Good day, and thank you for standing by. Welcome to the Alaris Q4 2023 earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Amanda Frazer, CFO. Please go ahead. Thank you, Daniel. We appreciate everyone taking the time to join us this morning. We're excited to present our Q4 results. I am joined on this call by Steve King, President and Chief Executive Officer of Alaris. After a short presentation from Steve and I, there will be a question-and-answer section, as Daniel mentioned. Before we begin, I would like to remind our listeners that all amounts given are in Canadian dollars unless otherwise noted. Listeners are cautioned that comments made today may contain forward-looking information. This forward-looking information is based upon a number of important factors and assumptions, and therefore actual results could differ materially. Additional information concerning the underlying factors, assumptions, and risks is available in last night's press release and our MD&A under the headings "Forward-Looking Statements and Risk Factors," copies of which are available on SEDAR+ and at sedarplus.com, as well as our website. Non-IRS data-sorry-Non-IFRS data is also presented and may differ from the way other companies present such data. As with the forward-looking statements, please refer to last night's press release and our MD&A for more clarification regarding non-IFRS measures. The highlights from our Q4 include revenue from the quarter of CAD 41.9 million, exceeding our guidance of CAD 39.9 million as a result of higher-than-anticipated common distributions received, and as expected, was 18% lower than our Q4 2022, mainly due to one-time payments on the FNC redemption that occurred in October 2022, as well as partial catch-up payments that we received of CAD 3 million late in 2022 from Ohana regarding deferrals of their distributions from the COVID pandemic. For the year, revenue of CAD 162.6 million was a slight increase over CAD 161.6 million of normalized revenue in 2022 after adjusting for both FNC and Ohana, as well as CAD 17.2 million of Kimco deferred distributions received in Q2 of 2022. EBITDA for Q4 of CAD 61.3 million and per unit of CAD 1.35 represents an increase of approximately 30% as compared to Q4 2022, and for the year, CAD 202.04 per unit, an increase of approximately 10%. The increase in EBITDA was largely attributable to capital appreciation on our common portfolio. For the year, the trust had a net unrealized gain on investments of CAD 65.2 million, of which CAD 58.2 million relates to Alaris's common equity investments. Alaris realized an increase in fair value of approximately 34% on the opening carrying value of its common, in addition to a 7.5% return on common distributions, or CAD 12.8 million. Overall, Alaris's investment in common equity earned a total return of 41.8% in the year. Over the last four years, Alaris has added common equity as part of its overall investment strategy, with 13 of 20 investments now containing common equity. Key drivers of the fair value increase in the quarter of $28.3 million were Ohana, formerly Planet Fitness Growth Partners, of $9.9 million, BCC of $5.4 million, Amur of $5.6 million, LMS of $4.3 million, and a decline in GWM of $3.1 million. Ohana Partners finished 2023 ahead of budget and further aided by tailwinds of positive announcements from Planet Fitness Corporate. Based on the budgeted growth for 2024 and continued expansion, Ohana expects this momentum to continue in the coming years. BCC continues to see impressive growth as they execute on their development and expansion plans. Organic growth through the year saw BCC add 28 locations for a total of 98 centers. Based on Amur's unaudited financial results for the year, their reset is expected to be up 6%. Amur saw steady improvement throughout 2023 as borrowers positively adjusted to a more stable macro environment and customer sentiment improved. LMS's results improved over the year, with their ECR now recovering to 1.2 times. Alaris expects this improvement in gross margin to continue into 2024. With these improvements, we expect LMS to begin catch-up payments on their deferred distributions in the latter half of the year. Based on the 12% reset for 2023 and forecast 2024, there is an increase in the fair value of LMS during the quarter of $4.3 million. As discussed in previous quarters, GWM has not realized the growth expected at the time of our investment, and a slowdown in early 2023 results impacted their growth expectations for the year. This performance against budget and negative reset for 2024 resulted in a decrease in fair value during the quarter of $3.1 million. Other less significant movements in D&M, B&S, SCR, F&P, Edgewater, Fleet, and Sagamore rounded out our changes in the quarter. The strategic transaction involving BCC and co-sponsor Brookfield completed earlier in the year, in which we exchanged $145 million of our traditional preferred equity for convertible preferred units, resulted in Alaris receiving an 8.5% distribution, as well as an annual transaction fee of $1.5 million, with a total of $12.2 million received in 2023. During the year, there was also an increase of CAD 13.9 million in the fair value of the convertible preferred units, resulting in a total annualized rate of return of approximately 20%. During the year, Alaris generated basic earnings per unit of CAD 3.05 and paid out CAD 1.36 per unit in distributions, resulting in total book value of CAD 21.12 per unit, which represents a record for Alaris. The actual payout ratio for the year was 64% after adjusting for the settlement and legal costs relating to Sandbox litigation in Q1. During the quarter, we also amended our credit facility, which included increasing the facility to CAD 500 million, expanding the leverage covenant to a permanent 3x, and reducing our overall pricing. We currently have approximately CAD 185 million outstanding and have CAD 258 million of capacity available on the facility. Since converting to a trust in 2020, Alaris's tax profile on distributions changed from being 100% eligible dividends to a combination of return of capital, eligible dividends, capital gains, and interest income. As a result of a decline in the amount of interest income generated directly by the trust, the effective tax rate of Alaris's distribution for an Alberta individual in the top tax bracket for 2023 was 24.5% as compared to 34.3% for a dividend received from a corporation. Facts and updates on our partners: Our portfolio continues to perform well, with a slight decline in weighted average ECRs to approximately 1.5x, with 11 out of 20 partners continuing to be above this threshold. With the effective higher interest rates now fully burdening the portfolio trailing 12-month period, we have seen a few partners' ECRs dip below the 1.2 threshold. With negative resets in these cases, as well as stable interest rates and later year declines in interest rates expected, Alaris sees positive go-forward trends in these metrics. Ohana's ECR is affected by the drag created by growth. We view this as a positive, and it is this growth that is driving the gains in common equity value. For the purposes of Ohana's bank covenants, this drag of new clubs is excluded for 18 months. We expect Ohana to grow back to an ECR above 1.2 over the course of the year. D&M, once the results of the acquisition in January and the lower preferred distributions are pro forma, D&M is above 1.2, and with a pickup in lease activity forecast for the later half of 2024, we expect to see D&M above 1.2 within the period. IT services have been most affected by a slowdown in the capital project spending over the course of 2023. Accion's business is stable, but we see the bounce back above 1.2 is likely to take longer than D&M and Ohana. Of our 20 partners, 13 either have no or less than one turn of debt as compared to EBITDA in the business. Our anticipated aggregate partner resets are expected to be flat in 2024. Positive resets are expected from nine partners, with negative resets from eight partners and three who do not reset in 2024. Coming off of the high growth periods for many of our partners over the last few years, we did expect to see some flattening and declining back to more normalized levels. Our current outlook calls for CAD 39.2 million of revenue in Q1 and a 12-month run rate of CAD 169.6 million. Our G&A expectations have increased modestly to CAD 16.5 million, reflecting the growth in the Alaris team and a general increase in costs. As noted in last night's release, we do have an upcoming change to reporting. With the evolution of Alaris's investment model over the last few years, beginning with the introduction of common equity and continuing to evolve with the expansion of SPV investments, subsequent to year-end, Alaris determined it had met the requirements of an investment entity under IFRS 10. As a result of this prescribed change, in 2024, Alaris will no longer consolidate its investment entity subsidiaries into its financial results. On a go-forward basis, these entities, including Alaris USA, the subsidiary which holds Alaris's U.S. investments, as well as Alaris Equity Partners, Inc., which holds Alaris's Canadian investments, as well as Senior Credit Facility and Convertibles of Ventures, will be reflected in the trust as investments held at fair value. While this method of accounting will have a pervasive effect on the financial information on the face of the statements, supplemental disclosures and non-GAAP measures will be provided to ensure a similar visibility into Alaris's operations and results. While this change is prescribed, it does have some benefits for Alaris, which include the ability to utilize our full suite of rights, including stepping in without having to consolidate the partners into our financial statements, providing more flexibility in how we address issues within the portfolio. It also allows us more flexibility in how we invest capital, as we are able to have a higher amount of influence or control in partners without navigating the accounting effects of this involvement. And on that note, I'll turn it over to Steve for his comments. Great. Thanks, Amanda. January marked Alaris's 20th anniversary, which on its own is extremely gratifying. Companies in the private equity industry don't make it to 20 years unless they're doing something right and creating value for their shareholders. It also happened to be one of the most exciting 12 months in our history because of the significant advances that our company has made strategically that manifested themselves in our results this year. Over the first 15 years of our existence, our unique preferred share portfolio created a low-risk, low-volatility cash flow stream. Entrepreneurs gave us downside protection in exchange for more control and more upside for them. At that point, and after analyzing the returns that our capped growth preferred shares had created for the common equity holders of these companies, we decided to tack on a portion of common equity to go along with our preps onto every deal where it made sense. We hope to expand our return profile while not materially changing the risk profile since we are still protected by the rights and remedies of our preferred shares. Fast forward to today, and the 42% total return from our roughly $200 million common share portfolio has more than justified our decision from five years ago. The other strategic initiative that crystallized this past year was the introduction of third-party capital management that resulted in a partnership with Brookfield along with our longstanding partner and Body Contours. Having an economic interest in $400 million that we didn't have to raise ourselves is completely additive to our return profile. It has had the additional benefit of really putting Alaris on the map in the U.S. private equity industry, as it was one of the most high-profile deals done in the U.S. last year. Investment banks and advisors are now very familiar with our company, and we can show potential partners a far more robust set of outcomes with Alaris as their sponsor. Prior to the BCC transaction, we were making a 13% return on that investment. 2023 saw a total return on BCC of 20%, a significant transaction in many regards. Looking forward, we expect to keep expanding our progress with traditional preferred and common equity investments into new partners, close another third-party capital transaction, and we also believe that 2024 will be a year to see some profitable exits. Because of COVID and the rising interest rate environment, we have had fewer partners decide to sell their businesses than usual. While we don't see a large number of them selling, we do expect that one or two decide to sell this year. Now that we have common equity upside along with the preferreds, exits have the potential to add a really nice upside to our returns and allow us to redeploy the capital into new situations. I've also set our goal for 2024 to be a year of growing through our partners. We now have a robust portfolio of 20 platform investments. Again, as a common equity holder in most of these companies, creating equity value while also deploying more prep shares into them is a highly accretive strategy for us. Our business development professionals have been tasked with increasing that activity in the coming year. From a professional and personal perspective, it's been an incredible journey to be involved with this company as we've evolved and adapted over the 20 years, and I really can't wait to see what the next 20 years bring. So, Daniel, happy to open it up to any questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Gary Ho with Desjardins Capital Markets. Your line's now open. Thanks, Steve. Good morning. Morning, Gary. We're starting to see your common equity investment strategy shine through here. Would you say the fair value of your common equity book now is fully marked to market already, or could there be some upside when these assets are redeemed in the coming years? I think, Steve, you mentioned you're prepared to mark several potential exits this year. Just in regards to the accounting standpoint, there is a difference in the mark-to-market of our common and to what we expect to receive on an exit. When we mark-to-market our common, we are including a minority discount. And in general, we exit these investments alongside our partners in control deals. Therefore, we will still have a pickup to the fair value on our book based on that control premium that we are not recognizing ourselves. Steve? Yeah, I think that's fair. We've tried to be conservative historically on our fair values. I don't think anything has changed in that regard. And that's just kind of the nature of the process. So we do think there's several of our companies that have had takeover offers on them recently that we don't think will go through. In each of the cases, they've been at higher valuations than what we're holding them at. So we think there's definitely upside there. Perfect. Thanks for that. And then on Planet Fitness, I think you mentioned there's some positives from the Planet Fitness Corporate. Can you elaborate what those are and also any opportunities for your partner to acquire other PE-led franchisees? Yeah. So Planet Fitness Corporate has had a change of their CEO over the last few months. Their interim CEO is one of the original franchisees and one of the largest kind of independently owned franchisees in their system. So there's a renewed focus on franchisee economics that starts with the cost of a build and a re-equip. So they've changed the timelines and also the equipment requirements for each club that has reduced the cost and given more time in between rebuilds. There's some other things around the fringes. One of the other things that they're testing right now in about 250 clubs is a price increase for the first time on their base membership of $10 a month. For our company, every dollar in base membership adds $2.5 million straight to the bottom line. So it's significant. And so yeah, it's a system that has been extremely stable over the years. That's why so many private equity firms have gone into the Planet Fitness system. It's just a wonderful cash flow stream. The membership count continues to grow past pre-COVID levels. And one of the things that they've really seen is that the Gen Z, as they call it there, generation is really providing some significant growth to their membership counts. They have something called the Summer Pass concept where every teenager in America gets kind of June, July, and August for free at every Planet Fitness gym. And that's really led to follow-on membership growth, not just for those kids as they age, but also for their parents. So it's been a wonderful investment for us. We're 10 years in, just tremendous people. And we also do think, to your second point, because private equity went into this space so hard starting about 6 years ago, and we were actually the first PE firm into the franchisee space in Planet Fitness 10 years ago, a lot of those companies are now having to refinance. And because of the stability of the cash flow stream, banks were going up to 6x debt on these things. So it's got two impacts. One, I think there's going to be assets for sale in the industry to help refinance some of those balance sheets. Secondly, there may be some territories that become available from corporate where people don't have the capital to keep up to their ADA requirements. And corporate has a track record of showing those opportunities to us because we've been one of the top operators in the system for almost 20 years. So yes, it's been the per-club economics has gotten better and better. And we'll get better and better here with these moves. And we do think there's very good acquisition opportunities here as well. And we're ready for that. Okay. Great. And then just last question, perhaps for Amanda. You do have your converts due in a few months, but you do, as you signaled there, have ample room on your credit facility. What's the game plan there as it stands today? I'm guessing you're comfortable with your dry powder position, even refinancing that on your revolver. Yeah, we have ample room on our revolver to still fund continued growth and move these converts onto the line. We continue to evaluate what redemptions look like within our portfolio as well as opportunities to potentially refinance the converts. So we continue to look at the options, and I think we'll make a decision on which way we go in the next few weeks. Okay. Got it. Thanks very much. Those are my questions. Thanks, Gary. Thank you. One moment for our next question. Our next question comes from Nik Priebe with CIBC Capital Markets. Your line's now open. Okay. Thanks. So Fleet partially redeemed the preferred share investment in the quarter. That business seems like it's performing pretty well lately. Are there plans to redeem more? No, not at this point. Fleet has had, obviously, just enormous growth over the last few years. But we have a clause in all of our agreements where if we own common equity, they can't buy our prefs down past a certain amount unless they buy everything out all at once. So we're kind of near that point with Fleet. So we expect that to be a stable number. Got it. And if that scenario were to materialize, how does the common equity investment get priced at exit? Is there a mechanism? Is it kind of formulaic in nature? How does that work? No, with the common equity, it's not formulaic. It would be market. So for the most part, our exits are in a third-party transaction. So we're just selling alongside the entrepreneur at the same valuation. In a situation where they somehow have financing where they're staying in and taking us out, which really hasn't happened before, it would be a third-party valuation that we both agree on. Got it. Okay. Interesting. And then, Amanda, you'd made reference to qualifying as an investment entity under IFRS. And it sounds like that'll have some changes to the P&L. Can you just preview for us what that'll look like with this accounting change and how that might just impact the look and feel of your statements? Might just be helpful if you can help us kind of visualize how that change could sort of impact the interpretation of your results going forward. So from the income statement point of view, all of the net operations of Canadian and Alaris USA investment holding companies will show up as one line as a fair value change. And encompassed within that one line will be both the distributions from our partners as well as the tax expense that is incurred on those, some of the operating expenses in each of those entities, as well as interest expense. So it will be more difficult to get back to a true EBITDA number. We still have the G&A expenses. Our staff and majority of our G&A is held in an entity that will continue to be consolidated. So a lot of that middle section of the income statement will continue to be there from a G&A legal perspective, trust taxes, and financing costs. Through the notes, the statements, we will blow back out so that the same visibility is available with regards to partner distributions and the fair value gains and losses. So we'll be able to understand in that fair value pickup sort of what is cash and what is non-cash. The notes to the statements will also give the same level of view into all of the movements in each of the partners. I think from a net asset value, it's going to be very similar in fashion, although the look will be different. We also will maintain reporting on our coverage ratio. We'll get back to some cash flow metrics, but we'll probably lose some of the visibility and ability to get back to EBITDA as we've traditionally had it. Understood. Okay. No, that's good. Thanks. I'll pass the line. Thank you. One moment for our next question. Our next question comes from Jeff Fenwick with Cormark Securities. Your line's now open. Hi there. Good morning, everybody. Morning, Jeff. Steve, I wanted to circle back to some of the comments in your MD&A around the go-forward growth and some of the deal opportunities you might see. There was some comment, I believe, around maybe becoming more involved with M&A support for the existing partners. You were just commenting a minute ago there on the Ohana. What's the thinking there? Is that still going to be effectively the same model of common and prep, or are you going to be a bit more flexible in terms of what that mix might look like if you saw the right opportunity? Or what's the thinking there? Yeah, one of the nice things about this equity accounting that Amanda and her staff have put us into, as she mentioned, is we will have more flexibility there. We're still a cash flow-based investor, though, Jeff. So I think the flexibility is more at the margin in terms of the cash versus exit profile of our returns. But yeah, it will allow us typically, we've kind of capped ourselves at 20%-ish of the common equity of the companies we've invested in. We can go higher than that in certain situations, including in situations where that company maybe has kind of the next transition, and we can actually step in as the buyer instead of selling alongside of the owner if we're comfortable with the management team that we've been working with for years. So it does give us a lot more flexibility, including, as you mentioned, on M&A. We just added to our business development department. We're going to be spending more time at industry conferences in addition to kind of the generalist conferences so that we can really dive into each of our platform investments that is acquisitive and kind of has the management bandwidth to be rolling in acquisitions. So I really want to make that a focus this year to grow through them. It's lower risk than new deals. Obviously, we're going to keep on doing every good new deal that comes our way. But it's very competitive in that scope. We've, for 20 years, been successful in it, and that's not going to stop. But I just think we can really add to our growth by really digging into our platform investments. And quite frankly, a lot of them now, really compared to 10 years ago, they're looking for that. They're wanting us to provide value to them. Whereas when I started this 20 years ago, people wanted us to stay out of their hair. That's completely changed in this market. One of the first things we get asked in every management meeting is, "How can you help us go to the next level?" So we've got one of our former partners that sold out that has now joined us as a full-time consultant that is helping out with each of our partners. We're spending more time with them. Our BD guys, again, have been tasked to help them grow. So that's something I'm quite excited about in the near term here. Okay. Then I just wanted to ask about a couple of the investments directly. I mean, Fleet has been obviously very successful, and you referenced that earlier. Maybe, Amanda, you might know the numbers here to remind me. But I recall that I think the original common equity component there was about CAD 8 million. And I think that you maybe have received close to CAD 16 million in distributions now, and I think have continued to mark up the equity as well. Is that a correct way to characterize? It's hard to sort of discern the total return off of an individual investment like that. Yeah. We originally bought that common for CAD 8 million. I think we have it. I'm going to get this wrong, but I'm going to say CAD 53 million of common at the moment. We've received CAD 16 million in distributions. They paid down a bit of that prep, which attracts favorably to the common in future distributions. So we do expect that that trend in distributions will continue, if not grow a little bit. So overall, a very successful investment with a strong backlog and runway ahead of it with regards to maintaining this level of growth for the next cycle. Okay. Great. Thanks. And then maybe you could just give us a bit of an update on GWM. I mean, that's one there where I think in sort of three of the last four years, they've reset at the low end of the collar for them. What's the prospect for that business? It's still a pretty sizable investment for Alaris, but how are you feeling there with how that business is positioned? Yeah. Certainly, the one company in our portfolio that really did get hurt by COVID, and it has been much slower to recover than what we or they would have hoped. We're still bullish on it, Jeff, to be honest. The management team very much is as well. In the last three years, while they haven't grown, they've done a wonderful job of diversifying their customer base. They're in a lot of different areas. They had too much exposure to the hospitality sector during COVID. So we think they're poised for growth. We still think it's a very good long-term play for us. We like the industry. We like the people. So while, yeah, it's disappointing that the last three years have not been what we'd hoped for, certainly a company in our portfolio that we actually have high hopes for. Okay. And in terms of just their financial position when you're sort of in that period of decline, I mean, is that one that has some senior debt sitting in front of you guys that might be a bit of a concern, or how do you feel about that? They do have senior debt sitting ahead of them. We are not concerned on payments there. They're in the 1.2-1.5 range with regards to cash flow. Where this investment has really been hit is by the growth profile and the common. From a pure prep perspective, we don't see a lot of risk there. Yeah. They don't have a huge amount of debt, much lower debt than most companies in their sector would have. So we think we're fine there, but it's certainly one that we've been watching closely and talked to, obviously, very regularly. But yeah, we still think there's upside there. Okay. Okay. Thanks for that, caller. I'll break you. Yep. Thanks, Jeff. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment for our next question. Our next question comes from Zachary Evershed with National Bank Financial. Your line's now open. Good morning, everyone. Congrats on the quarter. Morning, Zach. Thank you. Could you go into a bit more detail on the kinds of actions you'll be able to take after the IFRS 10 changeover you outlined? I guess he's asking more on the BD side, what the actions we'll take post-change. I don't know that it will significantly impact anything we're doing. I think it gives us more flexibility in reacting, potentially, to things within the portfolio if we do feel the need of stepping in or directing even just sitting on the board with something that we were restricted from an accounting perspective, where now we can sort of take a more active position on boards on a more regular basis. We can have a bit more structured influence within our deals, board seats. We've always worked very closely with these partners, more from an observatory position. We have great relationships with everyone. This just allows us the ability to be a bit more structured in that. We can take larger controlling positions with regards to equity, but I don't know that that's something that we're really not set up to be a controlling equity holder. We really like that position's maintained by management, just in the structure and how we rely on the management team, and we want them incentivized in the future. It can give us a little bit more upside. There'll be situations where, like I said, if we go in initially as a 30% shareholder and then some other legacy shareholder wants to sell, we can be the buyer of that instead of that triggering an exit event. So it just gives us more flexibility, especially with the people that we already know and trust. Okay. That makes sense. And so probably not a controlling position, but given that you will be able to strike above that 20% Common Equity mark, what would you say is the new ceiling on how high you'd like to take that? It'll be situation to situation, Zach. I don't like to put hard boundaries on it. We've really, over our 20 years, become known for people that create win-win situations between our shareholders and our entrepreneur partners. So if there's a situation where we do have to take 55% because that's what the situation requires, but we're completely confident in the alignment with management and the motivation, then that's something that we can now look at. I would say, though, that in a situation like that, it would likely be a situation where the common equity also pays a fairly known dividend. We're not going to have too high of a percentage of our portfolio in things that don't have hard cash flow attached to them. From a mix of our capital going out in some of these situations, 20% of our total check can still end up being 55% of the common. So it doesn't necessarily mean that we're going to change the mix of our capital. We've always sort of targeted an 80/20 split pref to common just from a cash flow return perspective. We would continue to maintain that perspective from our balance sheet side. That makes sense. Thanks. And then for the two deals that you outlined you walked away from that would have closed before year-end, how often would you say that happens when deals are well advanced, and what were the factors at play there? Both very different. But just through due diligence, it just raised enough concerns for us that we decided as a firm to not close them. So it's disappointing. We spend a lot of time and money on transactions to make sure we get it right. But that's the key phrase, is to make sure you get it right. And if you're not sure, then you move on to the next one. There's lots of opportunities out there. So we're only as good as our worst deal. So we've kept a very strict investment criteria, and that's not going to change. Perfect. Thanks. I guess last one for me, the idea behind deploying more to existing partners for acquisitions, is that driven from the partner's end, or is that something that Alaris will be pushing? It's both. So definitely, our partners want it. That's one of the reasons that they've chosen us. We just won a deal recently that we're working through right now. That was the key differentiator for us. They got a lot of bids from other kind of structured equity providers, but none of them kind of gave them the upside and the value added that Alaris does. So they termed it, we were kind of the best of structured equity and traditional private equity in the fact that we can get involved and create value, but we're not firing the entrepreneur. We're not controlling their board and all of those things. And we're not controlling their horizon as much as private equity does. So yeah, it's definitely both. And it's not for everybody. It's not for all 20 of our companies. There's probably 10 of them that would have no interest in acquisitions. But for the other 10, they're super keen, and they just love it when our business development guys find some deals at different conferences that they go to and different connections that they have that we bring to them. At the very least, it's great industry knowledge for them. Great, caller. Thanks. I'll turn it over. Great. Thanks, Zach. Thank you. One moment for our next question. Our next question comes from Geoffrey Kwan with RBC. Your line's now open. Hi. Good morning. Apologies. I joined the call late, so hopefully, these questions have been asked. But my first question was just on the different distributions at LMS and Ohana. I guess, is there any insight that you have in terms of the timing of those payments? Because I think you've talked about wanting to get or you think you'll get it in 2024. Is it going to be kind of steady of those payments? And do you have—I guess, how strong is your confidence that you'll get those payments caught up by the end of this year? So LMS currently has, I think, CAD 2.5 million outstanding in deferred distributions from the first half of 2023. We expect them to resume payments in the latter half of the year. I don't know. We'll have to see how the year plays out to see what the excess cash flow is to make those catch-up payments. So I don't know if we'll have that all back in the latter half of the year or not. We're also very cognizant. We don't want these catch-up payments to be detrimental to the go-forward of the business. So we're quite happy on that quantum of amount to ensure that the business is firing all sales and making payments as they're able. With regards to Ohana, we have another CAD 2.5 million outstanding. They've currently been making payments of $200,000 per month on those catch-up payments, and they'll be wrapped up at the end of the year. So we're very certain that we'll collect that $2.5 million at $200,000 per month over the next 12 months. And then by the end of the year, we will be fully back to caught up on their distributions. Okay. Thank you for that. Just my second question was just taking a look at the resets that we had for 2024. You had a good number of companies that had high reset numbers, and you had a fair number that had negative amounts. When you kind of take a look at the overall portfolio and portfolio health, I mean, how would you kind of assess where you are today given the current macro environment? I think we had nine up. We had eight down. I would say out of the eight, we probably were expecting six of those to be down just given the rate of growth that they had. Coming off of record years, we were expecting them to go back to normalized level. When we look at the weighted average of our ECRs, we're targeting, when we close a deal, to be at 1.5. The fact that our portfolio is normalizing back to that 1.5 number isn't concerning for us. It's probably where we're targeting to be. We peaked up at 1.8 while everything was very frothy, and all of our partners were doing extremely well. That wasn't our target. I think for the returns that we're getting, they balanced with the risk. 1.5x is sort of where we expect to be. Yeah. And I think, in fairness, I think 2023, if you look back at our 20 years, would be one of the lowest reset kind of performance years that we've had. Definitely kind of a choppy year where some companies had some tailwinds, but there was a lot of headwinds out there for different types of companies. And that's why we've created a portfolio like this, where you're going to have different drivers and different things happen in different years, all of which should come out to a very low volatility type of profile. And that's what we have. So I'd like to see it a little higher. And I think based on the forecasts that our 20 companies have for 2024, we do expect it to be higher in the next year, but we're not completely displeased with it. Okay. Great. Thank you. Thank you once again to ask a question. Please press star one one on your telephone. Our next question comes from Trevor Reynolds with Acumen Capital. Your line's now open. Hey, guys. So it looks like most of my questions have been answered. But on the last call, you guys highlighted that you had more deployment potential than you had capacity for. I expect with the deals that you walked away from and the redemptions expected and the increased credit facility, that's not the same issue. But I'm just looking for a little bit more color on kind of what your expectations for 2024 in terms of deployment are and what the competitive landscape is with PE right now? Yeah. It's always competitive. Really, there's still so much money out there looking for a home for a good company. It's always going to be competitive no matter what interest rates are, no matter what's happening in the world. It's what I've seen for the last 20 years, and I don't see any change in that. There are more people now in the structured equity space than there used to be. There's still nobody that does exactly what we do. And so for the deal we just won, for the deal that we closed in the late fall, there was only one choice for them. Both of those situations had 20, 30 bidders in the process. And after the face-to-face management meetings, both situations stopped the process and signed exclusivity with us because there is nobody else that does what we do. So we're still confident in our ability to deploy into new deals. In terms of redemptions, it's always a little harder to forecast. But as I mentioned in my talk, we do think that there will be more redemptions over the next 24 months just from the fact that there really hasn't been for the last three years. Our average hold period, if you look back at our 20-year history, has been about five and half years. And so when you go three years with very few, you just know mathematically that you're probably going to get some. And as I also mentioned, we have had some takeover offers on a few of our companies. We've got companies that are doing extremely well. They get attention from private equity or strategics. And so we have seen kind of more activity on that front in terms of unsolicited bids. But we think over the next 12 months, probably a partner or two will definitely redeem. And quite frankly, now that we have common equity investments, that's a real positive thing for us. That triggers nice gains, triggers the ability to redeploy capital that we weren't getting structured revenue from into new investments where we've got that 80/20 split. So those are real positive things for us when we get redemptions now. That's great. And so in terms of deployments, you do expect that to be higher, likely in 2024 than 2023? Yeah. My over/under is always CAD 200 million. We came in at CAD 130 million for this past year. If we would have executed on those two deals at year-end, we would have surpassed the CAD 200 million. So we were there in terms of deals that we won and had in-house. But sometimes things like that happen. So it's always a number you can't bank on. But we've had other years where it's been much higher than that. So CAD 200 million is always my kind of over/under. I don't know. Maybe I'm an optimistic guy, but I'm betting the over. That's great. Thanks for taking my questions. Yep. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Steve King, CEO, for closing remarks. Great. Thanks, Daniel. And thanks, everybody, for tuning in and for your great questions. As always, Amanda and I are available to answer any other further questions offline if you'd like today. And we look forward to the new year and Q1 coming out in a couple of months. So thanks very much. This concludes today's conference call. Thank you for participating. 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