Good morning, and welcome to the Navigator Global Investments company update and presentation of our 2022 annual results. My name is Amber Stoney, and I'm the CFO and Company Secretary of Navigator. Joining me on today's webcast is our CEO, Sean McGould, and our MD of Strategic Corporate Development, Ross Zachary. Moving on to our next slide, I'll just briefly outline our agenda for today. Firstly, Sean's gonna provide an overview of how the Navigator Group looks today after a very active 18 months of expanding our business. Sean will then provide a review of the Lighthouse business before handing over to Ross, who's gonna take us through in more detail to the recent investments that Navigator has made.
Ross and I will then discuss how Navigator's earnings from these investments and the key drivers underpinning them. Then I'll follow on with the discussion of the 2022 financial results themselves. Finally, Ross and I will discuss in further detail our funding strategy and dividend policy from 2023 before Sean wraps up with some closing remarks, after which we'll take questions. With that, I hand it over to you, Sean.
Thank you, Amber, and thanks, everyone, for joining us this morning over in Australia or this evening our time. I'm gonna cover first off just a company overview for those that may not be as familiar with the company. Then I will go into a more detailed review of the Lighthouse business and where we stand before turning it over to Ross to talk about the strategic investments. I am on page 4 now. When we look at NGI, as Amber said, it's been an extremely busy 18 months. We now sit with a company that is a diversified alternative asset management company. We have exposure to well-established hedge funds, public credit strategies, and real estate capital solutions.
It's been a lot of work to get to this point over the past 18 months, but we really feel like we've diversified the business into really high-quality asset management firms around the globe. Couple key pillars of what we're doing. We're dedicated to partnering with leading management teams. We want them to be operating institutional quality asset management businesses, and we really want them to have global types of reach. We understand the alternatives business. We've been in it now for 25 years. We wanna leverage our own investing and operating expertise to identify the specialized partners that have a strong growth outlook that we can invest in. The capital that we're putting in these businesses is really used to support growth initiatives.
That's very important to us that we're identifying again and partnering with businesses that can grow. I believe we have shown some nice growth over the past year despite very challenging market conditions. We're also partnering with proven investors and again, operators who have really strong track records. They know how to operate their business. They've grown their AUM and we believe can generate attractive cash flows over time. That's very important to us. Our primary focus is on scaled and developed businesses. Again, the cash flow from these businesses is important to us, but it's very, very important that we're dealing with the right partners and again, in the right segments of the market to continue to grow NGI.
With that, let's turn to page 5 to see where we stand today. As of today, very happy to report, the aggregate AUM across all of the businesses is about AUD 61.2 billion. Our ownership adjusted AUM is AUD 22.9 billion, so slightly below AUD 23 billion. We have 11 partner firms. So that's increased substantially over the past 18 months. The investment strategies, we have over 30 investment strategies across 150 different products. You can see in the boxes just below that where those strategies, where those products line up. We feel it covers a good portion of the alternative asset management industry and gives us good exposure to a stable and diversified asset base that can grow.
Also importantly is our relationship with Dyal Capital, which is part of the Blue Owl group, and we have a lot of interaction with them. Ross will cover this in a little bit more detail, but they continue to provide ongoing support, marketing services, other business development efforts on behalf of the 11 partner firms that we have within the portfolio now. When you look at the business, when you look at NGI going back 18 months, I think you can see the substantial changes. Again, we believe those changes lead to a more stable again asset base, more diversified and more growth opportunities, which are very important to us.
If we turn to page six, just some of the highlights in each of these three areas. We think going forward, that we are uniquely positioned to deliver earnings growth in what has been, certainly over the past year, a volatile and challenging market environment. On the first point, we've been able to deliver strong investment performance. Partner strategies are generating strong investment returns. The majority of the strategies remain at high watermarks, which is very, very important to our business, but also very important for our client satisfaction. Despite a really challenging market environment, AUM has continued to grow, as I mentioned, just below AUD 23 billion at 30th June 2022.
When Ross goes through his presentation, we'll talk about the specific growth that has occurred and where it's occurred. There is an increasing demand right now for well-established and proven alternative asset managers. I think that clients globally, the predominance of our clients, tend to be more institutional in nature. They do want to put money to work, and they're looking for investment solutions that are uncorrelated to more traditional forms of investment, like long-only equity investment, or fixed income investments, which have proven particularly challenging so far this year. The business, looking at the second box there, high quality and growing earnings.
We have a really stable and diversified earnings base, again, across 10 businesses right now, that are operating at scale, and strategies that have low correlation to each other. If we combine these businesses properly, again, the strategies will move a little bit differently across different cycles, but we're well diversified there. Again, these businesses are growing. We continue to have embedded earnings growth in the strategic portfolio and through the recent acquisitions. We will demonstrate how some of those firms have already grown in their asset-raising activities, and also in the stickiness of those assets. The redemption guidelines for the firms we're partnering with now are very different than the traditional hedge fund segment that we've operated in at Lighthouse.
Again, we have an extension of the assets over time, which we believe will continue to grow and provide embedded earnings growth going forward. We also have in the third box very strong alignment and engagement with Dyal Capital, which is a division of Blue Owl, as I mentioned. They are a global leader, I think the leader, in partnering with alternative asset managers, currently managing over $45 billion of AUM, and have completed over 55 partnerships with alternative asset management firms. We have a great partner in Dyal. We've been working well together, and I think that's showing up in our own growth within the number of firms that we are working with now and the opportunities that we have ahead of us.
Very happy with how we've positioned the firm over the last 18 months. Very pleased with what it looks like on a 3-5-year basis. We believe we can continue to, you know, double the earnings from this standpoint. We believe we're well-positioned to grow over the next several years. Now I'm gonna turn to page 8 and focus a little bit more specifically on the Lighthouse business. When we look at the Lighthouse business today, we have about AUD 14.4 billion in firm AUM. Again, I'm happy to report that our funds that can earn and are eligible for incentive fees are predominantly all at high water marks.
I think that's a great accomplishment, given what we've been through the first 8 months of the calendar year here in terms of the market. We've been in business now for 25 years, so we have a lot of longevity in the business. I think we've built up trust with our clients. I think one of the hallmarks of any of these firms in the alternative asset management space or in investment management in general is the trust that you build and the relationship you build over time. I think 25 years is a substantial period of time, and very proud of what we've done over that time period. Have about 188 employees, including the portfolio managers that we employ to work specifically in our multi-PM hedge funds.
We continue to have a broad investor base of over 1,000 worldwide and continue to make good progress in terms of the marketing across the world. Right now, what does the business look like? I know these three boxes. They do not add up to AUD 14.4 billion, but it's because there's some overlap between the different services we provide. Right now, the multi-PM hedge funds, NorthRock and Mission Crest, manage about AUD 4.4 billion. If we looked at that three years ago, it would've been probably a little bit over AUD 1 billion. We continue to see nice growth there. I expect to see more growth in the multi-PM hedge funds before the end of the year. The pipeline remains very strong.
I think that we could see as much as AUD 500 million of additional growth in those products over really a short period of time before the end of the year. The hedge fund solutions business, managing about AUD 9.5 billion. That's our commingled, multi-strategy and long-short equity funds. It's also our strategic partnerships and custom funds. We also have some regional and more specialized funds, for example, in Asia, and Europe and healthcare. We continue to, I think, improve our offering, improve the hybrid of the offering, for our clients. I think that has been recognized.
When you look at the original business that Lighthouse was in, if you just broadly classified it as a pure fund of funds business, that industry has shrunk from 2009 through today from a little bit over 800 billion in assets globally to about 250 billion today. We've managed to grow over that time period because we've changed the business. We've changed how we do our multi-strategy offerings. We have really created these multi-PM hedge funds as well, and that has helped us further growth. I think our clients recognize that value and how we continue to innovate and change the business.
The last part of the business is really our managed account services, which is the backbone of our funds, of our hedge fund solutions, and that's at about AUD 11.1 billion. That business, as we've said, takes a little bit longer to grow the external assets in that particular business. The flows in that business do ebb and flow. We'll have some outflows in that business between now and the end of the year. It'll be more than made up by the flows that we're seeing in the multi-PM hedge funds and the hedge fund solutions. That does vary a little bit in terms of what we're doing.
It is also the lowest fee portion of our business, but there as well, we're in active dialogue with several new clients that are large, you know, multi-billion, if not into the hundreds of billions, pension plans and sovereign wealth funds that we believe we can be helpful and are unique in terms of what we can provide to those clients. That's really the backbone of the Lighthouse business and where we stand today. When we look at just the total AUM, as I mentioned, it's about AUD 14.4 billion. The composition continues to grow and change. We have made additions to our sales team, particularly over in Europe and the Middle East, as well as continuing to refocus the sales team in North America.
I'm very happy with how the pipeline is positioned. As I mentioned, I do expect some nice growth between now and the end of the calendar year. We just received new notification today of a nice new substantial client that'll be coming into NorthRock and Mission Crest in a combined manner. That wasn't even something I was factoring in this morning. I thought it would take a little longer to get that client in. We have some other projects already for 2023 that will provide further growth. Very happy with the pipeline that we have, with the geographic distribution that we have, and feeling confident that we can grow our assets between here and the end of December.
When we look at the flows over the year, so just the net flows that we had as far as inflows and outflows, the managed account services, customized solutions, looking at the commingled funds, those were a little bit more challenging in terms of the flows, but I think that some of the issues that we had back in March of 2020 with COVID-related performance at our multi-strategy funds, which we weren't happy with, I think that activity has really slowed down and will continue to abate. I think the performance of those funds has really continued to pick up. Clients are very happy with them, so they expect to see less outflows in those areas.
The multi-PM hedge funds, as I mentioned, that's been the core growth over the last year. Performance. You can see across the board, performance has been quite strong, across all of these areas. That's led to the increase in AUM, over what has otherwise been a fairly difficult time period. Turning to page 10, you can see where we are, just calendar year to date, in various products and then the benchmarks below it. It's been a tough year in all asset classes. It's been a tough year in equities. It's been a tough year in bonds. Even when you look at these hedge fund indices, you know, down 5%, down 4.7%.
I am happy to report that we're having another good month here in August. We continue to compound on these results that we're putting up here. You can see the NorthRock results and Mission Crest results there. In a tougher time period, I think these strategies are holding up. We did believe that the markets would become a little bit tougher as interest rates were normalized, and you needed asset prices to correct. It's very important in these tough time periods, we protect capital, and then we compound it. What we're really focused on are the forward-looking opportunities going into 2023, when we can bring our risk levels back up to more normalized levels.
We're starting at high watermarks, which helps the earnings of the business as well. I'm happy with our position from an investment perspective, from a research perspective, and where we sit today in this calendar year for our clients. With that, I am gonna turn it over to Ross to start on page 11 or 12 and go through the NGI Strategic Portfolio before we turn it over to Amber to go through this year's specific results. With that, Ross, I will turn it over to you.
Thanks, Sean. As Sean said, if you could please flip to slide 12. This provides a summary of our investment activity and the breadth of our new partnerships. We're very excited to discuss today how the company has evolved over the past 18 months and the diversification, improved quality of earnings and the growth outlook that this brings. We'll discuss the NGI Strategic Portfolio as well as our recent investments in Marble Capital and Invictus Capital Partners in more detail. This overview slide provides a good summary and highlights two important things. First, Navigator has added partners with high quality, unique and differentiated businesses, all with identifiable investor demand, strong growth prospects, and with the exception of one unique early stage opportunity that we had, they are all operating at scale today.
Number two, these investments have all taken the form of strategic minority ownership stakes, which have been designed specifically and uniquely to preserve the alignment of interest between these partners and their current and future clients, and allow them to continue to attract and retain talent and provide them the capital and other support to help them execute on growth plans which are well underway. Although each is unique, several other key characteristics are the same across all of these partnerships. We are well aligned with management teams who built the businesses and who continue to own the majority of the firms. Each operate high capacity alternative strategies or platforms, and each have a track record of developing new products and new structures around their core expertise.
Each of these businesses have already demonstrated impressive growth, and we're very excited to participate in their continued success by offering our capital and our resources as support. Our most recent investments in Marble and Invictus were sourced by Dyal Capital, who were helpful and supportive in establishing both of these partnerships. In the case of Invictus, Dyal's long-term financing fund also invested in the firm, which will further support Invictus's near-term growth, which we will benefit from. When it comes to these investments, we are thrilled that after evaluating a large pipeline of opportunities, we found two growing businesses in Marble and Invictus with extremely gifted teams in place and that are operating at scale and can add value to NGI Strategic in a meaningful way. If you please flip to slide 13, this provides an overview of the firms which we acquired minority stakes in from Dyal.
Since the acquisition of this portfolio, these firms have delivered on their objectives of generating strong relative returns for their clients and continuing to manage their business well, both actively managing expenses while also investing in technology, talent, and launching new products to drive long-term growth. Following a very strong 2021, we have been pleased with their performance over the recent months this year. The firms in the NGI Strategic Portfolio continue to be leaders in the industry, and we believe that proven, established, and well-resourced firms with deep investment expertise have the talent and the resources to outperform their peers in market conditions such as today's and are best positioned to attract outside share of flows in the years to come. If you can please flip to slide 14, we're going to provide an overview of the acquisition of these firms.
Even though it's been 2 years since we announced the acquisition of the NGI Strategic Portfolio, which closed on February 1, 2021, we thought that given the highly structured nature of the transaction, and the importance to the company, we would just run through the transaction one more time for those less familiar with the story. The acquisition of this portfolio is a two-stage transaction that will fully settle in the second half of fiscal year 2026. In addition, as Sean highlighted, this established a long-term strategic partnership with Dyal Capital that we expect will continue on well past that 2026 settlement. Dyal is the global leader in evaluating and partnering with alternative firms. They have over $45 billion of AUM across 6 permanent capital vehicles that have executed over 55 partnerships since 2011.
This partnership brings a tremendous amount of industry knowledge to Navigator and adds unquantifiable value. At the closing of the transaction, initial closing, I should say, or stage one, we acquired five years of preferred minimum annual distributions in exchange for roughly 40% economic ownership over NGI, or at the time, which was valued at AUD 166 million. This was attractive to us as it provided what we have now confirmed is a very well-covered earning stream, which with extremely high level, if not certain probability of being earned as we embarked on our growth strategy. This earning stream through fiscal 2025 also has some embedded growth, given a 3%, excuse me, a 3% indexing per year, as well as some sharing above the pref.
To reiterate that, Navigator receives a well-covered preferred earning stream from six established and growing alternatives firms through fiscal year 2025. We will dive deeper into stage two of the transaction in a slide or two, but before that, if you can please flip to slide 15, we'll highlight and touch on the performance of the portfolio since acquisition. The portfolio has performed very well since closing of February 2021. Ownership adjusted AUM is up 17%, and fiscal year 2022 was a very strong year of profit distributions to NGI.
You will see on the portfolio firm level AUM chart that there's almost AUD 44 billion of aggregate AUM, so our earnings from this portfolio come from a scaled group of managers and a growing portfolio. If you reference the bottom left of this slide, you'll see that over AUD 70 million of profit distributions came from the portfolio in fiscal 2022, with AUD 28 million to NGI after taking into account the year two profit sharing calculation. To dig into that a little bit further, in fiscal 2022, we received our AUD 17.5 million preferred, up from AUD 17 million in 2021, as well as AUD 10.7 million or our 20% share of excess profit distributions in the period.
Although it was an extraordinary year in which it would be difficult to forecast repeating on an annual basis, this does exhibit the great earnings power and scale of the portfolio and the high alpha generating strategies and clear operating leverage embedded in them. Understanding the profit sharing is key to understanding just how high quality NGI's earnings will be over the next three years. On the bottom right of this slide, where we show a very wide range of outcomes, which we actually have experienced for the first two years since ownership, NGI would receive between AUD 20 million-AUD 29 million of earnings from the portfolio over the next three years, really under almost any outcome.
I'd also highlight that we do have a catch-up on a cumulative basis should for any reason, which again, we see a low probability, the pref does not meet in any given year. As we look to the next three years, we consider this earnings stream to be very high quality, and we're using it as one important tool to support the future growth of the company. Please flip to slide 16, and we'll spend some time on the second stage of this transaction. As mentioned earlier, the full transaction and the second stage will settle in fiscal year 2026. At the outset, we agreed with Dyal on a formula in which we will acquire their retained earnings share of the portfolio above the preferred minimum distribution amount. I'd like to pause there for a moment.
The second stage of this transaction will settle in 2026, and we will acquire the retained earnings from Dyal. This is not an earn-out related to the earnings we've already acquired, but rather a future acquisition of incremental earnings to the company at an agreed-upon price. For example, if you were to reference slide 15 that we just went over, we would have been acquiring AUD 9.5 million of earnings that we would have received in fiscal 2021 and AUD 42.6 million of profits Dyal received from the portfolio in fiscal 2022. The other aspect of this stage two is that timing is very important. Under the terms of the formula, the first portion of the future payment will be known around March of 2024. The second payment will be unknown, excuse me, well before the payment is due.
Given this redemption amount is calculated on calendar year profits of the underlying managers, the final calculation will not be finalized until March or April of 2026. Please note, we will be earning the full profits from the portfolio starting on July 1 of calendar year 2025 or the beginning of our fiscal 2026. The other aspect of this is pricing. Given the nature of the formula, we will only pay a high notional purchase price if the portfolio performs well over the five-year period, which, given the nature of these six businesses, would imply that these assets are even better positioned for continued success after our final settlement. We currently have one year of this formula for calendar year 2021 in the books and complete, and that's what you're seeing impacting how it's held on the balance sheet today.
The estimated payment will continue to be updated as in the years to come, and each year's results are considered. If you could please flip to slide 17, we'll spend some time on the recent Marble investment, followed by the investment in Invictus Capital Partners. In May, we acquired 16.8% of all earning streams of Marble Capital, a $1.6 billion capital solutions provider to experienced and well-regarded developers in the high growth and attractive markets of the Sun Belt for multifamily rental housing. Our $85 million investment is being made over two years, with 75% of that capital going directly into the business in the form of primary capital. Marble focuses on $5 million-$20 million investment opportunities that are directly sourced and often from repeat partners, allowing them to price teens returns on debt-like risks.
They manage these investments out of closed-end funds, which have highly visible revenues, and they happen to be in the process now of launching their fourth fund, which we expect will close later this calendar year. Since the investment closed in early May, Marble has continued to execute on the growth initiatives that we talked to them about, and we believe the existing portfolio remains well positioned to return capital to investors on our originally expected timeline. As a reminder, Marble's preferred equity investments, which represent 75% of the portfolios, have a large buffer priced in where significant price declines of exit prices can be absorbed before their capital is even close to being at risk, plus the interest that they receive.
We were also fortunate to acquire 16.8% of existing carried interest to be generated off their second and third vintage funds, which are already fully invested, with monetization well underway for fund 2. Marble did not underwrite their equity investments in these portfolios at the very attractive recent market sales comparables seen over the past 2 years. Therefore, we expect those realizations will not only occur in the timeline that we originally thought, but also at the exit prices that Marble and we originally underwrote. Despite certain economic conditions and continued inflation, the key factors to Marble's success remain in place. Demographic shifts to the Sun Belt real estate markets and a severe housing shortage continue. Now, with increased mortgage rates, housing is less affordable and therefore the rental projects continue to be in demand.
In addition, recent market volatility has caused bank lending in the space to decline. Therefore, Marble's capital is even more in demand from high-quality developers. Lastly, we do not expect the demand from other investors who purchase the projects that Marble supports to wane. Even with the increase in cap rates, high-quality multifamily assets present a much stronger return profile as compared to most other sectors in the real estate market available to institutional capital. If you flip to slide 18, we can walk through the recent investment in Invictus. Earlier this month, we acquired 18.2% of all earning streams of Invictus Capital Partners, with the exception of carried interest, where we purchased 9.1%. Our $100 million investment is being made over three years, again, with 75% of that capital going directly into the business in the form of primary capital.
Invictus is an established business with a deep and cohesive management team, which is currently fundraising their third vintage fund alongside other separately managed accounts. They are a leader in their strategy, which has a high barrier to entry, and their unique approach has resulted in deep relationships with high-quality institutional investors. Invictus's core strategy is to acquire what are known as non-qualified mortgage loans or those not eligible for U.S. government guarantees in a deliberate manner through a deep network of over 300 correspondent originators. They generate mid- to teen IRRs by processing these loans through their captive infrastructure and retaining roughly 10% of the assets after securitizing the rest.
Please note that non-qualified mortgages do not equate to lower credit quality and from our perspective, do not equate to what could have been considered subprime, low doc or any of the other truly problematic lending that was happening prior to 2008. Although Invictus is a complex business, it can be thought of like many other private credit businesses. What Invictus identified was a broad area of the U.S. mortgage market, which was underserved after banks retreated, given the regulatory changes and their own GFC experience, and the market opportunity which grew after the GFC in the agency and other guaranteed mortgage markets, especially through a multi-year refinancing wave through declining interest rates.
Just as Marble Capital filled the gap after Basel III limited bank lending, even to the highest quality of multifamily developers, Invictus fills the gap in the very large and inefficient and evolving U.S. mortgage market. Recent market conditions have created opportunities for higher coupon yielding assets for Invictus. In addition, Invictus's leadership and experience has proven very valuable as they often become the purchaser of preference for meaningful originators who are even more eager to find partners in today's volatile environment. In addition, Invictus's deep financing relationships have proven out as they continue to access securitization markets through today's market environment. If you can flip to slide 20, Amber and I wanted to provide a little bit more color on how we think of how these new assets and these new partnerships contribute financially to the Navigator business.
As the company has expanded, we now benefit from a broad set of products and earning streams, including an additional significant amount of AUM from closed-end funds that charge fees on committed and invested capital. We recognize this is increasingly complex as compared to two years ago. This slide was prepared to provide some background on what can be considered base earnings from the recent investments. In order to think about these base earnings, please note that we are referring primarily to management fee revenues plus some fees related to capital currently on hand to deploy without any future growth, with no performance fees and no carried interest. We're assuming these operate on historical margins.
In summary, current AUM and capital to deploy from these eight new partners can yield roughly 115 basis points-116 basis points on AUD 8.2 billion-AUD 8.8 billion of AUM. Recent history would guide you to roughly 27%-32% base profit margins, therefore resulting in AUD 25 million-AUD 33 million of truly base earnings to Navigator from the eight assets covered on this slide. Now, as we know from recent NGI Strategic performance, as well as the nature of the Marble and Invictus businesses, performance fees and carried interest does traditionally contribute, and at times, in a very meaningful manner to the business profits. I would note that the margin on those earnings streams are much higher than the base operating margins, and in the case of carried interest that we purchased, 100%.
We're very excited about the contribution that this diversified, high-quality earning stream will bring for the full year of fiscal 2023. Amber, let me know if you want to add anything to this slide before we flip to 21, which I think you're going to put into context for the next two years.
No, nothing further on that slide. I'm happy to move to slide 21. Here we really just wanted to give you a breakdown of how that baseline or base earnings compares in 2022 for what actually happened and what we're expecting it to be in 2023. In terms of breaking down our business into the various key divisions or sources, Lighthouse for 2022 delivered some base earnings of about AUD 18.1 million. When you back out the performance fee revenue, net of associated bonus expense, as well as deducting the cash lease payments, which we always add back to our EBITDA to give a better cash position. We consider that that's our baseline and we think that that is very replicable in 2023.
In terms of looking ahead for next year, we see that 18 million ex performance fees is easily an achievable amount for it to remain even without factoring in any significant growth from that perspective. In terms of NGI Strategic, if you look at just the base that we're looking at or the base around earnings, that was about 15 million. That was the 17.5 million preferred amount that we discussed, less some direct costs of about 2.5 million is where that 15 comes from. That excludes the excess distributions over the pref, which were around AUD 11 million this year.
We see the growth in that area for 2023, coming from the slight increase to the pref to AUD 18 million, plus a midpoint range of the earnings that Ross just went through on the previous slide of about AUD 7 million. That was the AUD 5 million-AUD 8 million, comes at about a midpoint of about 7. If you also take off an equivalent amount of 2.5 million of direct costs, which we think is reasonable for next year, that gives us a baseline for the NGI Strategic business of 22.5 million, which is a 50% increase, for that line item. We also have some other group costs. That's head office costs and some financing and FX and bank fees.
That came in at about AUD 3.1 million this year, which leaves us down to a baseline of adjusted EBITDA for 2022 of AUD 30 million. We think for next year, putting on a range ±AUD 1 million, given there's some FX gains and losses that can go through there, that would lead us down to what we see as our baseline earnings for 2023, between AUD 36.5 million and AUD 38.5 million. A 25% increase. I just want to point out that is not our full guidance for next year because that does not include any amount that could relate to performance fees, the excess above the pref or the carried interest that we're also expecting to come in.
We wanted to set it out this way because it's obviously much harder to reasonably or accurately predict what we'll earn in 2023 for those other types of earnings, the performance fees, the excess above the pref and the carried interest. But we think this provides a valuable insight for shareholders in terms of what that baseline performance earning power actually is. Just to put it in context, that extra upside, I guess you'd call it, between the AUD 30 million base was AUD 16.5 million to bring us to the AUD 46.5 million adjusted EBITDA that we delivered for 2022. That is all I really wanted to say on that slide. I'm happy to pass it back to Ross to go through slide 22.
Sure. Thanks, Amber. We just wanted to take a quick step back and recap the strategic benefits that you see from all these investments before digging into the financial results. When you look at the business today, you now see an increased exposure to new uncorrelated returns in businesses with strong demand across new areas of the alternative asset management industry. We also now have exposure to highly visible revenues with high margin carried interest and without as much risk of redemptions or capital coming out of those businesses. Therefore, the business is less exposed to the large institutional market's short-term behavior related to either short-term performance or general market conditions.
We are well-positioned to benefit from the growth of these additional areas of alternatives, and we have partners who have growth initiatives underway, which we can support and look to contribute to our earnings growth in the years to come. Amber, I'll turn it back to you to dig into the financial results for this year.
Thank you, Ross. If we actually go to slide 24, just wanted to give the highlights, I guess, for what we see from the 2022 financial results. As Sean mentioned, we closed the year at 30 June having ownership adjusted AUM of AUD 22.9 billion. That was up 9% on the prior year. That was through growth, not just from Lighthouse assets, but also through really good growth in the NGI Strategic Portfolio, as well as the AUM that we acquired along the way from Longreach and Marble, adding as well. That's increased obviously the earnings power of the business. The really great thing is that from the NGI Strategic Portfolio growth, that has also translated into the increase to adjusted EBITDA.
We're very excited to be able to deliver AUD 46.5 million. That is actually up 68% on the prior period on an adjusted EBITDA basis. It's largely or I guess the key driver to that in terms of the increase is the significant distributions that we received from the NGI Strategic Portfolio. As Ross mentioned earlier, they actually divvied just over AUD 17 million of gross distributions this year, which was well above expectations and very nice to receive. That's also, I guess, the driver behind the adjusted revenue and other income of AUD 113 million that we earned this year. That was up 22%. All of this distills down to a dividend. The Board has determined an AUD 0.03 final dividend.
That brings the total dividend to the year for AUD eight and a half cents. While we've had some good results in terms of the earnings power, that dividend is really in context of the key acquisitions and changes that we've made during the period, and we'll talk further on the funding strategy going forward. It equates to a dividend payout ratio of 52% on adjusted EBITDA for FY 2022. If we move to the next slide 25. This is a breakdown of the Navigator Group results, just showing how we've moved from the statutory EBITDA under IFRS of AUD 51.2 million through to our reported adjusted EBITDA being the non-IFRS number of AUD 46.5 million.
I'm gonna go through the key line items in a couple of slides, but just wanted to talk through what we can, you know, exclude from that statutory EBITDA to come down to what we see as the stronger earnings measure for the group that is more grounded in our cash result from that perspective. One of the first adjustments we make is we actually have a couple of line items where we have to record a gross expense and a gross revenue item. That includes some fund reimbursement expenses where the company pays for them first and then gets reimbursed from the fund, and there's a corresponding revenue and expense item that just offset. There's also some provision of office space that we do to affiliates at a non-markup.
That comes through as sundry revenue. We think that from a commercial way to look at that is more to offset that against the direct expense given that there's no markup. We make those adjustments, otherwise we tend to find that, you know, you'll get some distortions in your ratios if you don't. The other thing we do is we add back the cash lease payments that are no longer sitting in operating expenses under the AASB 16 leases standard. They are cash payments that go to pay down the liability in the balance sheet, but we think they are better reflected in terms of the earnings to come off EBITDA to show a better cash measure from that perspective.
The other next adjustment that we actually back out is some unrealized gains on the fair value of assets and liabilities. These gains and losses go through the P&L, but they are unrealized and non-cash, so we back them out, and they netted to AUD 2.4 million gain this year. That comes out. Then lastly, there's just some non-recurring transaction costs that we incurred during the year. All of those things step through to deliver our AUD 46.5 million adjusted EBITDA result. I'll move to the next slide 26. This sets out, you know, that adjusted EBITDA P&L and compares it to the prior period.
On a snapshot basis, and I'll go through each of these in more detail, you can see that overall we had that increase in revenue, and particularly that key driver that's coming through from the NGI Strategic Investments distributions. We had a 6% increase in our employee costs, but a pleasing drop in professional consulting fees that have come down. Our other operating expenses are up slightly, about 14%. With all of that coming down, there was some net finance costs that brought us to the 46.5%. Nicely, we can see the operating margin for the business on that basis has actually grown to 41%.
That is part of the power of the NGI Strategic Investments delivering on that that have a good operating margin attached to them. I might go into more detail on the particular line items. Starting on page 27. The key revenue items that make up the P&L are our management fees. We delivered AUD 73.5 million of management fees for the year. It was down slightly 3%, but stayed, you know, relatively steady, about AUD 1 million down on the second half. That's reflected in the average fee rate. It actually dropped by 2 basis points over that half. It's a function of the increase in AUM, but going into those products that have a lower margin.
Particularly the managed account services is a lower margin business, but also the multi-PMs, we've got some different fee structures on those that are more attractive. They generally have a lower management fee and are able to pass through more of the costs that we incur through to the funds themselves and a performance fee component to them. Those drivers are actually what has seen the average management fee come down, but it's only actually been a much smaller marginal drop. We expect that that'll settle around 50 basis points, maybe slightly lower, just on the back of those AUM mix drivers going forward. In terms of performance fees, the business delivered AUD 10.6 million of performance fees this year. It was down 20% or so to the prior year.
Having said that, prior year was a particularly strong year for performance fees. We still see this as a good result. As Sean mentioned earlier, these multi-PM hedge funds tend to have more classes where they have performance fees. We do think there's definite growth potential for performance fees going forward, 'cause there'll be a higher proportion of AUM that can earn them within the Lighthouse group. Lastly, I'll just touch on the NGI Strategic distributions. As we mentioned, the gross distributions are AUD 70.8 million for the year, and Ross stepped through how our share of AUD 28.2 million is derived at being the AUD 17.5 million of that preferred minimum distribution amount. Our 20% share of the excess equated to AUD 10.7 million. That is a big increase.
As you saw in the prior year, the total gross distributions were only just a smidge under AUD 29 million. Our share is actually, you know, almost equivalent to what the entire portfolio earned last year. We did get a small additional distribution from other investments, about AUD 400,000 during the year as well. Turning to the next page, slide 28, the key operating expense items. One thing I just wanted to pass through, 'cause you could obviously pass over, I should say, the pass-through expense model. You can see from the statutory P&L, those fund reimbursement revenue and expenses have increased significantly this year. They're now coming in at AUD 42.6 million compared to AUD 17 million for the prior year and AUD 7.1 million the year before that.
That is a function of a change in, you know, the operating model, particularly as it relates to the multi-PM hedge funds, where we're moving away from what is seen as legacy fee structures, I guess, within that space, to what's now more common, being a lower management fee and a passing through of direct operating costs incurred, like, initially by the company and then charged through to those funds. One of the drivers behind that is that we have been bringing a lot of staff who used to be external PMs to the business are now actually employees, and their employee costs are passed through, and that's been the big driver of the increase, up to AUD 42.6 million for the year.
In that context, you can see from our employee expenses are still the largest part of the expenses for the business. They came in at AUD 50.7 million this year. They are those direct costs after the impact of pass-through to the funds. It was up 6%. We did have some extra headcount, so we increased our headcount across the group by 7, which is about a 6% increase compared to staff numbers the prior year. There was also an increase in the discretionary component of compensation, in particular, just driven by the fact that there are very competitive labor market conditions in the U.S. at the moment in the alternative asset management space.
In terms of professional IT costs, they're actually down 32% on the prior year, which is about a AUD 3 million reduction. And that's a direct reflection of the pass-through model. That AUD 3 million reduction is through being able to pass through those costs under that pass-through model. They comprise part of the AUD 42.6 million. And then in terms of our other expenses, they were up 14% or about a AUD 1 million increase. It was variously very small increases across a range of items and none in particular. Although we do note that some of that was travel. As the world starts to get back to normal, people are now getting back to normal travel from a business perspective, so we'll see that reflected in our expenses.
I just want to go through our last slide for my section, which is slide 29. Just showing the fact that with these acquisitions, we are utilizing our balance sheet to support this acquired growth, and particularly the strong growth in earnings that we're looking for in the baseline that we went through earlier. With the pro forma column, that's taking into account our 30 June balance sheet, which reflects the Marble transaction plus the pro forma of the Invictus transaction that we completed at the beginning of August. The change being that the AUD 100 million increases our investments, AUD 85 million in deferred consideration goes against that deferred consideration line, and it shows the reduction of the AUD 15 million of cash up front we paid in consideration. Definitely utilizing the balance sheet more.
It does put us in a net debt position about 2.4 x FY 2022 adjusted EBITDA. Certainly looking at growth in that EBITDA going forward, that net debt to adjusted EBITDA ratio we're expecting will come down as a result of higher earnings next year, but also as a result of paying through the deferred consideration. That was. Sorry, I was gonna say, I do have to go through the dividend, which is important. On slide 30, as I mentioned earlier, The Board has declared a $0.03 final dividend. You know, based on current FX rates, that would be about AUD 0.0435.
Overall, it brings it to an $0.085 dividend for the year or a 52% payout ratio, which is within the range that we actually advised the final dividend would be on the fourth of August. Just in terms of some key dates, the ex-date will be the 31st of October, and the payment date will be the 16th of September this year. That brings us on to the next section, which was about the dividend and funding strategy. If you want to go to slide 32, and I'm gonna pass it back to Ross, who'll walk through the deferred consideration slide.
Thanks, Amber. Yeah, no, as you mentioned, if you go to slide 32, given the amount of recent investment activity, we wanted to provide a summary of the somewhat unique format of deferred consideration across the Marble and Invictus investments. There's really two key points to highlight here before going into the numbers in more detail. First, to clarify, Navigator does receive our full share of earnings from the time of the first investment rather than when all of our capital is provided to the respective businesses and to the sellers. Secondly, and importantly, the large majority of this deferred consideration and the timing we make it will depend on the capital needs of the business, which are generally linked to asset raising and other growth initiatives, which then in turn themselves also result in increased profits in relatively short order.
While we have the fiscal year 2023, 2024 and 2025 here, aside from the secondary, which we'll go into, the primary timing, you know, while this is the timeline we've targeted and agreed upon, does vary on growth initiatives. As previously highlighted, 75% of the proceeds are being used to fund those growth initiatives. The majority of this will go to provide investment alongside the clients of these firms in the form of what we call GP commitments. It's general market practice for the companies such as Marble and Invictus to invest around 2% alongside their clients. Therefore, as the businesses raise larger funds, which both are in the process of doing and will hold final closes at the end of this year, they need more capital to invest alongside those clients.
Some of the primary capital we've committed will help Marble acquire seed assets for a new product and for Invictus to expand its origination capabilities, both which accrue to our benefit in relatively short order. With regards to the secondary capital, which we paid directly to the sellers, or 25% of the total consideration we've made to these two deals, generally they're made to existing management, and those payments are scheduled. In the case of Marble, we know we will make, and they will receive two more payments on the first and second anniversaries of the investment. In the case of Invictus, we've agreed to a one-time $25 million secondary payment. This payment is subject to revenue growth triggers. This was agreed with the company to align interests with them and to protect our investment.
We expect that this payment will be made on the earlier of the first anniversary of the investment or the latest the third, but we'll measure the revenue targets starting on the first anniversary and make the payment when they do hit it. To be clear, we would like that payment to happen sooner rather than later, as growth is a good thing, and our deferred consideration will go in as a result of that growth. Amber, I'll kick it over to you if you want to continue the discussion on funding strategy.
Thanks, Ross. A key part of the funding strategy is obviously the use of our cash flows from operations, and that leads into the consideration of the dividend policy for Navigator. We did announce a reduction in the previous dividend policy that had been set prior to us undertaking this acquisition of Marble and Invictus, and that dropped it to that 50%-60% range that applied for the final dividend for 2022. However, The Board has determined that it wants to reduce that even further for the next three years or so as part of that funding strategy around the deferred consideration payments. We're putting more of the cash flows to work in supporting that growth that we've acquired.
The new dividend policy is an AUD 0.03-AUD 0.04 per year dividend. A fixed amount as opposed to being a payout ratio because it gives more certainty around the future cash flows for the company to manage. It'll continue to be unfranked, as at this stage, we're unlikely to earn more taxable income in Australia and create franking credits, but it is expected to have 100% conduit foreign income attached to it. It will be a single dividend payment as opposed to an interim and final, given the fact that we fixed the amount. Based on current share price, it gives an implied dividend yield of 3%-4%, and an implied payout ratio on FY 2022 EBITDA of 20%-25%.
Just moving to the next slide 34, and really seeing how this fits in with our overall funding strategy across the next three years or so. As Ross mentioned, our overall consideration payable over the next three years is AUD 140 million. Looking at the various components, you know, we estimate that we will have within the range of AUD 120 million-AUD 165 million, looking at our base earnings plus our other available facility and cash. At the moment, we have about free cash of about AUD 15 million. That's taking into account the cash that we have on hand per slide 29, which was the balance sheet slide.
Also accounting for the fact that we still need to pay Dyal's profit share out of that amount, the dividend in September and some other regulatory capital needs. It does not, however, take into account the AUD 18 million of receivables that we have on the balance sheet. I haven't factored that in that number. We have the debt facility, so it's currently at AUD 50, with scope to go up to AUD 75, and we are finalizing negotiations to increase that facility so that that's available. In terms of the base operating cash flows. We stepped through on slide 21, where we see our baseline earnings without the extra upside from performance fees and carried interest.
Taking into account the new dividend policy and variable payments that will arise on interest from drawing down on the facility, plus some cash tax that we may start to pay in relation to the NGI Strategic. For 2023, we see that as being about AUD 18 million-AUD 25 million that would be available in operating cash flows. Even with no growth over the next three years, you can apply that to come out to the AUD 120 million-AUD 165 million we see as available funding over that period. Obviously, the one thing it doesn't include is the additional upside from performance fees and from carried interest.
Obviously difficult to forecast with accuracy, but certainly the quality of the carry leads us, you know, to be very comfortable that it'll arrive just a little bit less in terms of the actual timing of when that might actually happen. If you look at Lighthouse's performance fees, you know, the average for the last three years have actually delivered AUD 10 million in performance fees, and there's scope for that to increase on the back of the multi-PM platforms hedge funds.
That's sort of the path to funding, I guess. Ross, if there's anything else that you wanted to add in relation to that discussion.
No, I think that was great, Amber. The only thing I would add, and it's a minor point, is on that base operating, as we highlighted on slide 21, although it all obviously does not include performance fees and carry, which are integral to these businesses, it also does not include asset growth. We do believe in the core NGI Strategic Portfolio as well as Marble and Invictus. These firms are at a stage where they will have asset growth both through organic flows, raising new closed-end funds, as well as through performance over the next three years. It's just as Amber said, when we were thinking through the base metrics to provide the market some clarity, hard to forecast. That's just another component I wanted to highlight that's not included there.
Thank you, Ross. With that, we are gonna hand it over to Sean, to make some closing remarks.
Thank you. Yeah, I'll just make a few remarks and then we can open it up for questions here 'cause we're at about an hour mark. The current business, just number one, we think it's a really unique alternative asset management business, and we've got really good firms, as you can see throughout this presentation, that are scaled, that have the ability to grow. We're very happy with the current mix of businesses that we have. On the Lighthouse front, we have some nice investment returns this year, again, in difficult market conditions. We believe the demand for multi-PM hedge funds will continue to grow. I think we're positioned well there, and we will continue to evolve the firm to meet the needs of our client base.
The recent investments that we've made have added high quality earnings, which we believe will deliver substantial value over time. As we mentioned, a lot of these new assets that we have brought on through the investments have longer term thresholds in them, as far as closed-end funds or locked up capital, and that gives good visibility into how these businesses will operate over the next three to five years. On the earnings drivers, we believe a nice stable base of management fee and consistent earnings. We also have a lot of upside, and that's from carried interest or incentive fees or growth opportunities. We have a way to continue to expand on our earnings base, and we're very happy with that.
Fiscal 2022 results, we think were very strong, in a tougher environment, and that just demonstrates the approach that we've taken, the quality and stability of the companies that we've partnered with, and the earnings stream we think we can generate over that. The funding and the dividend policy, we have the financing and the cash flow to absorb the recent transactions. As we've always said, you know, when we have good uses for capital, we're gonna use that, you know, over paying out dividends.
I hope this is indicative that we believe we have strong growth potential here and wanna retain some of those earnings rather than paying them out in dividends for those growth initiatives which we can see the growth in EBITDA this year in assets this year. We expect that to continue and certainly wanna use some of the capital to fund that growth. Overall, we're pleased with the results. We're pleased with the strategy and where we're heading. With that, we can open it up for any questions or comments.
Thank you. If you do wish to ask a question, please press the star key, then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the star key, then two. If you are on a speakerphone, please pick up the handset to ask your question. Thank you. Your first question is from Phil Chippindale from Ord Minnett. Go ahead. Thank you.
Thanks team. Appreciate your time this morning. Ross, a question for you just on slide 21. Amber ran us through that sort of base idea for FY 2023, but it doesn't include three things, being the performance fees, the above the preference level, and the carried interest components. I wanna actually ask about the last of those. On the carried interest, can you just remind us over the next sort of 12-24 months which of the vehicles you're expecting to see some realization there?
Sure. Thanks, Phil. I think she's right. Again, as you said, the other component is just additional, you know, asset growth that is underway. With regards to carry, primarily coming through in the NGI Strategic line will be from Marble and Invictus. The Marble investment had more exposure to carry given it was the same ownership percentage at 16.8 of all earning streams, and given the two funds that were fully invested we bought into are closer to realization than the case for Invictus. It's Marble that we originally provided accretion guidance, which had a big pickup in fiscal 2024. With that said, across both Marble and Invictus, there's some other, you know, smaller pockets of carry interest that can come in. The carry on Marble is very hard to estimate.
I think, you know, as we talked about at the time, that's where we would put it today if we had to provide guidance. There are obviously things can happen, realizations can happen sooner, and that could come in sooner. I do think you're right to point out that it was the biggest contribution from that carried interest initially, we expect to be in fiscal 2024.
Excellent. Thanks. Just turning to slide 34, and again, might be perhaps more of a question for Amber, I'm not sure. Amber or Ross, this funding of the commitments over the next three years, just to be clear, does that depend on the same assumptions that you made on slide 21, i.e., it doesn't include any of those four things that Ross just referred to?
Yes. Phil, I'll confirm that. That is the base operating cash flows, and it is in reference back to 2021. Looking at that sort of AUD 36-AUD 38 range that's on 2021, when you back off a dividend component, and an allowance for interest and cash tax paid for the next year, that's when we put it in that range of AUD 18-AUD 25. The reason it's quite broad is obviously we don't know exactly when we'll draw down the debt, so there could be quite some variance from an interest perspective. Also, the cash tax is starting to flow through more on the Marble and Invictus once we get earnings from that. We're still expecting to utilize all of the tax offsets on the Lighthouse side.
The tax is more on the NG, NGI Strategic Portfolio.
Sorry, Phil, to interrupt. I would go back to the question you asked also in that regard, is that it does also include anything above the pref for NGI Strategic. Including net carry on Marble, Invictus, obviously, over the first two years, we've experienced some meaningful distributions there. From what we know in 2022 and where the businesses sit from an AUM perspective, we have no reason to think that would not continue.
Okay, thanks. You know, I guess on slide 21, that FY 2022 number, you know, you actually achieved 50% more of that. There's gonna be potentially some significant upside beyond that base. It's probably more of a comment than a question. Appreciate extra color, especially with slides 21 and 34. Thanks very much. That's all from me.
Thank you, Phil.