Power Corporation of Canada

Thank you, operator. Good morning, everyone, and thank you for joining our first quarter financial results call.

Before we start, please note that a link to our live webcast and materials for this call have been posted to our website at powercorporation.com, under the shareholder Reports tab. Please turn to Slide 2.

I'd like to draw your attention to the cautionary note regarding the use of forward-looking statements, which form part of today's remarks. Please also refer to Slide 3 for a note on the use of non-IFRS financial measures and clarifications on adjusted net asset value.

To discuss our results today, joining us are President and CEO, Jeffrey Orr; and our EVP and CFO, Jake Lawrence. We will begin with opening remarks followed by Q&A.

And with that, I'll turn the call over to Jeff.

Thank you, Steve, and thank you to all of you for joining us here this morning as we go through our results for the first quarter. Very pleased with the first quarter results and generally the momentum that we have across the businesses at Power Corp.

I think the backdrop has been very positive macro factors, notwithstanding all the heightened risk that we see in the markets and going around the world right now. Obviously, the stock market levels continue to rise.

Interest rates have been supportive. Investors have made a lot of money.

There's high investor confidence, good flows going on. So notwithstanding that all that goes on around the world, the business conditions actually have been very supportive.

And that's combined with the strength of our group's earnings to basically provide very strong momentum from an earnings point of view and strong perspectives from a cash flow point of view, our -- that's evident across Great-West Life's businesses, IGM's businesses, strong cash flow, strong increases in dividends, buybacks and then the portions of the portfolio that are not earnings producing assets like Wealthsimple, Rockefeller, the NAV portfolios are doing extremely well. So all things well.

I was addressing Page 6, thank you for catching up to me. I should have said I was on Page 6.

And -- so very happy with the quarter. And with that, I'm going to pass it over to Jake to talk a little bit about the earnings and the asset values, and I'll pick it back up after that.

Jake?

Great. Thanks, Jeff, and good morning to everyone.

Thanks for joining us for our Q1 call. I'm going to begin on Slide 8.

And as Jeff noted, we're very pleased to report strong results for the first quarter of 2026. Our adjusted net earnings were $905 million, and that's up 15% year-over-year.

For the quarter, our net EPS of $1.43 is the second highest quarterly EPS that Power has reported since our reorganization that was announced back in 2019. And now our share price -- our earnings per share is up 17% from last year.

When we look at our earnings-based businesses, specifically Great-West and IGM, they both delivered strong financial results and continue to have very good business momentum. Great-West's contribution to Power's adjusted net earnings was up 21% year-over-year.

Those positive results were supported by Great-West's eighth consecutive quarter of base earnings in excess of $1 billion, including double-digit growth this quarter across all segments. In addition, great West reported base ROE above 19%, and this was the first time they had achieved that medium-term objective.

Moving to IGM. IGM's contribution to Power's adjusted earnings was also up 21% year-over-year as IGM saw strong IG Wealth and Mackenzie net flows.

Record high ending AUM&A was up 14% year-over-year. The results also saw a stronger earnings contribution from China AMC.

In terms of return to capital to shareholders, IGM reported its highest quarter ever of dividends and buybacks. Moving to our NAV-based businesses.

GBL reported a positive contribution in the quarter of net earnings of $20 million, which was up from $3 million a year ago. The improved performance this quarter was due to higher contributions from the operating companies within GBL as well as higher interest income generated from cash balances.

GBL also announced continued progress on its simplification strategy, which Jeff will have more to say on later in the presentation. Moving to our alternative investment platforms.

Sagard's contribution to earnings was a loss of $5 million, and that's down from a positive contribution of $37 million in the same quarter last year. The decrease was driven primarily by lower private equity gains in Sagard as reported in investing activities.

Power Sustainable reported a loss of $13 million, reflecting a higher loss compared to a year ago due to lower asset management activities and operating losses on the energy infrastructure assets. Corporate operations and other also reported a higher loss driven in part by higher dividends on nonparticipating preferred shares following our issuance of $400 million in 2025.

Meanwhile, operating expenses were lower than last quarter and flat compared to a year ago. Overall, we're pleased with the group's strong start to '26 and expect continued momentum into Q2.

Turning to Slide 9. Looking at our net asset value, we reported net asset value per share of $84.54 at the end of the quarter or March 31, 2026.

I want to remind listeners today that 83% of Power's gross asset value continues to be driven by our earnings-based businesses of Great-West and IGM. Second, Power Corp experienced strong NAV growth when we look at it on a year-over-year basis.

We were up 23% with strong growth across all of the operating companies. NAV related to IGM increased 51%, which is quite impressive.

GBL was up 22% and Great-West increased 12%. While Simple's NAV rose approximately 90% year-over-year and Power's cash balance rose 50% to $2.1 billion compared to the prior year.

Power Sustainable NAV reduced a little bit, and that was reflected in some sales that helped generate that higher cash balance up at Power Corp. Speaking of our cash balance, we ended the quarter at $2.1 billion.

And when we factor in dividends to be received and paid, we have about $1.7 billion available. We remained active with our normal course issuer bid and continue to participate in Great-West normal course issuer bid during the quarter.

As a result, we returned capital in the form of buybacks and dividends worth $650 million, tracking ahead of the $500 million we returned during Q1 of 2025. And with that, Jeff, I'll turn it over to you to talk a bit more about the business results.

Okay. Thank you, Jake.

So we will move forward to Slide 11, I think it is. Yes, there we go.

So we have the earnings on Great-West Life. Obviously, a very strong quarter of earnings growth across the company.

What was impressive, it was really across all the geographies and the segments. So we had broad-based strength in the earnings.

As you know, those earnings are very cash -- they transform into cash. I think the company estimates about 80% of its earnings are available as cash.

And so -- and they've been not only increasing their dividends but picked up their buyback activity, of course, which is also helping their ROE. So the company actually hit their 19% return on equity target, as Jake mentioned, which they had updated from the previous 16% to 17% when they announced their medium-term goals back in the spring of 2021, I think it was.

So very, very strong performance across the board by Great-West. If we flip forward one page, Empower continues to have very strong performance, delivered on a U.S.

dollar basis, constant currency, 23% earnings growth over the first quarter of '25. It's 18%, of course, in the financial statements of Great-West Life because of currency.

But in the local market in terms of measuring how the company is doing on its own growth is 23% growth in earnings. The -- it was about 18% up in retirement, so strong performance in retirement.

Market certainly helped but they're a growing franchise and the leverage in the business certainly coming through. It was helped a little bit.

There was some credit losses in the first quarter of 2025. So that favored the earnings growth a little bit ahead of what one would expect in the retirement sector over time, but nonetheless, a very strong performance and good flows in the first quarter and good participant growth year-over-year.

The Wealth business had a very strong quarter from an earnings point of view, 65% had strong positive flows. They were impacted by some seasonality and some transformation initiatives that the company had during the first quarter but continue to look at Wealth as the highest growth opportunity within Empower and I think really within the Great-West Life Group.

If I turn the Page one forward to Page 13. I mean I tend to focus on the performance over the last -- since 2021, over the last 5 years, which has been ahead or met all of the objectives that the company set for itself, but this is just a point to say there's a pickup from the slide that Great-West had a week ago to say that the first quarter was off to a great start.

Let me move forward therefore to IGM. Really, great momentum at IGM, great quarter.

earnings-wise, flow-wise, IG Wealth, Mackenzie, the strategic initiatives, really firing on all cylinders. From a -- I'll talk about flows for a second.

The Canadian individual market, retail market, if you want to call it that, in investments and savings -- this is -- it's really come back after having been shocked by the inflation and interest rate rises that came out of the post-COVID period. It had been rolling along with good inflows.

And of course, we went through that period. I don't know whether it's exactly 3 or 4 years ago, where all of a sudden interest rates were really biting.

You had people paying down debt. If they were savings, a lot of the money was going into deposits and the whole kind of investment equities, mutual fund, investment funds flows went negative, certainly, in the sectors where IGM plays, maybe not in the ultra-high net worth, where people still had a lot of money and in the upper reaches of high net worth, but the sector went into outflows.

And it's back -- and so the -- it's come back right now, the first quarter through the [ RSP ] season was back to levels it was at back in '22, '21. IG's, the 2 main core lines of business there, IG Wealth on the Wealth management side, Mackenzie and Asset Management, both are participating in that -- those strong inflows.

IG Wealth is just a stronger and stronger franchise, and my view continues to improve its competitive position every year. I'm quite pleased with what I see at Mackenzie.

If you -- Mackenzie's had strong flows in the first quarter. Part of that is because of strong institutional flows that they've been getting, which have been a real breakout for them over the last 12 months or so.

But if you just focus in on the Canadian retail investment funds flows, you're seeing some really positive developments. Gross flows were up a lot in the quarter.

And net flows were positive, but there's still a couple of big strategies, one big strategy in particular, which is outflowing. So their net flows are still being affected by that.

But the gross flows are up a lot. And those outflows.

It's hard to predict the future, but the strategies where there are outflows, it can't go on forever because the strategy gets smaller and smaller. So eventually, I see the making here of a pretty strong turn for Mackenzie's flows in retail, and now they've got the institutional business.

So that's -- I'm going on a little bit about that, but I haven't spoken about that for a while. I like what I see there.

Predicting the future is always a mug's game, but that's kind of my perspective here looking at what's happened over the last few months. Okay.

I'm going to flip forward to Page 15. You've got the earnings contributions.

The wealth management earnings really IG Wealth is the driver there, the strongest part of it and asset management also showing good growth. And then you've got the rest of the segments on 15.

I don't need to dwell on it. I will stop here on 16 for a second and just talk about the strength of these franchises.

The strategic investment portfolio of IGM, not producing a lot of earnings right now with the exception of China AMC has got earnings in there. It's small relative to the rest.

But the underlying growth of these franchises is really tremendous. Wealthsimple, the beat goes on.

They continue to drive very strong growth. Rockefeller continues to have very strong growth.

And while Northleaf, by comparison at only 10% year-over-year AUM, that's actually terrific in the alternative space. That's all organic fundraising.

They have got great track records. They are broadening out their distribution, really impressive story at Northleaf.

So good stuff happening there. Okay.

A couple of comments on GBL. It was, I think, a year ago, I think it was May of 2025, Johannes Huth came in as CEO.

And the strategy that GBL is pursuing is being pursued with vigor, I would say. Just to remind you, they are, in effect, reducing their exposure to publicly listed companies and switching to direct private assets.

So they're at about 32% of the portfolio right now is in direct private assets. On the left of the slide, they set a target to sell EUR 5 billion of their public portfolio.

They're basically done on that over the last 12 months. On the direct side, they continue to make investments.

You've got a couple of examples on the page. They also announced late last year the sale of Sienna, which was where they were investing in other people's funds.

And so that is being divested of. So they're going to really -- they're just focusing down on their direct private assets.

And while they're doing so, they're also returning capital to shareholders, which you see on the right side through dividend increases and buybacks. So lots of activities.

Last year, GBL produced an overall TSR of 23%. So we like what we see at GBL, good performance by the management team there.

On the alts platforms, moving forward to Page 18. Sagard continues to grow both organically and also through acquisitions.

Right after the end of Q1 here in April, Sagard closed the acquisition of Unigestion, which is a European-based private equity solutions provider, meaning fund to funds, secondaries, direct private placements where they put together portfolios of private equity companies broadly based and package that for institutional investors, high net worth investors. That complements the acquisitions that Sagard had already made, performance equity and BEX.

And we've combined all 3 of those into basically a private equity solution -- Sagard private equity solution provider with USD 22 billion of assets with a strong presence in Europe and North America. And that closing brings the total AUM of Sagard up to USD 46 billion.

It's very -- that's quite meaningful as a mid-market player. The Sagard plays in the mid-market and not focused on large cap.

So very strong continued growth at Sagard, very impressive with what they're doing. And over on the Power Sustainable side, they closed their U.S.

infra credit fund, USD 800 million, super strong team there based in the U.S. That's an asset class, notwithstanding what you might hear about private credit, infrastructure credit is very much in demand.

We have a very good team there and I'm quite optimistic for what we can do in that strategy. And the fourth of their 4 strategy is the private equity fund based out of New York, the decarb fund closed on their first transaction over the last few months.

So good momentum and building the power sustainable. Page 19, just to show the return of capital, we're about $11 billion since we announced the reorg back in December 2019, returned to shareholders through the form of dividend increase -- dividends, which are increasing and buybacks.

And we're sitting on a lot of cash, as you will have noted. So buybacks will continue to be a very high priority use of our capital.

Page 20 just follows the discount, which at 18% at last night's close, I continue to view as a future source of value creation. And I won't say much more about it now.

We probably talked a lot about that topic over many, many calls. You've got on 21, our shareholder returns over various periods since we've announced the reorganization.

We continue to be pleased with the absolute returns we're producing and the relative returns that we're producing. And I'll finish up on Page 22.

I mean, to my mind, the value creation strategy is completely intact. I've spoken in the past about how we create returns.

And that story hasn't changed over the last few years. And notwithstanding that the shares have moved up well, the story is very much intact in my view.

We have 83% of the NAV or the gross asset value, I should say, at Power Corp is in Great-West Life and IGM. Great-West is earnings driven.

IGM is principally earnings driven. They both have 9% kind of earnings guidance that they've given on the medium term since they've given those guidance, they both exceeded it.

But if you just take their earnings guidance and say for a second, they're going to be able to achieve that, they're both generating a lot of cash, so they pay out a good dividend yield on top of that. And you can just figure if all they do is hit that and there's no multiple revisions, the math works out to about 12.5%, 13% as to what kind of TSR you would expect.

Hopefully, they can do better than that, but we'll see going forward. Then we've got the NAV portfolio where our expectations are for even higher returns, and we have been performing very well there.

So all of that remains intact. What has changed in the last few months is that the valuations of IGM from a PE multiple -- excuse me, Great-West Life and IGM have moved up a little bit.

We haven't seen that really over the last 5, 6 years. They've moved up a few turns.

But 2 things about that. On a relative basis, they haven't.

Financials have moved up, banks have moved up, insurance companies have moved up. IGM's multiple, when you look at it, it might -- the PE multiple on a forward basis might look like it's moved up.

But if you just -- I think the company itself has disclosed about $15 in value just on the marks on Wealthsimple and Rockefeller based on the transactions that they announced last September. So if you just take those values and make some sort of reasonable adjustment for those 2 assets, which don't produce any earnings, IGM's multiple is reasonable.

So I look at the PE multiples on Great-West and IGM, they moved up a little bit, but they haven't moved up on a relative basis to their peers. And on an absolute value basis, those are not high multiples given the kind of companies and the earnings trajectory, certainly relative to the rest of the market.

So I think the valuation story is intact. And I think from a strength point of view, if I go back over the last 6 years, the companies are in a better position today, Great-West Life, all of their businesses, IGM, the businesses that power the -- alt program, the alt platforms, everything is in a stronger position than it was 6 years ago when we announced the strategy.

So I feel very good that the story -- the value creation potential and the strategies that we're executing are going to continue to be strong as we move forward. And I'll turn just before I close to say, this is my last call at Power here as CEO.

James O'Sullivan will be on the next call. And we started these calls back in December of 2019 when we announced the reorganization.

That was the first time we had done a call like that. We laid out then what we were going to do.

One of the things we said we're going to do is we were going to be a lot more transparent, a lot more in dialogue and actively engaged with the analyst community and the investor community. And we've tried to do that.

I think we've done that at Power and within Great-West and IGM. But it takes two to talk, and I just want to thank all of you on the line, both analysts and investors listening in and your predecessors who have actively engaged, done your diligence, asked your questions, probed and participated in generally helping get the understanding of what Power Corp is doing and what our companies are doing out to the marketplace.

So for that, I want to thank all of you. I do say as we move into new leadership, in addition to the strength of our franchises, the last thing I'd like to point out is we've got James O'Sullivan coming in as CEO of Power.

He can do a great job. But we've really -- we've had leadership transition across the group in the last 12 months I mentioned at GBL, but of course, also July 1 of last year, David Harney taking over as CEO of Great-West Life.

Damon Murchison is so well equipped and will do a great job as CEO of IGM. So really across our 3 public companies and across Power Corp, we've had leadership transition within the last 12 months.

And I think we're well set up to move forward with the strength of our team. So with that, I will close my comments, and I will, operator, pass it open -- you can open up the lines, and we can do a Q&A.

Jake, I just wanted to take a bit of a different tax. Looking at the expenses for the holdco, the corporates, the operating expenses, bumping along mid- to low $50 million on a quarterly basis.

I know Q4 had a bit of the compensation bump. But is this a level we should expect going forward?

Or is there going to be any inflation in terms of expected expenses at the holdco level?

John, thanks for your question. I'd say you should expect kind of the normal inflation around salary.

That should be traditional in any sort of business. So over time, that will creep in.

The other point I'd highlight is the greatest volatility we see, and you alluded to it a little bit in your question, is going to be around the LTI. And so as we have stronger performance around the stock, we have had some higher costs associated with that, whether it's around taxes or some of the hedging costs depending on where performance factors come out.

So those would be the greatest variability. The core operating expenses around the team and the investments and the technology up at Power, expect those to grow around the rate of inflation in the economy.

Jeff, I just want to pass on my congratulations on you stepping back, although I'm not sure exactly how far you're stepping back. But thank you for all your help.

Thank you, John. I'm not sure either, but we'll see.

We call it Hotel California here. So I'll be around to help Jake and help James and the team here move forward in whatever way I can help.

So -- but thank you for that.

I'll also just extend my congratulations, Jeff. We didn't overlap for long, but congratulations nonetheless.

I wanted to ask a question on you just John. Now that that's closed and you're launching the Sagard Private Equity Solutions, is there any updated information you can share just on plans for the acquired platforms to complement each other and work together?

Yes. I mean they are -- they will be working together.

They are being combined. They're quite complementary.

Unigestion has just a terrific reputation in Europe. They're focused -- they're investment focused, although they've got global capabilities, their real strength is into the European mid-market, and they have a very strong investor base in Europe.

When you look at Performance Equity Management and BEX, they're more North American focused mid-market, strong focus on the U.S., strong U.S. and North American investor base, although both of them have investors from other parts, they're not uniquely, but those are where their strengths are.

So those 2 platforms coming together under common leadership and then going out and being able to both bring their strategies to the investor bases that the other had and then also bring in the products and being able to do portfolios that are more broadly based. It's a real win-win.

And then trying to -- in asset management businesses, whether it's public company -- public asset management platforms or private, the cultural issues are always the one that you go, how is that going to work? There was so much -- I would say that here, the Sagard team is very good.

Paul III, his whole team has put so much emphasis on bringing teams together and the value added of being part of the Sagard network and lots of work before the deal was even announced to make sure that, that was on site and people were on site, including the way the equity lines up and the compensation lines up. So absolutely, this is not pulling together a string of pearls and hoping that somehow you can call it a business.

They are very much making it a business. And there's going to be -- I think there's going to be really good synergies over time.

Just a quick one then on the GBL, nice pickup in earnings in the quarter. And as they shift more to the direct private investments, just wondering if you could share anything on what we should expect for the rest of the year in terms of earnings contribution?

I don't really have visibility into that. And I think it's hard when you get into their particular accounting.

And when you get into a business that's -- a lot of the earnings are based on asset values, really hard to predict that number. Jake, anything you want to add?

But I don't have great visibility. I wish I did, but it's hard to do.

I think Jeff's answer is really good guidance. I think the best way we try to think about those businesses is how we present them with Great-West and IGM being the earnings-based ones and GBL being a net asset value business.

So we look for it to accrete net asset value, and it's a trickier model on the P&L lines just given the consolidation accounting that Jeff alluded to.

My experience is that the NAV businesses tend to create more noise than anything else. And you know some of the [ oddities ], I shouldn't take my last call to bash the accountants, but my [indiscernible].

In some of the accounting, I've got accountants around the table here, so just to understand, I'll be gentle. But as some of those -- sometimes you get the underlying asset value going up like in Wealthsimple, we get the underlying asset value goes up when we've got an upwards mark, but we consolidate or -- and we don't enjoy the growth in that upwards value, but we have a minority interest and noncontrolling interest that we mark-to-market.

So the more the value goes up, the more we have losses, go figure. Anyway.

So I -- just Scott, a broader answer to your question. I think that part of the portfolio, we really focus on NAV growth and earnings at best, if they're not noisy, I'm usually happy.

I guess before I start my question, I want to congratulate Jeff on your great career with Power Corp and your -- I guess it was Power Fin prior to that and your -- also your great career with BMO Capital Markets prior to that. So then the question is on your -- you participate in the Great-West buyback, but you don't participate in the IGM buyback.

And why is that? And what should -- what are you signaling to the market there in terms of the fact that your ownership is modestly increasing in IGM as a result of not participating in that buyback?

Yes. Thank you, Tom.

Good question. I think all we're signaling is that we are sensitive to the requests of our leadership teams within our major operating companies.

So to go back a few quarters ago, when we started participating in the Great-West Life buyback, I gave some background on that. We are not sellers of either IGM or Great-West Life.

In the case of Great-West Life, they are very much and very active on bringing in new shareholders into their investor base, and they are doing so on a global basis with some very, very large global asset managers who were very interested and have been very interested in participating. And one of the issues while they're focusing on that marketplace was the relative float of Great-West Lifeco.

And even though it's just a snick under a $70 billion market cap company, we own 68% directly and IGM has got another couple of points there. So there's only 30% available on the float.

And the float became an issue saying we'd love to buy, but your float is not really as big as we'd like to have when we participate. So then Great-West Life found itself kind of swimming in cash, if I can put it that way.

And rather than sitting on it, just earning money market rates that we've got to -- we're not going to have a lazy balance sheet like that. We've got lots of firepower.

We're going to start doing buybacks. But then we're going, well, we didn't want to -- we don't want to sell any Great-West, so go buy it in the float.

And they were finding that they were shrinking the float. And after about a quarter, they came to us and said, "Look, why don't you at least participate pro rata?

You're not reducing your position in Great-West Life, you're maintaining it. And then we can -- we're only buying back basically 32% of the float when we buy -- or not 32% only 32% of the dollars we're spending are going to reduce the float.

And we talked about that, we said, all right, we'll do that. It wasn't the plan, but we will respond to that.

So that was the background. And they've kind of put the monkey on our back.

It's a nice problem to have, but all of a sudden, we're getting -- we've built up this cash position kind of before we were really totally focused on what our -- what kind of buyback levels we would have. So that's exactly the background.

That has not been the story at IGM. IGM is not doing the same level of buybacks.

They haven't -- they've been increasing them recently. They haven't been out there talking to those major institutions in the same way.

It doesn't have the same market cap for them to be having those discussions. So that pressure hasn't been there at IGM, and therefore, it just hasn't happened.

So we just haven't been participating in it and allowing them to go to the market to do so. So Tom, that's the background.

And I'm not sure if I can add anything to that. Jake, did you want to add anything?

I think that's the fact. Hopefully, he understands that.

Yes. Wouldn't IGM want to be more broad-based with their shareholders and skinnies down.

Why wouldn't some of those same things that the arguments that raised to apply to IGM?

Yes, they could over time. But a $17 billion market cap company with what, $7 billion, $8 billion in the marketplace is not talking in the same way to the very largest U.S.

and global institutions and pension funds, right? Because they're not going to -- they might in some of their funds, but it's not -- they don't -- they haven't had the same pressure, even though their float is smaller.

It hasn't been an issue with the public shareholders that have been buying them relative to some of the places that Great-West Life has been talking. So -- but Tom, you're quite right, it could come up.

I mean it's possible that at some point of IGM's continuing to do buybacks and has a lot of excess cash. They might come to us and say, "Hey, we got -- our float's becoming an issue.

But you're quite right, that could come in the future. I don't know.

But we've been responsive to them as my point. Like this wasn't us going -- we've been responsive to how the management companies have asked us -- what they've asked of us.

Wealthsimple has become a bigger part of the conversation. Power, I think, owns 54%, 55%, but through various entities kind of like a spiderweb.

And maybe, Jeff, just thinking as you think longer term, is there a reason -- like you've done a lot of simplifying over the last 6 years across the Power organization, Wealthsimple is becoming bigger and bigger. Is there reasons to simplify just the ownership structure?

Is there benefit, again, longer term to have Wealthsimple or Power own the entire Wealthsimple stake? Because you've done this before with the China AMC being moved around.

So I'm just trying to think through longer term here as Wealthsimple comes bigger? Like how do you think about that?

It's a really good question, Doug. And let me give you one more time the background as to how we got there, just so you don't think that we spend our time trying to make our life complicated.

It's important to understand the background. And then I'll talk about some of the thinking about why we might or might not do that in the future.

So the background is simply that at the time that we were launching our fintech strategy back in 2014, '15, and we were looking at kind of the threat and the opportunity posed by fintech, we were all over that at Power Financial. We set up our Portage strategy, we set up, which was a VC and fintech.

We set up our diagram incubator strategy with [ Francois Lafortune ], which has given rise to companies like Dialogue and Nesto and others. And then we also said we would have our eyes open for some larger opportunities.

And that turned out that Wealthsimple was the opportunity with Michael Katchen. And in the States, it was Personal Capital.

And that was different with both of those we decided to commit quite a bit more capital as opposed to taking a portfolio with small positions. So we ended up funding the first 5 rounds, I believe, of all of the -- not the very first seed round that Wealthsimple did, but the next 5 rounds, our group was 100% of the funding.

And we had said to Michael, you go out and build the business and don't worry about fundraising. Power Financial -- IGM management wasn't engaged in that in an active way.

They weren't kind of -- didn't have capital to do that. They weren't focused on it.

It was a Power Financial initiative. And the first couple of rounds went entirely to Power Financial and then there was another vehicle where Portage had some in Great-West and IGM were investors in it.

So we ended up with all these okay? But it was mostly Power Financial.

I was up the view and then speaking to Jeff Carney at the time said, Wealthsimple this company could be in 10 years from now or 15 years from now, could be like one of the main franchises we have. And it really probably belongs at IGM more than it belongs at Power Financial.

So they started doing the next rounds. I can't remember if it was around 3, 4 or 5, but they started to come in, and we ended up with it in two places, okay?

So that's the history. As I said, we don't go out of our way to kind of complicate the way we're structured.

But to do it over again, you might have put it all in one place. Okay, we are where we are right now and look at the value that we have.

But Wealthsimple is not producing any earnings or cash right now. They're investing money to continue to grow their franchises.

So imagine if all of a sudden, you've got a great big asset with a lot of value not producing any earnings or cash flow. And now IGM has to buy great -- Power's position or Power buys whatever way you go, all of a sudden, you're looking at either issuing equity or using cash to buy an asset that's not producing any cash.

So right there, you end up with a bit of an issue in terms of cash flow dilution, mix. If it comes to us, it's more NAV in our portfolio if it goes to IGM.

All of a sudden, it's a big check to right? It wasn't -- it's not like when we did the China Asset Management deal.

China Asset Management was creating earnings. They had a dividend payment and they were on a very high growth rate, and it's turned out to be true.

They paid cash, and we swap we took some of the Great-West Life stock and the whole thing work for them because [ CHMC ] not -- didn't quite replace the earnings that they lost on the Great-West Life side. But it basically -- it had earnings and dividends to support it.

That is not true Wealthsimple. So I am just giving you the pieces to how we got there and some of the issues we talk about, but I agree that over time, it would be nice to see an opportunity.

I don't know when that would be for the group to consolidate its position, whether we can do that or not. I mean the time will tell, but would have been better had we had it in one place.

Hopefully, that gives you some background. Anything else you want to add to that, Jake?

No. I think, Doug, the only thing I'd add is, and you'll see it this quarter, we're starting to enhance a bit of the disclosure around the business, given its size to Jeff's point, and we're going to continue to try to do that in future quarters to make the visibility of the business given its relative proportion of our overall asset value.

That's good color. I mean, it sounds like you guys have thought about it.

Obviously, Personal Capital ended up at Great-West. And obviously Great-West is a much bigger entity, but I don't think personal capital was earning much at the time either.

So it's just -- it's interesting to hear how you think about it. So -- but I appreciate the color.

And then just second question, lots of discussion around private assets, private credit these days, and it's in the paper every day. So Jeff or Jake, when you guys take a step back, any concerns, anything that gives you pause, anything to change the long-term outlook or strategy for Sagard?

I assume no. But I'd be curious, you've been in the industry a long time, like anything that you're concerned with that you see that's going on out there?

Not from our perspective, I'll start high level, and Jake might want to jump in a little bit. The -- we have exposure -- so the impact is on the fundraising, particularly in getting individual investors to participate in alternative assets.

That's where the impact is because there's a lot of headlines, obviously, what's going on with Blue Owl and a few others. There's concern out there -- and therefore, the market is concerned, so trying to go out and raise money in private credit with individual investors is difficult.

And in fact, those that have put some of the money in or trying to take them out. And I think we've seen a little bit of that, but not a lot.

So that's the impact. The actual -- of what's going on in the markets, we have not either in Sagard or in Northleaf that has a private credit capability or on the balance sheet of Great-West Life, it's got some private credit or even in the seed capital that Power Corp has, which I think is about $100 million in private credit.

We don't have credit concerns at this point. We -- our Sagard and our Northleaf and therefore, our seed capital I mentioned earlier, we're all mid-market focused.

Northleaf is a mid-market. They're mid-market.

Sagard private credit is mid-market. And where the issues have been in private credit have been around some of the larger players, particularly in the SaaS and the software space.

We just don't have a lot of exposure there. We've got a lot more, I'm going to say, nuts and bolts companies, but they're more basic companies -- so we -- our portfolios, and I'm not speaking with 100% clarity, but we've gone through them at Great-West, spoken to the credit managers.

We're not seeing a lot of credit problems across. We're not seeing credit problems, period across our private credit portfolio.

So it's more of a market impact for us ourselves. And that's my overall comment.

And we'll get through it, but it's not -- we're not seeing any credit problems. Anything you want to add to that, Jake?

Yes, Doug, I'll run a bit of a commercial for the Sagard private credit project. As Jeff noted, it's first lien senior secured loans, it's mid-market based, moderate leverage with durable cash flows.

They're not seeing any loans in arrears currently. There's no loans ticking at this stage, payment in kind.

. And as Jeff alluded to, there's very minimal exposure to software.

So they've actually seen good performance. The exposure that Sagard has or the assets they're managing is about $6 billion, largely institutional.

So I think you get a different reaction in the institutional space than you may see in the retail space. And they are out fundraising the third vintage of the institutional private credit strategy, and it's going to -- it's targeting its largest ever size by final close of $2 billion.

So I think there's a lot of headlines and private credit can be a very broad term. It can refer to a pretty broad asset class across different sectors, different types of structures, private placements can get looped in there as well.

Some project finance sometimes gets looped in. So we just want to be clear that, as Jeff and I are commenting, we're very comfortable with our exposures here and on the balance sheet of our businesses.

And it is noise that it is impacting probably fundraising across the alternative space, but the Sagard product is holding up very well.

And Jake, just on that, have you disclosed or do you have what the net flows for Sagard would have been in the quarter relative to last year?

Yes, I got it in the quarter. I don't -- so I don't -- I can get you back to what the relative comp was last year.

So they did about CAD 1 billion. The majority was concentrated in the real estate sector.

There was some private assets as well as venture capital in there and broad-based retail, but the majority was in real estate in the quarter.

But as you know, Doug, most of the funds aren't open funds. They have closes on them.

So you can't always measure the progress in a quarter because you're building books and then you close the strategy every -- Fund III comes along 2 years after Fund II kind of thing. And it's episodic as to when you get the fundraising other than the open strategies, which tend to be the much smaller retail strategies that are just getting going.

Doug, I'm providing the absolute fundraising in the quarter, not net flow numbers you see at. Sorry, to be clear.

And then Jeff.

Sorry go ahead.

No, I was just going to say, Jeff, all the best in the next chapter, and thanks for all your insights and help over the years. I really appreciate it.

So thanks.

Thank you very much Doug Young. Thanks for the comments.

Most of my questions have been asked. It's been a pretty thorough call.

So I will just ask one question on GBL. Just as this portfolio is transitioned, it sounds like you're sort of nearing the end or the management team there is nearing the end of their sort of transition efforts.

Is it -- is the expectation for it to sort of be about 1/3 of the portfolio private assets going forward and 2/3 public? Is that how we should think of GBL going forward?

No, I think you're going to see more concentration on direct private. It's simply that they had an intermediate goal of EUR 5 billion over a time period, which they hit.

And we haven't heard from them stating new intermediate goals. But directionally, I think you're going to continue to see the public portfolio shrink and more focus on direct.

That's -- so I don't -- it's not complete. I think there's still lots to do is the answer.

Okay. And then how should we think about sort of the earnings impact going forward?

Like is it still going to be -- it sounds like low visibility and there's going to be some volatility in non coming from GBL going forward, even despite sort of transition in the portfolio?

That would be my view. I think you're going to continue to see with that kind of a business more kind of -- it's not really earnings based.

It's NAV based. You might have missed the question -- the answer to the previous question.

But yes, I think we bucket it with the NAV portfolio. We don't look to earnings as being the source of value as NAV is the source of value, which can go up and down over time.

But hopefully, over time, it's going up with good rates of return, but not earnings. And I made a quip earlier basically saying when there's no noise out of the NAV portfolio and I'm happy.

I don't look to it for earnings. I look to it for good growth in value, but not earnings.

And I think GBL will continue to be in that bucket.

Okay. Understood.

And then just on the alternatives platform, like as you think about this year, where are you sort of seeing decent appetite and opportunity for fundraising? And then what areas sort of continue to remain soft?

I'll take a crack at that and then you jump in, Jake. I think strength on private equity side because we are mid-market.

We've got a lot of secondaries, not just in Sagard, but we've got secondary -- really good secondaries capability within Northleaf as well. And as you know, secondaries and solutions are really well suited to a lot of investors because you end up with a much shorter duration.

You're buying into portfolios that have already been invested as opposed to the start of a new fund that's going to take 4 or 5 years to put the money to work and you're buying a broader portfolio. So good continued demand on private equity side.

On the private credit side, we already talked about it, good demand on private credit within Power Sustainable. Good -- really good demand on infrastructure credit right now.

They're also -- so I don't know if there are particular areas of weakness by strategy other than, as we said earlier, on the retail side, probably what's going on in private credit has set that back a little bit in terms of fundraising. But it's pretty good across the board.

Am I missing something, Jake?

Well, real estate was the strongest asset class in the first quarter, Graham, as I noted. I would say your question is around where you're seeing strength in fundraising.

I'd say it continues to be a challenging fundraising market. So I think that's an important backdrop.

And with that as a backdrop, I think the strategy we're seeing around consolidation that Sagard, in particular, has been pursuing for a couple of years now is going to be a theme that continues to play out. So Unigestion, as we alluded to, was closed at April 2.

I think you can expect that the team at Sagard to continue to look for opportunities to scale the firm. I think with that scale matters, obviously, as you get a larger asset base, you're able to spread out the fixed cost across a wider fee-paying pool.

So scale is really important here. And if it's not happening through organic fundraising exclusively, it's going to happen probably through inorganic strategies as well.

And scale gives breath.

Okay. That's great.

Jeffrey, congrats on a great career at Power Corp, even though I know you're moving into a different role, but all the best.

Thank you, Graham. Appreciate it.

Thank you for all of our engagements together. Thanks very much.

Just wanted to touch on the pace of share buybacks, obviously, ticking higher this quarter and to get your views on that pace of return of capital to shareholders through buybacks versus perhaps deploying some of that capital to more asset management acquisitions following Unigestion. Just maybe talk through some of that.

Thanks. So if you heard the answer to Tom's question earlier around how kind of the switch went on in terms of us participating in the Great-West Lifeco buyback at their request back in the fall, I think it was -- I think it was August of last year, we were dealing with it somewhere around there, we started to participate.

We've ended up with a lot more cash than we had originally planned for the reasons that I stated. And we end up where we know we want to continue to participate in buybacks.

But then you go and all of a sudden, you're coming -- all this cash is coming in, you go and do it all immediately or do you wait and pace it out. So we have those discussions.

And that's something that's clear. That's a priority for us.

The use of capital is not -- whether we're doing something because Sagard is buying something and we're going to put some capital in to help it or there's fundraising. I'm giving examples, Wealthsimple does a financing back in the fall of September last year, we put some money in, IGM put some money in.

So those uses of capital that are M&A related or funding, they're hard to predict. We're not sitting on them and you know that in 4 months, you're going to do.

Sometimes you do have some visibility. But generally speaking, they're harder to predict.

So we've kind of sat on more cash than we might otherwise have guided the Street and that we've talked internally about it. And answering your question, therefore, is difficult.

You're really asking what kind of deals are we going to do upcoming and what's the visibility on them. And even if we had them, it's hard to talk about.

But that's -- those are the 2 things. We basically sit there saying we've got buybacks and we have episodic uses of capital.

So that maybe not crystal clear answer to your question, I'll come to a higher level, which is to say buybacks are a high priority use of capital. We're sitting on more cash than we would normally sit on.

I think that means all things being equal, you would expect higher levels of buybacks going forward than maybe we've done in the past, absent some thing that comes up and we decide we want to deploy the capital. Jake?

Jeff, I said it during your remarks. At 18.2% discount to NAV, it still represents a great value creation opportunity for us.

Each time we buyback a share, it does create value for our shareholders. So we don't want to rule out other options at this stage, but buybacks is a pretty simple one that's right in front of us and easy to execute.

Thank you and congrats again, Jeff.

Thank you, Jaeme.

I wanted to start with the dividend and just ask around how you guys calibrate the growth rate. So Great-West IGM increased their dividend 10%, Power 9%.

And simplistically, I think about it as kind of the Great-West dividend funds the power dividend. So maybe walk us through, are there other factors that you consider when thinking about how much to increase the dividend?

Thank you for your question, Bart. So the way we think about the dividend is that the sources of the dividend are the predictable cash flows and the predictable cash flows are the Great-West Life, IGM and GBL dividends.

Everything else that we might get is episodic for lack of a better word. We're selling an asset.

We're putting some money out to work, et cetera. So we then deduct the predictable expenses being the expenses of running Power Corp and our preferred dividends and the little bit of interest we have on the debt that we have at Power Corp.

And you end up with basically internally net operating cash that is available for dividends. The -- we have typically flowed through most of that number, but we've been building up a little bit more of a positive cash flow.

So we have lagged a little bit the growth rate in the dividends of Great-West Lifeco and IGM. We make that -- we have that discussion every year.

It's not to say that it's cast in stone. But if you look at the cash flow -- I just went through the equation, the dividends minus expenses, the pref and interest.

We have moved over the last 6 years from a position of having slightly negative cash flow to having quite positive cash flow, and we like that. As we have been disposing of the noncore assets or you haven't been around for the last 6 years, I don't think on the strategy, but we had a lot of noncore assets.

Previous disclosures, we've talked about the fact that we raised about $3.6 billion over the last 6 years, about $1.8 billion of that was reinvested into supporting the platforms and other acquisitions of assets and about half of it went to buybacks. We're now in a position because of having lagged the dividend rate and shrunk the shareholder -- basically the share base of power through the buybacks, we're in a positive cash flow position from that predictable equation I just went through.

We're now in positive cash flow. And I would think we'd continue to want to increase that cash flow as we move forward, that will be -- a decision will be made kind of year-by-year as we go.

So there's a long story there, I can summarize it. But we flow through the dividend and have been keeping a little bit more to increase the cash flow is the short answer.

Got it. No, that's very helpful.

And then just on Sagard. So I mean the FRE is negative, but we did see positive operating leverage this quarter.

And then with the close of Unigestion now, could you let us know if that the profitable business and pro forma, the combined business, like could we be at a tipping point where we see profitability later this year or 2027?

Jake, who's on the board, I'll let Jake answer that question.

Good question, Bart. Yes, we will start incorporating Unigestion starting next quarter, and it is a profitable business as was BEX that has been acquired.

Tough to draw a straight line to say, we'll immediately have profitability in this quarter because there's lots happening elsewhere in the business. They're building out their private wealth capabilities.

They're building out retail and distribution. They're strengthening a bunch of the investment capabilities across the platform.

So the goal isn't a profitability goal at Sagard at this time. It's to continue to get that scale to continue to get that brand and reputation with capital allocators and get that capital formation strengthened.

So I don't want to give profitability guidance at this stage, and I don't think we will because we don't want to miss opportunities to make better business long term. What that means for Power shareholders is, obviously, we have the largest stake in and our stake in that GP over Sagard's history has gone four or fivefold in value for us.

So we want that strategy to continue to play out at this stage where they're creating value at the GP, they're creating value through carried interest. We're getting returns on our seed capital, but we're not going to hold them to a have to make $5 million or you have to break even at this stage, we want to build a great durable business long term.

Got it. Thanks, Jake.

And Jeff, look, great capital allocation, transparency increasing and ultimately value creation. So I wanted to echo the congrats.

Thank you, Bart. Much appreciated.

Thank you very much.

Thank you, everyone, for joining us today. Following the call, a telephone replay will be available later this morning, and the webcast will be archived on our website for 1 year.

We look forward to our next update on the Q2 results. This concludes the call, and have a fabulous day.