Good morning, ladies and gentlemen, and welcome to the Power Corporation Q2 2023 earnings conference call. At this time, all lines are in 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 Friday, August 11th, 2023. I would now like to turn the conference over to Mr. Jeffrey Orr, President and Chief Executive Officer of Power Corporation. Please go ahead, sir. Thank you, operator. Welcome everyone to our earnings results call here. Happy Friday to everyone. Thanks for being with us. I would, before starting the presentation, just like to remind everyone of page three, where we have our disclaimer regarding non-GAAP measures and forward-looking information. With me today is Gregory Tretiak, Chief Financial Officer of Power Corp, and we're pleased to go through our presentation with you and open it up to questions later on. Just skipping forward several pages, you've got on page six other information from our various companies that's available to you regarding results and other recent presentations that have been done. With that, I'll go right into the guts of the presentation on page seven. This is... We're really pleased with the results and with developments since we last spoke at the end of Q1. First of all, from an earnings point of view, it was a very strong quarter for our group overall. To my mind, it really demonstrated the earnings power of our two key earnings-driving companies, being Great-West Lifeco and IGM. From Great-West Life's perspective, really a broad-based earnings strength on a base earnings basis, and then led, of course, by the strong growth of the U.S. business through Empower. There wasn't a lot of noise in the quarter for base earnings. So it really, to my mind, demonstrated the earnings power of Great-West Lifeco. When you go to IGM, flat assets year-over-year, really very, you know, kind of consistent performance. So very pleased with both the earnings at Great-West Life and IGM, and then across the group, we had good, good earnings results as well. At the same time, as you go to the bottom part of the page here, continued to be extremely busy in executing on a number of strategic items that are part of our value creation strategy, including a number of key transactions, the sale of Putnam to Franklin, obviously, the largest of those, but also an important transaction for Sagard with ADQ and BMO. Along the way, we sold a position in Bellus for an after-tax, after-tax proceeds of $97 million, which continues to be part of our strategy of selling non-core assets and creating funds for principally for share buybacks. I'll move over to then page eight. You would know all of this information, but just to say, you know, it's a difficult environment. It's not an impossible environment, but obviously, with rates going up and with a lot of jitters around markets in the last several years, long-term fund flows have gone negative. These are just a Canadian example at the, at the start of the page, but you've also got the same phenomena happening with individual clients across a lot of markets in the United States. Money's been flowing in with rates where they are into term deposits. You just have one example of that over the last couple of years, the change in term deposits at the big six banks in Canada. You're getting. You know, clients are putting money with attractive rates. They're buying CDs at a far higher pace than they had been previously, and they're being fairly defensive in terms of their long-term flows. We'll see how that lasts. Markets have been strong in both the U.S. and Canada over the last period here, so we'll see whether that starts to change. That's the environment in which we're operating in. With that, I'm gonna turn it to Gregory to actually walk through the financial results over the next few pages. Gregory? Great. Thanks, Jeffrey, good morning. Jeffrey had mentioned a strong adjusted earnings across the group. You know, we're up CAD 200 million, CAD 847, or CAD 1.27 per share, versus the prior year of CAD 647 or CAD 0.97. Of course, the adjusted NAV is reflecting those strong earnings, you can see that we ended the quarter at CAD 48.86 per share. It traveled to August 10 to almost CAD 50 at CAD 49.95. Up sharply over 2022. Of course, we declared a dividend in the quarter at CAD 0.525. That takes me to slide 10. Not to be too repetitive, but Great-West Life, a very strong quarter, and as Jeffrey mentioned, quality quarter in terms of good, solid growth from the underlying segments, in particular, the U.S. and the Capital and Risk Solutions segments. At IGM, just a quick note, as Jeffrey had mentioned, AUM not changing all that much year-over-year, but still delivering comparable results. IGM did have a restructuring charge in the quarter, which they see leading to expense reductions on a run rate basis of about CAD 65 million a year. They guided that you should see expense growth of only 2% a year. That will take us to GBL. GBL, CAD 90 million contribution to PCC this quarter, versus the CAD -27 million year-over-year. Strong cash earnings at GBL, and also some fair value marks on their GBL capital portfolio in the quarter of about CAD 17 million. We had a reversal recovery of the Webhelp non-controlling interest liabilities, about CAD 37 million in the quarter. That, as you all know, has been going against the earnings statement for nine consecutive quarters, as we took the recognized the liability increase as the Webhelp asset increased over those periods. Takes me to other investments and standalone businesses. We sold Bellus Health, which was a nice event during the quarter. We realized CAD 97 million on that. Corporate expenses, pretty simple in terms of the changes there. We have a CAD 17 million gain in the prior quarter from our cash settled liabilities in compensation. This quarter, it was a loss of CAD 5 million. The 46 looks like a good number if you're looking at where we should be coming in for the remainder of the year. That's about 46 per quarter is a pretty good number. The financing and income tax charges last year, we had a deferred tax benefit that we recognized, that is basically the difference there. With that, I think I'll just go straight to slide 11. Here, we break down the net asset values, and of course, the big driver in the quarter, being Great-West Life. Great-West Life had has had a very strong stock performance over the last couple of quarters. Since March, it is up 7%, and of course, that's reflected in our NAV. As I said, at June, it was almost CAD 49, and yesterday, it was almost knocking on the door of CAD 50. With that, I'll turn it over to Jeffrey. Okay. Thank you, Gregory, I'll move forward to slide 12. Just make a few comments. Our first opportunity to speak about the sale of Putnam to Franklin. Just start by saying we're really pleased with this transaction. We think it's gonna work out really well for all parties. Just a little bit of background. You know, Putnam had... We had really created an amazing investment engine at Putnam. I think if you look at Barron's, they had Putnam as number two amongst the roughly 50 companies over their long-term 10-year track record. I think the firm that was in number 1 was a, was a sub-advised platform. If you look at pure investment firms that are managing their own funds, it, it basically is a fantastic long-term investment track record, which was, was translating, starting to translate into better flows, but the economics, obviously, we had struggled with those for years, as many of you have pointed out to us, and we were well aware of. This really unlocks that economic value with a really good fit with Franklin. I think when I say all parties are gonna, are gonna benefit, I would start by clients of Putnam. This is, you know, the, the, the model of Franklin, what they did with Legg Mason and all their other acquisitions, they leave the investment engines essentially untouched, as standalone investment engines. All the lead portfolio managers at Putnam have signed up to the deal and to be part of the new company going forward, prior to the announcement. It's great for the clients, it's great for the people at Putnam. I think it's gonna work out extremely well for the shareholders as well, for Great-West Life, and ultimately, up to Power Corp. I think Franklin are gonna be able to do a great job with it, and it will really benefit them in many fronts. They'll be able, over time, to get the economics given their scale on so, on so many functions, that they'll get the economics out of Putnam that we were struggling to get. A good transaction from Great-West Life's perspective. It's gonna un- it unlocks the value of Putnam. you know, wasn't earning any money for Putnam. We, we end up with total potential proceeds over time, of up to $1.7 billion-$1.8 billion. you know, that's, that's a good transaction economically, unlocks the value. It really allows them to focus on their retirement and wealth management business in the U.S., put all of their focus on it, which is another great benefit. We think the shares of Franklin will do well over time. Great-West is now a shareholder of Franklin. There's a distribution partnership that will benefit Franklin, but also benefit Great-West and our group. For Canadian audience might think of Franklin as their, as their, as Franklin Templeton, but Franklin Templeton is, which is their traditional business, it's changed a lot in the last several years under Jenny Johnson's leadership. They bought Legg Mason, which is eight different investment platforms, really interesting performance and different capabilities. They've built out a great alternatives business, having purchased some of the leading private equity and debt shops around the U.S. and Europe. Lots of capabilities that will benefit across our platforms. We'll, we'll benefit from closer cooperation with them, and our clients will benefit from that as well. Just very pleased with the transaction. Took a long time to get done, obviously, but we're very pleased with the results. As I flip to page 13, I just wanna kind of draw the, the lens back a little bit and give some perspective on what's happened in the U.S. If you go back to the start of 2019, so just 4.5 years ago, Great-West has completely repositioned its U.S. business. If I go back to the start of 2019, Great-West U.S. business was three businesses, and the largest of that was the individual life insurance and annuity business that was contributing the most profits. There was Empower, and there was Putnam. The business was contributing... I think, if you go in 2018, it was earning a little less than CAD 400 million, contributing about 13% of Great-West Lifeco's earnings. We, we kicked off 2019 by announcing the sale of the individual life and insurance business to Protective for a little over $2 billion. We then went on and did three significant transactions to enhance the position of Empower in their market and build it into the clear number two player in the U.S. market. Then we've just announced the sale of Putnam. Over about a 4.5-year period, we've gone from three businesses to one market-leading business. If you go to the quarter that Great-West Life just announced, Empower earned CAD 265 million, or roughly 29% of Great-West Life's earnings. That's in one quarter only. This has been a huge transformation from a strategic positioning point of view, a focus point of view, and we now have a, I think, a very competitive high growth business in the U.S. that is very meaningful to Great-West Lifeco, and I think it will become even more meaningful, meaningful, given what I think the growth prospects are for that business in the years ahead. That's the story there. I'm gonna then move to page 14 and just make a comment on IGM. It, it maybe not, not quite as dramatic from a transactional point of view, but IGM, I think also, if you go back over the last five or more years, has really changed its business profile, both internally, through in heavy investments in IG Wealth and Mackenzie, and also through a number of transactions. I think they're now in a position where in their two key fields, which is wealth management, the largest part of IGM, and in asset management, they have two very strong Canadian players in IG Wealth and Mackenzie. They have some very high growth prospect businesses as well in both wealth management and asset management, notably, with significant plays in both the U.S., through Rockefeller, and in China, through ChinaAMC. A lot of change has gone on in IGM. We really like the way the business is positioned. Gregory mentioned the initiative on cost. I think IGM are showing they can invest in their businesses, grow their businesses, while being very disciplined from a cost point of view, and that continues to be compressive and something that we're very encouraged by. All right. The ADQ BMO transaction, ADQ and BMO have become general partners, and Great-West Life also invested as well. They were already a partner in Sagard. I think this is really going to help the continued strong growth of Sagard and help them get to the next level. It's validation of what Sagard has become, with third parties coming in and, and wanting to be part of it, and wanting to play a bigger role in investing in their funds. It, I think will help fuel Sagard's growth, which has already been very impressive, and is consistent with the strategy that Power articulated. We have said we are all about creating value and ultimately profitability in our investment platforms, but we were looking to do that through third-party capital. So that third-party capital comes in the form of LP commitments to their funds, but it can also come in terms of participation through the GP. By selling shares in the GP, we not only help to fund the, the growth of the GP and its own activities, but we also get more LP commitments. We're, we're all about creating shareholder value here, and this, I think, is a big step forward and a validation of what we've been creating in Sagard. At page 16 is just a reminder, we do spend a lot of time focused on the organic growth of our businesses. We have continued in the last in 2023, to be very active from a transactional point of view. As we've said, we were going to, you know, the, we talked about those three levers of value creation, number two is M&A at the, at the operating businesses. Number three is things we can do at the power level to create value. You see on the page here, just a listing of some of the things that we've. announced over the last several months, in pursuit of our value creation strategy. Turning then, a few pages on the platforms themselves. On page 17, you have got the CAD 21.8 billion of funded and unfunded AUM at Sagard and Power Sustainable. That's up from CAD 19.2 billion, you know, a year ago. Pretty difficult funding environment out there, so we're pleased that they have been continuing to be able to raise funds. And in the last quarter that just ended, Sagard had a couple of closings of their funds. That includes the Portage Capital Solutions fund, which is a late stage, fintech fund. That's obviously a big position in fintech. This is actually to buy into fintech companies that are at later stages in what Portage has been investing in, as well as another Sagard Healthcare Partners. That's a series two of that particular strategy. At the bottom of the page, you see the CAD 16 billion- the CAD 21.8 billion, of which CAD 16 billion is funded, and you see Power Corp's commitment to that is about CAD 2.2 billion. We really have about the same amount of LP capital committed to those strategies as we had at the time we announced the transaction, the reorganization back at the end of 2020, and yet the funded AUM has grown dramatically. So again, to reemphasize the message, we are trying to grow these businesses to profitability, to create value, and we're trying to do so without committing further capital to the strategies. We're recycling our LP capital as we get, as, as the platforms look to us to be part of the seed as they launch new products, we're, we're looking to recycle proceeds that we're getting from distributions that we're getting from our LP positions. That, that's-- that is what, is what the strategy is. You- then flipping to page 18, you just get a breakdown on the fee-bearing capital at the bottom right, which is very close to the funded, the funded capital. Then you've got the, the economics there for Sagard and for Power Sustainable. Sagard, run rate management fee is about CAD 45 million in the quarter. That's just basically the fees before you get to carried interest. That can be a little noisy from quarter to quarter. Sometimes you get a closing in the quarter, and there's a catch up on fees. It's not quite like the fund business or the asset management business. There can be some. They can go and invest in a fund, and all of a sudden they get a closing, and all of a sudden you get a catch up. There's a bit of lumpiness, but it's not a bad indicator of run rate, notwithstanding that. You'll see a bit of noise quarter to quarter. Then you've got Power Sustainable, which doesn't have the same level of AUM, but has nonetheless done some good fundraising through a number of strategies and is looking to launch a number of other strategies in the quarters ahead to give it more scale. Page 19, I won't spend a lot of time on this. We're doing a lot of work to try and get to the point where we can explain to you what our returns have been on our LP, on our, on our different LPs investments, because it's hard to tell from our P&L. We're doing a bunch of work to try and be able to share that with you in the quarters ahead. This is us simply saying what we target in our different, or what the, what the strategies themselves target. In the top half, you've got basically more of the equity type strategies, private equity, venture capital. The China strategies, there's about CAD 1 billion of Power's NAV is invested in that, and the, the targets of those funds range from 10%-18% as LPs. At the bottom half, you've got private credit royalty, more, more of a real estate. It's hard to put a line on these things, but those would tend to be lower return, but still attractive return strategies, lower risk, and the returns on them, target returns tend to be 8%-11%. Okay, page 20. You know, get a lot of questions on Lion and LMP and Lumenpulse, when are we going to divest? You know, what's our strategy there? I think we showed in a previous quarterly result that we have raised a lot of capital, it hasn't been through Lion and through Lumenpulse, even though you might have thought, and we might have thought when we announced the strategy, they would have been at this point, we would have realized some capital on them. We haven't done that. We focused on other things. We just announced Bellus. We continue to, to, to raise capital and, and monetize assets. Lion and Lumenpulse have, it has not been opportune for us to do so at this point. This page points out that having said that, they've continued to grow their businesses, and we were, up until 2020, the primary sources of capital for those two companies, and that has completely changed since we announced the transaction. You've got at the top, you know, Lion did its SPAC, where I think Power put in something a little less than CAD 20. I think I, I've got CAD 17 or CAD 18 by memory. I'm not off by far, I'm not off by much. In 2022, we supported an offering they did, and then Lion's just announced CAD 142 million of financings. We were not part of that. The overwhelming bulk of the growth of Lion has been financed by third parties, and in the case of Lumenpulse, it's all been financed by third parties. Again, we're trying to build up the value, help these businesses grow. We'll ultimately realize value on them, and we're doing our best not to be the funder of their growth and of their value creation, which allows us, on page 21, to return capital to shareholders. We've been back more active on the buyback side recently. A total of CAD 280 million invested in purchasing shares to this point, including about 160 post the end of the quarter, June thirtieth. Cash is a very respectable CAD 1.4 billion. That's at the end of June thirtieth, so that's does not include the 159 there just above it. That, that's prior to spending the CAD 159 million to buy some shares back. As you know, we target about CAD 800 million, roughly, in cash, as a kind of a standing position, and we are always very mindful of our credit ratings across the group. Page 22, just a quick shot. We are very focused on shareholder returns. just to say, well, this is at July 30th, our PowerCorp's return to shareholders relative to some of our key benchmarks. As you're all in the business, you know these things can be very sensitive to start dates and end dates, so you can't put too much emphasis on any one date. They can jump around. Nonetheless, we track this closely, and we're not, we're focused on absolute returns to shareholders, but we're also relatively competitive and keep our eye out as to how we're doing against our key benchmarks. That's just there for your edification. As I flip to page 23, we, those returns have been there, notwithstanding that the discount to NAV kind of gapped out over a period from the middle of last year up until recently. It's come, started to come back down again. We could talk for an hour about what causes that. We're obviously not in the minds of all buyers and sellers of the stock, so we don't have any perfect crystal ball as to what creates it. I simply, rather than try to explain it, the ups and downs, I just look at the fact that when it goes up, it's an opportunity, because I don't see the justification for, where it is anywhere on these levels. I do understand, through the period up to, the end of, of 2018, why it was trading as, as high as it was, why the discount was as high as it was. As I've said many times, other than the net present value of our expense load, of, of roughly, you know, after tax, of the CAD 46 million that Gregory talked about on the expense load, which gets you to about a 2% or 3% discount, you know, I, I think the rest of it is all there for the taking, and we're going to continue to, to be out, communicate and broaden our shareholder base and tell our story, and continue to use that as an additional lever to drive value. Page 24, the last page, is, you've seen all this before. The strategy essentially remains unchanged, and we're continuing to be highly focused and very excited about the prospects for creating value. With that, operator, I will end my comments and would like you to open it up for questions from different people who would have questions. Absolutely. We will now begin the question-answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. The first question comes from Graham Ryding with TD Securities. Please go ahead. Hi, good morning. Maybe I could just start with the Sagard partnership with, you know, the institutional partners you brought in. Can you just flesh out sort of the, I guess, the pros and cons of why you, why you see the benefits here of bringing in these partners? Is it more around sort of fundraising and growth potential, in exchange for giving up some of the, the ownership in this alternative platform? Yeah. Hi, Graham. Good morning. I, I think it is all about value creation and about creating scale. Those partners bring and, and will bring significant LP commitments that will help both existing strategies at Sagard, as well as helping to launch additional strategies. They will also bring capital into Sagard to fund its own operations, including potentially whether Sagard would ever add groups. You've seen that in the past, where it, it was in fact, the real estate group that Great-West Life had in the U.S., where the group became part of Sagard. You know, are there opportunities for Sagard to add additional capabilities through other firms that might be out there? That's on the drawing board. It's not necessarily going to happen, that provides some funding for that as well. Significant validation and significant LP commitments that will help to bring Sagard to the next level of growth, profitability, and ultimately create value for PowerCorp. If we can own a smaller chunk of a bigger, more successful firm, and we can do that, we'll do that if that's what's going to maximize our value, and that's the way we think about it. Okay. Graham, does that answer your question or not? Yeah. That's helpful. How, how do you go about sort of determining the value on this business, given, you know, it's obviously got a high growth rate, but there's still it's not profitable yet? How do you go about sort of putting a pin in valuation when you're bringing in partners? Yeah, well, there's lots of valuation metrics that are used, and they've got, they've got AUM, they've got revenue, they've got growth prospects, and so-... you know, there, you get there are evaluators that do that, and you look at your strategies, you've got forecasts on fees, on revenues, funds that are existing, funds that are, they're, the, the second and third versions of funds, then there's new funds, and they all get discounted at different rates. There's a whole massive profession around how to value the a GP and lots of firms that have-- that do that for a living, 'cause these positions trade a lot. There's a lot of trading of GP positions in the in the alts world. Do you wanna add to that, Gregory? Yeah, I'd just add that, you know, both these platforms have a, a longer history than just the history that you may be aware of when, you know, the Sagard platform was launched with Paul III leading it and Power Sustainable when Olivier. They were legacy investments with several funds that had been successfully launched. For example, on the Sagard side, in Sagard Europe, we've been there almost 20 years. So, you know, there is a history of successful launches of these funds and also a track record in terms of their ability to generate revenues for the GP. So, you know, it's not simply, you know, as, as a startup might be. There is, there is a track record as well that, that is useful in, in, not only demonstrating to valuators, but also to, participants. You know, both the BMO and ADQ would be fairly sophisticated purchasers and, and are out there supporting, ventures like this all the time, so we get feedback from them as well, obviously. Okay, great, just on the GBL piece, there was some gains this quarter around Webhelp. Can you give us a little bit a color of what we should expect, if anything, going forward around either further for, you know, fair market value gains or, these sort of reversals of these, these put liabilities? Because I believe this deal, the merger of Webhelp, it still has to close by the end of the year, I think. Yeah, you're, you're quite right about that. Concentrix is the, the purchaser, and we're hoping that they successfully close. With that close, there will be a gain on the transaction, and at that time, you'll see a very significant reversal of that liability. It's almost CAD 1.6 billion on their books today. That all goes away on the transaction. That, that should be the last, if you will, mark, that we, we see when the transaction closes, so hopefully, that, that's helpful. Just to be clear, are you gonna... Is that gonna flow through to you as sort of your ownership position in GBL, of that CAD 1.6 billion? Yeah. gain or reversal? Absolutely. Yes, yes, you know, the 1.6 that I, I quoted, right now, I, I think that's accurate. I'm just looking down the table. Jay, I think it is 1.6, isn't it? Yeah. Okay. Yeah, we'll take, pick up a share of that, our proportionate share, Graham. Okay. Understood. That's it for me. Thank you. Thank you, Graham. The next question comes from Geoffrey Kwan with RBC. Please go ahead. Hi, good morning. Good morning. I wanted to, I just wanted to follow up also on the ADQ BMO transaction. You mentioned how it helps the growth from the LP and also maybe from the GP level, but just wondering, is there any benefits that might be contemplated from a distribution angle, whether or not it's from relationships they may have with other LP type investors? Then also, too, is there any plans to kind of grow distribution of your alternative strategies within the retail channel, kind of similar to what some other players in the industry have done? I think yes and yes would be the answer if there were two, if there were two questions. Two yeses, if there were three, three yeses, 'cause I was sort of nodding throughout your, your question, Jeffrey. Look, I think the first thing I, I use the word validation. So the fact that ADQ is in there, I think it will, will make a statement to investors, not just retail, but investors, institutional investors around the globe, about the quality of what a Sagard is. I think that I, I would be hopeful, I think Sagard people would be hopeful that that leads to other LP opportunities with a broader base of investors. I think the focus on the... Not that ADQ itself would be providing any distribution. It's a sovereign wealth fund. I don't think that, but the fact that they've invested will make a statement, to a lot of, I think, to a lot of people and open up different markets. Very much, Sagard is focused on retail opportunities within our own platforms, but also on other platforms. Retail, I've got to be a little careful how I use that word. I mean, it goes from family office to high net worth shops, to the democratization, as the word is used, of, of, of alts products that firms like Mackenzie and many others are doing across the world. They're focused on doing that. You know, the BMO partnership might help there as well, but I'm not into the weeds as to all of the opportunities that may be there. Sagard, like, like all of our ALTS platforms, are looking to broaden out their distribution and not just be focused on the institutional marketplace, because I think a lot of the growth over the next decade is going to come not just-- not from institutionals, institutions, but it's going to come from high net worth, ultra high net worth, and, and retail channels. I don't know if that answered your question. No, it does. Just the second question I had is, on page or slide 18 from the presentation, there's the mention of additional fund launch- sorry, additional fund launches expected. Is that new strategies that you're referring to, or is it subsequent vintages of existing funds? If it's the former, just any insight as to what those new strategies might be? There are some new strategies being launched. I don't know whether we've talked about them publicly. I'm looking at Gregory here. Yeah, go ahead. There are a couple that have been announced, actually. Yeah, Power Sustainable announced the the U.S. infra debt fund is one. Also I think they have plans to do similar in the U.K. I think that's been announced. There are vintages, Jeffrey, as you quite rightly surmised, that are add-ons to some of the existing funds. But there are always others on the drawing board, but those are a couple of things to look forward to. Okay. Thank you. Thank you. The next question comes from Tom MacKinnon with BMO Capital. Please go ahead. Yeah, thanks very much, and good morning. Question on slide 18 with respect to asset management activities. Investment platform expenses remain elevated here, and I'm wondering, is it just a matter of scale here that's needed before those management fees are going to be enough to significantly surpass those platform expenses? How should those platform expenses trend, you know, as you launch additional fund strategies? I have a follow-up. Thanks. Yeah, great question. I'll take a first cut, and then, Gregory, you can add whatever color you want. I think, in the case of Sagard, they're effectively on a fee basis, right around breakeven on a cash expense basis. But, but they have, you know, pretty significant scale at this point, as you can just... You know, you annualize the management fee. There's a good revenue base there. That's just the base fees, and their expenses are running at about that level. You know, more scale, more assets, scaling existing strategies, scaling existing strategies, that might mean, you know, the next vintage of it is the way easiest way to get that to a profitability point of view, and they're, they're pretty close right now. What you end up always having a trade-off with is that the opportunity to extend the products into, you know, adjacent products. You've got a credit fund and you're in a particular part of the market, and if you can put a new credit fund, you know, right next door that's got a different tilt, it might be less, less risk or higher risk. You know, you end up also scaling the core team. Then you try and add new strategies all together, and when you add new strategies all together, you create future value, but you go backwards on profitability because you go, there's a J-curve here. You go, every time you add a new strategy, you're probably two, three years where you're incurring at the margins and losses while you get the money to work and you get the scale going. It's a continual trade-off of how fast do you want how big do you want to be in five years versus how quickly do you want to get to profitability. The fastest way to get to profitability is to not launch any new strategies, but then you're, you're, you're curtailing ultimately your value creation, you know, three, four, five years down the road. I don't... I'm not trying to be evasive. Sagard's got lots of opportunities. They're right at the cusp of being profitable, on a fee-only basis. There's a forever kind of discussion about new, new launches and the pace of the pace of profitability going forward. I don't know. Does that answer your question? It's maybe you were, you were looking for something- No, that's good. Yeah. The follow-up is, there's a -10 in other on that slide. Just not sure what that is. What is your, what's your ownership now in Sagard, you know, post the recent transaction with ADQ and BMO and GWL? The other's got some noise in it. In fact, there are some transaction expenses, even though the transaction hasn't closed in it. That would be the, I think, a big chunk of it. There's some, there's, there's some non-cash equity amortization that is in that line, I believe, as well. The biggest one is a one-time item. We'd have a debate about whether non-cash equity amortization should be above the line in terms of fee-related earnings or below the line. We're doing a lot of work as to how others around the industry disclose that. That's what that, that's what that number is. Anything you need to add on the profitability, and I'll come back on the equity after. No, I think that's covered. Yeah. That's got it. There's a little bit of noise in that number this quarter. Tom? The ownership now post the transaction? We're- we are above 50%, but we're not much above 50% between management, which has got a significant chunk, Great-West Life, BMO, and ADQ. Where Power is a majority shareholder. I think we're gonna look in terms of your questions and in terms of I, I, the I think it was Graham's questions on on you know, how do you value this thing? When we get to a close here, we're gonna-- we'll, we'll talk about what we do with the mark, and we still got some work to do on that. It hasn't closed yet, but right now we're holding the GP interest at not a very significant interest, but we'll, we'll-. What was the ownership before the transaction, Jeffrey? We would have been around 70. Yeah, 70%? 70. Yeah, 70, 78. You went from 78 to just over 50? Yep. Yep. Well, it's gonna be freed up right away because of the negative earnings here, so. Yeah. Well, it'll at this point, it's a value play, not an earnings play. I hope you can appreciate. Yeah, I understand. I'm just being facetious. Sorry. Thanks. Yeah, no, but I think, I think the value that's in Sagard will, you know, we've, we've created value that will become evident. Not still, not massively material to Power Corp, but it is what it is. We got a business here that's growing quickly, that's got great capabilities, and that we're creating some value, and I think this is a big step. That was, it was an important decision for us. Do we dilute ourselves, or do we continue to own a bigger chunk? Again, it came down to, what's the way we're gonna maximize the value of our position? You put a value maximization hat on, and you say, this was a good thing for Sagard and a good thing for Power Corp. Thanks. Okay. Thanks, Tom. Once again, if you have a question, please press star, then one. The next question comes from Doug Young with Desjardins Capital Markets. Please go ahead. Hi, good morning. I think this goes back first to what I think, Jeffrey, you were alluding to in, in some of your prepared remarks. Just trying to get a little bit more color, you know, on the swings or the, the $18 million from Sagard in the investing activities. That has been swinging all over the place, which is, you know, I guess that's as expected. Can you talk a bit about, you know, the big improvement sequentially, like, what drove that? You know, what are some of the drivers there? Thank you, Doug. I'm scrambling here to find the 18 that you're referring to. So is Gregory. It's under investment activities, proprietary capital. You've got Sagard and Power Sustainable. It's page 846 in your shareholder report. Yeah. Do you have an answer to that question, Gregory? I don't. I'm still trying to find the reference. Yeah, you know, we can always kind of come back to that. I just, you know, just wanting to understand a little bit more about the drivers there. More importantly, within Sagard, I mean, you, you know, some of the things that I think about, you've got a real estate fund in there. You know, can you talk a bit about some of the exposure there? That's been a hot topic, you know, across the, the financial sectors. You've got Sustainable Energy Fund, obviously, IPP valuations have been hit hard. Just trying to... You've got, you know, fee caps coming through in China, whether that has implications at all for, for the Sagard platform. Those are the three areas there that are potential headwinds, but maybe they're not. I'm just trying to get a little bit more color. Yeah. Well, Gregory, you look at those numbers. I'll just go to the fee caps in China. That has no impact at all on our alternative asset platforms. We didn't mention that, but for those of you, I think it would have been discussed in the IGM call, that's really in the, in the, in the retail business in China. The authorities put on a fee cap, which resulted in a rollback of some of the fees in the mutual fund industry, and that would affect retail funds and will have a, I think IGM reported about a 12% impact on ChinaAMC's profitability. At the same time, the Chinese authorities are very conscious of having a healthy and profitable business. That, you know, that is what it is, and. It doesn't impact at all the China strategies that Power Sustainable Capital has. Those are not, those are not mutual fund strategies. It's ourselves and some institutions in that strategy, but not retail. With Gregory, I hope I talked long enough to give you an opportunity to catch up to the page. Yes, I find. That Doug was asking about on the CAD 18 million. Yeah. Do you wanna, do you wanna make a comment or do you wanna- For sure. Follow up after? Go ahead. That's fine. We can follow up later, too. In, in, in the quarter, Doug, it was largely driven by gains on our European funds. Those are all fair value through the P&L these days. You know, also, we had good performance in the private credit and the healthcare royalties. That's where the, the most of it came from. There was, you know, some negative marks on the real estate, the EverWest Real Estate, but not significant in the quarter. They don't have a lot of exposure to commercial properties. So that would be the key, I think, in, in terms of, the, the quarter. Okay. and you don't see anything on the sustainable like, sustainable energy side that's concerning to you from valuation or potential surprise impact within your funds at this point? No, I wouldn't say so. Certainly, we are in the business, Western Canada, and, yeah, I think the Alberta government did come out with an announcement the other day, but that's probably, it's not gonna affect what we have in the ground. I don't see a particular headwind, but that's probably what you were alluding to. Yep. Yep. Yeah. Okay. Then I guess what, you know, I guess what everyone's trying to kind of ask around, and, and I'll, I'll just kind of ask it directly. I mean, what was the valuation implied with the transaction of the GP, like, would you be willing to give that, or is that something that you would be willing to give essentially at close? Yeah, that's what I was just referring to, Doug. Thanks. I- I'm sorry if I wasn't clear about that. I think we, we are considering that issue after close, once we close, as to what we do with the mark. We haven't aligned it exactly, but the bias would be to, to mark and disclose. We're not at that position right now to make a comment. Okay. But Just maybe lastly... Yeah. Sorry, go ahead. No, that's it. Okay. Yeah, just lastly, maybe strategy-wise, big picture-wise, you know, Great-West has been doing deals in the advisor space to kind of, you know, position itself and, and have better distribution, you know, against the, the big, the big banks. You know, IGM is competing fiercely, you know, against the big banks, and we hear this time and time again. Now, would, would it be valuable for Power, and within the Power group of company complex, to have, you know, a Schedule I bank license or an entity that is in that space? And I know, you know, if you go back in time, Power has had, you know, a banking franchise and, and whatnot. Doesn't have it anymore. Like, when you think about strategy and things that are missing within the group of companies, is that something-- is that a reasonable direction to go in? I think you start with a client focus and say, you, you want to be able to provide as much capability to your clients as you possibly can, and that flows back into the health of your distribution, and then that ultimately flows back into profitability. If you just go that level, you'd say, like, we'd like to have more, and we should have more products. In the last 24 months, the flow back into banking products and CDs has shown that, right? That, that having cash products is important. People forgot about it over the period of interest rates going to zero and then staying there for so long, and interest rates popped back up, and all of a sudden, cash products are, are important. But once you go beyond that statement of how do you bring it to your clients, you get to, can you be competitive manufacturing it? Can you do it on a scale basis, and can you do it on a sustainable basis? Then the question gets a lot trickier, and the answer becomes less clear. You know, you've got... If, if anything has been shown in the last 12 months, it's that, it's basically a lesson in history, is that having a strong, diversified deposit base, as opposed to going out and building a business on kind of what I'd call, hot money is maybe too strong, but kind of competing on rates. Having a strong, diversified deposit base is essential, in my mind, in our minds, to having a successful, intermediary, you know, banking business, to having a banking business. And there, you know, looking at that from a Canadian landscape point of view or a U.S. landscape from where we are, that's a tall order. It's a really tall order. So that's where we always get to in that discussion. It doesn't mean we're not interested in providing banking products and services to our clients and then trying to make some margin on it, where it's important to our offering, but it might be more distribution margin than it is the actual manufacturing side. I don't know if that answers your question, but that's the way we think about it. Makes sense. Thanks for the color. Okay, Doug. Thank you. 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 line. Thank you very much.