Good morning, ladies and gentlemen, and welcome to the Power Corporation Second Quarter 2024 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 then zero for operator assistance at any time. I would like to remind everyone that this call is being recorded on Friday, August 9, 2024. 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 call. Thanks for being with us this morning. I will dive right into the presentation to go through our perspectives on the second quarter and overall commentary on how we are thinking about the business. Before I do so, I'll remind you on pages two and three of the cautionary disclaimer statements regarding forward-looking information and non-IFRS measures. On page four, you have the happy mugshots of myself and Jake Lawrence, who is here with us today for your second call as CFO. So, we're happy to be with you, and we've got some other colleagues with us here as well in case we get some very technical questions. The Q2 results, then, right after that, you've got the various public disclosures on page six from our different operating businesses, which I just make reference to if you're looking for additional information. With that, I'll start my remarks on the quarter on page seven. Look, it was really from our perspective, a very strong quarter. Had really good financial results, broadly based, led by Great-West Life for sure, who had you know, record earnings again this quarter, exceeding CAD 1 billion for Great-West Lifeco. So but really broadly based, all the businesses across Lifec o, IGM, all reporting either good financial results or good momentum in their markets. So we're feeling very good about the businesses. While market levels, the stock market levels and interest rates at the short end have helped at the margin, you know, overall, the macro conditions are not all positive. As you know, high inflation, higher mortgage rates are impacting a lot of our client bases. So from a flow point of view, there's a number of our businesses that are... The macro conditions are not helping. But aside from what's going on in the macro basis, on a macro side, you know, the earnings are based upon broad momentum across each of the businesses. The businesses have got clear strategies. They're executing on those strategies. They're building momentum, from a revenue point of view, from a cost point of view, from a capital efficiency point of view. So it's great to see it is happening across IGM and Great-West Lifeco, but also our NAV-based businesses also showing good momentum and good progress. So overall, feeling great about the businesses. On the alt side, we did continue to fundraise, but also work with partnerships at both the Power Sustainable Capital and Sagard to continue to build out their scale and their profitability and their revenue. As well, in terms of our ability to generate cash and return capital to shareholders, which continues to be a high priority. We had some good news at GBL, which we'll talk about, but they're going to make a meaningful increase in their dividend, which Power Corp will enjoy when that is paid. And we made progress on the standalone businesses, Peak, which owns Bauer and Rawlings, disposed of Rawlings. And so, we, in the just start of Q3 here, received a check of CAD 83 million from that disposal, and also I think recorded a gain, somewhere around CAD 42 million on the investment in the quarter. And we continue to be active on buybacks through the quarter, buying CAD 189 million year to date, so far. So with that, I'm going to pass it to Jake to walk through the financials, the NAVs over the next few slides. Jake? Great! Thanks, Jeffrey, and good morning, everyone. Picking up on slide 8 of the presentation, as Jeff noted, Power Corporation reported solid earnings off another strong quarter from our main operating entities. That's Great- West and IGM Financial. As we often point out, these two companies generally form all of Power's recurring earnings. For Q2 2024, adjusted net earnings from continuing operations were CAD 761 million. This compared to CAD 842 million in the same quarter last year. I'll address the breakdown of these results on the next slide, but we'll just note here that Q2 of 2023 included a few positive one-time item, one-time items. On a per-share basis, adjusted net earnings in the quarter were CAD 1.17, compared with CAD 1.26 in the same quarter last year. I'll also point out that the reduction in average share count from our ongoing and active NCIB program contributed approximately CAD 0.03 to EPS. Adjusted NAV at the end of the quarter with CAD 50.48 per share at June 30, compared to CAD 53.10 per share at March 31. The decrease in NAV quarter-over-quarter was primarily due to the share price decrease in Great-West Lifeco and GBL, which was partially offset by IGM's share price increase and fair value gains in some of our proprietary investments. As of yesterday's market close, Power's NAV was CAD 50.24, reflecting a rebound in Great-West Lifeco shares, offset by decreases in IGM and GBL. Finally, this quarter, Power Corporation's Board of Directors declared a quarterly dividend of CAD 0.5625 per share, in line with last quarter, and that's up 7.1% from Q2 2023. Now turning to slide 9 to break down the earnings. Great-West once again delivered strong earnings of over CAD 1 billion, with contributions to growth from each of its four segments. As Great-West noted yesterday, its U.S. retirement and wealth business Empower is on track to becoming the largest segment in its business by year-end. This is very much in line with the growth strategy that was embarked on several years ago, but further fortified with acquisitions such as Personal Capital, MassMutual, and Prudential. IGM also reported strong earnings this quarter, with year-over-year earnings growth across its two segments: wealth management and asset management. Average assets continue to grow despite a challenging macroeconomic environment. This past June, IGM saw heightened gross flow and redemption activity in advance of the Canadian federal tax change, which came into effect during the quarter on June 25th. In Q2, IGM wrote up its investment in Wealthsimple by 15%. This reflects the strong business performance we saw in Wealthsimple, including revised revenue expectations, as well as an increase in public market peer valuations. This marks the third consecutive quarter in which Wealthsimple's value was written up. I'd like to remind everyone that Power Group's combined investment in Wealthsimple is now valued at CAD 1.5 billion, up from CAD 1.3 billion last quarter, of which Power's share is CAD 563 million, and that's up from CAD 490 million at Q1. Moving to GBL, whose comparative earnings contribution was impacted by a positive net recovery last year related to the decrease in Webhelp's NCI put right liabilities. As a reminder, these put right liabilities no longer exist as they were extinguished as part of the Concentrix merger. As well, GBL received lower dividend income this quarter following the sale of its investments in Holcim and GEA. This is part of GBL's broader strategy of rotating its portfolio in favor of private assets and returning capital through buybacks and dividends to shareholders. As mentioned earlier by Jeffrey, this strategy was on full display as GBL announced a proposed record high extraordinary dividend of EUR 5 per share, funded by gains from its partial sell down of its investment in Adidas and strong cash earnings. This dividend will, of course, be subject to approval at its next shareholder meeting. Moving to our alternative investment platforms, Sagard contributed positive earnings this quarter, driven primarily by performance in Power's investment in Sagard's private equity funds. Power Sustainable continues to scale with two recently announced strategy launches. This quarter's results also include fair value decreases in its energy infrastructure strategy. Sagard and Power Sustainable continued to deliver strong fundraising despite headwinds in the fundraising for alternative assets. Continuing with the other investments in stand-alone business lines, this quarter saw a modest contribution to earnings as the gain realized on the disposal of Peak's minority interest in Rawlings was offset by a non-cash impairment charge taken on Lion. On a comparative basis, Q2 2023 included a CAD 97 million gain on the sale of Power's investment in Bellus. Turning to slide 10, where we break down the CAD 50.48 net, net asset value per share as of June 30. As our publicly traded operating companies represent over 85% of our gross asset value, they generally account for the majority of the change in NAV. This quarter, the share price trading of Great-West and GBL accounted for the decrease in NAV per share. As noted, this was partially offset by a share price increase at IGM, as well as fair value increases in some of our proprietary investments. I'll note that the NAV closed yesterday at CAD 52.04, which does reflect that rebound in Great-West shares, partially offset by declines in IGM and GBL. Looking at the balance sheet, Power's cash and cash equivalents stayed relatively stable at CAD 1.5 billion on June 30. We did remain active, as Jeff noted, in buying back shares and spent close to CAD 100 million in the quarter under our NCIB program, and this is reflected in the lower share count you see near the bottom of the page. With that, Jeffrey, I'll turn it back to you. Okay, thank you, Jake. So then I'll just make a few high-level comments on our various businesses. On page 11, we have the financial results for the last five quarters for Great-West Lifeco. Again, extremely strong earnings. We mentioned a 13% growth year-over-year in base earnings, led by Empower, for sure. But across all of the businesses, Empower, Canada, Europe, and the capital and risk solutions businesses, we had good growth. Capital and risk solutions looks like it's down year-over-year. It had the implementation of the global minimum tax, which primarily hit that business so that they absorbed that in the results. But on a pre-tax basis, the business continued to grow. So strong, broadly based earnings, which is great to see. It was a clean quarter as well. I mean, there was not a lot of noise. A few items that offset, for example, at Empower, there was a catch-up fee of approximately $40 billion related to the Pru transaction, I think was the number. I may not have that exactly. There was an offsetting impairment related to credit in the commercial mortgage portfolio. So you've got those two, but the underlying number was basically, you know, a sustainable number, if you can put it, or a clean number is a better way to put it. So the quality of the earnings we thought was great. There's not a lot of noise through them. Just generally, since we've moved to IFRS 17, you have a lot less one-time items coming in and out, which I think is a positive in terms of all of us and all of you getting comfort around sustainability of earnings levels. The Pru transaction was completed in the quarter, and so that's behind us. That was successfully done. That's, Jake mentioned the three deals. All three have been successfully integrated, great client retention, synergies achieved, and the group's long-standing tradition of being all over the execution of M&A transactions continues. It's one thing to get deals done, it's another thing to then successfully integrate them. So, declaring victory on the Pru, on the Pru transaction, and the team focused on execution here at this point. And then I just finally point out that the ROE at Great-West Life is up over 17%, and that is at the high end of where the company's target ranges are, but great, great to see the return on capital being produced by Great-West. Turning then to 12 for IGM. You know, IGM produced really strong financial results, and, but also, so at both IG Wealth and Mackenzie produced strong earnings. Markets, for sure, have helped, but again, here, the macro environment on balance is hurting. High inflation over the last several years, very high interest rates, high mortgage rates are impacting both IG Wealth's business and Mackenzie's business, and the fund business in general in Canada, as many of you would be aware. You know, a lot of clients, particularly in the mass market, mass affluent, where a lot of the existing business of IG Wealth and Mackenzie exists, a lot of clients are really feeling the pinch. They do not have the cash to invest, or in fact, they're drawing on their investments. So you got the industry, basically, which typically is in net inflows of a couple of% per year, and those segments have been in outflows for a while here, and that's impacting the flows. But the markets themselves have helped the earnings levels. The businesses continue to invest heavily in positioning their business for long-term future growth. I think across the investments, as you know, we have in each of wealth and asset management at IGM, we've got more mature businesses, IG Wealth, Mackenzie producing the lion's share of the current income, but we've got investments that position the company well as we look forward 3, 5, 7 years out, and Rockefeller, Wealthsimple doing extremely well. Jake mentioned Wealthsimple. I won't repeat that. And then China AMC really performing well, and Northleaf really performing well. Great fundraising at Northleaf in an extremely difficult environment, CAD 1.8 billion in new commitments in the quarter alone. So really great to see IGM's businesses all performing well. You were pretty thorough, Jake, in covering GBL. I won't add, you know, too much to the story. Returning capital to shareholders has been something GBL has done for the last number of years. We have not participated in the buybacks, and neither has the Frère family, but with them now using dividends as a tool to return capital to shareholders, we're gonna enjoy the benefit of an 82% increase. I think we take in, at current exchange rates, about $92 million a year in dividends from GBL, so an 82% increase. You can do the math. It should be somewhere around an extra $70 million when we get to 2025 by increase. So starting to enjoy and participate in their strategy of returning more capital to shareholders, which will be able to flow through to the Power Corp shareholders, and they have continued to be active on their repurchases. Okay, I'm going to spend a couple of minutes on alts then. You know, our alt strategy is not only a financial strategy, it's also a strategic strategy. There's a lot of things that we are able to do at Power Corp that are synergistic with Great-West Life and IGM, and participation with GBL as well, where things that we can do. I'll give an example of the fintech strategy we launched in 2015, which has morphed into part of Sagard's business, an important part of their business. But, you know, that is highly synergistic with what IGM and Great-West Life are doing. We think that we were able to do that by attracting a lot of talent into that business that we wouldn't have otherwise necessarily been able to do through our more traditional platforms, Great- West Life, IGM. There's an example, but I can go across all of the examples, a lot of the strategies where there's a lot of cooperation, and we can do some things in these platforms that are perhaps more difficult for Great-West Life to do. So there are strategic reasons, but from a financial point of view, it's, we think it's also going to be attractive. And we make money through both the asset management activities and the investing activities. I'm gonna talk a little bit about each of those. On the asset management activities, we spent a lot of time focusing on the fee-related earnings, which. We haven't spent as much time talking about the carried interest or in fact, the returns we've made on our proprietary capital. We're gonna try and change the narrative a little bit on that, as we move forward and get a greater visibility into it. It's probably, I think, our error in focusing a lot on fee-related earnings, when in fact, they're not that meaningful at this point. You know, we've got businesses that are trying to get to scale, are getting to scale, but where we have been making money is on the carried interest and on the proprietary capital. So if I flip you on the page to 15, you've got the... Basically, from when we announced the strategy at the end of 2019, we had CAD 3.7 billion on the left side of the page. In funded AUM, it's now up to CAD 28.6 billion, which CAD 26 billion is fee-bearing. So good growth, and you see the dark blue line. Basically, as we said, Power Corp has still got CAD 2.2 billion of its own proprietary capital in there, which was just about the same amount we had five years ago. So we have succeeded in using third-party capital, a portion of which is Canada Life, and a little bit of which is some of the IGM strategies. On the right-hand side of the page, there, we do have CAD 154 million in accrued carried interest in the platforms from the different strategies. We would have recognized probably about half of that into the PNL, and another half is to be recognized. Well, there'll be a minority interest in that because the minority shareholders in Sagard and Power Sustainable Capital will get some of that. But we are making money on the carry. That'll go up and down. There's some volatility to that. We get into a period where we get really weak markets that get into a drawdown, and you can see some of that going backwards, but over time, we expect that to contribute. If we flip over to page 16, the CAD 2.2 billion of prop capital that we do have is invested in different strategies. These are just the broad categories. There's many, many more funds than that. And it's a mix between fixed income, dividend income, you know, credit, real estate, infrastructure, which either produces steady cash, not always earnings, but steady cash flow. And then there are more venture capital and private equities, which the returns come in the form of capital gains and realizations. And we have different targeted returns on each of those, but overall, we expect to return over 10% when you look at the current mix. So on a $2 billion strategy, we expect over time to make $200 million of value creation. And we have, in the past 5 years, realized distributions. We've sold secondary positions. It's contributed to our earnings, contributed to our cash, even more importantly, and contributed to our share buybacks. So we will try to continue to focus on this and give greater balance to all of the areas that we think we're benefiting from our old strategy. Speaking of returning capital to shareholders on page 17, we've returned almost CAD 1 billion year to date. I mentioned the 4.9 million shares that we had purchased up to June 30, and we have very strong cash balances at this point, and are in a strong position to continue to do so, and we'll continue to look for additional sources of cash flow to do buybacks. We think, you know, it's great value. It shifts the balance of our portfolio over time to more earnings-based and less NAV-based, which we think is a positive. and as well, it lowers the share count, which means we have, more dividends and more earnings, for the remaining shareholders. So, we'll continue on that as a priority. page 18, we pay obviously, close attention to our shareholder returns. We are ultimately in business here to provide strong, attractive, risk-adjusted, shareholder returns. They bounce around. Obviously, these are all end date and start date sensitive, but we continue to be highly focused on our, our primary goal, which is to provide attractive long-term shareholders to our-- returns to our shareholders. And then moving to 19 on the discount, it bounces around. We've been making really good progress over the past year on reducing the, discount. It was down into the low 20s, and then it bounced back quite, quite a bit in the last week or so through these choppy markets. So you know, a glass half full, kind of attitude. If you loved it at 22%, we really love it at a 28% discount. So we're not happy with the discount gapping out, but, we'll view that in the positive light as being an opportunity. And then I'm gonna, you know, conclude again, where, where I started on page 20, just talking about the, the business from a big picture point of view. Feel really good about the way the businesses are positioned, across Great-West Lifeco and their various businesses, IGM and their various businesses, GBL and the platforms. We've got clear strategies in every area. We have got management teams that are highly focused on executing those strategies. We're more in an execution mode than we have been, say, going back a couple of years ago, which is not to say we always have our eyes open for the next acquisition, but the teams have got clear strategies, they're executing, and they're making progress. We have a mix of businesses, some of which are more mature, producing high income, and we have a number of businesses that are creating the growth either today or into the future. So we've got a good portfolio, a mix of mature and income-producing businesses. The macro environment is gonna be what the macro environment is gonna be. We'll navigate through whatever comes our way. And, and there's providing some tailwinds right now, but also some headwinds. So with that, prior to opening it up for questions, I just want to do one last thing, which is, I just want to recognize Jeff Kwan, who I think, is on the line. He's not on the line. Okay. I will recognize Jeff Kwan in any event, who has covered the group going back to 2014. And Jeff has done a great job appreciating that the role of an analyst is to inform the investor base about what's good, what's bad, what they don't like, what the opportunities might be, and that is the role of all of the analysts. Nonetheless, Jeff has always been very thorough, very professional, very clear in his communication, and always curious to learn and understand what's really going on in the business. So we thank Jeff and congratulate him, and wish him good luck in his new endeavors. And with that, I would like to... Operator, if you could open up the lines for questions at this point. We will now begin the question and 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 a moment as callers join the queue. The first question comes from Jamie Gloyn with National Bank Financial. Please go ahead. Yeah, thanks. Good morning. First question- Good morning. Good morning. On the buyback activity, it seemed to have picked up a little bit of the pace post-quarter with this recent sell-off. You know, you have the excess cash position you have today, more cash coming in the pipe over the next couple of quarters, especially with the extra divvy from GBL. You know, is that something you're looking to potentially accelerate in this environment? And how are you thinking about that? Yeah. So I'm not going to telegraph all of our, you know, purchase activities, ahead of time. I would, I would, get scorned from all of the traders I used to know when I worked at BMO Nesbitt Burns. But having said that, no, look, I, I said, twenty-- we, if you like the stock at 22% discount, you got to love it at 28. We've got some, got some weakness here, so that's probably an opportunity. We, we'll play that. We, we try and be in the market throughout, throughout the year, but there's no question that when it's, the stock is weak, there's more, there's more opportunity there, and we're buying it at, at better prices. So we'll... Jamie, I'm not going to answer the question directly, but those are factors we look at when we decide the levels of buybacks that we're doing. Yeah, understood. On the carried interest disclosures, I appreciate the extra color around that and how you're thinking about the proprietary capital returns. That proprietary capital has been about CAD 2.2 billion. You know, you're highlighting carried interest as a more meaningful component today. It can obviously fluctuate, but is there a view to potentially dedicate more proprietary capital as you're continuing to build those strategies to drive some more of that carried interest upside? Or you know, should we still take the view that prop capital is fairly stable and really focused on bringing in third party? Okay, so just a clarification, and then I'll address your question on the seed capital. So the carried interest actually comes through the GP, not our LP investments. It comes through the general partner. So the general, as you know, on, let's say, a private equity fund, there'll be a 2% fee and a 20% carry beyond a target return. In some of our infrastructure funds, that carry kicks in at a 15% return, and on some of the credit funds, it's at a lower target level, but there's carry typically on all the funds. And that carry gets paid to the general partner, Power Sustainable Capital or Sagard, of which we own an equity interest in the GP. We're controlling shareholders in both. Some of the carry gets paid to the portfolio managers, some of them gets paid to the management of the GP, and then the GP shareholders get the balance. So the 154 is the carried interest that we've accumulated to date that has as a GP in Sagard and in our ALTS businesses, not as an LP seed investor. So just to make that distinction. To your question on the seed capital, CAD 2.2 billion, and whether we would increase it, that's not what we've been doing to date. As you know, we've told each of Sagard and Power Sustainable Capital that we will keep the overall capital level the same, and they need to build their businesses based on third-party capital, including Canada Life, which a better way to say it is non-power capital. And that, that is our current view. Would we ever change that to facilitate faster growth? Yeah, I wouldn't say we never, like, I... Well, that's not our current stance, Jamie, but I, I hate to say we'd never do that. Circumstances would, either because we thought there's an opportunity to get great returns or we thought it was really, it would really make a difference in moving them forward, would be, you know, we never, we never say never to strategy. You're always open to changing what you do. But at this point, the CAD 2.2 billion, and I don't want to put too fine a point on it, that level of capital is what we expect to have invested in the businesses. It will also, you know, jump up and down a little bit with market values or all of a sudden, you know, we just got a big realization, and we just got a big funding and a drawdown where we've been asked to put up funds. It'll bounce around, but managing it to that level is our current strategy. I hope that answers your question. Yeah, perfect. Thanks, guys. Okay, thank you. The next question comes from John Aiken with Jefferies. Please go ahead. Good morning. As Jamie noted, you've got a very strong cash balance, more coming in from Peak in the Q3, and then in 2025, obviously coming in from GBL. Jeff, or Jake, you know, this is a big cash balance. Should we be expecting deployment at some point over the medium term, call it the next three years, for something large, or are we just holding cash balance because of the unpredictable nature of the market these days? That's a good question. Let me go to prioritization of capital, and Jake, you're welcome to jump in in any way that you would like after I make a comment. So you know, we try and keep a minimum balance of cash, and we have, and then we have inflows and outflows that occur. We and they're not always predictable. We have realizations because all of a sudden, you know, Peak sells Rawlings, we sell Bellus. We get distributions from our investments in the private equity or in the VC world, out of our proprietary capital. So you get cash that's coming in, and you don't always see it coming two years in advance, and it's market dependent in some ways as well. And then we get drawdowns. We've got commitments. We've the CAD 2.2 billion is the funded, but we've made additional commitments to different funds, and as those funds deploy, we'll get drawn down. So the nature of our future cash generation is difficult to put a precise focus on it. So that's that was really how do we generate cash? But we expected that will continue to generate cash through those various sources going forward and add to the balances. Now, on the capital allocation question, you know, the number one priority, absent our different businesses requiring and wanting to look and needing capital to do something that's attractive to them, and I'll give some examples of that. The number one priority will be to return capital to shareholders by way of a buyback, and that relates to Jamie's question, is trading at 22% discount, trading at 28% discount. You know, it's hard not to look at that as a pretty attractive place to put the capital. But we've always said, and if you go back over the past 20-25 years, if Great-West Life or IGM have an opportunity to make some acquisition and there's equity required, we have always jumped in and supported those issues. I could go back to, you know, many of the equity issues they've done. Hasn't happened for a while. They haven't required equity, but we've always kind of underwritten those with a lead order. That'll be a priority. Supporting our companies will be a lead order... The lead priority would trump in those circumstances, buybacks. But you know, we don't have, we're not kind of saving it up. If your indirect question is we're trying to build the cash up because we got something that you know, the curtain is gonna open and we're gonna... We're not building it up. The fact that it's grown to this extent is you know, we had some big realizations, particularly with the China strategy, as you know. And so to my point, the cash comes in on a lumpy basis sometimes, and it happens to be at a higher level than it's been for a few years right now. That's as much color as I can give on you. So prioritization is buybacks, absent our companies needing us to support them on an attractive acquisition. Thanks, Jeffrey. You, you did answer what, what I wanted. And then just as a, as a quick follow-on, as we've seen GBL kind of shift its strategy, and, you know, I'm kind of a bit surprised with the special dividend, is that something that, that Power would ever consider, given your cash balance? You know, I think our priority is buying shares back versus special dividends. That's, that would be the view of the, of the company right now. I think we get better value for that long term. I think it's, again, we're buying... We're doing a bunch of things. We're buying the stock at a discount. We're, we're, we're shifting the mix to more earnings-based. And while we really like our NAV-based businesses, you know, our shareholders communicate to us that they struggle to value our NAV businesses, and, and it's a lot easier for them to value the earnings-based businesses in those streams. So, you know, we're gonna keep having the NAV businesses. They're, they, they do lots of things for us. But, but by buying shares back, if you do the math on it, we're, we're actually shifting our mix over time. And then it also produces, I think, more longer-term benefits. If you take CAD 1 billion and buy CAD 1 billion buy of stock back, you know, and you eliminate 25 million shares, well, that's another CAD 50 million-CAD 60 million of cash flow that we have available to increase the dividend over time. Whereas if you do it one time, it's one time, it felt great. Everybody's, you know, goes off and enjoys the quarter, and then so our bias is heavily towards, towards doing buybacks versus doing, versus doing special dividends. But I won't speak for the GBL board. I mean, that's, that's, a whole other dynamic, and they had their own rationale for doing it. Thanks, Jeff. I'm glad that we're philosophically aligned. I'll reach you. Okay. Thank you. The next question comes from Doug Young with Desjardins Capital Markets. Please go ahead. Hi, good morning. Just back to, to the Sagard discussion, just kind of three areas I want to dig into. The carried interest, so it sounds like CAD 77 million not realized, so call it CAD 75 million, not realized. That's net of comp. How much of this would be attributed to Power? Is it CAD 50 million? And, and assuming no change, and I, and I fully get this can bounce around, but, like, how, how long does it take for this to kind of flow through into earnings? So that would be after. That would be the share of the shareholders after employees comp. Okay. Net. Yes, net of that. But it is for all the GP owners, and I think Sagard- Yep ... is really the contributor to that. And on an undiluted basis, we would own, you know, 60-odd%. I think it's somewhere around there. Fully diluted, we're at 52-53. So the realizations of it, I can't answer that question. There's gonna be some of that which is venture capital, private equity, and that's the question of when is it realized and when does it get paid? It'll be in future years. I hope the balance is a lot bigger, by the way, is that gross?... But I don't have a good visibility, and probably Sagard themselves doesn't have good visibility on the realizations. But we would share in that pro rata to our equity ownership in Sagard, is the way to think about it. So there'd be a minority interest that would participate in that. And so the point of illustrating it wasn't to say, you know, and half of it's flowing through the P&L, approximately always. So there's CAD 75 million with the minority interest in there. Wow, there's CAD 40 million there that you should all be getting excited about. But the point was to illustrate that the economics that are being driven out of the GP are not just from the fee-related income, because, you know, we have, as I said earlier, we're probably guilty in our communication of having put a lot of emphasis on the fee-related income, and the reality is building up these businesses to get them to scale, where they're going to make a meaningful contribution to PowerCorp, is a long road. But you step back and say, well, yeah, but we've got other drivers of aside from the strategic reasons we're doing it, we've got other drivers or drivers of economics. It's carry. We hope to make a lot more money on carry going forward. And again, the CAD 2.2 billion, we've kind of not really focused on in the short to medium term, that's going to be the prime driver of the earnings coming out of these strategies, and we've kind of neglected that in our communication. So as we've discussed that, we're realizing we probably put the emphasis on the wrong syllable here for a while, and we're going to try and try and be more complete in our disclosure. You, you went to where I was going next, and that CAD 2.2 billion, I think you, and I know this isn't going to be consistent, but you're aiming for a 10%+ return on that. That's CAD 220 million. I- Yeah. Let's say you don't increase that CAD 2.2 billion [that] stays constant, CAD 220 million of cash coming in, there's really no offset or use. So, I mean, that's really what you could, you could think of in terms of funding buybacks at the minimum. Is that the right way to kind of think of it? Yes, but what I would say is that, the realizations of that cash, are different. But that's why I pointed out that half of it is in equity infrastructure, private credit, royalties, those kinds of strategies which are designed for income investors to produce steady income, not always net income or equity infrastructure. Or excuse me, the infrastructure funds, for example, have actual P&L losses to them, but they produce a lot of cash because... So I won't get into the detail, but so we're looking at this on a cash basis. They produce. That part of the portfolio produces steady cash returns. The private equity and the VC is through realizations, and if you just follow the private equity market or the VC market, you go through, like, the last two years have been. They've been very difficult to do realizations, right? That's why the whole private equity in the alts market is, is backed up. It's not just, it's not just there's difficulty in funding. The reason there's difficulty in funding is that there's difficulty in realizations, and so, and the money's not getting deployed, so the whole system's backed up. Starting to loosen up now, if you have been following that. So the realizations on that portion of it are dependent on you creating capital gains, and then they're actually being sales of the portfolio, which can sometimes drag out, and you get two years where you get a lot and it rains, and then you get a couple of years where it all dries up. And so they are not steady, they're episodic. So the 220 or 250, depending, we said, we think we're going to get-- we're hoping to get a little more than 10% on the mix, but it's around there, will not be 250 every year. It's going to be a portion of it, it's going to come in steady income, and a portion of it will come episodically. Now, there is one other way we can realize cash on that, which we've also utilized as a tool. You'll remember a couple of years ago, we sold for, I think, about CAD 300 million, I'm not too far off, a secondary position in Sagard 3, I think it was. Mm-hmm. There's a big secondary market, as you know, in the alts. I could go on a lot about that for you, but there's buyers of secondary positions, and sometimes we get a bid for a position we have, for a fund position, and we just kind of liquidate it. That's a third source of cash, which can create, again, kind of episodic, if I can use that word, realizations. So it's not just straightforward, is we're not buying a bond here and collecting it every quarter. That money will come in in different ways, and back to my comment about, you know, predicting the cash flow here. We're confident we're going to get a lot of cash out of it, but it's hard to exactly put a timetable on when it comes in. Doug, it's Jake. The account. Sorry, the accounting geography will also be complicated just a little bit. The energy infrastructure will have some amortization of the assets flowing through, and so that will offset some of the earnings you see, just given consolidation. But to Jeff's point, they are economically profitable. They will be producing cash flow. The top part, the income strategies, will have more of a consistent flow to them, with the bottom portion around capital appreciation really being dependent on those episodic activities Jeffrey noted. Now, that makes sense. Then can you remind me, I don't think you do, but do you, do you actually hold Sagard, the business, not, like, the actual business itself, not the funds? Do you hold that? Is there a value of that in the NAV? Yeah, there sure is. And it's been written up with the ADQ, now, Lunate BMO transaction last year. That was done at a value. I think it valued Sagard overall. I'm going to say $500 million for the entire GP. I'm looking at my colleagues here. Sorry, US. $500 US. And our share in that is on the books for $200 and something over a quarter of- CAD 290. CAD 290. CAD CAD 290 U.S. or Canadian? Canadian. Okay. CAD 290 is what we have in our NAV for our GP position in Sagard. Okay, so that would and we have not. That's, like, that's a nice capital gain on that. ... Yeah. Okay. And then just lastly, Jeff, maybe you could put your investment banker hat back on here. But, you know, like, do you get the feel that the market's more conducive to getting the rest of the non-core businesses off your books? Like, you've done some on, you know, within Peak, there's still some left in Peak. Now you've got Lion, Lumenpulse, I think, still in there. Like, what's your feel in getting some of those non-core businesses off the books? Yeah, your crystal balling on this thing is difficult because, you know. So if you're asking me whether the Fed is gonna be able to work interest rates down quickly enough and avoid a hard landing versus a soft landing, I. That's. I'm not gonna answer that question, but that has bearing on what the market. But yeah. So obviously, you know, if we go into a recession, it's gonna be tough to do things. I think the business of maybe looking at it another way, I think the business of Peak is doing well across the board. They were doing well in their sports businesses, doing well in their hockey businesses. I think that Lumenpulse's business has gone through fits and starts, but they've got a growing backlog and growing momentum on their business. So I think rather than talk about the market environment, which I cannot predict, I think the business of Lumenpulse, we think, is picking up momentum, which is a good thing. And Lion is facing challenges, as you would have seen a big reduction in their workforce a couple of weeks ago, of 30%. They've got a nice position in the electric bus market. Big, big issue for them is that the subsidy programs for the various municipalities that were announced across Canada have not been put in place in a way that the different municipalities can access them. So they built out a lot of capacity and buses with a lot of demand for their product that is backlogged because they can't get the federal funding that was expected. And like you've seen in, you know, the electric car business, where you've had subsidies to buy Teslas and whatnot, that they—the economics of the business are dependent on public policy helping the sale of buses, and that's backlogged at this point. So they have got challenges in cash flow. So does that get resolved? How does that get resolved? I think that's a difficult one to see us, you know, trying to be making any moves there with Lion, given the current state of their business. So we'll just wait and see on that one. Anything to add on that, Jake? Yeah, Doug, what I would point out is when the pivot was made back at the end of 2019 towards financial services, as you correctly note, these were identified as essentially non-core standalone businesses. The following four years, I'd say, were extremely challenging, right? We had a pandemic. We had a massive spike in rates, which obviously hurt financing and valuation activities. Assuming the next four years aren't as challenging, I would expect further progress would be made than what we would have had in the last four years. Oh, there's no— Yeah. There's no question. Yeah. I mean, this is. I've said this before: Had you told me or us back in December 2019, when we announced the strategy, that we would still own these businesses, I would have said, "No, come on." So, you know, that's another way of saying what that Jake said. We went through a few challenges here in terms of market ups and downs. But, you know, it doesn't matter. Like, we're in the grand scheme of things, we continue to execute on the strategy and the opportunity to realize those funds will present itself, and we'll take advantage of it when it's there. So we're very committed to getting it done. Appreciate all the color. Thank you. Thank you. Thanks, Doug. Once again, if you have a question, please press Star, then one. The next question comes from Graham Ryding with TD Securities. Please go ahead. Hi, good morning. Just wanted to maybe talk about the alts platform that you have and the idea of penetrating the retail channel. It seems to be an opportunity or a focus for a lot of alternative asset managers in the market. So how much of that is—how much of a priority is that for Sagard and our Power Sustainable? And if so, how are you going about that- Yeah, great- -potential opportunity? Yeah, great, great question, and we do view the buzzword is the democratization of alts. So that, that, that is no question a priority, not just for Sagard, Power Sustainable Capital, but also for Northleaf, for Mackenzie, for IG Wealth, for Empower. You know, both as distributors and as manufacturers, we view that as a big opportunity. The more you go into, to do so requires different structures. So in a traditional alts business, you go out to an institutional buyer or a very large family office, and you say: We're gonna launch a fund, and it's gonna draw down over the next four years, and we're gonna call on you every time we need money. So going out to, you know, thousands of investors and millions of investors, you need to have different structures to manage that. And as well, you end up with different products. Hence, secondaries, which don't have long drawdown periods. Secondary funds tend to deploy their capital very quickly and have also the benefit of diversification, can be highly attractive as you move into smaller markets. And by the way, Northleaf has got that, and that's what Performance was, that Sagard purchased, PEM, sorry. Yeah. So I got the name wrong there, excuse me. But that's why Sagard has gone into secondaries. Northleaf is already in the secondaries business. That has a lot of appeal. Secondly, when you then look at it from a retail, kind of, smaller investor, perspective. Their multi-asset programs and multi-asset strategies are probably the easiest way to think about it. So rather than them going out and buying a fund itself, if they're in a fund-to-fund structure, or they've got a portfolio approach where they've turned over the management of their overall portfolio to the house, like IG Wealth has. As you may know, IG Wealth has got 82% of its flows coming into managed assets, where the investors simply said to IG, "You manage the portfolio," or in many of, excuse me, Empower Strategies, where the money is in multi-asset, you can allocate 5% of the multi-asset or 10% of the multi-asset to alts. Because it's not a single fund where you're going to get liquidity concerns that there's a run. You're in a multi-asset strategy that's got a long duration to it. And so there's lots, there's lots of work that needs to be done to think about that. And the final thing I'll say, I may be going on too long here for your answer, but Mackenzie's launched a bunch of alt funds, and in order to deal with the liquidity issue, they've got windows, you know, basically windows where you've got liquidity. You can take 5% out every quarter, you've got to give notice, et cetera. So there's different structures, but this is a huge focus across our group. Our Canadian firms, Sagard, Power Sustainable Capital, and Northleaf, are also touching base with our U.S. distribution platforms, you know, including Empower, including Rockefeller, and, and looking for distribution into different markets. So we are leveraging that across the group. Hopefully, that answers your question, Graham. Yep. Yeah, that's helpful. And then, probably just a quick one, but, you know, you touched on the targeted returns, slide 16, just for your CAD 2.2 billion of capital that's proprietary, roughly 10%+. What is your, what has your track record been over the last five years? Have you, have you been able to hit those targeted thresholds? Yeah, I think if we went through all of these existing strategies, they've all got track records. I want to be careful to make a blanket statement. All is too strong. I think the reason we feel good about our ability to grow these businesses is that they've got track records in these various areas that have demonstrated these returns. We've got some new strategies where they're fund managers that have joined our group. So, in particular, I'll point out Tom Murray in Power Sustainable Capital, who's got an infrastructure debt fund. But, you know, he's got a record with iSquared and with Apollo. It's not our record, it's his record, but he's got a very, very long-term track record and credibility with investors. So, we... You know, the reason we think we'll be able to go out and continue to raise money is these existing strategies have produced attractive returns, so. And the ones that, you know, we've had some other strategies that haven't done as well, that have been closed, that we're not in anymore. Great. That's interesting. Thank you. Okay. Thank you. There are no further questions. I would like to turn the conference back over to Mr. Jeffrey Orr for any closing remarks. Okay, thank you, operator. Thank you again for being with us. Thank you for your interest and your coverage, and we wish you all hopefully you get a little bit of time to enjoy what's left of the summer, and we'll look forward to talking to everybody in the very near future. Thanks, everyone. Have a good day. Operator, back to you. Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. Thank you for participating, and you may now disconnect your line.