Earnings Call: Q3 2021

Sep 29, 2021

Welcome to the Q3 2021 AGF Management Limited Earnings Conference Call. My name is Richard, and I'll be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I'll now turn the call over to Adrian Vasurava. Mr. Vasurava, you may begin. Thank you, operator, and good morning, everyone. I'm Adrian Basarava, Senior Vice President and Chief Financial Officer of AGF Management Limited. Today, we will be discussing the financial results for the Q3 of fiscal 2021. Slides supporting today's call and webcast can be found in the Investor Relations section of agf.com. Also speaking on the call today will be Kevin McCreedy, Chief Executive Officer and Chief Investment Officer. Question and answer period with analysts following the presentation, Judy Goldring, President and Head of Global Distribution, will also be available to address questions. Turning to Slide 4, I'll provide an agenda for today's call. We will discuss highlights of Q3 2021, provide an update on the key segments of our business, review our financial results, discuss our capital and liquidity position, and finally, I'll close by outlining our focus for the remainder of 2021. After the prepared remarks, we'll be happy to take questions. And with that, I'll turn the call over to Kevin. Thank you, Adrian, and thank you, everyone, for joining us today. During Q3 2021, we continued to execute against our strategy and stated goals. I'll begin with some highlights. Our strong business momentum from the previous quarters carried into Q3. AUM and fee earning assets reached $43,400,000,000 at the end of Q3, an increase of $2,600,000,000 compared to the 2nd quarter. Our mutual fund business continued It's sales momentum reporting net sales of $288,000,000 marking the 4th consecutive quarter of mutual fund net sales. As a tenured leader in sustainable investing, we are proud to announce that AGF International Advisors Company Limited has been successfully named as a signatory to the U. K. Stewardship Code. U. K. Stewardship Code 2020 recognized globally as a Best practice benchmark in investment stewardship sets high stewardship standards for those investing money on behalf of U. K. Savers and pensioners and those that support them. Diversity and inclusion have been a long standing pillar of our social responsibility commitment. In early September, we entered a multiyear partnership to create a scholarship program with Inspire, a national indigenous organization that invests in the education of indigenous people. This partnership is part of our multiyear plan to accelerate Our diversity and inclusion initiatives. Over the past few months, we have made significant progress in diversifying and expanding our private alternatives business. In early July, we launched the AGF Staff Private Credit Limited Partnership and Trust. The LP targets Canadian institutional investors, while the Trust offers increased liquidity that is more appealing for Canadian retail investors. Subsequent to the launch, we refined our long term partnership with SAS. Furthermore, we strategically expanded our Private Alternatives business into the Private Equity In venture capital space, by partnering with First Ascent Ventures, a firm that focuses on investing in emerging technology companies. Strong business momentum has translated into a strong financial results for the quarter. We reported an adjusted diluted EPS of $0.21 up 163 percent from the $0.08 in Q3 of 2020 excluding Smith and Williamson. We have achieved these results partly by holding core expenses flat, which we will continue to do going forward. We have been able to realize efficiencies and unlock some capacity in our sales process. We believe that going forward, our Investment Management business can grow with the existing resource base. Having said that, incremental operating expense and capital will be required for corporate development as we accelerate the redeployment of our excess capital. Finally, the Board confirmed a quarterly dividend of $0.09 per share for the Q3. This level was increased last quarter from $0.08 per share. Starting on Slide 6, we will provide updates on our business performance. On this slide, we break down our total AUM and fee earning assets in the categories disclosed I'll provide more color on our mutual fund business in a moment. Institutional, sub advisory and ETF AUM increased by 11%. We continue to receive allocations from our existing institutional clients, including US100 $1,000,000 into our global sustainable growth strategy during the quarter. After successfully on boarding a large institution who selected 3 of our global and U. S. Equity strategies on their SMA platforms in Q2, In August, we onboard another large institution who chose one of our global equity strategies on their SMA platform. While AUM growth on these SMA platforms will occur gradually over time, we are optimistic based on flows for the initial few months. Building on the success of these wins, we target entering into similar relationships with other SMA platforms in the U. S. During the quarter, we received a redemption notice from one of our institutional clients for $900,000,000 The redemption was a result of an asset allocation shift, resulted in a large reduction of their public equity exposure overall in favor of alternatives. This highlights the importance of alternatives and also the SMA business, which tends to be less lumpy and will create some consistency in AUM levels. Looking forward, RFP and RFI activities have remained strong. We continue to see interest from institutional investors in a number of our strategies, which bodes well for future sales. Our Private Client business continues to demonstrate consistent steady growth with AUM increasing 23% year over year. Our Private Alternatives AUM and fee earning assets were 2,200,000,000 And we maintain our goal of reaching $5,000,000,000 in AUM and fee earning assets by the end of 2022. During the quarter, we refined our partnership with SAF, where we have entered into a definitive agreement along with a distribution arrangement as an alternative to AGF Exercising its option to acquire management contracts of select SAF funds. We will be the exclusive provider of their investment capabilities in the Canadian retail marketplace. This arrangement allows both firms to capitalize on the expected growth in the Private Credit space. Our strategic partnership with First Ascent Ventures helps to broaden our alternatives platform into an area that It gives investors an opportunity to invest in top tier emerging technology companies. AGF committed $30,000,000 to First Cent's 2nd fund and as a member of the Limited Partner Advisory Committee. These initiatives, along with our robust pipeline of opportunities in the alternative space, will help AGF achieve our goal of reaching Excluding net flows from institutional clients invested in our mutual funds, net sales were $288,000,000 across all channels IIROC, MFDA and strategic partnerships And strong flows into multiple categories, including global and U. S. Equities, fixed income and ESG or sustainable opportunities. The momentum in our retail mutual fund business has continued into September. Excluding net flows from institutional clients, we have net sales of approximately $80,000,000 up to September 24. Before I return the call back to Adrian, I want to give a quick update on performance. AGF measures mutual fund performance by comparing gross returns before fees relative to peers within the same category, with the 1st percentile being the best possible performance. We target an average percentile ranking versus peers of 50% over Q3 average percentile rankings were 53% over the past 1 year This concludes today's conference call. This concludes today's conference call. This concludes today's conference call. This concludes today's conference call. This concludes today's conference call. This concludes today's conference call. This A period of comparisons, we've shown EBITDA before private alternatives contributions separately. Excluding the Private Alternatives business, we reported EBITDA before commissions of $29,200,000 in the quarter. This is $1,000,000 favorable compared to Q2 2021 $9,100,000 favorable SG and A was $50,000,000 an increase of $3,000,000 from Q2 2021 $4,000,000 from Q3 2020. This is driven by higher mutual fund sales and strong investment performance. SG and A in the quarter was also impacted by Increased corporate development activity and associated expenses of $1,300,000 As we work to deploy capital, these costs Temporarily increased SG and A. Core SG and A, which excludes variable compensation and corporate development costs, We're relatively consistent with last year. EBITDA from our Private Alternatives business was higher The phenomenon we saw last quarter when the U. S. Dollar weakened was suppressed LP earnings. As noted, At a subsequent event in our financial statements and on our previous call, one of our long term private alternative investments managed by SAF fully monetized in June 2021. As part of the transaction, AGF recorded carried interest revenue of $2,200,000 this quarter. As we continue to grow and diversify our Prominent platform, Management fee profits and earnings from our LP investments will become more consistent and predictable. Diluted EPS was $0.21 in the quarter, That's 0.14 dollars higher than Q2 2021@0.13 $1,000,000 this quarter compared to $17,700,000 last quarter. We're currently in the middle of our And as Kevin mentioned, expense control Turning to Slide 9, I'll walk you through the yield Note that AUM and related results from Smith and Williamson, the Private Wealth Business, One time items and other income are excluded. The Q3 revenue yield is 112 basis points, That's one basis point lower compared to the trailing 12 months. Q3 SG and A as a percentage of AUM was 50 Basis points, that's 1 basis point lower compared to the trailing 12 months. That resulted in an EBITDA yield of 27 basis points, which is flat to the trailing 12 months. Let's turn to Slide 10. I'll discuss free cash flow and capital uses. This slide represents the last 5 quarters of consolidated free cash flow on a trailing 12 month basis as shown The orange bars on the chart, the black line represents the percentage of free cash flow There will also be further recycling of capital as monetizations occur, which will help to fund future commitments. Taking all that into account, we currently have excess capital available. Our future capital allocation will be balanced and include Redeploying our excess capital to generate recurring earnings is a key strategic priority. Over the past few months, we've made significant progress to begin deploying our capital and have generated a robust pipeline of corporate development opportunities. Executing on this priority will be a catalyst for EWAY growth and value creation. Last quarter, In recognition of our strong results, robust financial position and confidence in our business, AGS Board of Directors increased the quarterly dividend by 12.5%. This is just one example of how we are directly returning capital to our shareholders. So turning to Slide 11, I'll turn it over to Kevin to wrap up today's call. Thanks, Adrian. Q3 was a solid quarter. Our AUM and fee earning assets continue to climb. We recorded Quarter of positive mutual fund net flows, marking the 4th consecutive quarter of net sales. We continue to deploy our capital and invest in key growth areas such as the private alternative business. We launched the new AGF at SaaF Private Credit Products in July, refined our partnership with SaaF and partnered with First Cent Ventures. Our strong business momentum translated into strong financial results. Excluding Smith and Williamson from the prior period results, EBITDA before commissions was $37,500,000 or 76% higher than Q3 of last year. Our margin Also expanded by 8 60 basis points year over year. Adjusted EPS for the quarter was $0.21 163 percent higher than last year, excluding Smith and Williamson. We are focused on building on the momentum from the past few quarters and creating value for our shareholders over the long term. In the past 12 months, we have returned almost $70,000,000 to our shareholders through share buyback and increased dividend payments, which started last quarter. We will continue to strategically invest and accelerate the deployment of our capital to key growth areas, creating value for shareholders. Along those lines, I'd like to reiterate our strategic priorities, which are to deliver consistent and repeatable investment performance drive the organization to sustainable net inflows redeploy our excess capital to generate recurring earnings We position the firm to reach $5,000,000,000 in alternative assets by 2022. While we continue to be diligent in controlling costs to ensure increased revenue translates to expand in profits and margins to take advantage of the operating leverage in our business. I want to thank everyone on the AGF team Thank you. We will now begin the question and answer session. And And our first question online comes from Mr. Gary Ho from Desjardins Capital. Please go ahead. Thanks. Good morning. In your MD and A, there were several mentions This capital deployment plan and you also spent a couple of million on the corp dev costs. I think both Kevin and Adrian you mentioned it in your prepared remarks. Kevin, can you just refresh us on the key pillars of that plan? It sounds like a lot of effort is bulking up your private alts platform. Is that where we should see growth come from the next 2 to 3 years? And how much would you look to deploy in that silo in particular? Hey, Garrett. Thanks. So a couple of thoughts on that. Capital is always something that we try to balance out between growth, Doing some buybacks as well as we'll continue to think now about the dividend as well. Over the last year as we've said, I think we've put back $65,000,000 to our shareholders in 2 of those buckets, right? Now as it's with The fact that we've year on we've got the S and W transaction behind us, we really are going to amp up getting the capital back to work and accelerate that. So So with that, we'll come some deal costs, which are kind of one time things. And as part of that obviously is we look at the landscape around us, the alternative space continues to get bigger and bigger. Asset allocations are continuing to grow It continues to get bigger and bigger. Asset allocations are continuing to grow across the spectrum from large institutions, family offices, even Retail Brokers. So we know the core public markets are going to shrink. The alternative asset areas are going to grow pretty significantly over the next decade or so. So yes, so for us strategically it makes sense for us to start to rapidly accelerate the deployment of that capital. Part of that is We're bringing a new Head of Alternatives. We are in the late stages of a search process for a significant hire there. We We are down to several very good candidates there. So hopefully we'll have somebody on board here into the early part of next year where we can then really ramp that up. So As soon as we get that capital back to work as you all know, we'll have the sooner we can drive those earnings through. So we're on pace to I think as we've said a year ago At this time, we said it would take 18 to 24 months. So I think you're now starting to see the beginnings of that. In terms of the quantum, we have a lot If you think about current cash on the balance sheet, dollars 70,000,000 If you think in a world post DSC, our cash flow is probably going to Ramp to north of $100,000,000 And then we think conservatively about relevering the company up to 1.5 times our EBITDA. So you can kind of think of that over a multiyear period about how you can get that to scale into earnings. Perfect. Okay, great. And then next question just maybe related to some of Kevin's comments there. Just on the free cash flow, Adrienne, on the quarter $21,000,000 I think there's some kind of one time private alts carry or distribution in there. And then LTM is around $52,000,000 But when you look at the run rate, what's the free cash flow profile look like for the company? Is that $50,000,000 sustainable? And I'm looking at it excluding the DSC benefit that's coming next year. Can Can you maybe walk us through how you think about that? Yes. Thanks for the question, Gary. Yes, I think that the $50,000,000 is Sustainable based on where our AUM is today and I would not call the free cash flow contribution From the alternatives platform as one time, I might categorize it as lumpy. And as we build out the platform and diversify it, as Kevin mentioned, What you're going to see is that the cash, if you want to talk about cash, the cash we're getting from management fee profits from carry Also from Treasury Investments and our LPs is going to become more consistent and sustainable. And if you factor in the TSC, I think Kevin's comment is probably close to $100,000,000 Is that what you guys are thinking there? Yes, I mean, rough math there. We spend about $60,000,000 a year in DSC Now that goes away mid-twenty 22. There's a temporary benefit there, but for a couple of years, it's going to be in the $60,000,000 range in terms of a tailwind on our cash flow. And then As we've talked about, we're cognizant of the fact that that financial benefit reverses over time. But yes, for the 1st 2 or 3 years, it's a significant increase in our free cash flow. And Gary, that's probably why you want to see us accelerate this a little bit, right, as we can take advantage of that in those beginning years. Yes, it makes sense. Great. And then last question for me, maybe for Judy. Can you can we get an update on how you plan to Do you need to significantly invest on the distribution side of things? Thanks, Gary. So we are looking at the Ulta platform across the spectrum of offerings. So starting really with the mutual fund and real assets, ETF vehicles for liquid alternative strategies have been quite strong as well, whether it be the market neutral or long short strategies. And then with our private credit offering, It is available to retail as well as family offices and institutional. And on the distribution side, whether it be in our Canadian institutional team, our U. S. Institutional team We're across the retail channel and our team there. We have capacity. We've got the capabilities to distribute all of these products To the investors as they are demanding them and we don't anticipate significant additional expenses or headcount there. Gary, one of the things that when we strategically thought about this, we do have that end to end distribution there and where others have to acquire pieces of it. So for us, I think it's natural to go the other way, which is to provide product to that spectrum. Thank you. Our next question online comes from Jeff Kwan from RBC Capital Markets. Please go ahead. Hi, good morning. I want to ask on the SG and A. So I think the guidance is And at the high end would imply a Q4 number would have to be around 40 Meaningfully lower in Q4 to hit your guidance range? Yes. Thanks, Jeffrey. It's Adrian. I mean, basically the short answer is that we're 3 quarters of the way through the year now. So we have a little bit of a better read on where the performance type compensation is going to land. But again, I do want to reiterate that when you look at the SG and A increase in the quarter, Again, related to corporate development, which we're going to incur These expenses to generate future incremental profits and also performance compensation. And so the performance compensation relates to pretty impressive sales. So $2,900,000,000 in gross sales of mutual funds year to date Some of the increases in the 1st three quarters really relate to the fact that we didn't anticipate the performance to As strong as it has been for the year, but we have a pretty good readout now and where the full year 2021 is going to land. Yes, I mean, this is Richard again. Jeff, it's Kevin. The only thing I'd reiterate is that we've tried to accept the, what I call, sales based and investment performance comp and Just bonus comp based on the success. The core SG and A has run basically flat from where it was a year ago. Right. It's just I mean, obviously the net sales and we see it in the numbers as you've reported, right, and the AUM has been reported. I'm just trying to get a sense is, okay, if we see the momentum sustain itself into Q4, You still hit with all the factors in terms of performance based comp and the corporate development. Are you still comfortable that you can hit it within that range or as The growth you've had and the performance you've had, it's going to come in higher. Just to make sure there's a matching in terms of trying to forecast What the margins look like for the last quarter of the year? Yes, Jeff, it's Kevin again. Yes, so I would say lean it towards the high end there, right? But that can get Back to where it is, we do try to true up each quarter, so we don't have this effect. So clearly, if we have another blowout quarter in sales, We may have to push that a little higher, but I think you guys would look at that and say that's a pretty good short term trade off. Remember, some of these things will reset, right? The bonus numbers all start to reset as we go into a new year. The targets get higher etcetera. So these are the essentially the impacts of Probably too great a success on some of these metrics vis a vis where we had planned, right? So but some of these will reset as we move into 2020 And we haven't done that work yet. We're just starting our planning process right now. But lean Q4 toward the high end of the range right now. Okay. So if you have sorry, just to not belabor the point is, if you have the same momentum through the 1st three quarters as you get into Q4, Are you comfortable that you'll still be within the target range? Yes. I mean, I think we've said a number of times in the remarks and during the answers that were upper end of the range, which is 190. And we're not going to We can't give you too much transparency into some of the minutiae around how we do the forecast. But at this point, That's what we're anticipating. So, we're certainly not going to change that today. Okay. Just on your alternatives business, can you help us understand, I guess, how much Have your clients invested into the various alternative strategies? And what is that kind of mix between the different In terms of institutional versus retail versus have a client that sort of segmentation? Yes. Hey, so I think, Jeff, the way you want to look at that between our current, which is roughly $2,200,000,000 Private alternative assets, right. We've got 150 ish in our money in that. And again, there's some other commitments that will follow on to that. But you can think of the rest of that as 3rd party client money that stretches from institutions and family offices. And we've just started on the side on the really rolling out this retail product that will be So you'll see that come on last. So I would say of the 2.2 ish, most of that is institutional family office type money across the spectrum of products. Okay. And one last question. To your point, Kevin, in terms of if alternatives is where it's at and Where our clients are going, shifting capital, does it make sense to build kind of an in house Specialization and in house team as opposed to kind of partnering with some third parties as you've kind of done so far? Yes. We spent a lot of time on this, right, with our alternative advisory committee and the team here. I think you guys and I've I come from this as a PM and an analyst in my DNA, right? If we went on and just started ramping up OpEx to build it out, you wouldn't The return on that for 6 or 7 years, right? I think if we can partner take majority stakes work with folks on GP structures where we're joined together in it, That's a way to kind of rent to own it model, which I think you drive the earnings first, and bring the what I call that knowledge equity in house over time. That's to us a better way to reward our shareholders to get the earnings flowing quicker, be in the space, test out some partners and think of it as a portfolio Of products and managers that we'll acquire over time. But you should think of it though that should lead you to hopefully We're trying to bring that expertise in house, but not through an organic body by body expensive growth. Okay. Thank you. Thank you. Our next question online comes from Mr. Tom MacKinnon from BMO Capital. Please go ahead. Yes, thanks very much. Good morning. Just On the $5,000,000,000 private AltSchool, you've been sitting at $2,200,000,000 now for about a year, certainly talking I guess you would be putting more capital work into this. But if you want that goal by the that $5,000,000,000 goal by the end of 2020 That's more than doubling within a year or about 5 quarters, I guess. So can you give us any kind of path as to How we should be thinking about this? And then would that be another commitment of $100,000,000 of your capital? Just if I kind of look at the $150,000,000 you've put in the $2,200,000,000 you have so far. Just two parts to that question. The path to get to $5,000,000,000 and what are some of the cash flow demands of that? Yes, Tom, thanks. It's Kevin. I think we're still pretty comfortable with that $5,000,000,000 number over the next horizon for sure. In that implies a couple of new initiatives we may be putting on the board over the next year to get us there. They may be a little slippage, but I think we're comfortable with what we have line of sight to that. In terms of the what our capital would We've already disclosed that we're going to put $50,000,000 into Support Fund III on Instar when that rolls out. And then Obviously, a couple of the other ventures will probably have some seed capital to work with there. So not sure we're going to have we circled the number yet? You can know that 50 is clearly committed And so it could be in that range, it could be higher. But it's not going to be significantly in the 1st year. In other words, I wouldn't see it out of that band. But again, it's stuff that we're comfortable with right now. And you mentioned over the next horizon. Is that Yes. I think that's what we said and I think we're still looking at the end of 2022. And I said if there's slippage it may be a quarter or 2, It feels like it's tracking to that at this point. Well, if it feels like it's tracking, it's been flat over the last year. So how do Within there what are you reading in terms of making it feel like it's tracking to get to that? Yes. So we've had some monetizations That have been bringing things down. We haven't had a lot of new initiatives as I said on the early part of the call. We have just rolled out a new product With SaaS, which we have high expectations for, but there'll be a ramp time there. At the same time, we've made an investment in our 1st early Dave Venture Funds that hasn't been called yet. So while we've got some things that we have started to ink, It will take a little bit of time to get in that call. And there are things that we're working on that are in the pipeline that will also play into that. So I'm not thought by the flattish given the fact that we've had some monetizations and carry that came through. I mean Adrian you made some other thoughts on that. Okay, thanks. Sorry, I think that covers it. Anything else on that, Tom? No, that's good. Thanks, Adrian. Thank you. Our next question on line comes from Nick Priebe from CIBC Capital Markets. Please go ahead. Yes, thanks. So just to build on the conversation surrounding excess capital deployment and the recent cash build, in the past few quarters, you've alluded I was wondering if you might just be able to give us a sense of what your total unfunded commitments might amount to. I'm just Thanks for the question. It's Adrian. So there's about $77,000,000 of unfunded commitments that we have with the funds that are up and running now. But one of the things you have to keep in mind is that when we look back over the years, a lot of these new commitments get Funded through recycled capital, number 1, and that would be monetizations from Investments within the funds that we've invested in, but also cash earnings that are coming out of the GPs in the form of recurring management fee and other income as well as carried interest. So you sort of have to look at a net number, Which would be much lower than that. Understood. Okay. And then just one high level question on the net flows outlook. Demand for retail investment products at the industry level has clearly been very strong this year, presumably a consequence of improving household balance sheets, on the sustainability and the trajectory of that trend, as we see spending patterns begin to normalize, How quickly we might see demand for retail investment products normalize accordingly. I wouldn't expect you to have a crystal ball, but just thought I'd ask for your read on some of those macro dynamics. Yes. Hey, Nick, it's Kevin. I'll start, and I'll pass to you for some of the micro parts of our business on that. Yes, I think clearly what's been a big The higher savings rate. We think that that savings rate probably stays up a little bit elevated with the hybrid work world. So think about The fact that if folks only work downtown 2 or 3 days a week, they're saving commuting costs, etcetera, gas, things like that. There Some offsets with higher inflated prices for things. But if you put that in the mix, there should be some extra disposable income in that. So we've seen that go into some of We know it's going into some parts of the savings world in the market. How sustainable that? I think it will wane out over time as we normalize hybrid and the downtown starts to come back. I'd say probably second most important thing and maybe even more important is the market itself. If we Market can stays in this range. And even if it's range bound to choppy range bound to an upward trend, flows will be fine. I think where you get into trouble in our industry, as you've seen, When you have market declines of 20%, 30%, the retail investor I think things we're not calling you're calling for like There's probably some choppiness in here, maybe some minor pullbacks, but we're not seeing a scenario where we think things are coming off a cliff at this point. Those are the 2 Just the breadth and scope of our product offering out of the top 10 selling funds, 6 are top quartile performing funds. So we would be very optimistic that we could continue that outpacing of industry going forward. Yes. And I'd add to that, Nick, that there were also things that are probably Probably the highest demand. So it's not only strong performance, but also in key categories of people. We focus the shelf to think that Advisors really can't do themselves. So things that are harder to do more global etcetera and that's where we're having the outperformance. So there's some linkage to that sustainability there I would suspect as well. Okay. Good color. Thanks for taking my questions. I'll pass the line. Thank you. Our next question on line comes from Mr. Graham Ryding from TD Securities. The investment in the First Ascent, I just want to make sure I've got that correct. It sounds like it's a $30,000,000 commitment on year end. Is that incremental to the $77,000,000 Adrian that you flagged partnership as something that you're hoping will grow into a fund and that sort of a fee earning AUM opportunity for you? Yes. It's a good question. I mean, we this is an investment fund. It's really A partnership and a structure. We will have multiple Points of revenue if you think about it right, not just as an LPC, but also through the structure itself and some carry. But it really sets us up to do more with them In the future, what we think is one of the better early stage technology venture firms out there. So think of it really as the first part of a multi Prominent approach to this. Okay, understood. And then my second question, Not related, just the regulatory changes around client focused reforms. We've seen recently that some of the banks have Announced that they're moving to a more proprietary model within the branch sales. Any expectation that that would have an impact on your flows at all or The independent asset managers largely? This is Judy. This has been a trend that has been Developing over a number of years. And so for ourselves, and I do I would argue with most of the independent asset managers, they will have minimal impact, as we really have not seen a significant sales flow through the bank branch in many years. So we're not concerned about it. It's an interesting development. It'd be interesting to see what the regulator says to it. But at this point, we're not concerned. Okay. Thanks, Judy. And then maybe just a follow on on that. Your mutual fund sales momentum is strong. Can you give us some indication of how that is currently split across the different channels IIROC and FDA and then your strategic partnerships? Yes. The gross sales across well, we're seeing about a 50% increase across IIROC and MSDA both just in terms of the sales, In terms of the trajectory of where they're going and in terms of the split, we're seeing about 25%, I believe it's through IIROC And a smaller yes, I believe it's about 25% through IIROC and the rest is that where is it? I think that's correct. Yes. Sorry, I can get that number and firm it up for you. If it's directionally correct, then that's fine. Thank you. We have no further questions at this time. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. AGF's next earnings call will take place on January 26, 2022. You may now disconnect.