Good afternoon, ladies and gentlemen, and welcome to the Power Corp Third Quarter 2022 Earnings Conference. 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 operator assistance at any time. I would like to remind everyone that this call is being recorded on Thursday, November 11, 2022. I would now like to turn the conference over to Jeffrey Orr, President and Chief Executive Officer of Power Corp. Please go ahead. Thank you, operator, and welcome everybody to our Q3 results call. Thank you for joining us. With me is Greg Tretiak, who is EVP and Chief Financial Officer of Power Corporation. Just start off on page six of the presentation. Well, we've actually got our disclaimer. I guess I should pause on those pages. We do have our regular disclaimer regarding forward-looking information. Once you've had a chance to digest that, I'll skip you all the way forward to page six, which just highlights some of the additional information that is available to you with respect to Power Corp and Great-West Life and IGM and GBL, and different sources of information that have been presented recently that you can look to to follow up any additional information you may want that we haven't addressed here or in subsequent discussions with you. With that, I'll move forward to page seven and just give you some high-level comments on the quarter. I think from an earnings point of view, we actually feel it was quite a solid earnings quarter, at least with respect to the 75% of our portfolio, which is namely Great-West Lifeco and IGM, where we really look to earnings as one of the principal measures of performance. Given the environment that we were in in the quarter where we had stock markets down, bond markets down, we had currency headwinds, certainly in the case of Great-West Lifeco, who would have more of their portfolio exposed to Europe and UK pounds than other companies you might follow. That was a headwind as well as a hurricane. You know, Great-West Lifeco's earnings, we thought, were very solid, and they demonstrated how diversified the business is and how resilient the business is in a down market. In the case of IGM, very exposed to asset levels that are driven down by equity markets and fixed income markets. They also demonstrated good solid earnings with good cost control. On the portion of our portfolio that earnings are a critical measure, we thought it was a solid quarter in a very difficult environment. The other 25 percent of the portfolio is not really driven by earnings. It's more of an NAV type of business, whether it's GBL, our investment platforms, which while we are working hard to get them to profitability are not at that level at this point. Then we have other assets. When you get into an environment where you've got public markets down, private markets down, that's gonna create a downdraft on from an earnings point of view. That was evident in the quarter. We feel good about the quarter, and we are just in an execution mode and following our strategy as we've articulated it to you many times. We're spending all our energies doing that while we weather what are pretty difficult conditions at this time. I'll move you forward to page eight, and these are just a little bit of an example of what's going on. You know it. If you go on the left-hand side, you look at the S&P down to 21% over the first months of the year, the first three quarters. Then you look at the bond market being down 16%. This is. I think it's the worst combined equity bond market start to a year on record. You probably saw the headlines. I think it was BofA that did the work, showing a 60/40 portfolio, typical portfolio that an investor. Please stand by. Apologies, ladies and gentlemen. Please stand by while we reconnect the host. Do we know if everybody else is on the line? We know how many are still on? Okay, great. Hello. Gentlemen, you may proceed. Thank you. Okay. Hello, everyone. I'm sorry. Just had a communication failure. I don't know, operator, whether we still have people on the line. I'm assuming there are some on the line. We'll carry on. Apologies to everybody for that break. I think I was talking about market conditions, so we'll try and speed up because we've lost some time here. I believe I was on page 8, and I was just making the point that it's the worst start to a year for the client portfolios globally. Taking the 60/40 portfolio as an example in the 100 years that it's been recorded, and that's had an impact on flows. A very, very difficult environment. With that, Greg, I'll pass it to you to pick up on page number nine. Okay. Thank you, Jeff. With that backdrop, I'll give you the headlines for the earnings for the quarter. Both net EPS and adjusted EPS were CAD 0.63. That obviously includes the CAD 0.13 from Hurricane Ian. Without that, a CAD 0.79 quarter. I'll talk about the NAV in a subsequent slide. We announced a quarterly dividend at CAD 0.49 and 0.50. If that just take you quickly to the net and adjusted earnings page, which is page 10. Jeff spoke about our perspective on IGM and GBL or Great-West Lifeco, IGM's earnings for the quarter. GBL, as you are aware, a NAV-driven business, and that's their focus. In the quarter, their contribution to earnings was affected by a CAD 22 million charge related to the minority interests in Webhelp and the put liability that they have on that. In addition to that, costs that were incurred in the acquisition of Sanoptis and Affidea. Moving on quickly to the Alternative Asset Investment Platforms. You can see we were down in the quarter at CAD 34 million. This line is obviously affected by realizations in our investment operations. We had a good year in 2021 when both China was realizing gains and also Sagard 3 when we did a secondary sale. This year, Sagard was quiet in the period for realizations. In China, our portfolio manager was positioning our portfolio in light of the market activities and realized gains or losses in the period leading up to the party Congress in October. China Asset Management you can see was down slightly, but it was affected by a $2 seed capital markdown. Other than that, it would have been basically right on 2021's numbers. Standalone businesses not contributing in the quarter. Last year was affected by fair value marks on Lion, as the market on that particular stock decreased, and the liabilities associated with gain minority interests were reversed. Corporate operations, I'll just stop on that for a second. I think some of the analysts may have used Q2 as a benchmark for projecting where Q3 might have been. We are right on our guidance after Project Next at about CAD 38 million in corporate expenses. The corporate expense line is the one that's most variable. In addition to that line includes financing expenses and of course, our dividends paid on our preferred shares, and a little tax, and depreciation. The number generally should be going around CAD 102, and that's what we would expect going forward on that line. With that, I just go quickly to the NAV slide. The NAV for the quarter at CAD 26.3 billion down from the 27.8, largely driven, in fact, mainly driven by the marks on our publicly traded operating companies. With that, I turn it back to you, Jeff. Thank you very much, Greg. I'm gonna move on to page 12 then, and just talk about Empower. The key message here is Empower is playing out very, very well. We are on track on the acquisitions. The business continues to grow and gain market share organically and is winning net flows organically. There's one thing that isn't down is the market, and they have a lot of fee-related income. It's not the only thing, but they do have a lot of fee-related income on the revenue line, and that's been impacted by the lower markets, both fixed income and equity. On the MassMutual, basically, the eighth wave of the MassMutual integration was completed in the fourth quarter. That's the final wave. All of the MassMutual clients have been converted, and the company's expecting to reach its $160 million run rate synergy target by the end of this year. That's Great-West Life and Empower, of course, I'm talking about. The revenue retention is ahead of the original expectations that Empower and Great-West Life had at the time of the acquisition. Kind of declaring victory on MassMutual. Prudential is at a much earlier stage. As you know, it closed on April first, so they're still very much in the planning phase. There's been no transitions of customers from Prudential's platforms onto the Empower platform. There's nothing at this point that we see that would have us believe that we're not on track, but it is early days, so there's still lots of work to do on that. Personal Capital. The Personal Capital tools and many of the features that we saw in the Personal Capital business model have now been incorporated and launched in Empower's defined contribution business. You've got messaging services. You've got onboarding that's much simpler. You've got better client interfaces. Empower already had great client interfaces relative to most of its competitors, which is one of the reasons it has been gaining market share organically for a number of years. They're even better right now with the Personal Capital tools. In addition, the Personal Capital tools have been embedded into Empower's Retail Wealth Management business, which, as you know, is set up to pick up rollovers from the defined contribution business. That's a big flow that comes out of the Empower book every year as people retire and change jobs, as well as roll-ins, people that have outside assets that Empower looks to bring into their Retail Wealth Management business. The Personal Capital has its direct-to-consumer business, which was the original business that existed when it was purchased. That continues to grow, but it is affected, of course, by lower fees and an overall risk market where investors are not as aggressive, don't have the same risk appetite that they had a couple of years ago, but it continues to grow. Okay, turn my attention to page 13. Really solid quarter, again, given the circumstances for IGM. We're just highlighting here, IG Wealth, which continued to be in positive flows in the quarter, which was great. You see the second bullet point on the page there. They continue to show great momentum. We've talked many, many times and for some time about the retooling of that business and the company's in a really good competitive position. They are growing clients. They're growing advisors, and they're making inroads into larger and larger clients. You see some of that illustrated on the left-hand side of the page. More and more of their new client acquisition is coming from clients that are with balances above 500,000 with the company. The business continues to demonstrate, this is IG Wealth we're really focused on here. The business continues to demonstrate really strong resiliency in the face of difficult markets, and that's always been a hallmark of this business model. We don't have a slide on Mackenzie. Mackenzie is doing extremely well on a performance basis. All of the work we do on advisor surveys says they continue to make great inroads in terms of their position with advisors in Canada. We think they're a clear number two at this point in the market, and the flows reflect the current market environment. You, you've seen different flow numbers. I showed it to you earlier. Their flows are reflecting the fact that people are, in Canada, retail investors, essentially, at the margin taking... not panicking, but taking money out of the market, and those tend to be flowing into GICs right now, at this point in the cycle. Turning to page 14, I already got the comment from Greg on really strong results at China AMC. The market's down big time. Their assets are actually up from a year ago. The profits are in really good shape relative to last year, other than some seed capital losses. As you might expect, they've got seed capital, markets are down, so they'd have some marks that would be down there. On the terms of the transaction, we expect the transaction to close, and that is the transaction where we're selling our interest to IGM. We expect it to close by the year-end. We don't control that. There's authorities involved, but that is our expectation that we'll get it done by year-end. Move to page 15. Just to call it, we don't often talk about Northleaf. That has done really well. It had a long growth record, as you can see, very successful track record of growing their AUM prior to the acquisition by Mackenzie in which Great-West also participated to the tune of 20%. They've continued to grow organically from their third-party funds, but also good progress in launching products and having Northleaf products into both the IG Wealth shelf. Mackenzie is launching interval funds using some of the Northleaf strategies. Great-West Life is committing capital to the Northleaf balance sheet. Overall, this business continues to grow and doing really well. The team's doing a great job. We're really pleased with how things are progressing at Northleaf. Page 16, just a quick few comments on GBL. They have continued to rotate and put more assets into their private assets as opposed to public assets. You can see at the top of the page, 23% of the portfolio is now in private assets, and then they have Sienna, which is an alternative asset manager, which is another 14% of their assets. Those percentages are somewhat reflective of the fact, in part, that the public portfolio is down, of course, with the markets being down. Notwithstanding that, there's absolutely the private portfolio is growing in absolute terms as well. As you see in the first or the second bullet point on the page, their private asset values are up in the quarter and year-over-year. They are putting more money to work in the private sphere. The two large acquisitions that Greg mentioned in the healthcare space are called out. Again, from an earnings point of view, those resulted in losses. There were transaction costs. I shouldn't call them big, but there were transaction costs. Those two deals resulted in losses, but they were, we think they're very attractive acquisitions for the company. Down at the bottom of the page, you can see that there has been a drop in the value of GBL as well as its holding. Its discount has widened out as well as some other European holding companies. They're taking advantage of that by stepping up their share buyback program, and they've been active in buying back their own shares, which I think are pretty attractive at current values. Turning to page 17. Power itself has been returning capital to shareholders in the form of dividends. We've also been active, as you know, through the year in our own share buyback. We've purchased 15.2 million shares at this point over the course of the year. We slowed down a little bit in Q3. We're at a higher pace. You know, the markets were pretty shaky. We were looking at, overall, you know, where's the world going? What are the financial conditions out there? Got a little more conservative in terms of looking at our own liquidity, but we are still continuing to buy back shares and intend to continue to do so as we move forward. We have on the balance sheet about CAD 1.1 billion of available cash. There's another CAD 575 million that we expect, pre-tax to receive, assuming that the ChinaAMC transaction closes. We like to keep about two times our fixed charge coverage, which is somewhere a little north of CAD 700 million. We've still got lots of available firepower at Power Corp and are looking at how we deploy that liquidity. Then at the bottom of the page, we think we're very much looking to the future, but we're also cognizant of the fact that there's uncertainty, financial risk out there. Are we getting into a recession? If we're getting into a recession, how hard a recession will it be? Those are all unknowns at this point. We just point out that we are in a very strong financial position as our investment companies, the Great-West Life, IGM, the investments, strong credit ratings, and a capital structure really where it's almost all preferreds. They're virtually all perpetuals. The small amount of debt we do have is not. The first maturity is in 11 years. We're in a pretty strong position financially here. Okay, 18, a comment on the alternatives. There was continued fundraising in the quarter, slowed down in the third quarter. The strategy is completely what has been and what we've spoken about so far. They're out trying to build their asset base and their revenue base, both Sagard and Power Sustainable Capital. I would say continued good fundraising on the credit side, on the royalty side, infrastructure. The equity and venture capital is tougher, as you would expect. Both platforms are working on a number of products and fundraisers, and we hopefully have more to announce in the quarters ahead here as they try to build out their scale and build out their revenue as we try and work to get them onto a profitable basis on a fee-related earnings basis for both platforms. Sagard is pretty close to break even here. It depends on the quarter. There's a little more work to do on Power Sustainable, but they have got a lot of products in the hopper that we think will help build the top line if they're successful in getting the fundraising done. I'll leave it at that. Just a quick comment on page 19 on Fintech. We continue to be delighted with our Fintech strategy. Wealthsimple has, I think, crossed the 2 million client mark at this point. Their revenues are well down from where they were in 2021 when you had the trading side of their business really explode. That business is still doing well, but at much reduced levels. They've been managing as many companies that are at their stage of development. They've been managing to ensure they have good liquidity, and they keep their liquid resources. They've managed their expenses as well as their costs on client acquisition and are in a good position financially. I've already commented on Personal Capital. Portage, which I mentioned, I think in the last call, had closed their third fund. Now they're in a position where they're funded. Values are down, as you know. That's an interesting opportunity for them as they look to deploy, I think it was four hundred million—CAD 600 million, excuse me, in the third fund. Okay, let's move forward on page 20. Standalone business. There's not too much to report here. The Lion Electric Company, however, is really ramped. It's got one bus line that's now getting into really good production. They are making deliveries. They've got a number of other lines that have order backlogs. That business continues to build out. We follow that. Evaluations, of course, on EV companies as most technology companies are well down from where they were about 12-18 months ago. I think I'll leave my comments at that. Last couple of slides here. We continue to be very focused on taking the steps that are necessary to put Power in a position where investors understand their value creation and understand how we make money and and how the value will be created. We continue to communicate that clearly and are determined to continue to see this net asset discount line that you see really going back and starting to drop from the start of 2019 when we announced the sale of the U.S. life business at Lifeco and did the three-way buyback and then the reorganization. We are determined to continue to drive this to a point where investors are paying net asset value for Power as opposed to buying it at a discount. In the meantime, we'll be buying shares while it's sitting there at a discount. The last page you've seen before, I'd just say, I will go through the page, we are very focused on execution. We're in tough markets, so we're aware of that. We're gonna be cognizant of that. If markets get worse, if financial conditions get worse, we think we've got businesses both at Power and in our subsidiaries that are well positioned for down markets. But we're very much focused on building out value going forward, and we have not changed our strategy one bit, and we're focused on executing the strategy that we announced a couple of years ago. With that, operator, if we still have anybody on the line, I don't know. We lost them when we dropped off the call for 10, 15 minutes, but I invite you to open up the line for questions. 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 touchtone phone. You will hear a three-tone prompt acknowledging your request. If you are using a speakerphone, please lift the handset before pressing any keys. First question comes from Geoff Kwan at RBC at RBC. Please go ahead. Hi. Good morning. Just had one question. Just wondering if you could kinda talk about how the M&A landscape looks for you right now, kind of appetite, but also too, just how attractive are valuations in the areas that you're looking or is there still a valuation disconnect between, you know, asking prices and what bidders might be willing to pay? That's a good question. I would say that if you look where we've deployed a lot of our capital, Jeff, in the last couple of years, it's been in the DC space and we continue to believe that sector is going to consolidate. We think we have a winning hand, and we think we have a winning business model. That would be the first priority in terms of capital deployment. There, there's two factors. The availability of properties is a bit episodic. You know, it comes and it goes. We continue to believe there's gonna be platforms that become available, but we haven't seen a lot of opportunities in the last year or so. In the meantime, we've been busy from an integration point of view, as well as Great-West Life looking to get its debt that it incurred in the three acquisitions down to the levels where we've got a loaded gun again, if I can put it that way. We think we're getting over the next year. We'll be in that position. We've only got one integration going on versus three. I hope the team in Power is not listening to me now because I'm saying we've got capacity to do more. They're exhausted, by the way, as you can imagine. They won't want to hear me say that we're ready to do more. We're getting through the integrations, the financial position will be there. I think we're getting in a position where we could act if something came, but we haven't seen a lot recently there. The rest in terms of really an area of focus, and I'll hand it to Greg in a second. You know, all of our businesses are always looking for areas where they can grow. I do think in a few cases, we have not seen valuation expectations come down. We've been involved in a number of processes and it's a little bit like the housing market. The volume goes down because nobody wants to come to grips with where their businesses are currently worth. Greg, did you want to add a comment to Jeff's question? No, I was just gonna say that our thinking is very much aligned with what Geoff Kwan would've heard last week when James was talking about the Wealth Management sector. He said in his experience as well that he hasn't seen the gap between private and public pricing this high for a long time. Yeah. We're spot on with that as well. Okay, great. Thank you. Thank you, Jeff. Thank you. Next question comes from Nik Priebe at CIBC Capital Markets. Please go ahead. Yeah, thanks. So we often talk about the discount to NAV and the disconnect between the run rate operating expenses and the size or the magnitude of that discount. What action, in your view, might be necessary to close that further? Do you think it's a product of continuing to deliver on the commitments that you had articulated at the outset of the reorganization or maybe accelerating some of those initiatives? I'd just be interested to hear your thoughts around that? Yeah. I think people pay for value when they understand clearly that the value is there and that the value ultimately will be translated into monetization or cash. That might be on a longer horizon, depending on the asset, but they need to have a good understanding and need to have confidence around it. I think on the Power portion of the portfolio, in fact, I think even including all of the NAV piece of our business, there's still room and progress we need to make, both in simplifying the portfolio, but it also in simplifying and in being better at illustrating where the value can come from. That's a journey. We've made good progress. Your comment on the expenses, just to replay that for others listening. You know, I think that everything is in our net asset value in terms except for our operating expenses. You know, the debt and the prefs are all deducted. If you've got CAD 150 or 175 or whatever the number happens to be of pre-tax expenses and you do a discounted cash flow on that, you're gonna get to about a 2%-3% NAV discount. You could figure out, well, that maybe that's if we don't add any value at the Power Corp level, you should trade at a 3% discount. We still got lots of room to move here, but I think we need to continue to execute. Maybe, Nick, that's a better way to put it. I think we'll simplify what we own. I hope what we own in that 25% switches to more earnings driven over time. You know, as we execute our strategy, I think we'll move the dial so that the 75%, we're gonna put more capital into actions that drive earnings and less capital into actions that drive NAV. That at the margin will help. I think just continue to execute and communicate. Like, I think the more we make progress on our articulated strategy and the more we communicate transparently, the more confidence we'll gain from investors and the more I see that discount dropping. Okay. That's good. Just moving on to the asset management platform. As you think about the future development of that business and you know, maybe the introduction of new capabilities, are there any adjacent markets or asset classes that might be step out in nature to what you're currently doing or you feel could be a good vertical to participate in, either organically or through or inorganically? I'm just wondering about how that might evolve over the next few years. Yeah. The answer to your question is bang on. It's a great question. It's exactly where they're focused. We're not looking to add strategies that are completely new to the platforms. I won't say it's not ever gonna happen, but each of the platforms are looking at building out in adjacencies. For example, at Sagard, they have private credit funds. They're looking to be raising capital on a more senior private credit fund that's elsewhere in the credit stack. If I look at the infrastructure business at Sagard Holdings, they are very much in the business of working on infrastructure products that are not what they currently have, which is infrastructure equity. Those are step outs. Where you don't have to completely go and add to your cost base in a major way in order to add revenue. That's the way they're thinking. Scale what they have, but expand the product suite in the areas of expertise that they have. Now, the exception would be in the case of Sagard or excuse me, Power Sustainable Capital. Just this last quarter, they launched their agri fund, you know, their environmental agri fund. That's a new product, but it's also very much on scope. We'll get some products that are new, but I think the scaling of the business requires that you focus on the capabilities you have and then build out new strategies around those capabilities. Your question is exactly the way we're thinking. Yeah. Okay, that makes sense. All right, thank you. Thank you, Nick. Thank you. Next question comes from Tom MacKinnon at BMO. Please go ahead. Yeah, thanks very much. With respect to slide 18, just looking at the PCC funded portion, which continues to come down. As you build out kind of new strategies, are you really filling a lot of those new strategies then with largely third-party money? And secondly, where do you wanna see the PCC funded portion of this come to? Could you go as low as 10%? And then the final would be, I assume that as you take the money out of those, it really doesn't do anything to NAV. It just augments your cash position for which you would be able to buy back stock. Lots in that question. Sorry, but if you can just sort of take that, I'd appreciate it. Well, there's lots in the question 'cause there's lots to the formula as to how we get to where we get to. The first question is that the answer as to how much capital would we like to have in seed, the answer would be as little as possible. But we're also trying to grow those businesses from start with an fee-related earnings basis to profitability and contribution. And in order to launch new products, they do need the support of the sponsor, and Power Corp is the sponsor. The as little as possible, what's my expectation? We're trying to work it so that we don't add more capital and that we recycle our capital, if I can. That would be a goal. We don't know. The number's gonna go up and down from time to time, but the goal would be to not put a lot of new capital in, but take capital out of existing strategies as they mature, as they get realizations, and make that capital available to recycle as the businesses grow. That's a kind of a two, three -year comment. I don't know what happens beyond that. Now let me give you a nuance to that, however. When you launch a new product for the first time, the sponsors expect you to have more capital in it. So we had more in the first vintages of certain funds. By the time you're launching the third fund, you've got credibility, and the other LPs, I should say, don't expect you. If I said sponsors, I'm sorry. The other LPs do not expect you to have as much seed capital when you've already got a proven track record. We're finding we might have been 20% of a first fund, and by the time you get to the third fund, you can have 5%. You launch a new product, and then you're back, and it might be a debt product, and it's got a big AUM to it, and they want you in at 20%. Now you're putting CAD 200 million to work. The thing jumps around a bit. The other thing that happens, you know, if you remember last year, we had in our European Sagard 3 fund, you may not remember this. In our third private equity fund in Europe, when last year someone came along and said, "We'd like to buy your entire position in fund three." We sold it, and we took about CAD 300 million off the table. Bang, all of a sudden, our committed capital goes down. It's gonna go up and down a little bit, is what I'm trying to tell you, Tom. The percentages will vary as we launch products, depending on what we're launching. Our goal is not to be putting over time new incremental capital into the seed. It would be to try and manage the capital we have, recycle it while the third party and the revenues continue to grow. That's kind of the playbook. I don't know if that answers your question. Yeah, I think that's pretty good. I assume there's. It doesn't look in terms of the investment platform expenses. It doesn't look like. Is there any kind of operational leverage in that? Because if I just kinda look at the investment platform expenses, it's just sort of grown with the assets. Is there any way as this entire part of your business becomes bigger, that the investment platform expenses would change at all? Yeah, I think there's two things that drive expenses. The first is, as these platforms have been built out, you've got to put finance people in place. You've got to put people in place to dialogue with investors. You've got to put technology people in place. You've got to put distribution people. You're building up the infrastructure of the asset manager itself, and you got to get a certain minimum scale where institutions come by and they say, "You're not actually set up to deal with us, and you don't pass our due diligence." So you've seen at the center a buildup of those costs, and I think that is pretty well, I don't wanna say it's done as they grow, but that is leverageable. Okay? That the AUM should grow much faster than those expenses. In fact, you see the year-over-year expense growth. If you go back to our report on Q2, and I'd invite you to do so, the both for Sagard investment platform expenses and for Power Sustainable, our expenses are at the same level as they were last quarter. In fact, I think they're down CAD 1 million on each platform. You know, that doesn't mean they stay there forever, but those center costs are leverageable. You get actually to Nick's question earlier. If you're driving all these new strategies and you're always hiring new teams every time you launch. You know, you're gonna be in a J curve every time. When you launch a new strategy, you lose money for two, three years until you start to get some assets in there. If we just keep launching new strategies with new teams, then the expenses over the short to medium term will grow commensurate with the revenues, and you won't get any real leverage on those strategies and your profitability. Where the profitability comes is when you got an existing team, and you start to build up the AUM on the existing team. Then you start to get leverage at the product level. If you've got more AUM and you've got more leverage at the product level, you start to contribute at the product level. You've got your infrastructure built at the center, and you hold that to grow much more slowly than the revenues, and you get to profitability. I'm being fast, but that's the way the business works. We're close to that point of inflection at Sagard, and we've got further to go for reasons I can explain. We don't have time to do it here at Power Sustainable, but that's the way the business model works. It's leverageable. It is. The bottom line is it's leverageable. The revenue should grow faster than costs or we're wasting our time here, obviously. Presumably, if that ever gets to a significant break-even point, and you're not recycling new capital for that, and that could be enough to offset any kind of Holdco Expenses, then by virtue of your example, you would eliminate any discount to NAV. If it was actually greater than the Holdco Expenses, then it's additive to the NAV. Is that a way of thinking of it? It is. I think that well, I think it's additive in and of itself. Okay. Like, it's like whether you've got 150 or 175 or whatever our corporate expenses are, they are. So if you can have a business that's currently at the fee level losing, you know, CAD 20 million a year, I pick a number, and you can turn that into CAD 50 million of profitability. I think that's 70 million to the good no matter what. We would certainly be doing our best to try and explain that we got cash flow and earnings coming in. Whether the expenses are there or they're not, it's additive. I think I do want to caution, though, that I think we've got to do. This will go to earlier questions as well. I think when you're in this business, the carry part of it, you know, there's carry. So you get the, as you know, a lot of these are 1 in 20 or 1 in 10 or 2 in 20. The carry goes up and down. Because if markets come down, you get negative carry. When markets go up, you get positive carry. And that's not all in cash. Some of that's just kinda marked. And then you've got the seed capital that can go up and down. So you've got volatility in the seed capital returns in some of the strategies and in the carry part of the business. It's not cash, it's just volatility. That's the part that we need to kinda isolate in our reporting and kinda say, "This bucket is gonna go up and down, but you got to look at it on an NAV basis over time. These buckets are producing earnings and producing cash, and you should look at those 'cause we think of them differently." When I talk about improving our reporting, our thinking is getting around to how do we do a better job of kinda laying that out for you, the analyst community, and for our shareholders to properly understand. That's the thinking we're doing right now. Right. Appreciate the color. Okay, Tom. Thank you. Thank you. Next question comes from Graham Ryding at TD Securities. Please go ahead. Hi. Good afternoon. Maybe I could just start with GBL. The private assets there, they're up 12% year to date. Is that market performance or is there some capital deployment that's in that 12% growth number? I know they've deployed a lot of capital in the area, so I'm suspecting it's mostly deployment. I don't know if that's a fact-based answer. It is, Greg? Yeah, it is. Yeah. I don't have the quantum readily at hand. We certainly can circle back on that, Graham, but I don't have that number off the top of my head. They've deployed capital in private. I'm pretty sure it's gonna come from and it's close to NAV. Okay. Yeah. That makes more sense 'cause it just seems like a difficult market to be growing private assets by 12% year-t o- date. Yeah. On your alternative investments platform, and in particular the proprietary investments, you know, you see capital behind your strategies. You know, I recognize that the returns here are gonna be lumpy, especially with the carry and whatnot, but what is your targeted return there when you sort of think, you know, through the cycle? Yeah. Again, I'll start and I'll invite Greg. But, you know, we've got some products that are in healthcare royalties. I think that's a seven, eight kinda range return that they're targeting. We have private credit that would be below investment grade that would probably be in a comparable target. We've got at the other end of the extreme venture capital Fintech that would be in the well into double digits, 15, 20% target. We've got infrastructure equity that would be once it is deployed around 7% target. But we still have some assets on our books that are under the development stage that would have a higher target. It's all over the map, is the answer. I haven't tried to come up with that. Do we not have a sheet somewhere where we have targeted returns? We do. It's just looking for it, but we didn't have it in this quarter's deck, but I think we had it in the Q1 deck. So- We actually. That's been made public. What's hard then to gauge is, in answer to Tom's questions earlier, I was saying where we have our seed kinda jumps around depending on what we launched and whether we, you know, we sold out of some equity strategy. The mix changes. But the returns, we have our targeted returns, and our targeted returns would be the same as the LPs because we're coming in as an LP, in effect as an LP when we're putting seed in. Does that answer the question? Okay. Yep, understood. That's helpful. You know, you talked about it a little bit earlier, but just want to make sure that, sort of thinking about at the Power Corp level, when you think about what you can do to drive value over the next few years, and you make reference to execution. Should we be looking for you to monetize some surplus value from those standalone investments, return capital through buybacks when you have excess cash, and then continue to grow this alternative asset management platform? Are those sort of some of the key pillars that you're looking to execute on? Yes, is the answer. That's exactly what we're trying to do. It never you know, I've answered this question to a few folks recently. It doesn't always work out in exactly the way and in the sequence that you think it is, that you think it does, or that we even think it does. If I go back to when we launched the new strategy going back and announced it in, you know, two and a half years ago. At that time, our expectation was likely that we were gonna raise capital by selling the standalone businesses, in the appropriate time and returning that capital. What actually ended up happening was different than that. What ended up happening is on Lumenpulse, for example, we got into COVID and their business was caught in all kinds of backlogs. A beautiful business, but not exactly the time to try and realize value on Lumenpulse. Then we had a very small investment in Lion Electric, which turned out that the EV market, you know, really took off. While valuations maybe got ahead of themselves as they did in many sectors, that business has got more prospects than we thought it might have. Exiting that business at the stage we were at didn't seem like the right thing to do to realize value for Power Corp. What ended up happening on the other side is that while Wealthsimple, you know, did a financing round where very, very sophisticated, the leading investors in technology around the world came along and said, "You know, we think the company is worth a lot of money, and we would like to buy a lot of the stock." We had an opportunity between ourselves and IGM to monetize some of our positions. We, not as Power Corp, as a group, took CAD 500 million off the table. We had CAD 300 million invested to remind people. We took all of our money off the table and then some. Power Corp realized its share of that. I mentioned earlier in the call, we had this Sagard Fund III, and I think it was about CAD 300 million we had in seed capital. We had a pretty big chunk of the seed going back from 2007 or 2008, that fund. Maybe it's not that far back. I I may have got it wrong, but we had about CAD 300 million in the seed, and somebody came along and said, "We want to buy the whole thing." We sold it. We ended up monetizing assets from. We sold some buildings too, by the way, that we had in the Power portfolio. We ended up monetizing assets and not in the way we thought when we announced the strategy and the ones we probably thought we were going to monetize, we still own them. I guess when I answer the question, we have a goal in mind. The goal is to simplify, focus on financial services, get what we own to profitability at the Power Corp level and monetize assets and buy shares back. Unless IGM or somebody wants to do a transaction and they need our support, fine, we're going to support that. That is the goal. If something came along in financial services that we could buy at Power Corp, we might do that as well. I'm not holding our breath on that, but that would be something that could potentially happen. Focus on financial services, realize value from those parts of it that are non-core, and then return cash to shareholders. As we do so, you know, we actually create value in and of itself, not just by our being the discount. You know, there's another thing, if you'll permit me to go there, is when we sell an asset that's NAV and we buy a share back, even if we were to buy it at 100% NAV, we're actually getting more earnings into our mix because Power currently, 75% of the assets drives earnings. That's Great-West Life and IGM. The other 25% is NAV. Every time we liquidate an NAV asset, even if all we do is buy shares back at NAV, we're shifting our mix and getting more of our mix in earnings. That hasn't been an explicit part of our strategy to date. In fact, we are trying to get more of our base driving earnings, and they also drive cash flow. I think you'll see that maybe not in a straight line, but directionally over time. That is another way we think about it, and we also think that will create value. Sorry, a long answer to your question, but. That's perfect. Thank you. Okay, Brian. Thank you. Thank you. Next question comes from Jaeme Gloyn at National Bank Financial. Please go ahead. Yeah, thanks. Maybe just one quick one on the fundraising. It looks like you were able to raise CAD 200 million this quarter, CAD 1.4 billion for the year. Just some commentary on how that compares to other alternative asset management peers that you're aware of. Also comment about your pipeline to continue with those fundraisings into the next quarters. I don't have an answer in terms of like focusing on one quarter and CAD 200 million raised relative to peers. I don't have a good answer to that question. I don't have the data. Maybe the folks that are in our platforms would have a better answer. We could try and maybe I don't know where we'd get a source for that. I sort of more think of it relative to our plans. It's not like we're not Blackstone yet. We don't have, you know, 100 strategies out there fundraising. The money comes in on a little bit of a lumpy fashion. Putting too much emphasis on one quarter is, I think, would be tough. I think you're maybe your better question or not better question, they're both good questions, but a better answer might be on the pipeline side. I think we're looking at a number of credit products across both platforms that we hope that we have a good lineup of potential funding coming in. There is more work being done on the equity side of the infrastructure fund, Power Sustainable Capital. We think we're in a good position to get some funding there. I don't know that I wanna put a dollar value. I don't know that we've actually talked about that. It's Jamie, I'm not trying to be evasive, I just don't wanna get ahead of what we should think about whether we can what we wanna say on pipeline and how specific we can be. At this point, we haven't been specific. Greg, I'm looking at you. Yeah. I think we can see if we can get some transparency on that and share it with folks. I think your general comments earlier on were spot on. I mean, the market environment, everybody we talk to, anecdotally, you know, when we're traveling around is finding it a tough environment. However, there are pools of capital in the world where I don't know, shall I use the word flush? And those are the opportunities that our teams are currently exploring. They're out in the field right now trying to convince people to sign up for some of our offerings. Jaeme, I'll give you another comment. You're probably aware of this, you know, a lot of the money that is in alternatives is with large institutions. They generally, of course, have an equity-debt allocation. When public markets are off 20%, all of a sudden their allocations to equity are overweight even though the debt markets are off. They end up with more fixed income, but also their private-public mix comes off. They've done a lot of privates, publics go down in value, and they end up kinda going, "Well, we're at our allocation for private equities." You're getting the institutional world not putting a lot of money into equity-type products right now. That's not true of family offices, it's not true of other pools. Those institutional pools are currently not deploying a lot of work in equity strategies. That's just the reality of where it is. It's a bit of a risk-off environment to boot. You've got all that going against you. That was why my earlier comment on some of the credit products and the royalty products. We're still seeing really good demand from a fundraising point of view. Great. Thank you. Yeah. Thank you. Ladies and gentlemen, there are no further questions, so this concludes the conference call for today. Thank you for participating, and you may now disconnect your lines. Thank you. Thank you.