Good morning, ladies and gentlemen. Welcome to the Power Corporation Q4 2022 Earnings Conference 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. I would like to remind everyone that this call is being recorded on Friday, March 17, 2023. I would like to turn the conference over to Jeffrey Orr, President and Chief Executive Officer at Power Corporation. Please go ahead, sir. Thank you very much, operator. Welcome, ladies and gentlemen. Happy St. Patrick's Day to all. Joining me here today is Greg Tretiak, Chief Financial Officer of Power Corporation. I will walk through some of the slides in our presentation, and then we will open up for questions. I will draw your attention to the cautionary notes regarding forward-looking statements and non-IFRS financial measures on pages two and three. With that, I will skip all the way ahead to page six just to highlight other information available from Power Corp and our operating businesses that have recently come out from different earnings calls or presentations. With that, move right to page 7 and start to talk about the quarter. Power Corp announced yesterday that it increased its dividend to CAD 0.525 per share on a quarterly basis, a CAD 0.03 increase or 6.1%. That's really flowing through the Great-West Lifeco increase that was announced at their quarter earnings, and then making certain adjustments on a pro forma basis for the additional Great-West Lifeco shares that we own, and then the lost dividends that we have from having sold ChinaAMC to IGM. When all that comes out in the wash, we float it through, and we have a 6.1% increase in the dividend. It was, you know, really we thought, a very strong and a very solid earnings quarter for Great-West Lifeco and IGM. You would have followed their particular call, so I won't go into it at this point. A lot of noise, like a really noisy quarter in particular. A combination of, in some cases, some markdowns to market on some assets, and in other cases, writing liabilities, where we actually had positive developments, but we either have liabilities towards minority shareholders or we consolidate the accounting and you're marking to market on the minority interest when it was an increase in value. Greg 's going to walk through some of that for you, obviously a lot of noise when you get outside of Great-West Life and IGM. The quarter from a business point of view, have to talk about what goes on in the U.S., because that's where we've put a significant amount of capital over the last couple of years. The integrations of MassMutual and Personal Capital were completed in the fourth quarter. On MassMutual, the expense synergies were achieved, and the targets for participants and assets and revenue were ahead of what we had planned at the time we did the transaction. That's good news. Also, I'll talk some more about Empower Personal Wealth in a few minutes. The Prudential integration is on track. We just closed that deal, to remind you, at the end of the first quarter in 2022. We're just three quarters into that. I'll speak about IGM strong results and GBL. I'll move all the way down to the bottom. The last couple of points, we had pretty good fundraising in a difficult environment at our alternative investment platforms, and we've been active on the share buyback and capital front. I'll then move to page eight. This is a difficult environment. You had both, as everyone knows, both the stock markets and the bond markets down in 2022. I know in the third quarter I'd seen a lot of material coming out saying a 60/40 equity/bond portfolio. I haven't seen that, whether that's been brought forward to the fourth quarter, but it is, it was certainly in my experience, having both markets down by this much is really. It was a very difficult year. We of course have fee revenues that are driven by market levels across the business at both IGM but also at Great-West Lifeco and through our businesses. The right side is just a proxy. This is Canadian mutual fund sales. That was the worst fourth quarter on record. You've got the same thing going on in the U.S., where you have significant outflows. There's a, you know, investor confidence is not was not a year of high investor confidence. Of course, then we've got what's happened over the last week or so in the, in the U.S. banking and now over with Credit Suisse. We're in a very challenging environment, as all of you are aware, and we're navigating through that. I'm going to turn it to Greg then for the next few slides to walk through the financial results. Greg? Good. Thank you, Jeff. As Jeff said, there's a fair bit of noise in the quarter. We're anticipating with the adoption of IFRS 9 and IFRS 17 for future quarters. We're going to adopt that in Q1, and that should hopefully dampen some of that noise that we have become used to in the accounting. Nevertheless, this quarter I'll turn to and net earnings, CAD 486 versus the CAD 626 of last year, and adjusted net earnings of CAD 394 versus CAD 676. We'll see some more color on that in the next page. Adjusted net asset values were moving up sharply, or I should say smartly, over the last quarter, from the low of Q3. We're from the year-end, we're up about 10% at 46.19 in our NAV per share. Of course, the dividend increase we've already mentioned. I'd go to page 10. On page 10, you can see that we've focused on basically two aspects of our business, which is basically the operating companies and their earnings for the quarter. You can see that net earnings of operating companies produced an CAD 833 million contribution. Here we have the adjusted earnings at CAD 741 million versus CAD 702 million, which is obviously reflecting the good results at Great-West Lifeco in the quarter. I know that was announced last quarter, and they had a very good quarter back in February when they announced that. IGM certainly reflected the AUM year-over-year. Even though it was down slightly, I think that they produced a very good result in the quarter. Strong contributions from their net investment income and Northleaf and Great-West Lifeco. A good quarter all in all for them as well. You can see that the contribution from GBL and the effect of the consolidation, which primarily is driven by GBL. You have to look at the two together. The other thing I'd point you to is where some of the noise in the quarter was. You can see in Sagard and Power Sustainable a CAD 183 million. That's driven largely by the CAD 160 million from Power Sustainable, a charge of CAD 63 million on the revaluation of the NCI. As you may be aware, we manage that particular asset and fund and therefore we consolidate it. Whenever fair values go up, which they did, which is a good thing in the quarter, they went up on that set of assets to CAD 1.035 billion versus CAD 805 million. That's, you know, a CAD 230 million change in the quarter. With that change in the quarter, we have to mark to market the non-controlling interest and take that liability onto our books. We don't get to recognize the increase in the fair value, but we have to recognize that. The other item that I draw your attention to is at Power Sustainable is our China A-share portfolio, which was repositioned in the quarter. I think in speaking to our team there, they repositioned the portfolio in advance of the October Congress and in an anticipation of the March meetings of the party and repositioned the portfolio and adjusted it. Therefore, we see a lot of realized gains in the quarter. Realized losses. Sorry. Yeah. Pardon me. Thank you. Looking forward. Looking forward to realizing. Yeah. Next time. Yes. Great. The standalone businesses is another one I draw your attention to. You can see that is driven by a mark on Lion. Lion, we marked it down by CAD 109 million on our books. They had a good quarter. They just reported, they delivered 174 vehicles, up from 71 last year. I think they were right on target with respect to their delivery. I think they were pleased with their quarter. With that, I think I turn it right back to you, Jeff. Okay. We thank you very much, Greg. We've got the Greg has already spoken to the net asset values on page 11. I will just kind of skip over that page and move us on, make a few comments on page 12 on Great- West. The results have already been well, you know, publicized, and Great- West had their own meetings. I just highlight a few things. One is that Great-West Life, in terms of our disclosure and our communication with the market, you're aware that Great-West Life gave medium-term financial objectives back in, I think it was June of 2001 when they had their investor day, if I'm remembering that correctly. They've reconfirmed their medium-term financial objectives. They've also, as you are aware, are tracking that and then every quarter saying, how are they doing against the objectives that they communicated, both in earnings objective and the ROE objective. That's part of the effort to continue to improve our disclosure and our transparency. This quarter, I think it is noteworthy. There's a lot of kind of confusion, I think is a fair word to say, about what was happening at Empower. The decision was made that with respect to Empower, they would actually give earnings guidance. They gave guidance that they expected in 2023 that earnings would be up 15%-20% from the level of 2022. That was another important step forward, and that's what I would highlight in terms of IR disclosure. I will go then to page 13. Not really anything here on this page. I think I've already made my points as I made my introductory remarks. Why don't we move it forward to page 14. They did announce in just last month that they've now, in effect, combined the individual business of Personal Capital, which was a direct-to-consumer business, wealth management business, and the individual business of Empower, which is a retail business. Most of the money in that retail business are flows that come out of the defined contribution business as people retire or change employers. They've combined those into one branded business called Empower Personal Wealth. The Personal Capital brand, well, is not part of that anymore, and they're continuing to build out the Empower brand. That's about a CAD 50 billion wealth manager right now, when you combine the assets that were in Empower's retail business and the Personal Capital direct-to-consumer business, that's under one brand. It's under a common leadership of Carol Waddell, who was announced a little earlier, as president. She had been running the retail individual business of Empower. You're gonna start to see more branding of that business, which will obviously is important in the individual business, but also hopefully will have some benefits in our defined contribution business. If for those who watch the Broncos, there may be some of you out there that are watching the Broncos. We hope that more of you watch. If you're a Power shareholder, we encourage you to watch. You saw that the Empower Field in Denver, but you're also, there's a start of rollout of ads on TV to talk about to bring the Empower Personal Wealth brand to the marketplace. Everybody's excited about what's going on there. Importantly, again, on the disclosure front, Great-West Life is gonna begin reporting the results from the defined contribution business of Empower and the personal wealth side separately starting in Q1 2023. They're gonna have a session in the spring to for investors and analysts to cover that and other issues, other factors. Okay, going forward, just to comment on IGM. It was a, you know, a pretty strong year in a very challenging market and good leadership by IG Wealth, strong flows in a difficult market, and everyone is. They're obviously very focused on their expense management. Greg's mentioned as well not only good flows at IG Wealth, but Northleaf had a lot of new commitments during the year. Good momentum, and we're very encouraged by what's happening at IGM. On page 16, you just get a breakdown of the momentum in terms on the left-hand side of attracting new client flows, and that's a testament to what has been done at IG Wealth over the last really six, seven years. A lot of investment in technology and new products and different kinds of products and a different recruiting model in pricing. We've been saying for some time we believe we have a very competitive offering and a differentiated offering in the Canadian wealth market. That's showing up in very strong client flows, including clients that are bringing accounts to IG Wealth that are greater than CAD 500,000, which you see along the bottom of that left-hand chart. Even, you know, 2022, a difficult year, for investor confidence and yet still bringing in really good flows into the platform. Okay, let me turn then to page 17. IG Wealth, their business model is really comprehensive financial planning. It is not a product-focused approach. It's a planning-focused approach. Part of that is to be as comprehensive as they can be, and that includes mortgage, dealing with the mortgage needs of their clients, the insurance needs of their clients. They announced in the quarter that they're gonna use Nesto as the basic platform to bring our mortgage services to our clients. That was announced, and basically, it's gonna allow our advisors with really a leading edge platform that fits right into the financial planning capabilities. It's an online process which is very, very convenient. It's really miles ahead of where we were. The folks at IG Wealth are very excited about it. This is another example of our fintech strategy playing out with our operating businesses. I think you're aware our fintech strategy was much broader than just trying to get some capabilities into our operating businesses. It was much broader than that. It included at one end, you know, trying to create and have a place with some emerging businesses to place our group in the digital space. Wealthsimple, Personal Capital would have been two examples of that. It included the Portage VC funds to expose ourselves and all of our group companies to what was going on in disruption and emerging technologies. Then there's been some opportunities where the groups have operated together and actually done something on a JV basis. Nesto is one of those. Conquest, which is a financial planning tool, is now being used by IG Wealth and Canada Life. Dialogue, which is the telephone health app that came out of the groups as well, is being offered across the Canada Life platform. To its group clients, and some other carriers in Canada as well. This is never an exclusive strategy to our group. Anyway, we're pleased about that, and at the same time, IGM made an equity investment in Nesto. That was a very good moment for the group. Turning to page 18, we, of course, closed the ChinaAMC transaction in January, like a little over a year after it was announced. It was a long process, longer than I think we had anticipated, but we're delighted that we got approval and the transaction went forward. It is now, you know, this is the last quarter that you'll have direct reporting of ChinaAMC in Power's businesses, and IGM will be obviously reporting on their now, 27%, 28% interest in the company. I'll just point out ChinaAMC in a difficult year overall and a difficult year for the Chinese market. You can see on the lower left that, you know, it was not a strong stock market year in Chinese equities. The company's really performed well, continuing to grow their AUM, and keeping their profitability at very strong levels. Good, good results for ChinaAMC. I'm gonna turn to page 19 then. Just a couple of comments here. GBL continues on their strategy of putting more of their portfolio in private assets, and they continue to do so. As well, they've been active on the capital management front. In addition to their regular dividend, they've been active buying share buybacks and canceling those shares and have announced an intention to continue to do so. At the bottom of the page, it's funny how, you know, a year ago, everybody was talking about ESG, and it was kind of front and center, and it's not going away, and it's gonna continue to be a very strong focus, I think, of the world, of shareholders, of all of our stakeholders, and of all issuers. It hasn't got a lot of attention, and it's been kind of sideswiped by all that's gone on in financial markets and inflation and then what's been going on in the last week or so. It's nonetheless a force. In that regard, our companies continue to be very active on it. GBL was recognized, as you see at the top of the page. They, like Great-West Life, IGM, the Power companies, continue with significant efforts in that whole important area. Turn quickly to page 20 then. I mentioned good fundraising in a difficult fundraising environment, and we've had more announcements in the first quarter, additional fundings we've announced. You see some of the funding here. We've got now CAD 21 billion of funded and unfunded AUM. Power's share of that continues to decline. The dark blue lines are Power. We do have Canada Life and Great-West Life, you know, participating in some of what we're calling third party here. Particularly when you get into debt products, there's and some of the areas where they have and real estate, where they have big interest. The real estate business, of course, that you see on this page, which is in Sagard, was Great-West Life's U.S. real estate advisory business that was folded into Sagard. Good buildup in our AUM, and you see a little more of that as you turn to page 21. On the bottom right-hand corner, you can see the funded fee-bearing assets 'cause the CAD 21 billion are the commitments, but the fee-bearing assets is at CAD 15.5 billion, and you can see Power's portion of that year-over-year is actually down CAD 600 million. On the profitability side, on the lower right-hand side of that slide, a little bit of noise at Sagard at the top in the fourth quarter. Noise can come from sometimes they'll close a fund that has been out making investments, and we would be putting the capital up. It closes, and there's a catch up on the fees. Sometimes there's on the expense side, there can be expenses that can be of a one-time nature. We think Sagard is running somewhere around breakeven at an FRE point of view. I'm sorry, somewhere is not a very specific term. We think they're running at about breakeven, more or less, as we look at their current run rate, even though it's showing a loss here of CAD 5 million in the quarter. We think there's some noise in that number. Currency can have an impact here as well, 'cause a lot of their assets are not in Canadian dollars and some of their expenses are, for example. Down at the Power Sustainable level, you see an increase in the management fees there. They, you know, they are still further away in terms of their assets and their revenues and their fee-related earnings. A lot of that is just where they started from. A lot of the business and the expenses are tied to the energy business. A lot of those assets are now in the CAD 1.6 billion infra equity fund. That was the fund that Greg was describing when we talked about the markup and the value of the assets, where we had the loss on the non-controlling interest. I think he called it PSIP or whatever. That is, in effect, the equity infrastructure fund. We had a big group of people working at Power who were developing energy assets for our balance sheet. That's a big group. Some of the expenses are that legacy group. They're very talented people, but we're getting that business to the point where you've got fees covering it is a longer effort than some of the other strategies we have. Anyway, that's maybe more detail than you wanted, but Power Sustainable made progress on fundraising and on their revenue side, and they're very focused on getting themselves to profitability. Okay, just a quick comment on page 22. Greg mentioned Lion Electric and what's happening there. We did put $25 million i nto their fundraise in the fourth quarter. Some of you may say, "Well, how is that happening? I thought we're becoming a financial services company. What are you doing putting capital into non-financial services?" That is true, but we have said all along that we are long-term investors. We make commitments to partners, to other shareholders, to management teams, and we don't desert those commitments even if our strategy changes. In the case of Lion, it's got, you know, a really exciting business long-term prospects. 2021, we were, businesses like Lion and other VC-type early stage companies were able to raise a lot of capital. We went out and did a SPAC, and a lot of money was raised. 2022 was, as you know, the complete opposite. Capital markets have dried up. So, you know, we did not desert Lion, and we participated in putting not a meaningful amount of capital from a Power point of view, but meaningful for Lion to help support that business as they continue to build out. That doesn't change our long-term goals that, you know, industrial companies are eventually not going to be part of the portfolio, and we will look for the right opportunity to monetize those in a way that makes sense for Power Corp shareholders and also honors our commitments to our, to our partners. That's my comments there, and then I'll turn to page 23. CAD 1.7 billion of capital returned in 2022. It's our dividends plus the share buybacks of 11 million shares or 1.7% of the total participating shares. We did that while also building up our cash position. With the sale of ChinaAMC to IGM, we're at about CAD 1.6 billion of available cash. We like to keep two times our fixed charges. That's a guideline that we keep. We don't follow it religiously. If there's an opportunity, we sometimes go below it, we're sometimes running above it, but we kind of keep that as a guideline. We've got some available cash here to be in the absence of other opportunities, buying shares back. We did that, of course, while we maintained our very conservative leverage and our very strong credit ratings. All right, I will turn to page 24. Everybody's favorite topic of discussion, at least around here, is the discount to NAV after five years of it hovering at historically high levels. We've been on a march, I think starting really with the sale of Great-West U.S., life business and then the three-way buyback and then the announcement of the reorganization in the end of 2019 and the pursuing the strategy, which we've been doing for the past three years. It hasn't been a straight line down. It's had some volatility to it and but it's on its way down, and we, and the, and the discount has, gapped out in the last, several months. We view that as an opportunity. We, we think our strategy as we continue to execute will drive the discount down. I've been asked many times where should it be. I don't know where it should be, but I know that the only economic factor that I can see that would justify a discount is the expense load that we have at Power, and that, when I do the math, is somewhere around 2%-3% of the NAV, not to be too precise about it, and the balance is all available for us to continue to drive or buy shares back and arbitrize that discount. I think the real strategy is to continue to simplify and continue to execute on our strategy. As we do so, we think that we're hopeful that discount will narrow over time. We're very focused on it. I'll just conclude, I won't really... On page 25, it's there for you. You know the strategy. We are still on strategy. We continue to think about what we do next, what can we do better, what can we do differently, but we're basically still executing the playbook that I think most of you know well. With that, I will stop my comments. Operator, if we could open it up for questions on the line, we'd be pleased to take questions. Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touch-tone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw from the question queue, please press star followed by two. If you're using a speakerphone, please lift the handsets before pressing any keys. Please go ahead and press star one now if you have any questions. Your first question will be from Graham Ryding at TD Securities. Please go ahead. Hi, good morning. Good morning. Maybe just on the Power Sustainable Energy, what drove the large increase in value there? Obviously, the impact on your income statement was the impairment charge on the non-controlling piece, but what actually drove the increase in the fair value for those investments? You wanna do that, Greg? Yeah. Sure. Yeah. Absolutely. We've got a in Western Canada, we have a number of turbine wind generation units that have been in production and development. A significant project went from development into production, and that drove the revaluation of that particular asset. We have several other plants that will be coming on stream in the coming year. Certainly as that comes on stream, we would see a similar sort of thing in the future. We look forward to further write-downs as we increase the value of the portfolio. Sorry, I'm just rehearsing for a meeting with the auditors. Is humor allowed on these calls? I don't know. Graham, other questions? No, that's helpful. One more if I could. Just the fundraising across your different verticals, perhaps in the alternative platform. You know, obviously, private equity, venture capital, seems like the environment right now is quite difficult, private credit and sustainable infrastructure, possibly more, more positive. Can you just give us some color or context of what you're seeing from your outlook for fundraising? I'll start, then Greg, you add anything you'd like to. You're quite right. Credit funds have been where the market has been, we've also been successful. The equity infrastructure fund we just talked about was CAD 1 billion. In the fourth quarter, another CAD 600 million was raised by investors. I think Power's participation in that was at CAD 50 million. Do I have that wrong? CAD 50 million of CAD 600 million, which, you know, the first tranche, we were CAD 400 million of CAD 1 billion, we were CAD 50 million of CAD 600 million. Canada Life took a little bit of that as well. You know, that's equity infrastructure in the fourth quarter, good fundraising there. We've done private credit. We are making some progress on some of the equity sides as well. Power Sustainable launched an agri-sustainable PE fund. There's about 160 million raised in that fund. They're looking for more capital. We're seeing some progress in Europe on some of the equity products that we've got there. Your characterization overall is correct. Income, safer type products are getting a lot more traction in this market than the higher risk ones. Certainly in the VC space, lots of opportunities out there to invest some money, but that's a little bit tougher going. We're still optimistic. Our track record will get some more money into those funds. Greg, did I miss anything? No, I'd just say that, you know, in some of those funds or verticals, the agricultural one in particular is interesting that they were able to launch that fund with without any seed capital from us. You know, I think that's a pretty special accomplishment in terms of their ability to raise capital. It's they're in the sweet spot, as they say. Yeah. Good. Is that good, Greg? Graham, excuse me. Graham, did that answer your question? We lost him. Did we lose Graham? Oh, sorry. I was on mute there. Apologize. No, no, that was helpful. I guess just one last one, if I could. With the revaluation that you took on those non-controlling interests, will we continue to see that potentially under the new accounting standards that you're moving to? As long as we consolidate them, Graham, we will have to do that. I should have said earlier on, you know, the three fair value marks. There was also the one in GBL, where we took another fair value mark for CAD 18 million in the quarter. On that one in particular, it's due to the puts that the management team has on the equity of Webhelp. Of course, we have to mark that liability as Webhelp is going up. We bought that back in, I think, 2019 for about EUR 800 million. We, I mean, GBL. Today, the mark on that is something like CAD 1.7 billion. You know, we've been marking up the liability, you know, for probably a good 10 quarters now and not recognizing the gain. Thanks for asking that question because, you know, it just gives you a bit more insight. If you add the three of those together, like we had about CAD 180 million of mark, fair value mark, in the quarter, that, you know, contributed to, you know, the noise in the quarter. While you're on that, if you don't mind, I meant to say in my remarks, I didn't on the Lion mark, I just wanna make it clear here that we marked that down from where we were carrying it on the books, that's not to say that we've lost money on the investment. I just wanna be clear on that. I think we're somewhere just a little north of CAD 100 million. We had CAD 54 million when the company did its SPAC. We put another $18 million, as I recall at that time, $25 million in the fourth quarter. You do the currency there, we're somewhere just a little north of CAD 100 million. I think the market value of our position is about CAD 220 is what we've got in right at this time. You know, we've got a good gain on the position, but because when the SPAC occurred, we had a dilution gain on our equity position, and we had some options to buy more equity that then got marked up onto the book value when the SPAC happened. We're marking it down from where it was on our books, but the actual value of what we own is still significantly above the money that we put in. Just to make that clear. Good color. Thanks. Yeah. Okay. Graham, more from you? Nope. That's good. Thank you. Okay. Thank you very much. Next question will be from Nik Priebe at CIBC Capital Markets. Please go ahead. Okay, thanks. Within your venture capital funds at Sagard or maybe even among portfolio companies more broadly across the asset management platform, can you tell us how you're navigating the recent dislocation in U.S. regional banking? you know, and whether you're taking any action to assess counterparty risk with respect to primary banking providers there. You're talking about within our VC and our fintech world? If that, I think that's where your question is focused. Of course, you know, we, like everybody else, have been going across every portfolio we have in all of the companies and kind of finding out where our exposures might be. I think the answer to the question is not very much. I got to turn it to Greg, who's been who is chair of the risk committees of the various groups, who's been spending a fair bit of his time just making sure we're on top of this as well as the rest of the team over the last week or so. Greg, did you want to add anything to that? Yeah. It, you know, certainly nothing material in terms of the group. Obviously, to some of these startup companies, it is disrupting, and they're having to, you know, find different providers of operating lines and look to, you know, their LPs or GPs in some circumstances, to provide them with the capital that they need to continue their business. Our teams are going through that exercise right now. No significant dislocation, I would say, from the folks that are operating our platforms, either in Canada or in Europe, at Sienna, which is our alternative platform, now renamed GBL Capital and Sienna Investment Managers. It's been split in two. Anyhow, no significant dislocation that we've heard so far. Okay. That's very helpful. Maybe stepping back, thinking about the asset management platform more broadly, you know, over the past few years, you've been raising a growing amount of third-party capital across that platform. Does there come a point in time when the carry eligible capital seasons sufficiently that you're able to crystallize significantly higher carry in order to accelerate the path towards profitability there? Is that a few years down the road, or how do you think about that opportunity? Crystallize carry. I think as, how would I put that? As the strategies mature, one would hope and expect that if they're meeting their investment returns, then the carry will become larger and grow, if that's what your comment is, if they're meeting their IRR targets versus funds that are in their early stages. I think that would be our expectation as we move forward. The carry is also, volatile, as you know, because, as you get into the larger amounts of the carry, a lot of it's on the equity and on the VC type funds. You're, you're susceptible to markets going up and then markets going down. That carry line will have volatility on it, as will our seed capital, that, you know, 'cause you mark, you mark it up and you mark it down. When you're in that business, you've got the fee related income, which we, the FRE, which we focus on because that's kind of a how are we doing on our fees and how is that covering our expenses? You expect that those will create value over time, but there will be volatility is what I'd say. Yes, you're right. As they mature, you'd expect the carry to continue to grow. If it doesn't grow, that means you're not making returns for your shareholders. You're probably not meeting your targets, and you're probably not gonna be doing more fundraising in that strategy. Does that answer your question? Yeah. Yeah. No, that's good. That's it for me. I'll pass the line. Thank you. Okay, thanks, Nik. Next question will be from Geoff Kwan at RBC Capital Markets. Please go ahead. Hi, good morning. You talked about with Sagard that you think you're running roughly the break even right now on FRE. Power Sustainable isn't quite there yet. To getting to breakeven on Power Sustainable, is that like a one year, two-year or other kind of time horizon to get to that breakeven level in FRE? Probably, it might even be three years out, I think. You know, it's more than one or two. But it's a bit of a combination. I was trying to hint at that, which maybe wasn't, I wasn't clear enough, Geoff. I think of Power Sustainable as two pieces. The first piece is the just the straight business of going out and fundraising, putting teams in place, launching strategies, getting the revenue side up and managing your costs. That's business is not as developed as Sagard. If you think about Sagard has done an amazing job of launching new products and new strategies and credit and royalties to an example, Canadian PE. They've also had businesses that had been around for a while, and I'd point to Sagard Europe, which was a private equity business that Power started over 20 years ago. The Fintech strategy, which the Sagard team, and Paul III and others started. Not give them credit for starting, but that was done in 2015. It was, you know, already at a point where it was more mature. They rolled in the Great-West Lifeco U.S. real estate, which already had a bunch of assets under management. There was a bunch of strategies there, and then they've augmented that with a fantastic team in launching new products. It's further along in its revenue base and its scale and scope. In the case of Power Sustainable, its two main strategies were the China fund that was all of Power's capital. They went out, you know, two, three years ago to raise money into China, and that's been a bit of a challenge to be for obvious reasons, that's not exactly where capital's been flowing in the last few years. They had their energy infrastructure, which is now the CAD 1.6 billion fund. They've done a really good job of bringing outside capital into it. They, they are in the process of launching new products to broaden out their scale and scope. We talked about the Agri fund, and there's more that they have in the works and other teams that we expect, and announcements that we're hoping to be making over the upcoming 12 months to broaden out their base of products. That's one side of it. The second side is we have this kind of legacy of expenses that were development people that work within Power and our subsidiaries, outsourcing wind projects and sun projects, and we have them in Canada, and we have them in the United States. They were never set up at Power to be income generating. They were set up to invest our capital. You, you know, hope to get a double-digit return on the development part. The previous strategy, and then we'd end up owning a nice stable cash flow earning company. That was never set up as a fee-generating income, and we still have a lot of those expenses within Power Sustainable Capital. The plan is to change the mix from how much we have in development and how much we have in income producing properties. Ultimately those people end up working for the funds, and they end up moving off of the P&L of Power. That may be more than you wanted to hear in terms of detail, but what I'm saying is, Power Sustainable Capital, very different position and a different challenge to profitability. Whether we launched an alternative asset management business or not, we would still have those projects on the books. We'd still have those people to pay for. It's kind of there, whether we're pursuing alternative asset management or not. It's been in the interest of transparency and disclosure, we've got it all pulled together into the Power Sustainable Capital P&L, and that's one of the reasons contributing. What did I just say in a nutshell? I just said the alternative asset management business is started at a far more less mature point than Sagard did. One of their main strategies is in China, difficult fundraising. Secondly, there's a development team, a lot of people here that we've got assets to develop, we are where we are. We've got to continue to develop those assets, and that contributes to the greater loss. That's a long answer to a short question, that's what's going on. Greg, yeah, please add to that. Geoff, the only thing I'd add to that, is that, they just recently announced two new funds, the U.S. and U.K. infra debt funds. So with that announcement, comes as well the hiring of teams and standing up of those funds, right? You talk about the J-curve, and so, until you get it now funded and up and up and running, we're gonna have e-expenses. That's gonna happen until they actually hit a mature point, and they're generating enough excess cash flow to cover their expenses as they're adding platforms. That's certainly one thing that would contribute. You know, not that they're going to be launching 20 verticals in the next little while, but as you can appreciate, there's a lot of green space, and excuse the pun, in the area they work in. Power Sustainable is ESG focused and centric. They see a lot of opportunity. That's one of the reasons why we think the runway there may be just a little longer than one might expect. Okay. To start, my second question was on the OpEx side, you kind of have been where you wanted to get the OpEx when you collapsed the structure with Power Corp and Power Financial. Just wondering, going forward, how you think about what OpEx growth looks like from here. Yeah, it's a great question and one we need to turn our attention to a little bit. I think we were trying to, we were reorganizing. We thought there was an opportunity to drop costs, and we were also trying to send a loud message across, both internally and to The Street that, you know, we are very, very focused on creating shareholder value, and we need to have discipline in everything that we do. That's kind of a statement of where we got to. We're not gonna be, you know, crazy about it. If we have an opportunity to either add some real talent that can add value to the top line and the value creation, and that would mean that we would have some increase in that, not, you know, we shouldn't be blind to it. I think we were very focused on meeting the target. Right now our view is we're gonna hold the line on expenses and grow it with inflation, for example. We're not gonna be stupid. This is a dynamic business and, you know, we're not a huge group at Power, as you probably know. If we got an opportunity to hire some talent in that we thought could add value to the business, and it was gonna mean that our costs were gonna go up by several million dollars to do it, I think we'd be dumb not to do it. What am I trying to say there? We don't have any current plans to increase the cost base. We're gonna manage it, but we're not gonna be blindly, you know, following that and missing opportunities. Greg? Now I'm looking at the CFO who actually manages the cost. Greg is wincing as I'm saying that. You can't see him. Greg, anything to add to that? No, I think you captured it well. You know, our expectation would be that we'll continue our run rate basically where it is, plus, ± a couple million CAD for inflationary expenditures in the foreseeable quarters. The CFO has spoken. All right. Great. Thank you. Thank you, Geoff. The next question will be from Jaeme Gloyn at National Bank Financial. Please go ahead. Yeah, thanks. Good morning. First, first question, just on the China shares. Could you give us a little bit more color as to perhaps, what sectors those shares were, or the losses were realized upon? What, what exposures are potentially left in that, in that portfolio today, maybe from, like, an industry perspective or, however you wanna break that down? Thanks. Thank you, Jaeme. Before I pass that question to Greg, I just again want to point out that we follow the NAV and the returns and how that is. You know, we look at the NAV all the time and say, "What's the portfolio worth?" The losses, as you know, just for everybody on the line, you would know this, James, or for everybody on the line. The losses come through when they actually realize the positions. While we look at the NAV, all of a sudden the portfolio manager says, they bought some positions and they want to reposition or go more to cash or what have you. They'll liquidate the positions and change the portfolio, and those realized losses move through our P&L. Whether they're realized when it's part of the NAV, it's already part of the NAV. It doesn't change the NAV. We tend to focus more on the NAV, but the financial statements reflect the actual sales of securities. With that, Greg, did you wanna? Yeah. You know, two things I'd say, Jaeme, on that particular question. One that you'll notice that the NAV on that has actually increased lately over the last quarter. I think we're sitting at CAD 666 million in terms of NAV. When the portfolio managers were repositioning the portfolio, you know, in the Q3, I think it was at the bottom, if my memory serves. They, you know, they basically stay away from the SOE based businesses, and that's the state-owned enterprises. They have the portfolio basically is composed of non-SOE positions. They didn't change that going into the party congresses or coming out, but they certainly repositioned the portfolio. The specifics of that, you know, I can't, you know, give you the portfolio names, but certainly, you know, they would have held a lot of retail-facing positions and companies. They would have had a certain amount of technology in the fund as well. They were basically realizing losses. In some cases, they just moved off the position to lighten the exposure and repurchased them later after the meetings when they felt that the risk was off on some of those positions. That's the color I would offer for you this morning. Yeah. Thank you. very helpful. The second question, just as we're as we're starting to see some other commercial real estate portfolios see some marks, wondering if you have any commentary on commercial real estate and how that could potentially affect Power Corp? you know, we got the comments obviously from Great-West, but thinking more maybe Sagard or elsewhere. Thank you. Commercial real estate affecting Power. I don't have an answer to that question. I mean, I can think of it in the context of the Great-West Life, and they've already made your comments. We do have the Sagard Real Estate Fund. I don't think there's a lot of our seed capital in that particular fund. I'm trying to think on a real estate basis. Question is, would Power be impacted by drop in value in commercial real estate? I'm looking at. Yeah, not directly because we only through an LP investment in our platforms that has commercial real estate, and we do not have direct exposure. Yeah, exactly. You're going through the same logic. Yeah, the reason you can see how much we've been talking about it, Jaeme. I don't think it's an issue. Yeah. We're trying to think about it here. It would be in EverWest, and EverWest was a Great-West Life investment, and we brought it over and don't have any seed in it. I don't think so. No. I don't think so. I'm pretty confident to say that I don't think we have that exposure. Okay, great. Very helpful. Thank you very much. Okay, great. Thank you. Are there other questions? Ladies and gentlemen, there are no further questions. This concludes your conference call for today. Thank you for participating, and you may now disconnect your lines.