine stone sub advised mandates.
Lucas: This was partly offset by higher revenues from financial intermediary clients in the U S and EMEA and from institutional clients in Canada and Asia.
Lucas: Despite outflows related to points don't sub advised mandates over the last 12 months base management fee revenue within public markets remained resilient and our fee rates remained relatively flat year over year.
Lucas: Performance fees were nil during the quarter down from fees of less than $1 million in the same quarter last year.
Lucas: Yeah.
Lucas Pontillo: and other revenue of $1.5 million in the quarter were down from $3.5 million in the same quarter last year, largely reflecting revenues related to an insurance claim in the prior year.
Lucas: And other revenue of $1 5 million in the quarter were down from $3 5 million in the same quarter last year, largely reflecting revenues related to an insurance claim in the prior year quarter.
Lucas Pontillo: Turning the private market ready. Base management fees increased by $4 million, or 9% year-over-year, to $49 million for the quarter. The increase was primarily driven by higher assets under management in real estate, agriculture and infrastructure, reflecting new subscriptions and the acquisition of a controlling interest in a UK real estate investment. Commitment and transaction fees of $2 million, or $1 million higher year-over-year due to higher fees earned from clients in EMEA in the current quarter. $200,000 during the quarter, or approximately $2 million lower year-over-year, reflecting higher performance fees in the prior year quarter from our growable agriculture.
Lucas: Turning to private market revenues.
Lucas: Base management fees increased by $4 million or 9% year over year to $49 million for the quarter.
Lucas: The increase was primarily driven by higher assets under management, and real estate, agriculture, and infrastructure, reflecting new subscriptions and the acquisition of a controlling interest in the UK real estate investment platform.
Lucas: Commitment and transaction fees of $2 million or 1 million higher year over year due to higher fees earned from clients in EMEA in the current quarter.
Lucas: And then fees of.
Lucas: 200000 during the quarter or approximately $2 million lower year over year, reflecting higher performance fees in the prior year quarter from our global mobile Agriculture Fund.
Lucas Pontillo: Share of earnings and joint ventures related to our UK real estate business were close to $3 million in the quarter, a decrease of $4 million year-over-year, related to the timing of completion of our joint venture projects, with the first quarter realizations in 2024 being particularly high. Completions are expected to be later in the quarters this year. Our private markets platform comprised 13% of our total assets under management in the quarter and generated 34% of total revenue.
Lucas: And share of earnings in joint ventures related to our UK real estate business, we're close to $3 million in the quarter, a decrease of $4 million year over year.
Lucas: Related to the timing of completion of our joint venture projects with the first quarter realizations in 2024, being particularly high completions.
Lucas: <unk> are expected to be later in the quarters this year.
Lucas: Our private markets platform comprised 13% of our total assets under management in the quarter and generated 34% of total revenues. This.
Lucas Pontillo: This platform continues to provide attractive revenue growth and diversification to our turning to SG&A. For the quarter, SG&A expenses of $122 million were down more than 3% from the prior year, mostly due to lower employee compensation costs and sub-advisory. and partly offset by higher travel and market. Turning to Adjusted EBITDA and Adjusted EBITDA Margin, Adjusted EBITDA of the quarter was $43.4 million, down $2 million or 4% from the same quarter last year, reflecting lower performance fees and share earnings in joint ventures, and partly offset by lower SG&A excluding share-based competition. adjusted EBITDA margin was 26.6% for the quarter, largely flat from 27% the same quarter last year.
Lucas: This platform continues to provide attractive revenue growth and diversification to our business.
Lucas: Yeah.
Lucas: Turning to SG&A.
Lucas: For the quarter SG&A expenses of $122 million were down more than 3% from the prior year.
Lucas: <unk> due to lower employee compensation costs, and sub advisory fees, and partly offset by higher travel and marketing costs.
Lucas: Yeah.
Lucas: Turning to adjusted EBITDA, and adjusted EBITDA margin adjusted EBITDA for the quarter was $43 4 million down $2 million or 4% from the same quarter last year, reflecting lower performance fees and share of earnings in joint ventures, and partly offset by lower SG&A, excluding share based compensation.
Lucas: Our adjusted EBITDA margin was 26, 6% for the quarter largely flat from 27% the same quarter last year.
Lucas Pontillo: Looking at earnings, net earnings attributable to the company's shareholders were $22 million or $0.17 per diluted share for the quarter, up from $8 million in the same quarter last year, largely due to a $12.7 million re-evaluation gain related to our acquisition of a controlling interest in a UK real estate investment. Total net earnings generated this quarter also had an impact on our average fully diluted shares outstanding. Excluding share dilution resulting from the hybrids, our average shares outstanding would have been $111 million compared to $140 million for the quarter. On an adjusted basis, net earnings were $25 million, or $0.20 per diluted share for the quarter.
Lucas: Looking at earnings.
Lucas: Net earnings attributable to the company shareholders were $22 million or <unk> 17 per diluted share for the quarter up from $8 million in the same quarter last year, largely due to a $12 7 million reevaluation gain related to our acquisition of a controlling interest in the UK real estate investment platform.
Lucas: Total net earnings generated this quarter also had an impact on our average fully diluted shares outstanding excluding.
Lucas: Excluding share dilution, resulting from the hybrids are average shares outstanding would have been $111 million compared to $140 million for the quarter.
Lucas: On an adjusted basis net earnings were $25 million or <unk> 20 per diluted share for the quarter.
Lucas Pontillo: Excluding share dilution from our hybrids, net earnings for the first quarter would have been $0.23 per share, down $0.01 from the same quarter last year. And finally, last 12 months' free cash flow of $87 million was flat from the prior quarter and up from $72 million in the prior year. Turning to our financial leverage, net debt was just over $700 million at the end of the quarter, up approximately $50 million from the end of the prior quarter. reflecting higher cash use in operating activities, as is usual, the case in the first quarter of each year, and the purchase of additional interest in the UK real estate platform during the first quarter of each year.
Lucas: Excluding share dilution from our hybrids net earnings for the first quarter would have been 23 per share down <unk> <unk> from the same quarter last year.
Lucas: And finally last 12 months free cash flow of 87 million was flat from the prior quarter and up from $72 million in the prior year quarter.
Lucas: Okay.
Turning to our financial leverage net debt was just over $700 million at the end of the quarter up approximately $50 million from the end of the prior quarter.
Lucas: Selecting higher cash used in operating activities as is usual the case in the first quarter of each year and the purchase of additional interest in the UK real estate platform during the first quarter.
Lucas: The quarter over quarter increase in Q1 is consistent with prior years and largely reflects timing of cash outflows that occur in the first quarter of the year.
Lucas Pontillo: Quarter over quarter increase in Q1 is consistent with prior years and largely reflects timing of cash outflows that occur in the first quarter of the year. As such, our net debt ratio increased to 3.6 times from 3.3 times in the prior quarter. And our funded debt ratio, as defined by our credit agreement, increased to 3.27 times from 3.06 times in the prior quarter.
Lucas: As such our net debt ratio increased to three six times from three three times in the prior quarter and our funded debt ratio as defined by our credit agreement increased to three seven times from 3.06 times in the prior quarter.
Lucas: Yeah.
Lucas Pontillo: Delivering value to our shareholders continues to be a fundamental pillar of our strategy. To that end, given the uncertain and rapidly changing macroeconomic environment, we have recommended to the Board to reduce the quarterly... While free cash flow remains resilient and is expected to continue to improve going forward, we wanted to ensure that we maintain the financial flexibility to invest in accretive opportunities. to share buybacks and strategic growth initiatives. all the while reducing our leverage. As such, the board has approved a quarterly dividend of 10.8 cents per share, payable on June 19th, 2025, to shareholders of record on May 22nd.
Lucas: Delivering value to our shareholders continues to be a fundamental pillar of our strategy.
Lucas: To that end, given the uncertain and rapidly changing macroeconomic environment, we've recommended to the board to reduce the quarterly dividend.
Lucas: While free cash flow remains resilient and is expected to continue to improve going forward. We wanted to ensure that we maintain the financial flexibility to invest in accretive opportunities.
Lucas: As for share buybacks and strategic growth initiatives, all the while reducing our leverage.
Lucas: As such the board has approved a quarterly dividend of $10 eight per share payable on June 19, 2025 to shareholders of record on May 22025.
Jean-Guy Desjardins: Now I'll turn the call back to Jean-Guy for his closing remarks. Thank you, Lucas. 2025 is proving to be an eventful year in numerous aspects. while we are being faced with a volatile market environment. We are pleased that efforts undertaken over the past few years transform to a regionalized distribution model. are largely complete and are bearing fruit with positive net organic growth, excluding assets sub-advised by Pinestone, achieved in the first quarter of 2021. This is also a testament to the strong long-term performance achieved by our investment teams across our country.
Sean: I will now turn the call back to Sean for his closing remarks.
Sean: Thank you Lucas.
Speaker Change: 225 is proving to be an eventful year and numerous aspects.
Speaker Change: While we are being faced with a volatile market environment.
Speaker Change: We are pleased that efforts undertaken over the past few years to transform to a regionalized distribution model are largely complete and are bearing fruit with positive net organic growth excluding assets sub advised.
Speaker Change: Fine stone.
Speaker Change: <unk> in the first quarter of 2025.
Speaker Change: This is also a testament to the strong long term performance achieved by our investment teams across our platforms.
Jean-Guy Desjardins: However, We are facing a challenging microeconomic odds. and continued uncertainty.
Speaker Change: However.
Speaker Change: We are facing a challenging macro economic outlook and continued uncertainty.
Jean-Guy Desjardins: So in this light, we have made the difficult decision to reduce the quarterly dividend. This action enables us to establish a more balanced approach to capital allocation aimed at providing additional financial flexibility. So this proactive approach also gives us greater ability. to accelerate deleveraging and invest in future growth opportunities as they arise. to ultimately enhance shareholder value.
Speaker Change: So in this slide we have made the difficult decision to reduce the quarterly dividend.
Speaker Change: This action enables us to establish a more balanced approach to capital allocation aimed at providing additional financial flexibility.
Speaker Change: So this proactive approach also gives us greater ability.
Speaker Change: To accelerate deleveraging and invest in future growth opportunities as they arise.
Speaker Change: To ultimately enhance shareholder value.
Jean-Guy Desjardins: So lastly, as you may have seen from a release last The Board and I are pleased to announce the appointment of Maxime Mnard as Global President and Chief Executive Officer, effective July 1, 2021. As founder and executive chair of the board, I will continue to be involved in the strategy of the firm, in the oversight of our public markets platform, and lead the global asset allocation activities, including portfolio construction and multi-asset solutions. So I am confident that Maxime's leadership skills, deep understanding of the industry and of Fiera's culture. Make him the right choice to steer the firm's next...
Speaker Change: So lastly, as you may have seen from our release last night.
Speaker Change: The board and I are pleased to announce the appointment of Maxim Menard as global President and Chief Executive Officer effective July one 2025.
Speaker Change: As founder and executive Chair of the Board I will continue to be involved in the strategy of the firm and the oversight of our public markets platform and lead the global asset allocation activities, including portfolio construction and multi asset solutions.
Speaker Change: So I am confident that makes <unk> leadership skills.
Speaker Change: Deep understanding of the industry and of Euro Sculpsure.
Speaker Change: Make him the right choice to steer the firm's next phase.
Jean-Guy Desjardins: I am also pleased to announce that Gabrielle Castiglia Executive Director, Global Chief Legal Officer, and Corporate Secretary. has been appointed Executive Director and Global Chief Operating Officer. He will work closely with Maxime to enhance the effectiveness and efficiency. of the firm's operating model.
Speaker Change: I'm also pleased to announce that <unk> <unk>.
Speaker Change: <unk> Director Global Chief Legal officer, and corporate Secretary.
Speaker Change: Has been appointed executive director in Global Chief Operating Officer.
Speaker Change: He will work closely with Maxim.
Speaker Change: Hence the effectiveness and efficiency of the firm's operating model.
Jean-Guy Desjardins: Lucas Pontillo Executive Director and Chief Global Financial Officer. will now also lead corporate strategy. spending his current mandate. in his role as Executive Director and Global Chief Financial Officer and Head of Corporate Strategy. He will work closely with Maxime to shape the firm's strategic direction. Together, Maxime, Gabriel, and Lucas. will continue to drive growth and promote sustainable shareholder value.
Lucas: Lucas from deal.
Speaker Change: <unk> director and Chief Global Financial Officer.
Speaker Change: We will now also lead corporate strategy expanding his government mandate.
Speaker Change: In his role as executive director and Global Chief Financial Officer, and head of corporate strategy.
Speaker Change: He will work closely with Maxim to shape, the firm's strategic direction.
Speaker Change: Together, Maxim Gilead, and Lucas will continue to drive growth and promote sustainable shareholder value.
Speaker Change: So I will now turn the call back to the operator for the question period.
Sylvie: So I will now turn the call back to the operator for the question period. Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. And should you wish to decline from the polling process, please press star followed by 2. And if you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star 1 now if you have any questions.
Speaker Change: Thank you Sir.
Speaker Change: Ladies and gentlemen, if you do have any questions. Please press star followed by one on your Touchtone phone, you'll hear a prompt that youre Ann has been raised and should you wish to decline from the polling process. Please press star followed by two and if you're using a speakerphone you will need to lift the handset first before pressing any Keith. Please go ahead and press star one now.
Speaker Change: If you have any questions.
Etienne Ricard: First, we will hear from Etienne Ricard at BMO. Please go ahead. Thank you and good morning. Maxime and Lucas, congrats on the new responsibilities.
Speaker Change: First we will hear from Timothy call at BMO. Please go ahead.
Timothy: Thank you and good morning.
Speaker Change: Maxim and Luca is congrats on the new responsibilities.
Lucas Pontillo: I'd like to start on capital allocation given the dividend announcement. So you'll be generating close to $50 million in excess free cash flow beyond the new dividend level. What are your priorities as it relates to financial leverage, buybacks and acquisitions? Thank you, Etienne. Great question. I mean, as we looked at the decision on the dividend, and as Jean-Guy mentioned, not an easy one, but the right one, we think, for the firm. In the face of, you know, uncertain economics, we wanted to make sure that we had a glide path to, in the worst possible economic scenario, really focus on deleveraging and be on a path where by the end of 2026, we can have a funded debt ratio that would be comfortably below 2.75 times, even in the face of the worst economic scenario.
Timothy: I'd like to.
Timothy: To start on capital allocation, given the dividend announcements, so youll be generating close to <unk>.
Timothy: $50 million in excess free cash flow beyond the new dividend level.
Speaker Change: What are your priorities as it relates to financial leverage buybacks and acquisitions.
Timothy: Yeah.
Timothy: Thank you.
Timothy: Great question.
Timothy: As we looked at.
Decision on the dividend and as <unk> mentioned, not an easy one.
Timothy: One we think for the firm.
Timothy: In the face of uncertain economics, we wanted to make sure that we had a glide path to in the worst possible economic scenario.
Timothy: Really focus on deleveraging.
Timothy: And be on a path whereby the end of 2026, we can have a funded debt ratio that would be comfortably below 275 times, even in the face of the worst economic circumstances.
Lucas Pontillo: So certainly in that type of a scenario, the focus for a capital allocation would be strictly on deleveraging and making sure that we've got a very resilient balance sheet to weather any type of economic crisis. The other scenario we looked at in a much more favorable economic environment is one where we would have the excess capital to sort of target a, let's say, a funded debt ratio below two and a quarter times by the end of next year. And in addition to the leveraging, that would give us ample opportunity to do things like share buybacks.
Timothy: Certainly and that type of a scenario with a focus from a capital allocation would be strictly on deleveraging and making sure that we've got a very resilient balance sheet to weather any type of economic storm.
Timothy: The other scenario, we looked at in a much more favorable economic environment is one where we would have the excess capital to sort of targets.
Timothy: Let's say a funded debt ratio below two and a quarter times by the end of next year and in addition to deleveraging that would give us ample opportunity to do things like share buybacks. We continue to believe that the share is significantly undervalued and have been the best interest of our shareholders for us to reinvest in the company stock and at the same time redeploy.
Lucas Pontillo: We continue to believe that the share is significantly undervalued and it would be in the best interest of our shareholders for us to reinvest in the company's stock and at the same time redeploy on opportunities similar to what you saw us do in the first quarter with regards to our investment in Packaged Living the UK investment firm that we already had an interest in but to be agile and to be able to take advantage of such opportunities Okay, thank you for the details.
Timothy: On opportunities similar to what you saw us do in the first quarter with regards to our investment in packaged living.
Timothy: UK investment firm that we have already had an interest in.
Timothy: But to be agile and to be able to take advantage of such opportunities as they present themselves in the market.
Timothy: Okay. Thank you for the details.
Maxime Mnard: And Maxime, since joining FIERA about two years ago, What are some key learnings that you've acquired? and how are these impacting the way you're thinking about shaping the strategy going forward? So I think my My appreciation for the investment platform. has obviously evolved from looking at it from a competitive standpoint before joining and as I spend the last 18 months.
Jim: Next Jim.
Timothy: Since joining <unk> about two years ago.
Timothy: What are some key learnings that you've acquired.
Timothy: And how.
Timothy: How are these impacting the way youre thinking about shaping the strategy going forward.
Timothy: So I think my my.
Timothy: My appreciation for the investment platform is as obviously evolve.
Timothy: Looking at it from a competitive standpoint before joining and as I spent the last 18 months understanding the depth of the investment solutions.
Maxime Mnard: Thank you all for attending. Thank you for understanding the depth of the investment solutions. I've grown to have a... found appreciation for what we could bring to markets. We've seen some early results in Canada over the first quarter, but more to come in Q2 in terms of our success.
Timothy: We're on to have a.
Timothy: <unk> found appreciation for what we could bring to markets. We've seen some early results in Canada.
Timothy: Over the first quarter, but more to come in Q2 in terms of our success.
Maxime Mnard: How does that help me to shape the next phase of it is going to be a lot about accelerating execution from a Sales Cycle point of view, and also internationally, making sure that we double down on some of the... low-hanging fruits opportunities that we have in these different markets. Again, in Canada, we've seen some early success in the public markets, also in the private markets. We're looking forward to announce more in the next few quarters.
Timothy: How does that help me to shape. The next phase of it is.
Timothy: That would be a lot about accelerating execution from a.
Timothy: From a sales cycle point of view and also internationally, making sure that we double down on some of the.
Timothy: Low hanging fruit opportunities that we have in these different markets.
Timothy: Again in Canada, we've seen some early success in the public markets also in the private markets. We're looking forward to announce more in the next few quarters.
Maxime Mnard: And again, from speaking to Eric in the U.S. and Klaus and Rob in Asia, we are well underway to be able to execute. really good results.
Timothy: And again from speaking to Eric in the U S and clauss and Rob in Asia.
Timothy: We are well underway to be able to execute on some really good results. So I'm looking forward to continue to accelerate that regionalized strategy and implementing.
Maxime Mnard: So I'm looking forward to continuing to accelerate that regionalized strategy and implementing distribution scenarios that we had built a year and a half ago, even prior. Thank you for your comments. Thank you.
Timothy: Our distribution the scenarios that we had built a year and a half ago, even prior to me joining.
Timothy: Thank you for your comments.
Timothy: Thank you.
Gary Ho: Next question will be from Gary Ho at Desjardins Capital Markets. Please go ahead. Thanks and good morning. Maybe question for Shanky. So just on the back of the CEO transition announcement that you just provided, just curious to hear kind of your thoughts on timing. I know you're very active in many of the silos within Fiera, investment management, private clients, etc. So sounds like you're still going to be pretty hands-on after the hands-off transition on July 1st. Just wondering your thoughts there. Uh, well, uh... What we just did is we executed on the plan.
Speaker Change: Next question will be from Gary Ho at Deutsche Bank Capital markets. Please go ahead.
Speaker Change: Thanks, and good morning, maybe a question for chunky and so just on the back of the <unk>.
Speaker Change: CEO transition announcement that you just provided just curious to hear kind of your thoughts on timing I know you're very active in many of the silos within Sierra investment management private clients et cetera, It sounds like you're still going to be pretty hands on on the after the hands.
Speaker Change: And as I've transitioned unchanged on July one.
Speaker Change: Just wondering your thoughts there.
Speaker Change: Okay.
Speaker Change: Well.
Speaker Change: But what we just said as we executed on the plan.
Jean-Guy Desjardins: If you recall, when I came back, I agreed with the board that I would be coming back for a maximum of three years. And when you think about it, it's 2023. And very, very early towards late 2023, the board asked me to come up with a succession plan, which I did present to the board. And part of the succession plan is being implemented today. And I had identified, I think I said that publicly, I had identified four potential candidates after. When Max joined, we had four candidates, and towards the end of last year, the choice became at least to me and to the HR committee of the board, with whom I was constantly discussing that issue as we were coming close to the end of my three-year term.
Speaker Change: If you recall when I came back I agreed with the board that I would be coming back for a maximum of three years.
Speaker Change: And.
Speaker Change: No.
Speaker Change: When you think about it it's 2023 and <unk>.
Speaker Change: Very very early towards late 2023, the board asked me to come up with a.
Speaker Change: With.
Speaker Change: Our succession plan.
Speaker Change: Which I did present to their board.
Speaker Change: And part of the succession plan is being implemented today.
Speaker Change: And I had identified I think I said that publically I had identified for potential candidates.
Speaker Change: <unk>.
Speaker Change: After.
Speaker Change: When the Max Max joined.
Speaker Change: We had four candidates and.
Speaker Change: Towards the end of last year.
Speaker Change: Joyce became at least to me and to our to the exhibit to the HR Committee of the board.
Speaker Change: With whom I was constantly discussing that issue.
Speaker Change: As we were coming close to the end of my three year term.
Speaker Change: It became increasingly are favorable towards our towards Mack Sim and early this year in the first quarter of this year.
Jean-Guy Desjardins: It became increasingly favorable towards Maxime, and early this year, in the first quarter of this year, the decision was made to move forward with the changes that we just communicated today. So July 1st, if you think in terms of December 31st being the end of my committed mandate to the board, it's just barely six months before the end of that arrangement. And I think it's been, I think the transition from my coming back at the beginning of 2023 to where we are today has been as per plan. What we executed is exactly the plan that I had presented to the board at the beginning of 2023 when they asked me to come back.
Speaker Change: Decision was made to move forward with.
Speaker Change: With the changes that.
Speaker Change: We just.
Speaker Change: The communicated today. So so July 1st as a if you think in terms of December 31st being the end of my committed mandate to the board.
Speaker Change: It's just barely six months before before the end of that of that arrangement and.
Speaker Change: I think it's been I think.
Speaker Change: The transition from <unk>.
Speaker Change: From my my coming back at the beginning of 'twenty three to where we are today has been.
Speaker Change: As per plan.
Speaker Change: We executed is exactly the plan that I had presented to the board at the beginning of 'twenty three when they asked me to come back.
Speaker Change: And the.
Jean-Guy Desjardins: And the transition to the new leadership, especially in the context where there's Max, and there's Gabrielle, and there's Lucas, who are impacted by these changes and new responsibilities, I think is, I'm very happy about how we have executed on those fronts over the last two and a half years. So everybody is very excited now, including myself, about moving into the next phase. So we're very, very comfortable with the leadership of the firm being in the hands of the five key senior executives of the firm. which by the way includes John Valentini who's with here today but people should not forget that John is a key member of that executive group.
Speaker Change: The transition to the new leadership.
Speaker Change: Especially in the context, where there's mics in their schedule. Yeah, then theres Lucas who are impacted by this.
Speaker Change: These are these changes and new responsibilities.
Speaker Change: I think as I'm very happy about.
Speaker Change: Oh, Oh, we have executed on the on those fronts.
Speaker Change: Over the last two and a half years so.
Speaker Change: So everybody is very excited now.
Speaker Change: Including myself.
Speaker Change: About.
Speaker Change: Moving into the next the next phase so.
Speaker Change: We're very very comfortable with the leadership of the firm.
Speaker Change: Being in the hands of.
Speaker Change: The 555 in fact, the five key senior executives of the FERC.
Speaker Change: Okay.
Speaker Change: Which by the way includes.
Speaker Change: John Volentine use with here today, but.
Speaker Change: We should not forget that.
Speaker Change: John is a key member of the executive group.
Gary Ho: Yeah, no, for sure. Always appreciate your thoughts and comments.
Speaker Change: Yeah, No for sure I always appreciate your thoughts and comments and John sorry.
John Valentini: And, John, you know, I saw that you've added to your platform acquiring the rest of package living. So, can you maybe give us some detail on this? What's the multiple paid for the increased stake? Maybe talk about that asset in particular. And do you have the ability to purchase the rest of that or vice versa, any option from the minority to kind of sell that at a later date?
Speaker Change: Now that you've added to your.
Speaker Change: Platform acquiring the rest of <unk>.
Speaker Change: Packaged living.
Speaker Change: So can you maybe give us some detail on this what's the multiple paid for the increased stake.
Speaker Change: Maybe talk about that asset in particular and do you have the ability to purchase the rest of that or vice versa.
Speaker Change: Any option from the minority to kind of sell that at a later date.
John Valentini: Well, the acquisition of Packaged is... is really a strategy of growth of our European platform. When you see the share of JV earnings, I mean, we call it... I always discuss with Lucas if we can change the nomenclature of those earnings. What they really are are performance fees, similar to performance fees, and they're joint ventures that we established. There's about eight platforms. that we operate. And those eight platforms are going to provide a platform for growth for our asset management business in the UK, and packaged living is a good example. It was a platform that specializes in residential housing, which is a growing sector actually if you look at, there's quite a few articles in the Financial Times that have been published as to how this is emerging to be one of the fastest growing sectors in the asset management space in the UK.
Speaker Change: The acquisition of packaged is.
Speaker Change: It is really a strategy of growth of our European platform. When you see the share of JV earnings I mean, we call it.
Speaker Change: I always said discussed with Lucas if we can change the phenomenal nature of those earnings what they really are performance fees.
Speaker Change: The performance fees and there are joint ventures that we established earlier theres about eight platforms.
Speaker Change: That we operate and those eight platforms are going to provide a platform for growth for our asset management business in the UK and package living is a good example.
Speaker Change: It was a platform that.
Speaker Change: Specializes in.
Speaker Change: Residential housing, which is a growing sector actually if you look at.
Speaker Change: Theres quite a few articles in the financial times that had been published is that how this is emerging to be one of the fastest growing sectors in the asset management space and in the U K.
John Valentini: So we acquired that platform. It operates because it's truly a asset manager. It has mandates with institutional investors. And in actual fact, since we acquired the platform, we've already increased, had new mandates of over $100 million. And we expect that to continue over the course of this year. So it's not our intention to acquire more, we've got a controlling interest in the platform. We already had 33%, Gary, and I would say that over the coming years, it could happen that we would, you know, our operating platforms where we have joint ventures will be another vehicle for continued growth of our European platform.
Speaker Change: So we are we.
Speaker Change: We acquired that platform. It operates because it's truly a asset manager.
Speaker Change: It has mandates with institutional investors and in actual fact, since we acquired the platform.
Speaker Change: We've already.
Speaker Change: Increased had new mandates of over $100 million and we expect that to continue over the course of this year.
Speaker Change: So it's not our intention to acquire more we've got a controlling interest in the platform.
Speaker Change: We already had 33%, Gary and I would say that over the coming years.
Speaker Change: It could happen that we would.
Speaker Change: Our operating platforms, where we have joint ventures will be another vehicle for continued growth of our European platform.
John Valentini: I don't know if I provided you enough color on that. And just, you know, maybe to finish up on private markets, again, we've had new mandates of $500 million in the quarter. We expect that the number will be larger than that in Q2, based on our pipeline. quite confident in new mandates that will be in infrastructure. in real estate and in credit as well over the coming quarters, we expect to get net new capital and new mandates. So we will expect continued growth in AUM in Q2 and the rest of the year.
Speaker Change: <unk> provided you enough color on that.
Speaker Change: And just.
Speaker Change: Maybe to finish off on private markets again, we've had new mandates a $500 million in the quarter.
Speaker Change: We expect that the number will be larger than that in Q2 based on our pipeline.
Speaker Change: I'm quite confident in new mandates that will be an infrastructure.
Speaker Change: In real estate and in credit as well over the coming quarters, we expect to get net new capital and new mandates in credit so.
Speaker Change: So we will expect continued growth in AUM over the rest of it in Q2 and the rest of the year.
John Valentini: Okay, no, I appreciate those those comments. That's helpful.
Speaker Change: Okay.
Speaker Change: Those comments that's helpful. And then maybe just last question.
John Valentini: And then maybe just last question, 5.7 billion canoe leakage that's behind us, and then the 1.2 billion small cap fund. How should we think about redemptions for the remainder of the year and any other further pinestone leakage expected in the coming quarters? Well, you know what? I think everybody knows that Nazim and I are pretty close, so we'll talk about that. I think for the rest of the year, you can almost assume that there won't be anything. There might be something, but it's going to be very minimal. It could be 100 million here and there, but nothing significant.
Speaker Change: $5 7 billion to newly leakage, that's behind US and then the $1 2 billion small cap fund.
Speaker Change: How should we think about redemptions for the remainder of the year and any other further pipestone leakage expected in the coming quarters.
Speaker Change: Well.
Speaker Change:
Speaker Change: Yes.
Speaker Change: Right.
Speaker Change:
Speaker Change: I think everybody knows that Jim and I are pretty close and so we talk about that.
Speaker Change: I think for the rest of the year.
Speaker Change: Almost assume that there won't be anything there might be something but it's going to be very minimal.
Speaker Change: It could be a 100 million here and there but nothing significant.
Speaker Change: And.
John Valentini: And we happen to both believe that the future leakage will be very minimal. And there's a fundamental reason behind that. If you look at the leakage that has occurred up to now, it has been by far, and by far is 90% of it has been from intermediaries. And that's all behind us now. And those clients, we've had very little institutional client leak. And those clients who had any motivation or intention or desire for whatever reason, and from the intermediary side, there's... I won't go into it, but there's a long list of reasons why they would want to go direct to Pinestone.
Speaker Change: We are open to both believe that.
Speaker Change: Future leakage will be will be very minimal.
Speaker Change: And there is a.
Speaker Change: Fundamental reason behind that if you look at the leakage.
Speaker Change: Third up to now.
Speaker Change: Has been by far.
Speaker Change: And by far as a.
Speaker Change: 90% of it has been from intermediaries.
Speaker Change: And that's all behind Us now.
Speaker Change: And.
Speaker Change: Most clients.
Speaker Change: We've had very little institutional clients leakage.
Speaker Change: And those clients, who are the any motivation or intention or desire for whatever reason.
Speaker Change: From the intermediary side there is.
Speaker Change: There is.
Speaker Change: I won't go into it but there are there's a long list of reasons why they would want to go direct to bind stone.
John Valentini: But if other clients who would have had either reasons or motivations or whatever to move directly to Pinestone, if they haven't done it by now, it's difficult to see why would they do it in the coming years. So we expect that the future leakage from our Fiera clients going directly to Pinestone will be minimal.
Speaker Change: If.
Speaker Change: The other clients who.
Speaker Change: Had either reasons or motivations or whatever to move directly to finestone, if they haven't done it by now it's difficult to see why would they do it in the coming years. So we expect that.
Speaker Change: The future leakage.
Speaker Change: From our Sierra clients going directly to bind stone will be minimal.
Speaker Change: Yeah.
John Valentini: Okay, great. Those are my questions. Thank you.
Speaker Change: Okay, Great. That's all my questions. Thank you.
Speaker Change: Thank you.
Nick Prabe: Next question will be from Nick Prabe at CIBC Capital Markets. Please go ahead. Okay, thanks. Maybe just for Lucas, I would imagine that when you'd engage in the discussion around the dividend, you would have looked at what run rate the cash flow generated capacity the business would be. And just considering the recent choppiness that we've seen in equity markets and the chunky redemption of higher margin assets from Canoo, are you able to just update us on what run rate free cash flow looks like from your perspective today? Would it be very different from that LTM number?
Speaker Change: Next question will be from Nick Priebe with CIBC capital markets. Please go ahead.
Nick Priebe: Okay. Thanks, maybe just for Lucas I would imagine that when you engage in the discussion around the dividend you would've looked at what run rate.
Nick Priebe: The cash flow generative capacity of the business would be and just considering the recent choppiness that we've seen in equity markets and the chunky redemption of higher margin assets from can you are you able to just update us on what run rate free cash flow looks like from your perspective today, but it will be very different from that LTM number.
Nick Priebe: No in fact, and as I mentioned in my prepared remarks, you can see an improvement year over year, particularly when you look at Q1 of last year and we do expect it to continue to improve going forward.
Lucas Pontillo: No, in fact, and as I mentioned in my prepared remarks, you can see an improvement year over year, particularly when you look at Q1 of last year, and we do expect it to continue to improve.
Lucas Pontillo: I want to be clear that the decision on the dividend... is not one in terms of constraint from a free cash flow perspective. Again, we're very comfortable with the resilience of the free cash flow and sort of where it's going and really more want to make sure that we have the financial flexibility. take advantage of opportunities that present themselves, but at the same time, whether any different. got it. Okay.
Nick Priebe: So I want to be clear that the the decision on the dividend was not one in terms of constraint from a free cash flow perspective, let's say again, we're very comfortable with the resilience of the free cash flow and sort of where it's going and really more want to make sure that we have the financial flexibility as I mentioned to take advantage of opportunities that present themselves.
Nick Priebe: But at the same time, whether any downside and protect the balance sheet.
Nick Priebe: Okay.
Nick Priebe: Got it Okay and then just in light of the leadership transition I thought I would ask a strategy related question.
Lucas Pontillo: And then in light of the leadership transition, I thought I would ask a strategy related question. You've always highlighted that the market doesn't give you a lot of recognition for the value of the private markets franchise. I wouldn't think that strategy changes too dramatically with the leadership transition but is the divestiture of the private markets platform something that you would ever contemplate to surface and crystallize that value?
Nick Priebe: You've always highlighted that the market doesn't give you a lot of recognition for the value of the private markets franchise.
Nick Priebe: I wouldn't think that strategy changes to dramatically with the leadership transition, but is the divestiture of the private markets platform something that you would ever contemplate to surface and crystallize that value.
Speaker Change: I'm not sure we would contemplate divesting something that we think is a future growth engine of the firm so that would be a categorical no.
Lucas Pontillo: I'm not sure we'd contemplate divesting something that we think is a future growth engine of the firm, so that would be a categorical no. Okay, all right, that's clear. Okay, that's all I had. Thanks very much. Thank you.
Speaker Change: Okay, Alright, that's clear.
Speaker Change: That's all I had thanks very much.
Speaker Change: Thank you.
Graham Ryding: Next question will be from Graham Ryding at TD Securities. Please go ahead. Hi, good morning. Just want to follow up on the JV earnings piece. What was the size of the incremental investment? Has that been disclosed? Or would you disclose that? And then what sort of lift should we expect in the JV earnings now that you've got a larger majority stake? Yes, so it's actually, it goes the other way, so thanks for the question, so the acquisition cost was roughly 9 million Canadian, so that was the additional investment, and you saw that translated into a gain for us of over, end of books for the year in terms of net incomes, and it was really related to the fact that We had had a historic investment in there that was from early days that was really quite low value.
Speaker Change: Next question will be from Graham Ryding of TD Securities. Please go ahead.
Graham Ryding: Hi, Good morning, just wanted to follow up on that Jamie JV earnings piece.
Graham Ryding: What was the size of the incremental investment has that been disclosed or would you disclose that and then what sort of lift should we expect in the JV earnings now that you've got a larger majority stake.
Speaker Change: Yes, so its actually it goes the other way so thanks for the question. So the acquisition cost was.
Speaker Change: Roughly 9 million Canadian dollars. So that was the additional investments and you saw that translated into a gain for us of over.
Speaker Change: And the books for the year in terms of.
Speaker Change: Net income and that was really related to the fact that.
Speaker Change: We had had a historic investment in there that was.
Speaker Change: From early days, it was really quite low value.
John Valentini: And so as a result of the way we can account for the acquisition, you got the gain on sort of the market. where you'll actually see that revenue coming in now, however, is actually going to be on a consolidated basis. So it's actually coming out of JV earnings. So as a result, you know, for the quarter, we had about 800,000 of revenue that's now embedded in our base management fee, as opposed to it coming through the JV revenue line. So what you'll see going forward is effectively disappearing from the JV revenue line, and we consolidate 100% of the revenues and expenses.
Speaker Change: So as a result of the way we can account for the acquisition you've got the gain on sort of the markup.
Speaker Change: Where youll actually see that revenue coming in now however is actually going to be on a consolidated basis. So it is actually coming out of JV earnings. So as a result for the quarter. We had about 800000 of revenue that's now embedded in our base management fee as opposed to it coming through the JV revenue line, so what youll see going forward as <unk>.
Speaker Change: <unk> disappearing from the JV revenue line, and we consolidate 100% of the revenues and expenses.
John Valentini: can tell you sort of the, this was positive accretion in terms of What comes off of that investment in particular is closer to a 40%. Yeah, a comment I'd make on the JV earnings, in actual fact, the amount we've been recording over the last couple of years. have been lowered in what we've historically realized. We need to understand that the real estate business. has been slower due to the macroeconomic environment since 2022-23 that's impacted. But prior to that, our JV earnings were substantially higher than what we've realized over the next two, three years. So I'd expect maybe not so much this year, but starting in 2026 onwards, we will see an uptick in our share of earnings as the real estate market in Europe in 2025 is improving significantly over the last couple of years.
Speaker Change: I can tell you sort of the this was positive accretion in terms of.
Speaker Change: What comes off of that investment in particular is closer to a 40% margin in terms of EBITDA relative to our consolidated a mill.
Speaker Change: I don't know if you wanted to add anything John comment I'd make on the JV earnings in actual fact, the amount we've been reporting over the last couple of years has been lowered than what we've historically realized we need to understand that the real estate business.
Speaker Change: Has been slower due to macroeconomic.
Speaker Change: Economic environment since 'twenty two 'twenty three.
Speaker Change: That's impacted but prior to that.
Speaker Change: Our JV earnings were substantially higher than what we've realized over the next two three years.
Speaker Change: So I'd expect maybe not so much this year, but starting in 'twenty six onwards, we will see an uptick in our share of earnings as the real estate market.
Speaker Change: And Europe has.
In 2025 is improving significantly over the last couple of years.
John Valentini: So while we may lose the package living share of earnings, I don't expect the share of earnings to go down. In an actual fact, in 26 onwards, we should see potentially an uptick as we benefit from the increasing activity in real estate activity in that market.
Speaker Change: So while we may lose the package living share of earnings.
Speaker Change: Don't expect a share of earnings to go down and in actual fact in 2006 and 26 onwards, we should see potentially an uptick as we benefit from the increasing activity in real estate activity in that market.
Speaker Change: Yeah.
John Valentini: Okay, that's helpful.
Speaker Change: Okay. That's helpful.
Lucas Pontillo: Lucas, maybe I'll follow up and just make sure I'm fully, fully understanding the internet. Um On the on the private market side, 21 billion in totally UN, how much of that would be within your private wealth channel, your proprietary channel? And then, you know, how much opportunity you know, and this will be a maybe a question for Max or, or john, but how much opportunity do you see to sort of compete and penetrate into those third party retail wealth channels? other banks or independent wealth. Well, the private wealth has approximately $3 billion of our assets in the private market.
Speaker Change: Okay, maybe I'll follow up and just make sure im fully fully understanding the internet.
Speaker Change: On the on the private markets side $21 billion in total.
How much of that would be within your.
Speaker Change: Private wealth channel proprietary channel and then.
Speaker Change: Much opportunity on this would be a.
Speaker Change: Maybe a question for mark or for John but how much opportunity do you see to sort of compete and penetrate into those third party retail wealth channels.
Speaker Change: Other banks are our independent wealth.
Speaker Change: Okay.
Speaker Change: While the private wealth is approximately 3 billion of our assets in the private markets.
Lucas Pontillo: And as your second question is, I think... One of our one of our best opportunity in terms of underpenetrated market or segmented market. has really been through the intermediaries, the banks, the insurance. from an overall platform standpoint. The early touchpoint is through, typically, public market platforms where due diligence and others are just easier to execute, but we've seen loss of interest for our private market platform. It's hard for me to really give you a number in terms of our ability. get hard data of how much success we could get, but I certainly from a In terms of human interest standpoints, we've seen all of them at the table discussing and also seen early wins or finals on the public side of things.
Speaker Change: And as your second question is I think.
Speaker Change: One of our one of our best opportunity in terms of.
Speaker Change: Underpenetrated market our segment has really been through the intermediaries are banks insurance.
Speaker Change: Many overall platform standpoint.
Speaker Change: The early the early touch point is through it typically public market platforms, where due diligence and others are just easier to execute.
Speaker Change: We've seen lots of interest.
Speaker Change: Private market platform.
Speaker Change: For me to really give you a number in terms of our ability to.
Speaker Change: Get hard data on how much success, we could get but I certainly from a from.
Speaker Change: From an interest standpoint, we've seen.
Speaker Change: All of them at the table discussing and also seen early wins or finals on the public side of things.
Lucas Pontillo: We are Spending a lot of time introducing the rest of the platform, particularly on the private side of and I'm very up for it. Okay, so it sounds like success on the public market side, you think is going to open the door for for potentially some private market mandates on those same channels. Is that the message? Yeah, for sure. I mean, on the public side, I have visibility on what we're about to book and things are potentially to be announced on Q2-Q3. And again, like far advanced discussions on the private market side of things, the cycle is a bit longer.
Speaker Change: We are.
Speaker Change: Sending a lot of time, introducing the rest of the platform, particularly on the private side of things.
Speaker Change: I'm very optimistic that we can see some of the results in the next two.
Speaker Change: Two quarters on that.
Speaker Change: Okay. So it sounds like.
Speaker Change: Success on the public market side, you think it's going to open the floor for.
Speaker Change: Or potentially some part of the market mandates on those same channels.
Speaker Change: So that's the message.
Speaker Change: Yes for sure I mean on the public side I have visibility on what we are about the book and things are potentially to be announced on the Q2 Q3 and again.
Speaker Change: Far advanced discussions on the private market side of things the cycle is a bit longer but when I look at the pipeline.
Lucas Pontillo: But when I look at the pipeline from where we get RFPs or early discussions all the way to due diligence, it could take a few quarters or a couple of months as they run through the different strategies and make. But we're well-equipped, again, when you look at open-ended private market solutions on any of those platforms in Canada, there's very little offering of this quality available. Now it's up to us to make sure we execute on distribution. So we've done that in Canada, we've accelerated distribution in our presence in those segments. And again, if I look at international, I think it's one of the easier, under-penetrated segment where we're going to push harder, particularly through the insurance market.
Speaker Change: Where are we get Rfps are early discussions all the way to due diligence it could take a few quarters a couple of months.
Speaker Change: They run through the different strategies and make assessments on it but we're well equipped and again when.
Speaker Change: When you look at open ended private market solutions on any of those platforms in Canada.
Speaker Change: There is very little offering of this quality available now it's up to us to make sure we execute on distributions. So we've done that in Canada, we've accelerated distribution and our presence in those segments and again, if I look at international I think it's one of the easier.
Speaker Change: An underpenetrated segment, where we're going to push harder, particularly through the insurance market globally.
Speaker Change: But you should.
Lucas Pontillo: You should expect to have more color on it on... Okay, perfect. Thank you.
Speaker Change: More color on it on during the Q2.
Speaker Change: Okay perfect. Thank you.
Speaker Change: Thank you once again, ladies and gentlemen, if you have any questions. Please press star followed by one on you touched on Tom.
Sylvie: Once again, ladies and gentlemen, if you have any questions, please press star followed by one on your touchtone phone.
Jaeme Gloyn: Next question will be from Jaeme Gloyn at National Bank Financial. Please go ahead.
Speaker Change: Next question will be from James <unk> of National Bank Financial. Please go ahead.
Jaeme Gloyn: Yeah, just to start with the clarification, the JV earnings, that shifted to base management fees this quarter or is that a Q2 start? Shifted this quarter by about just under 300,000. So that was my earlier comment about annualized. It's about 800,000 on the base. You'd have about 300 in this room. Yeah, got it.
Speaker Change: Okay.
Speaker Change: Yes, just to start with the clarification.
Speaker Change: The the.
Speaker Change: The JV earnings that's shifted to base management fees this quarter or is that a Q2 start.
Speaker Change: Shifted this quarter by about just under 300000. So that was my earlier comment about annualized it's about 800000 on the base management fee lines. It up about 300 in this quarter.
Speaker Change: Yes got it.
Lucas Pontillo: Okay, and then it just in terms of the, I guess, some of the changes and restructuring and elimination of some folks. Did that flow through in this quarter? Or should we expect to see a step up in some of those restructuring and other costs in Q2? No, that'll be in Q2. So there wasn't any.
Speaker Change: Okay and then.
Speaker Change: Just in terms of the <unk>.
Speaker Change: Some of the changes in restructuring.
Speaker Change: Elimination of social.
Speaker Change: Did that flow through in this quarter.
Speaker Change: Or should we expect to see a step up in some of those.
Speaker Change: Restructuring and other costs in Q2.
Speaker Change: No that'll be in Q2, so there wasn't anything that was taken in the first quarter for that.
Speaker Change: Okay.
Lucas Pontillo: And then as I'm thinking about the the OPEX lines You know down this year versus last year on SG&A Was there anything unique in in this quarter? Is that just a you know, what else can we think about in terms of that line? And is this a stable sort of starting point for? for Fiera going forward or is there more to come through in Q2 in terms of like OPEX savings on SG&A? I mean, if it's stable, you keep in mind that there is a portion of compensation expense that's variable, right? So that fluctuates with AUM and market and revenue.
Speaker Change: And then as I'm thinking about the Opex lines.
Speaker Change: Down this year versus last year on SG&A.
Speaker Change: Is there anything unique in this quarter or is that just.
Speaker Change: What else can we think about it in terms of that line.
Speaker Change: Is this a stable sort of starting point for for.
Speaker Change: For <unk> going forward or is there or is there more to come through in Q2 in terms of like Opex savings on SG&A.
Speaker Change: I mean, its stable you keep in mind that there is a portion of compensation expense, that's variable rate, so that fluctuates with AUM and market and revenues.
Lucas Pontillo: There's also, you know, percentages allocated to bonuses and the like. It's a good run rate at this point, if you will, but I wouldn't factor in much in the way of... Great. Got that clear.
Speaker Change: Theres also percentages allocated to bonuses and the like so as I say.
Speaker Change: It will.
Speaker Change: It's a good run rate at this point if you will.
Speaker Change: I wouldn't I wouldn't factor in much in the way of additional changes.
Speaker Change: Great.
Lucas Pontillo: And then last one just on the expense. The share based comp came in a little later. I believe you guided to kind of, you know, plus or minus 5 million a quarter. Is there a shift in how to think about share based comp going forward? No, more timing, I would say, this quarter, Jaeme, really just because of some of the changes we announced, some of the... The implementation of some of those plans got pushed forward. So on an annualized basis, that's still a good number. There's really just more time. Great.
Speaker Change: Okay got that clear and then last one just on the expense.
Speaker Change: The share based comp came in a little later.
Speaker Change: I believe you guided to kind of.
Speaker Change: Plus or minus $5 million a quarter.
Speaker Change: Is there a shift in how to think about share based comp going forward.
Speaker Change: No more timing I would say this quarter, Jamie really just because of some of the changes we announced some of the <unk>.
Speaker Change: Implementation of some of those plans got pushed forward. So on an annualized basis. That's still a good number is really just more timing at this stage.
Speaker Change: Okay great.
Lucas Pontillo: And just the last one for me, I just want to go back to the capital priorities question and some of your scenarios where you're talking about funded debt ratios. 275 would be kind of the goal in a, let's call it a stress scenario, and then 2.25 funded debt ratio would be in a more favorable macro scenario that would allow more aggressive buybacks. Would that 2.25 include those more aggressive buybacks, or would you sort of view it as like 2.25 and then more aggressive buybacks would take you sort of back up to that 275? Like, I'm just wondering, you know, the flow of the cash flows in those scenarios and where funded debt could end up.
Speaker Change: Just a last one for me I just want to go back to the capital priorities question and some of your scenarios. When you were talking about funded debt ratios.
Speaker Change: <unk> hundred 75 would be kind of the goal in a let's call. It a stress scenario and then two in a quarter funded debt ratio would be in a.
Speaker Change: More favorable macro scenario that would allow more aggressive buybacks would that two and a quarter include those more aggressive buybacks or would you would you sort of view it as like two and a quarter and a more aggressive buybacks will take yes sort of back up to about 275, when I was just wondering.
The flow of.
Speaker Change: The cash flows in those scenarios, we're funded that could end up.
Lucas Pontillo: Yeah, no, I think that's a fair assessment. You know, the two in the quarter doesn't include sort of excess opportunistic opportunities. So as I say, this is more sort of the comfort level for us to manage to, and then you can view the rest as sort of the excess for us to deploy as well. Yeah, okay. So you're not saying two and a quarter is where you'll land in a in a good macro scenario. That's just, you know, starting point and then maybe some buybacks taken a little bit higher, maybe some acquisitions taken a bit higher from there too.
Speaker Change: Yes, no I think Thats, a fair assessment tool in the quarter doesn't include the sort of excess opportunistic opportunities.
Speaker Change: As I say this is more sort of the comfort level for us to manage to and then you can view the rest of the sort of the excess for us to deploy as we see fit at any given point in time.
Speaker Change: Yes, okay, so youre, not saying two quarters, where you land in a good macro scenario thats just.
Speaker Change: Starting point.
Speaker Change: Yes, maybe some buybacks take it a little bit higher maybe some acquisitions to get a bit higher than that yes, exactly I mean, there is.
Lucas Pontillo: Exactly, I mean, it'll come into the capital allocation mix in terms of things that we're intending to do. So it's a good comfort level for us to be able to then take advantage of. Understood. Appreciate it. Thank you.
Speaker Change: It will come into the capital allocation mix in terms of things that we're intending to do.
Speaker Change: So, let's say, it's a good comfort level for us to be able to then take advantage of other opportunities.
Speaker Change: Okay.
Speaker Change: Understood I appreciate it thank you.
Speaker Change: Thank you.
Gary Ho: Next question is a follow-up from Gary Ho at Desjardins. Please go ahead.
Speaker Change: Next question is a follow up from Gary Ho at Deutsche Bank. Please go ahead.
Okay.
Lucas Pontillo: Please go ahead, Gary. Sorry about that. A quick question for Lucas, just the 49% JV that's not owned, is that booked in your non-controlling interest? Because I did see that go down sequentially versus December. Just wondering where I should see the other side of it. No, you'll see it, you'll see it consolidated at this point. So again, you won't see that. And you'll see sort of the note that described really to step up in the acquisition value and the gain. Direct you to that note because there's some good information. Okay. All right. I'll dig through that.
Speaker Change: Please go ahead Gary.
Speaker Change: Sorry about that.
Speaker Change: Quick question for Lucas, just a 49% JV thats not owned.
Speaker Change: I cant is that is that booked in your noncontrolling interest because I did see that go down sequentially versus December just went nowhere.
Speaker Change: I should see the other side of it.
Speaker Change: Yeah.
Speaker Change: No youll see it youll see a consolidated at this point. So again, you won't see that Youll see sort of the note that describes.
Speaker Change: Really the step up in the acquisition value when the gain on the sale.
Speaker Change: I'll direct you to that note because theres some good information there just in terms of.
Speaker Change: The economics around the transaction itself.
Speaker Change: Okay, alright, thanks for that thank you.
Sylvie: Thank you.
Speaker Change: Thank you.
Sylvie: And at this time, it appears we have no further questions. Please proceed.
Speaker Change: And at this time it appears we have no further questions. Please proceed.
Thank you Sylvie, that concludes today's call. For more information, do not hesitate to take advantage of our website at ir.fieracapital.com and thank you for joining us today.
Speaker Change: Thank you Sylvia and that concludes today's com for more information and I hesitate to take advantage of our web site at IR Docs, Yes capital Dot com and thank you for joining us today messy.
Speaker Change: Thank you ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we ask that you. Please disconnect your lines have a good weekend.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: No.
Speaker Change: Okay.
Speaker Change: Thank you.
Yes.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.