Good day, ladies and gentlemen. Welcome to the Power Corp Q2 2022 Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for a question. If anyone has any difficulties hearing the conference, please press star zero for the operator assistance at any time. I would like to remind everyone that this call is being recorded on August 8th, 2022. I would now like to turn the call over to R. Jeffrey Orr, President and Chief Executive Officer. Please go ahead, sir. Thank you, operator, and welcome everyone to our Q2 results call, and happy Monday morning to all of you. I'll kick off the call here on the pages two and three. We have our disclaimers on forward-looking information and on non-IFRS measures. Page four, with me today is Gregory D. Tretiak, who is EVP and Chief Financial Officer of Power Corp. Between the two of us, we'll go through the presentation and answer your questions. Page six is just a reminder of various sources of information that you can look through that have been recently released by either Power or our three principal operating public subs. You can reference that material at your leisure. I'll start my remarks focusing on page seven. I think two key highlights from our perspective for the quarter, really solid earnings in what was a pretty challenging environment. Obviously, we have a lot of our earnings across different parts of the group are tied to market levels. Markets were shaky, flows were negative in certain parts of the industry and in certain both in Canada and other countries. Challenging environment, but on the two main earnings drivers for Power Corporation being our interest in Great-West Lifeco and IGM, really solid results. Great-West Lifeco, really the diversification of its business, the strength of those businesses, performed well and offset a lot of the market weakness, which was most pronounced in our results in their results in the U.S. businesses. IGM continuing to roll along with its business strategy and showing good results in a challenging environment. The second point, from my perspective, and this was really a quarter really focused on execution. In previous quarters, we've come along and said, "Hey, we did, you know, two deals or three transactions." We've done a lot of transactions over the last couple of years. The group is heavily focused on execution. Not to say we're not focused on what could, you know, other deals and other transactions in the future. We're always focused on it, but everybody's got their head down focused very hard on executing the strategies we've already articulated. It was most pronounced in the U.S. with progress made in Power. Again, IGM continuing to move forward. GBL executing on its strategy in the face of difficult markets, continuing to fundraise at the platforms. We continue to return capital to shareholders. Those are some of the themes, solid earnings results and execution. Page eight is could have picked a whole bunch of slides and examples. You all live it. On the left-hand side, really challenging markets. The S&P, I think it was down up to June 30th. I think it was 21%. It looks like it's about 20% in that. I got 21% in from January 1 to June 30th in my head. Also, the Barclays Agg, so the bond market, fixed income market, down 10%. You know, it's been a long time since we've seen those two act in that way. And so, investors really got whacked in the face on both the fixed income side and the equity side. On the right-hand side, just one example. These are Canadian mutual fund sales, so we are certainly in a lot more markets than just that, but it's a very concrete example. You're looking at the second quarter mutual fund flows for the last 10 years in Canada, and this is the worst quarter Q2 on record. I think if you go back in history, this is the worst quarter that the industry has suffered, certainly from a gross dollar outflow point of view. Challenging environments on the market side of the business. Greg, I'm gonna turn it to you to walk us through page nine and the next few ensuing pages. Greg? Great. Thank you, Jeff. I'm gonna go straight to page 10, where we have a little more color on the results for the quarter. As you noted, challenging environment, but delivered solid results from the operating companies. I'm gonna go basically down the page on the right-hand column and just give you a few points on some of the significant items here. You know, first starting with Great-West Lifeco, as you alluded to, Jeff, you know, a diversified business mix that delivered in this environment. You know, Great-West Life's insurance businesses across all the geographies were strong, and you know, offsetting some of the market-induced weakness in the wealth and asset management businesses. IGM was basically right on Q2 2021, with the exception of the mortgage business was a little softer and seed capital marks that management referenced in their call last week. Otherwise the earnings would have been right on last quarter. GBL. We've tried to enhance some of the disclosure and give you a bit more insight into that business. You know, their management focuses on cash earnings and dividends in addition to NAV, but principally, you know, they're focused as a key performance indicator where their NAV is traveling, of course. They had a negative $44 million contribution to us in the quarter, and that reflects some impairments that they took on their tech book in the quarter. Down the page, alternative investment platforms, as well, we've enhanced the disclosure. I think hopefully you'll see those changes. You know, we do cite one of the big reasons for the change in contribution quarter to quarter and primarily being the China public equities portfolio, where this year we realized losses on the portfolio, whereas last year at the top of the market, they were harvesting some gains. Those are reflected in the results. I would in the appendix of this particular presentation on page 33, there's a significant amount of detail on the alternative asset investment platforms, both Sagard and Power Sustainable that I would invite you to take a look at over the course of the next couple of days. In the corporate operations and others, two points to make. Operating expenses, our run rate is about CAD 35 million, which is in line with our post-synergy targets, as we completed our CAD 50 million synergy target. It's running right in line with where we expected it to be. The CAD 76 million number is lower than you might expect, and it includes a CAD 17 million net gain, which is associated with certain options that were designated as cash settled in the quarter. You would have probably been expecting something a little higher. Just point that out. With that, I just flip over to the next page, which is page 11, net asset values. Certainly our net asset value is reflecting the market environment, down from March 31st, CAD 49.92 to CAD 41.49. Just to note that, you know, almost 90% of the portfolio is actually mark to market. Certainly, that is reflected here. With that, I think I turn it back to you, Jeff. Okay. Thank you, Greg. I'm going to move forward to page 12, and let's just pick up a few highlights within the companies, not going to go exhaustively. But a key message at Great-West Lifeco is that the Empower management of its three acquisitions over the last couple of years are on track. MassMutual is the furthest along in terms of its integration, and they are tracking very well. Management reaffirmed that they're expect to hit their synergy target on the expense side, and revenue retention is actually tracking ahead of their own models. There are six of the eight waves that have already been completed, and they're on track to complete all eight by the end of the year. MassMutual is moving along well. Prudential closed during the quarter, so that's great, and adds significantly to the position of Empower in the DC market. The Personal Capital work continues, and the tools of Personal Capital are starting to be rolled out both within the core DC program. 8.5 million of the participants have now starting to get Personal Capital tools, including messaging tools. So we're enhancing the experience of participants as well as those tools being incorporated into the retail wealth management strategy of Empower on the retail business, where effectively people roll out of their DC plan on retirement or when they change jobs. Of course, Empowers got a strategy to try and capture an increasing share of that. Really good progress on and feel very good about all of the original goals that we have announced at the time we announced those transactions. Page 13. You know, IGM, overall, I talked about the results. I think really focusing on the strength of the IG Wealth Management business is the core point I'd like to highlight. We have talked about it for a number of years, how there's been a lot of investment into that business. Things have changed. It's been a multi-year journey, and we felt we had good momentum building. In this difficult first part of this year and through the second quarter and into July, the flows at IG Wealth continued to be really, really strong, which is just great news. On this page, you just highlight a bit of that. On the left-hand side is a slide that IGM used in their presentation. You know, new client flows from new clients continue to grow, and they are attracting clients to the platform at an increasing rate, and it's coming across different wealth bands, including mass affluent and higher net worth clients contributing. The redemption rate on the right-hand side continues to be very solid as you've got advisors basically very pleased with the platform and new advisors joining the platform. I think IGM in their call highlighted some of the marks that they're getting on the different surveys of advisors and on how well the IG Wealth platform is being rated by advisors. Lots of good stuff happening. We're really pleased with the progress being made at IGM and with IG Wealth in particular. Greg mentioned GBL. A lot of the earnings was remarking related to marks on their private investments in the tech sector. They're continuing to execute on the strategy and made a couple of big acquisitions in the healthcare space during the quarter, continuing to make a rotation and returning capital to shareholders. Their dividend is actually up this year, and that they've announced for from May 2023. You know, the cash earnings we're getting from GBL continuing to increase notwithstanding the noise around some of the private marks. Okay, I'm gonna flip here over to page 15 and just talk about what we've actually done to try and lighten the capital intensity of our model and create cash. At the time that we announced the reorganization and subsequently, we put a lot of focus on the standalone businesses and as being a source of capital that we could liquidate, and a lot of questions were on it. That's the way we were thinking at the time. You know, as we've reflected on our activities, we've actually been looking to realize and monetize assets wherever we can as we move to a more capital-light model. The standalone businesses actually have been less of a source of capital than we would have anticipated for reasons like I'm happy to discuss. It doesn't mean we didn't have other tools in the toolkit. What you've got on page 15 is an example of a series of transactions, the most notable being having an opportunity to sell our interest in the Sagard III fund, some money we took off the table at Wealthsimple, of course. You go through here and you see about CAD 1 billion from the start of 2021 through to 2022, and those are pre-tax numbers. And then another, the cash we're gonna get pending the sale of China AMC to IGM, being another source of capital that is still, and cash that's has not closed at this point. We've been taking a lot of steps here to monetize assets. This is not a reconciliation. We actually do invest in the platforms and in the seed capital. You know, this is more an example of the action steps management has taken to create cash. On page 16, just kind of adding it up, going back to the same 2021, we've returned CAD 2.4 billion to capital shareholders. Obviously, the dividends are the biggest part of that, CAD 1.9 billion. That was also impacted by the dividend increase we announced last November. Also the buyback program. We bought back, you know, about 2% of the participating shares, 2.4% of the public float, CAD 511 million. The bulk of that, of course, is in 2022 because we were not active really in 2021, as all of you, I think, are aware. At the bottom of the page is just a statement of our current cash position. That's a little different perspective on what we've been up to. Page 17, speaking of the standalone businesses, they're continuing to make good progress. Lion, you've got some talking points there. Even though, you know, the capital markets are less keen on the electric vehicle space, Lion continues to make good progress in building out their business. Lumenpulse been affected by supply chain issues quite a lot over the last year and a half, but their business remains very healthy. We've said all along, right from the time we announced the reorganization, we're gonna support the growth of these businesses. We're gonna do what's right for the businesses. We do not have a gun to our head to have a deadline by which time we need to realize value. We're gonna do what's right for Power Corp. We're gonna do what's right for our shareholders. We're gonna do what's right for the partners, our, the other shareholders in those businesses and the management teams with which we partnered prior to us changing our strategy in late 2019. We continue to support these businesses, and ultimately, we'll realize a good value for Power Corp when the time is right and most opportune. Okay, so I'm gonna carry on then to page 18. Greg mentioned we continue to enhance our disclosure. It's a work in progress, but we're just trying to continue to get greater clarity on these businesses. You've got some disclosure on the P&Ls here, including fee-related earnings for the businesses, which is down in the lower left-hand corner in the third line. That's basically the fees not including carry or performance fees, basically the management fees less the expenses. There is a little bit in the Sagard line where we have CAD 4 million of pre-tax profit there. That is, there's some one-times in there that's probably think of that business more as running at a break-even at this point. As Greg mentioned, you've got some negative carry going on during this quarter. We are also trying to put emphasis on the lower right-hand corner, you get the AUM, and then you get the AUM, which is funded and unfunded. You also see the Power Corp portion of that. Of course, the fees are not on the AUM. The fees are on the fee-bearing capital. Sometimes the funds that have been committed that have not been put to work yet. There's also on some of the, like, the private equity funds, you get paid on the initial amounts, not the carrying value. The fee-bearing capital is the one that's most important when you're looking at the fee line, and you've got that on the last bullet point. My overall message here, businesses are continuing to make good progress, and we're continuing to try and enhance our disclosure to get greater understanding for all of you. On page 19, continued good fundraising. Notwithstanding the difficult market, continued good progress. Power Sustainable closed a sustainable Agri food private equity fund in Canada. Sagard is up to CAD 400 million on their Canadian private equity fund. Portage has launched a late-stage fintech fund which is just in the initial capital raising stages. Good progress there. Continuing on with the businesses on page 20, the original capital that Power put in the China strategy back in 2005 is now the seed capital in our sustainable Power Sustainable Capital China strategy. This is just to say notwithstanding the weakness in the Chinese markets and some losses that we took on realizing positions during the quarter, that Greg alluded to, the capital we've had in this strategy has been a very good one for Power Corp over many, many years. It's not just because the market has done well. The team has outperformed the market, both in their security selection and in their asset allocation decisions. Gonna move to page 21. Just to comment on our Fintech strategies, attention around, you know, the group's taking a breakdown on its Wealthsimple position. Just reiterating, we're just delighted with our Fintech strategy. As we've said many times, the strategy started back six to seven years ago, and it was primarily to get our group on top of what was happening with technological change, make sure we knew where it was coming from, we had visibility, and we were on top of it, and our operating management teams were on top of it. This has been a huge success. It's a subjective point, but from the point of view of senior leadership of the group, it's worked well. We made two significant investments, Wealthsimple and Personal Capital, where we put, you know, more significant amounts of money in, and we're delighted with the outcomes of both of those businesses. Portage was really our main window into what was happening in about five different verticals around the financial services space that we cared about around the world. That has not only done well for its shareholders and for all the other LPs, but it's also succeeded in getting our group and other LPs, by the way, really up to speed and on top of where technology is impacting financial services. Very pleased with what we've been creating in our fintech strategies. Then just to comment on China AMC, it has continued to build its business in a difficult market and grew its assets over the first six months of the year and has been really driving its profit forward, its assets forward. Really good progress at China AMC. The business is doing well. On page 23, a comment on the discount. We have continued to say that as we execute our strategy and communicate what we're doing and simplify our model and get the market to understand the value drivers, that we should be able to narrow that discount and we continue to make good progress. Doesn't always go in a straight line, depending on. You get bumps in the market from time to time, but that continues to drop, and we continue to believe that that's an additional source of value as we continue to execute. Through all the market turmoil that's been going on in geopolitics, et cetera, it's almost like the ESG agenda has been taken off the front page of the papers, page 24. Of course it is still there and as it should be, and our companies continue to be very focused across the board on moving forward on the various ESG initiatives that touch pretty well every part of our businesses. Just a note on that. I'll wrap up on page 25. We haven't changed our strategy. We've got a playbook. We're following it. The theme right now is execution. We've got lots of opportunities to continue to drive forward. This is the playbook that we're following and pleased with the progress that we have been making. With that, I will stop the formal part of the presentation, and we can turn it to questions. I would ask the operator to open up the lines for questions from people who have questions. Operator? Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. If you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Geoffrey Kwan of RBC Capital Markets. Please go ahead. Good morning. Morning. Mark, my first question was on the China AMC deal. If I recall, when the deal was announced, at the start of the year, the expected closing was at some time in the first half of this year. IGM mentioned last week that it may be more late this quarter, maybe even slipping into Q4. Just wondering what's changed, that's causing the delay for the deal from being completed and is what is the likelihood that the deal may not even get approved? Yeah s ure. A good question, Geoff. You're quite right. We had anticipated that we would be closing earlier, and the cause of the delay is changes, different waves of changes in regulations in China that have caused re-filings, that basically information that was provided on the basis of the rules that existed at the time that we announced on January 5th, then changed a couple of times. It's just the nature of the beast. There's a lot of change that goes on in their regulations, so we've had to provide new information and refile. Nothing to my understanding, and I'll ask Greg to confirm, that was at all specific to this transaction or to us or to China AMC or to, you know, IGM or Power. Nothing specific related because of us. It was just the rules changed, and all of a sudden what we filed originally was no longer what was adequate, and we had to file different information and that's taking time. I think there's still some filings that are pending. Greg, do you want to add any color to that? Did I answer the question accurately or did I miss something? Yeah. No, I thought you've got it. There was a change during the Chinese New Year that I don't think anybody expected. That came out after everybody returned from Chinese New Year and there was a new regulation or a new set of regulations. Later in June, there was an addendum to it. You know, it is part of the regulatory regimes changes to modernize its regulation with respect to asset managers in the country. As you know, there's been a lot of change in China with respect to opening up its financial services market, and this is just part and parcel of that. I don't see anything that is preventing us from moving forward on the transaction. Are you able to elaborate, like what was the regulatory changes? You also mentioned there's an addendum. Greg, I'll let you take that to the extent you want to. Yeah. They're quite elaborate. They're filing, you know, requirements with respect to the type of filing, the amount of information, the financial statements that have to be filed. It's quite a laundry list, Geoff. Okay. It's very technical in nature. Yeah. So, I gather. Second question. I the other question I had was just, how do you think about in terms of the co-investments that you have in your strategies as LP investors, do you kind of think of it in terms of whatever strategies that we do wind up launching in the alternatives platform? You know, this is kind of the ballpark percentage commitment we want to make. Or is there perhaps like an aggregate dollar amount you want to commit to this part of your business? That's a great question and one that we spend a lot of time talking about among ourselves and with the platforms. So the answer is, and I'm not trying to be evasive, is it depends. So when you launch a new product and it's the first time a strategy has gone out, the sponsor, being Power Corp, is expected by the third-party investors to show a real commitment. So think of Portage Three. The first fund, we needed to be a big investor to get it off the ground. By the time we got to the third fund, you know, the LP community, the investor community, didn't really need Power to put a lot of money in order to launch a third fund. The fund's track record spoke for itself. So an initial fund requires more capital commitment. The... That can be different, whether it's an equity fund or whether it's a debt fund, and what's the track record of the investment team. When we come at it, our overall goal would be to minimize our capital commitment, because, you know, I don't know how much, notwithstanding all of our efforts to articulate, that we're gonna get good returns and have got good returns on our LP commitments, I don't know how much the market fully values that relative to, investing in things that produce earnings. We think we're gonna get good returns on the capital, and we're building the business out to get to profitability, but we're trying to minimize our capital commitment while we do so. That's kind of the discussion that happens every time there's a fund launch. The more there are new products that they introduce, the more we are asked to put some capital in. We're trying to run it so that we are not over time here gonna be putting more capital in. We're trying to run it on a pretty balanced way. It goes through some waves. At times, some years you're putting in, and other years you're taking more out. Geoffrey Kwan, I don't know if that's giving you a sense of it. I think bottom line is that we're supporting the businesses to grow and we're putting capital in to support the platforms while we're at the same time trying to minimize our capital position and change our mix, if you will, at Power Corp to have more, really, at the margin, more earnings-driven and less NAV-driven businesses, as we go through time here. Okay. No, that's perfect. Thank you. Thank you. Thank you. The next question comes from Graham Ryding of TD Securities. Please go ahead. Hi, Graham. Hello? Hi, Graham. Your line is open. Sorry. Oh, go ahead. Thank you. Sorry, I was on mute there. Apologies. Morning. Just with the China AMC, assuming the deal does go through, with IGM CAD 575 million in cash proceeds pre-tax, what would your plans be there for that? Would that be sort of further support of your share buybacks, or how should we think about that? Yeah. A good question. I think. Do we have the number disclosed somewhere, Greg? I have the number in my head. I just don't want to get ahead of our disclosure. The after-tax number, have we disclosed what we think that is in terms of proceeds? I thought we had. Yeah. I think it's about CAD 60 million is the tax. Yeah, 515. Got it. Yeah, I knew the number. I just didn't wanna get ahead of our disclosure inadvertently here. Yeah. 515 is the after-tax proceeds, Graham, is what we've estimated. The answer is we'll look at it at the time. What we are always doing is trading off buying shares back, which financially is attractive for a number of reasons, and that is our go-to playbook. We're also looking at different opportunities from time to time, and our subs are looking at different opportunities from time to time. We're trading off. The go-to playbook is manage to our minimum cash level and buy shares back. We'd always prioritize, you know, buying business, either supporting our principal subs in something that they might wanna do, or if some opportunity came up at the Power level that was financial services. Those would be priorities over buying shares back. I don't wanna create expectations in answering your question that way. I'm just stating that would be our priority. In the absence of that, buying shares back would be the go-to playbook. I hope that answers the question. Yep. Yep, that's helpful. You've been active with your buybacks year- to- date. Is that a reflection of you just feeling like you're sitting on some excess capital? Or in addition, you know, are you of the view that your shares are undervalued, or is it because they're trading at a discount to NAV, you just think that's a worthwhile way to deploy capital? Yeah. I would say that we're just following what we said we're going to do. Why that makes sense is the second part of your question. In terms of buying back, it wasn't so much that, oh my goodness, the market's down, we should buy some shares. As you remember, through 2021, and going all the way back to COVID, you know, we had stopped aggressively doing buybacks. I think we had a minimum program in place to manage dilution on options. We were being super cautious through the COVID period until ultimately our major source of cash, which is dividends from Great-West Lifeco. When OSFI basically in the fall said, "Okay, the restrictions on dividend increases are pulled off financial institutions," nothing special about that, but that was the event for us to say, "Okay, we can get back into the market buying shares." The fact that we bought in the first part of 2022 happens to coincide with a weak market, but it was more related in our perspective to the fact that we hadn't been buying shares back, and we'd been selling a bunch of assets, as I showed on page 17 or whatever the page was that I went through the divestitures. You know what happens. Think about it. When we sell an asset, that is particularly an asset that's either non-core West, non-financial services, and typically, if it's a power, a lot of them are NAV-based. We sell an asset at NAV, and then we turn around and we buy our shares back. We buy our shares back, we're buying them at a discount to NAV. So that's a good thing. We're arbing that. But the other thing that's happening is we're kind of at the margin every time we do that, increasing the percentage of our company that comes from earnings. Because if you see that of the value that Power Corp has, about 75% of it, I'm just being simple, but Great-West Life and IGM, about 75% of our value is really earnings and dividend growth-based. Not to oversimplify, but the rest of 25% is, for the most part, NAV-based. You sell an asset at NAV at CAD 1, you buy stock back at CAD 0.80, and then when you're buying the stock back at CAD 0.80, you're actually buying 75% of that. Of that value that you're spending is increasing earnings relative to what you sold. I'm just doing a little financial math with you there. As we buy the shares back, we're actually arbing the discount, but also changing very slowly, but over time, more meaningfully, the mix of earnings versus NAV. We think it's in the absence of one of our subs doing some transaction where they ask us to finance it, that's a good use of our capital right now. Okay. That's fair. Then just my last one, if I could. This late-stage fintech fund seems a little different than your previous ones at Portage. They were more venture-focused. What are you seeing in the market that makes you think there's an opportunity here for more late-stage focus fund. A whole bunch of capital having rolled into Fintech in the last three to four years with a lot of companies that are not yet to the point where they're cash flow positive, having markdowns on their values. We've experienced some of that ourselves, and going to be needing capital to get themselves to the stage where their profitability, where they're profitable. Not necessarily a lot of venture money ready to jump in now because the momentum has been lost on the trade and on the investment. To us, that smells an opportunity to use our network and our expertise to fund later stage companies that are. When I say late stage, they're still venture, but they're later stage venture. That is the opportunity that the Portage team is seeking to take advantage of. Okay. Understood. Any size that you're targeting here or too early to? Uh. Put a number on that? I should know that. We can get back to you on that. That would probably be in the public domain. Greg, do you have it at the tip of your tongue? I don't. Forgetful. I don't know that it's in the public domain yet. Okay. As to what the actual target will be, Jeff. I think that's still on the come Graham, that more fulsome disclosure. We'll certainly let you know when it's available. That's it for me. Thank you. Okay. Thank you. Thank you. The next question comes from Nik Priebe of CIBC Capital Markets. Please go ahead. Okay, thanks. Maybe to bolt on to one of the earlier questions. You had a page in the presentation dedicated to highlighting some of the progress you've made in making the platform increasingly capital light over time. When you look across the various businesses, is there any other low-hanging fruit you see to advance that a little further? You know, whether it's the sale of, you know, secondary sale of LP interests or, sale of a standalone business. Yeah, I'm just trying to understand what the roadmap might look like on that front over the next year or so. It's a good question, and I'd love to be able to give a good answer, Nik, but I'm not sure I can. I'll just give by way of example, when we launched the strategy and said, "You know, we're gonna be looking to move capital light, we're gonna move these to a fee business based on third-party capital, and we're gonna try and raise some capital from our standalone businesses." You know, well, look at the way the world actually worked out. We got into a COVID case, and all of a sudden Lumenpulse, which we thought was gonna be part of that, their business got impacted. EV took off, electric vehicles, and all of a sudden Lion, which we really hadn't done a lot of focus on in terms of being a major source of cash, became a very, very meaningful value creator. But in order to realize that, you got to support it to a stage where it's got its business a little bit more developed. A bigger opportunity, but it's gonna take longer. You know, the standalone businesses, we did liquidate and sell GP Strategies, which is on page 15, but that's a small part of it. We really didn't have in our playbook that Sagard III would be an opportunity to raise capital, but there was such an interest by some secondary funds that that became an opportunity. They were out fundraising for fund four, that they've got interest in fund three. The Wealthsimple financing we didn't have in our playbook, we'd be doing a secondary. I guess I'm trying to give you an example that we have an overall approach across a pretty wide variety of assets that we have to realize cash. Looking forward, do we know where the opportunities are gonna be? I can't kinda give you a roadmap on that. I can just say that that's the way we think, and we'll look for opportunities to do so. I can't tell you this is gonna be sold or that's gonna be sold. I just don't know at this point. I'm sorry that's not helpful. The China AMC, I mentioned, like China AMC was really not predicated on trying to raise capital, but you kinda kill two birds with one stone in that you say it does make sense in terms of Power simplification strategy to not have China AMC in two places. That's, let's get it in one place where it belongs, where it can get better value recognition, and then you work out the economics of all that. Lo and behold, we're taking back only half of the proceeds in Great-West Lifeco, which is in furtherance as well to simplification. We're taking half out in cash, which you got another opportunity to raise cash right there at the Power level. We're just. We actively manage this. We're looking for opportunities. Maybe we'll go through a period where we don't realize anything. Maybe we'll go through a period where we realize a lot. I can't tell you. The market being down and this environment is probably, you know, less conducive to selling assets right now than it had been over the period of 2021. That is an overall tone here of caution that, you know, we don't have. The capital is not running around chasing transactions the way it was in 2021. That's a bit of a note of caution, Nik. Yeah. No, it's fair enough. Yeah. China AMC is a good example of that. On the fundraising front, are you able to give us an update on just what the third-party demand looks like for Power Sustainable strategies specifically? Which I think, you know, historically have been a bit less advanced with respect to their reliance on LP capital or let's call it third-party assets. I'd just be interested in an update on how the outlook appears for scaling those strategies. Yeah. Good, great question. Yeah, and for sure the strategies that existed within the Power Sustainable capital realm had really been built for Power's own balance sheet. Both the China strategy and then the energy infrastructure, which is an equity strategy. If I start with China, great track record. You know, they got off to the races early by raising third-party capital. Putting money into China right now is not at the top of every investor's list, right? It's just, there's uncertainty around the market. We think that will be successful over time. That's not exactly the hottest area right now. The energy, we had a portfolio of assets that were and still are to some extent under development. Greenfield wind and solar projects, for example. Those were at such an early stage that they were not necessarily ones that you could put into a fund. Some of those assets remain on the Power Corp balance sheet. Again, with the funds that we have raised, the energy infra fund, CAD 1 billion, you know, as those assets come to fruition, they get transferred into the fund. We'll get some more cash as that goes forward. Your question was on fundraising, however, and I do think that we're optimistic we can do more fundraising in the energy infra fund. There's some other product extensions that we think we can do in the energy area that we think can raise some capital. In addition, I mentioned the Canadian Sustainable Agri Fund that we did raise over CAD 200 million on our first close here, and there's good interest in that area. I think lots of progress and lots of opportunity to continue to build that business out. It really started. That was the most capital-intensive part of the whole thing. It was never geared to be a third party. The Power Sustainable Capital team comes with a bigger challenge than the Sagard Holdings team that was already to a large extent in some third-party funding businesses around Sagard, around Portage, the Fintech, around Sagard in Europe, and then the transaction they did with EverWest, with the Great-West Lifeco that was already in third-party funding. You know, they're just at a further stage in their development. I hope. Yeah. I don't know if I answered the question for you. No, that's good color. That's all for me. Thanks for taking my questions. Okay. Thanks, Nik. Thank you. The next question comes from Doug Young of Desjardins. Please go ahead. Hi. Good morning. Good morning. Just first on Wealthsimple. Just so I got this right, because it's consolidated, Greg, you don't take the earnings hit from the valuation decline, and you actually get an earnings pickup from the revaluation of the put option liability. Do I have that right? I apologize. It's Monday morning, and I'm still kind of on- Yeah. If that's right, what was the positive impact from the revaluation of the put option liability this quarter? Greg, you're gonna take that? Yeah, sure. Yeah, because it is consolidated, we don't get to enjoy the markup or markdown on the asset, if you will. It's really the carry that was affected by the valuation adjustment in the period. I think I'm remembering it right, but I think it was CAD 36 million negative. You see that in Sagard's asset management activities line. If you go to that page in the back of the deck, page 33, you'll see the color there. However, there is also an offset to that of CAD 25 million where it is in the Portage fund, which is, of course, taking the other side of that transaction because that's who the carry is paid to. Okay. Oh, that makes sense. There's no put option anymore. It was extinguished at the funding round. Right. Last year. As part of that funding round, we negotiated with management that the put was gone. That part of our financials did exist, but no longer does. That answers my second question. Maybe, Jeff, on to you, bigger picture. I mean, one of the levers you talk about three levers to surface value, and you've been very consistent in that. We've seen some actions on this. One of the levers you talk about is actions between the holdco and the publicly traded operating companies and investments. You know, China AMC makes a ton of sense. You've talked a lot about that. What else can you do between Power and IGM, Power and Great-West Lifeco in terms of shifting things around to surface value? Like, is there stuff? Like, what's your vision there? Is there more to be done? Can you maybe kind of flesh some of that out? Yeah. It's a good question. It's not kind of a linear answer in terms of it's only this thing that we do or that thing that we do. I think I would bring your question up a level to say we have a simplification strategy, because Power Corp has been far too complex for investors to understand, and the simplification is on a whole series of dimensions. One of the dimensions is our structure. We've done a lot with respect to the Power Corp reorganization, Power Financial, the purchase of GBL. Another is where we hold things. China AMC is in two places. IGM owns a big chunk of Great-West Life stock. You know, those are things that, like, complicate life and investors go, rightly, think why would you hold it there? Now, some of those things were done for valid business reasons. It's not like they were done without thought. There were usually, at the time of those transactions, either constraints on where you could buy things or a need for capital or what have you. But straighten it. You know, cleaning that up over time in a way that makes sense, when the opportunity is right, is the second piece of the simplification strategy. The third piece is to simplify what we do and not have us do 20 different things that look like they're all in different industries so that people go, "I don't get this," is to try and simplify our business. The main focus there is financial services. The move over time to transform the Power Corp operations from diversification to financial services without blowing up the assets that we have or blowing up the management teams that came and worked for us and signed up because we're good long-term shareholders. Doing things in a methodical, smart way that honors our commitments to people, but simplifying what we own so that it's financial services, while we communicate, is all part of the strategy of getting greater value and having the market appreciate the value. You're also hearing a little theme playing into it that, getting over time, greater focus on earnings, and increasing the earnings, I think will reward all Power Corp shareholders well, at the margin, getting more earnings driven. Those are all the themes we're playing into it. Now that was. I got really big picture, but that is the way we think about it. Whether there's other specific examples that the co-ownership structures, there's you know a lot we co-own right now. We still got some Great-West Life stock in the IGM balance sheet. There's a further opportunity, but when and how that gets realized will be you know told in the future. I don't know the answer to it. But it's the bigger picture, I think, is where you got to go. We are on a simplification strategy. Lots of ways to do it. Well, where it's going is, you know, I think just it makes a ton of sense. You know, you look around the portfolio between Great-West, IGM, and Power, you know, you've got asset management at Great-West with Putnam, you've got asset management obviously, you know, at IGM, and you now add some asset management up at the Power level. Like, I guess where I'm going, would make a ton of sense, and it's a lot more complicated than me being an armchair quarterback here, but does it make a ton of sense to have asset management in one particular silo? Like, so is that something that goes into the simplification? Is that just something that just is not on the table? Or is that something that Yeah that you think about? It's a great question, and it, you know, I should have gone there because I should have actually. I don't know. When you said it, my mind didn't go there, but that's a great question and an obvious one. One we spend a lot of time thinking about it. The answer is yes, but it's also got to be doable and practical and not kill the businesses. You got to do what's right for the business always. The examples of us having done so, as you know, in Canadian asset management, we took all the IG, Investors Group, investment management and put it into Mackenzie. Canada Life was managing its Canadian shelf of public equities and debt, and that looked like it was duplicative in a I won't say an easy move, but one that was easier. We then transferred that business and negotiated between the IGM and Great-West Life teams. That was an effort of consolidating our asset management. When you get to the other obvious questions, which is that Great-West's got investments like Putnam, and we've got Mackenzie, it gets more complicated. You've got different business models, and typically when you're doing a transfer, there's a big synergy to kind of make it work. They're not always obvious when you're going into different markets. There may be long-term benefits. It's something that I've been asked a lot, and we look at from time to time, but we don't do any. But there are some impediments to us doing that at this point. That's at the Putnam level. At the asset management level at Power, you know, you go with where the opportunity is. The fact is we have the teams at Power, and we've got people as investment managers in the alternative space who were working for us, for the group. They weren't working for one of the subs. They weren't working for one of the public opcos. They were working for Power, and those teams have an ability to attract additional talent to them. That's the key, as you know, in investment management. It's all about talent, investment management talent. We're able to attract them. We've got the businesses at Power, and they're running, and they're growing. You don't just turn around and say, "Oh, well, why don't you all go work somewhere else? We're gonna move you to another company." It doesn't work that way. You destabilize them. I guess I'm gonna come back to a high level. We are trying to simplify, but we do have a number of public companies, and we have businesses in those public companies that are people businesses. You prioritize not doing anything that would. The first priority is make sure the businesses succeed, and that trumps kind of putting them all in one place, which on paper looks good, but if there's not real synergies in doing it, you don't do it. You don't. Long answer, maybe too long for you, but that's the way we think about it. No, I appreciate the color. Thank you. Thank you very much. Thank you. The next question comes from Tom MacKinnon of BMO Capital. Please go ahead. Yeah, thanks for taking my question. Good morning, Jeff and Greg. Just taking this Power simplification theme a little further, this may have been asked in prior quarters, but Wealthsimple here, owned in two places. You took some money off the table, which in hindsight is good given the markdown. How does this? You've got another kind of retail wealth management strategy, that kind of plays a bit into Fintech space being the or robo-advisor space as well in Personal Capital. You know, that seems to have been probably closer to breakeven and more successful leverages into Great-West, and we can see how that happens. Just, you know, with respect to Wealthsimple, you've got a lot of windows into this Fintech space through other means now. How does it leverage into the company in terms of does it just provide intel or? What's the longer-term plan for it with respect to joint ownership and where it fits overall in the whole Power group? Lots to chew on there, sorry. Anything you can give is great. Thanks. Yeah. Hi, Tom. Good morning. Thanks for your question. It's a good one. I'll start by saying, addressing the Personal Capital and Wealthsimple. You know, financial services are really a regional market here. When I say here, they are a regional market. It's not because somebody has a franchise in one country that you then just port it to the other side of the border. The regs are different, the competitive reality is different. Financial services at the individual level is a regional market, and Wealthsimple and Personal Capital have extremely different business models. They are both emerging in the Fintech space, but they are not the same business model at all, either in their technology, their approach to market or the clients that they focus on. That's not a marriage made in heaven, I guess, is what I'm saying. Even Great-West Lifeco has purchased Personal Capital, where the synergies are very, very significant over time, we think. Wealthsimple, if I flip there, that is a good example. I think it was on the next question about complication, you know, how we end up with things in different places. It's not that we try to complicate life, but when Wealthsimple came along, you know, it was the opportunity came through and it was the team in Portage and Paul Desmarais III and Adam and the whole team there that were close to it. The initial providers of the capital at that time was Power. We saw the opportunity, and we funded the first few rounds. We said to Wealthsimple, "You know, you've got a good thing. We want to support your business. We'll provide the capital, assuming you make your business plan goals." The first few rounds happened out of Power because that's where we had the interest, and IGM was less focused on it at that time. As time went on, the whole Wealthsimple, it became obvious, was a way for our group to get exposure to a direct-to-consumer digital model going after the next generation in effect, and creating a franchise there. We said, "Well, let's put some capital in here. We don't know where this thing is going to go, but we're not exposed there, and we should be because how is financial services going to emerge over time, and how big is digital going to be and what's the next generation going to get? We decided to invest in that area without necessarily having a clear idea where it was going to go. We didn't bet the farm. You know, in total between ourselves and Great-West, we invested CAD 315. It wasn't, you know, like we have no crystal ball here. It was to position ourselves in the sector and see where it goes. That's where we're at right now, and we have the investment in two places for those historical reasons. Where does it go in the future? We said all along, and I think IGM and James O'Sullivan will say the same thing. We are going to continue to support the growth of this business, and we have full optionality. Don't know what we're going to do in the future. We have taken all of our initial 315 off the table and then a little bit more than that. We own between 43% and 48% of the company between ourselves and IGM, based upon how management options get realized over time. We've got all the optionality in the world, and we'll just decide how we're going to play it as the world unfolds. Haven't made any, like, those are future decisions. I've given you I think there hopefully the explanation of why Power, Wealthsimple and Personal Capital are different, how we ended up with Wealthsimple in two places, and why we did it in the first place. Going forward, we're just kinda going to continue to watch it develop and make our considerations. Tom, that's. I'd like to go further, but we aren't any further. That is where we are in our thinking. It sounds like, I mean, you're playing with the house money here. Do you continue to think you're going to have to put more money into it? Or, if more money is needed to change it or grow it, does that just come from more third parties, or would that come from, Power or IGM? Yeah. We haven't crossed that bridge. They're pretty well financed right now from their previous rounds of financing. I think we'll make that decision in the future. You know, one way to look at it is, it's simply a financial bet. We put money in, and we took the money off the table, and it's house money, and that's true. So good. We feel great about that. But, I don't know that Wealthsimple could be part of the Power group for the next 50 years. Like, it could become a core part of the franchise or maybe we don't play it that way. When I say about optionality, it's not just a, you know, a venture capital bet. We're in financial services, and we got in there because we wanted to see what was happening and have a leg in the digital emerging space, as I said. Whether we're gonna be there long- term or we're not, I think those are decisions in the future. I just don't know. Okay. Thanks for the color. Yeah. Thanks, Tom. Thank you. The next question comes from Graham Ryding, TD Securities. Please go ahead. Yeah, I just wanted a follow-up question, if I could. Jeff, just you talked about some themes. I wanted to sort of revisit GBL. It's a sizable investment for you, 7% of your gross asset value. You talk about sort of simplification of the business and looking to own financial services and then also a greater focus on earnings, less focus on NAV. How should we think about GBL? It's an obvious fit with those sort of themes. Maybe we could sort of revisit that. Yeah. My comments were, you know, directionally, yes, looking more on earnings, but not doing anything that destroys value short or medium or long- term through taking actions that, you know, destroy what we've got or hurt what we have. GBL in its own right is making a switch into more privates and asset management when you look at what they're building with Sienna. And therefore, there's some of that going on within the business. I've always said on GBL, that's a part of Power that doesn't, as in its current configuration, fit the definition of financial services perfectly. I acknowledge that, and we've acknowledged that. We also have a 40-year history of having built up a business that is the second-largest holding company in Europe and has a flow of transactions both at the GBL level, at the Sienna level, but also was the genesis of Sagard equity way back when it was launched, the private equity funds. Because there was a deal flow in the private space that at the time, and still to this day, might have been too small or out of scope for GBL. You know, we've got this machine over there and this presence in Europe that brings a lot of information, a lot of knowledge, a lot of windows and has created value over time. You don't just turn around and say, "Well, that's not pure financial services," or, "It's not pure earnings. Let's just exit that." That's not the way we think. We think about many other things that we can work on to simplify, create value along the strategies that I've articulated. GBL is carrying on its own strategy of rotation into private assets and more towards financial services, and we'll just see how that goes. But short- term, we have no current plans to be divesting, if that's underlying your question, that's not the plan. No, I just wanted to get a sort of updated view on how it fits with the overall strategy, but that's. Yeah. That's helpful. Thank you. I'm gonna go back to Tom MacKinnon's question on Wealthsimple. Tom, I don't know if you're still on the line, but you know, I didn't say that notwithstanding the markdown that Wealthsimple has and that's gone on with Wealthsimple, and that's obvious in terms of valuations of tech companies and then a slowdown in market activity and in business activity in certain areas. Wealthsimple have done an unbelievable job, the management team, in creating a brand and in going out. I think they've got 1,000,007 clients, if I'm not right. Our disclosure will be elsewhere, but it's created a major client base, a major brand, happy clients with good experiences in an area of the market that is going to be it is the next generation. They've done a great job. You know, valuations go up, valuations go down. I don't wanna let this kind of quarter go through and talk about a write-down without saying the company's done a great job, and they're very, very well positioned going forward in the future and well-funded at this point. I'll add that, Tom, if you're still listening. Jeff, I just- Operator. Thank you. Jeff, could I just add that, you're right. It's the 1.7 billion or 1.7 million clients, but CAD 17 billion in AUM, as well. 1.7, yeah. One point s- yeah, 1.7. Boy, for the day when the CEO is picking up a decimal place on the CFO, and it's. Yeah. My week's off to a great start already, so. I'm thinking 10 years ahead. Okay. All right. Operator, more questions? Thank you. As a reminder, ladies and gentlemen, if you do have a question, please press star one at this time. The next question comes from Geoffrey Kwan, RBC Capital Markets. Please go ahead. I just have one follow-up question. We've seen other alternatives, private equity managers, that have looked to distribute their funds through proprietary wealth management arms. You know, is that something that Power is looking to do? For example, whether or not IG Wealth or whatnot. Or is it maybe perhaps given, you know, you've got a number of different strategies, a number of them are relatively new that maybe you'd wait for future iterations of those funds before looking to distribute those through your retail wealth management channel. In terms of examples, and Greg, I might kick it to you in a second, but in terms of examples of others, I haven't kinda. I'm not. I'm trying to think of where there are, where you've got. I will come back to you on that. What I am gonna say is that definitely the teams at Sagard, Power Sustainable, and Northleaf within IGM are in discussions with our retail platforms to look to see how they can be distributing product, they can be embedding product, particularly in multi-asset strategies. If you think about the mass affluent market, you know, may not be appropriate that an investor who's got whatever portfolio that they'd be making direct investments. If they've got an asset allocation program and there's some portion of that program that's got a portion of its assets invested in alts, that can make sense. The teams are working hard on that with Northleaf and with our group at Power Corp to get access to product, because they want that kind of product across IGM. I think you'll see it through Great-West Lifeco over time. That's very much a focus. I know other groups who have been in the liquid asset management business who are buying into capabilities in non-liquid are looking to further those strategies through their distribution. I'm sure some of it's prop, but I can't kind of articulate all the names there. Greg, do you wanna add anything to what I said in answer to Geoff's question? No, I don't think so. Yes, certainly Northleaf, like, that's where my mind went to, has already been exploring those type of opportunities. I think you're quite right that not only our own distribution channels, but others where, you know, like our major manufacturers like Mackenzie and their relationship with distributors are looking to provide this type of product as well through their efforts. Okay. Great. Thank you. Thank you. Thank you. Ladies and gentlemen, there are no further questions at this time. This concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Thank you. Thanks, everybody. Bye now.