Good morning. My name is Anderson, and I will be your conference operator today. At this time, I would like to welcome everyone to Fiera Capital's Earnings Call to discuss financial results for the first quarter of 2022. All lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a question and answer period. As a reminder, this conference call is being recorded. If you'd like to ask a question during this time, simply press star one on your telephone keypad. If you'd like to withdraw your question, please press star two. Thank you. I will now turn over the conference to Ms. Marie-France Guay, Senior Vice President, Treasury and Investor Relations. Ms. Guay, you may begin the conference.
Good morning, everyone. Bonjour à tous. Bienvenue à la conférence de Fiera Capital. Welcome to the Fiera Capital conference call to discuss our financial results for the first quarter of 2022. Before we begin, I invite you to download a copy of today's presentation, which can be found in the investor relations section of our website at ir.fieracapital.com. Note that today's call will be held in English. Also note that comments made on today's call, including replies to certain questions, may deal with forward-looking statements which are subject to risks and uncertainties that may cause actual results to differ from expectations. I would ask you to take a moment to read the forward-looking statements on page 2 of the presentation. Our speakers today are Mr. Jean-Philippe Lemay, Global President and Chief Executive Officer, and Mr. Lucas Pontillo, Executive Vice President and Global Chief Financial Officer.
On today's call, we will discuss our Q1 2022 results, starting with an update on AUM flows as well as on our investment and distribution performance. We will then review our financial performance. Following our prepared remarks, we will take your questions. With that, I will now turn the call over to Jean-Philippe.
Thank you, Marie-France. Good morning, everyone, and thank you for joining us. The first quarter of 2022 has been characterized by a confluence of geopolitical and economic events that significantly affected global financial markets and created the highest inflation rates in several decades. Despite the challenging equity and fixed income markets, we are pleased with our business activity. We delivered CAD 1.9 billion in gross new AUM flows for the quarter, which contributed to this quarter's estimated incremental annual base management fees of CAD 14.9 million. Our continued focus on building out and raising capital for our private markets investment platform proves to be highly beneficial both for our clients and for our firm's performance.
In such a highly unpredictable environment, the allocation to private market strategies such as real assets and private credit, being less susceptible to volatile market swings and providing an edge against inflation risk, thereby improving the risk/reward efficiency of our clients' portfolios and the resiliency of our business model. The private markets platform continues to scale, generating year-on-year growth in AUM of 24.3%. We are encouraged by the momentum in our private markets pipeline and will continue to make the platform a strategic priority for our firm. In terms of our financial performance for the quarter, we saw adjusted EBITDA for the first quarter of CAD 47.3 million, compared to CAD 47.5 million in the prior year period.
Our adjusted EBITDA margin for Q1 2022 was 27.5%, and our last 12-month adjusted EBITDA margin continues to trend above 30%, coming in at 32.7%. Our adjusted EPS for the quarter was CAD 0.33, and we are pleased that our last 12-month adjusted EPS increased 10.8% compared to the first quarter of 2021 to CAD 1.74. At a macro level during the first quarter of 2022, we were faced with significant events impacting the world and our industry. There was the unexpected Russia-Ukraine conflict, continued uncertainty from the impact of COVID-19, significant inflationary pressures, and the accelerated tightening of monetary policy. As a result of this challenging macroeconomic backdrop, global equity markets have been volatile since the beginning of the year and trending downwards on fears of an economic slowdown worldwide.
Additionally, there was a decline in fixed income markets in the first quarter due to a sharp rise in interest rates, elevated inflation, and aggressive monetary policy. Despite these headwinds, we continue to demonstrate resiliency thanks to the depth and diversity of our investment platform and our overall approach to capital allocation. Now I'd like to take you through the key highlights for the quarter. Assets under management reached CAD 174.5 billion as of March 31st, an increase of CAD 1.6 billion or 0.9% over the last 12 months.
When compared to AUM for the fourth quarter of 2021, we saw a reduction of CAD 13.8 billion or 7.3%. This decrease in AUM is entirely attributable to our public markets assets under management and is overwhelmingly driven by adverse market returns, given the volatile quarter in both equity and fixed income markets. The end of year 2021 equity market valuations impacted net flows for our public markets equity strategies at the onset of the first quarter as our clients rebalanced their portfolios to crystallize their accumulated gains. We saw strong AUM flows for the first quarter in private markets with a year-on-year growth in AUM of 24.3% despite returning CAD 665 million of capital and income distributions to our clients. I will now discuss our investment performance for the quarter, starting with our public equity platform.
Given our growth-oriented, active style bias across most of our non-domestic large-cap equity strategies, the current unfavorable macroeconomic backdrop and rising interest rates and inflation environment negatively impacted the absolute and relative investment performance of our equity strategies in the first quarter. As these results are to be anticipated in this type of macroeconomic environment, and that most of our client base are evaluating and monitoring our performance within an institutional framework, we expect continuing relationships with our clients in these strategies as we maintain our long-term outlook of added value. Also, longer-term historical performance of these strategies remains very healthy. As for our U.S. small- and mid-cap and our frontier market strategies, they generated sustained strong positive alpha in line with their investment philosophy. Despite the current quarter challenges, our public market assets continue to deliver and outperform over the long term.
Over a three and five-year time horizon, 86% and 96% of our equity strategies are beating their benchmark as of the end of Q1. Moving to our public fixed income platform. I will start by mentioning that our fixed income asset base is characterized by a combination of various maturity mandates, including specialized liability-driven mandates with long-dated exposures. Hence, by design, more sensitive to rapid short-term changes in interest rates than standard fixed income portfolios. This helps to explain the decrease in fixed income AUM. Turning now to the relative performance for the quarter. Our core active fixed income strategies were challenged, given the hawkish pivot by central banks to curb the inflationary pressures caused by the consequences of the pandemic and the unexpected conflict in Eastern Europe.
As is the case for our equity strategies, the long-term historical performance of our fixed income platform remains very strong with 98% and 99% over three and five years of our strategies beating their respective benchmarks at the end of the quarter. Moving to our private markets platform. Our private markets platform delivered outstanding performance this quarter. Our real asset strategies and most of our private credit strategies continue to demonstrate great resiliency and, as expected in this inflationary environment, delivered robust performance in the first quarter. Canadian real estate and private equity strategies in particular performed very well. I'm pleased with how our private market teams navigated this choppy environment while maintaining a healthy deployment pace into attractive investment opportunities.
We deployed CAD 700 million into new investments across our strategies and have accumulated $2 billion of committed undeployed capital, providing for a healthy deployment pipeline for our teams in the coming quarters. Furthermore, we continue to make significant progress in our diversified private market solutions, which is a testament to our commitment to becoming an ever-increasingly recognized efficient allocator of capital by delivering outcome-oriented solutions to our clients. Finally, our tactical asset allocation team decision to underweight equity, move to shorter duration fixed income, and strategically support a long-term private market allocation contributed to outperformance in client portfolios at the end of the quarter. I will now turn to our distribution performance for the first quarter. The first quarter of 2022 has seen continued business activity throughout our strategies and solutions as we maintain our commitment to organic revenue growth initiatives globally.
On the gross revenue sales side, we were able to generate approximately CAD 15 million in expected annualized gross incremental base management fees, or about 10% growth in base management fees on an annualized basis. This result is largely explained by new private market subscriptions for the quarter of CAD 1.2 billion, representing approximately eleven point seven million of the fifteen million expected incremental annualized base management fees. On the net revenue growth side, two key structural factors drove the losses of revenues. First, as indicated earlier, our public equity strategies were affected by client portfolio rebalancing out of equities towards other asset classes, given the rich valuations observed at the end of last year in global equity markets. These are typical of systematic asset allocation rebalancing from our institutional and private wealth clientele.
Second, our real estate platform returned capital to investors as a result of asset dispositions and end of life of closed-end structure. These assets will not generate further base management fees. However, helped crystallize some performance fees in the quarter. Removing capital distribution in private markets and structural profit-taking on the public equity side experienced in the first quarter, we believe the growth trend remains promising as we are seeing continued activity in fundraising across our private markets platform and select opportunities in public markets as we head into the second half of the second quarter. Moving to our distribution channels. Our strategy is built to capture organic growth opportunities and increase distribution across targeted channels within each region we operate in.
In addition to further growing our business in Canada across the core institutional market and in private wealth, significantly growing our U.S., European, and Asian revenues across selected channels remain a top priority. In Canada, we are seeing continued strength and outperformance institutionally on a gross and net revenue basis, driven by private market strategies momentum and a strong focus on client retention. The Canadian private wealth channel continues its momentum and delivered strong revenue growth on the back of our differentiated and diversified private market-focused asset allocation model. In the U.S., sales in the intermediary segment were the result of structured efforts and strong relative performance by our U.S. SMID equity strategy. Similar to what we saw in Canada, the U.S. experienced market-driven rebalancing outflows, which were exacerbated by the proportion of very large accounts we managed.
In Europe and Asia, existing institutional clients increased contributions in our public market strategies. Furthermore, we are achieving progress with targeted U.K. consultants, including multiple favorable recommendations for our real asset strategies. In our financial intermediary segment, we saw new client wins and strong sales momentum for our Atlas global equity strategy in Europe, which continues to accelerate. Across all channels, we remain focused on exporting our successful Canadian distribution model to the U.S., Europe, and Asia to achieve sustainable growth across all regions and channels through continuous organizational developments. Given that we established a StonePine sub-advisory arrangement in February of this year, I wanted to provide a brief overview of how we are tracking against the strategic initiative we have previously laid out.
As mentioned in our Q4 call, client consent level was almost 100%, with only one client redeeming assets subsequent to the announcement of the transaction. As of the close of the transaction, AUM stood at CAD 61 billion, and since then has been adversely affected by market conditions. We continue to see strong client support for the new arrangement, which reflects the resiliency of our client interaction and engagement model, delivering the complete value of our firm proposition to clients globally. The StonePine and Fiera Capital management teams continue to work together constructively and collaboratively to foster the relationship and achieve thoughtful investment solutions and long-term value preservation. With that, I will turn it over to Lucas for a review of our financial performance.
Thank you, Jean-Philippe. Good morning, everyone. Before going into details, for the quarter, I wanted to highlight that we continue to evolve and enhance our financial disclosures in order to provide greater transparency on the drivers of value for our business. Starting with this quarter, we will be disclosing transaction and commitment fees from our private markets platforms separately, as these items were previously included as part of other revenues. We believe that doing so will help provide a better understanding of both the totality and diversity of revenue streams that our private market assets deliver. We have also added a free cash flow measure, which I will discuss in greater detail. Moving to our results.
We generated total revenues of CAD 172.3 million for the first quarter of 2022, an increase of CAD 6.7 million or 4% when compared to the prior year period, driven mainly by higher base management fees in private markets, higher share of earnings in joint ventures, and higher commitment and transaction fees. As you may recall, the first quarter of 2021 included CAD 15.5 million of revenues related to dispositions. Excluding the impact of these dispositions, revenue from the prior year period would have been CAD 150.1 million, translating to a year-over-year increase of CAD 22.2 million or 14.8%.
When compared to consolidated revenues of CAD 241.9 million for the three months ended December 31, 2021, we saw a decrease of CAD 69.6 million or 29%. Given that the fourth quarter revenues were historically higher and fourth quarters are typically lowest as a result of the performance fees that are generally realized in the fourth quarter of each year. A reminder that Q4 2021 also included a large outsized performance fee from our UK-based emerging and frontier markets team. Looking at private market revenues, total revenues were CAD 45.8 million during the first quarter of 2022, an increase of CAD 13.9 million compared to the first quarter of last year, or 43.5%.
Base management fees of CAD 36 million in the first quarter of 2022 increased by CAD 8.7 million or 32% year-over-year, driven primarily by favorable asset class mix and market appreciation in the real estate, infrastructure, and private credit strategies. Across distribution channels, we are happy to report that base management fees for private markets increased 27% in the institutional channel, going from CAD 20 million in Q1 2021 to CAD 25.5 million this quarter, highlighting the success we are having in driving organic growth in private assets. Also, base management fees for private markets increased 51% in the private wealth channel, going from CAD 6.6 million in Q1 2021 to CAD 10 million this quarter, demonstrating our ability to offer institutional-grade private market strategies to our private wealth clients' portfolios.
The platforms generated CAD 2.1 million in performance fees this quarter, and CAD 3.6 million in shared earnings and joint ventures, a respective CAD 1.1 million and CAD 3 million increase compared to the first quarter of last year, each driven mostly by our real estate platform in the U.K. Finally, CAD 3.8 million in transaction and commitment fees were generated during the quarter, a CAD 1.2 million or 47% year-over-year increase due to higher deal volume compared to prior years. This type of revenue is unique to private markets and does not apply to our public market investment platform. These fees represent revenue earned between the time capital committed to a strategy and the time of capital deployment, which is when we begin to generate base management fees.
As we continue to grow and scale our private markets platform, we expect that these fees will become increasingly recurring in nature and hence want to highlight them separately in our disclosures. Turning to a review of public market revenues. Total revenues in public markets were CAD 126.6 million during the first quarter, a CAD 7.1 million decrease or 5.3% compared to the first quarter of 2021. Adjusting for the CAD 15.5 million of revenues related to dispositions that were included in Q1 2021, public market revenues were actually up 7% year-over-year. Base management fees accounted for most of the year-over-year decrease, representing a CAD 5.9 million or 4.6%.
Excluding the impact of dispositions, base management fees were up CAD 8.1 million or 7% compared to the first quarter of 2021. Across distribution channels, base management fees for public markets increased almost 3% in the institutional channel, going from CAD 56.9 million in Q1 to CAD 58.4 million this quarter despite market volatility and rebalancing of client portfolios. They decreased 5% in the financial intermediary channel, going from CAD 53.7 million in Q1 2021 to CAD 50.9 million this quarter. However, this channel was impacted by dispositions and when adjusting for CAD 8.7 million in revenue included in Q1 of 2021, revenues in this channel were actually up 13%. Revenues in the private market channel decreased 25%, going from CAD 18.6 million in Q1 2021 to CAD 14 million this quarter.
However, again, this channel was also impacted by dispositions, and when adjusting for the CAD 5.3 million in revenue included in Q1 of 2021, revenues in this channel were actually up 5%. Performance fees increased by CAD 800,000 to CAD 1.2 million, due largely to the continued successful performance of some of our Canadian and UK-based investment teams. Overall, we are pleased with our revenue results for the quarter, and particularly to the growing share of revenues generated by the private markets platform, which have increased 21% from 21% of our total revenues to 27% of our overall revenues on a year-on-year basis. Now looking at our SG&A. SG&A was CAD 139.6 million for the quarter, compared to CAD 121.4 million for the same period last year.
SG&A for the current quarter was impacted by CAD 11.6 million of additional expense related to the grant and accelerated vesting of awards to the former Global Equity team. While Q1 2021 SG&A included CAD 9.5 million of expense related to dispositions. Excluding the share-based compensation, SG&A was CAD 125 million for the first quarter of 2022. Further adjusting for the prior period dispositions, SG&A before share-based comp for Q1 2021 would have been CAD 108.6 million, resulting in a CAD 16.4 million increase. This compares favorably to a year-over-year increase of CAD 22.2 million in total revenues when adjusting for dispositions as previously mentioned.
As the StonePine arrangement became effective February first, share-based compensation previously paid to this team will now form part of sub-advisory fees and therefore be included in operating expenses as opposed to share-based compensation. In Q1 2022, two-thirds of this reclassification of expense was captured in the quarter. Looking at net earnings and adjusted net earnings. We recorded net earnings attributable to company shareholders of CAD 3.4 million or CAD 0.03 per share during the first quarter of 2022, compared to net earnings of CAD 22.2 million in the first quarter of last year. Adjusted net earnings during the current quarter were CAD 33.3 million compared to CAD 37.5 million in the prior year.
The difference between net earnings and adjusted net earnings is due to an increase in share-based compensation, driven largely by the one-off expense of accelerated vesting and share-based compensation relating to the StonePine arrangement, which was CAD 11.6 million of the CAD 14.6 million recorded during this quarter. Balance of the difference mainly represents CAD 15.4 million in amortization and depreciation expense. As we look at our adjusted EBITDA and adjusted EBITDA margin, we generated adjusted EBITDA of CAD 47.3 million compared to CAD 47.5 million in the first quarter of last year. Included in the first quarter of 2021 was CAD 6 million of adjusted EBITDA related to dispositions. Excluding the impact of disposition, adjusted EBITDA for the first quarter of 2021 would have been CAD 41.5 million, resulting in a year-over-year increase of CAD 5.8 million or 14%.
Adjusted EBITDA margin in the first quarter of 2022 was 27.5%. Excluding the impact of dispositions, adjusted EBITDA margin in the first quarter of 2021 would have been 27.6%. Hence, the margin is essentially flat year-over-year despite the reduction in AUM and the fact that a portion of these expenses related to share-based compensation previously paid to the StonePine team is now included in adjusted EBITDA as a part of sub-advisory fees paid to StonePine. Adjusted EPS has grown steadily over the course of the last three years. Last twelve-month adjusted EPS of CAD 1.74 is a year-over-year increase of CAD 0.17 or 11%. The ratio of dividend paid per share to adjusted EPS has fallen from 54%- 49% over the year.
When looking at this from an adjusted EBITDA perspective, this ratio has improved from 41%- 36%. In addition to our ongoing enhancements of our revenue disclosures, I would also like to mention the introduction of our new free cash flow measure. In response to recent analyst and investor feedback, and as free cash flow is becoming an increasingly important measure for the asset management industry, we have decided to provide additional transparency by disclosing this measure. Specifically for Fiera, last 12 months free cash flow highlights the cash available to return to shareholders to dividends or deployed for strategic purposes. A last 12-month measure was chosen as quarterly measures would be more affected by working capital fluctuations throughout the year, as well as the timing of performance fees.
Last 12 months free cash flow is defined as net cash generated by or used in operating activities and adjusted to deduct obligations such as lease payments, interest paid on debt, cash paid for the settlement of purchase price obligations, and dividends paid to non-controlling interest. Cash generated by or used in operating activities is further adjusted to add back proceeds received from a promissory note, distributions received from joint ventures and associates, and also added back are payments of acquisition-related restructuring and other costs. With that in mind, last 12 months free cash flow was CAD 145.3 million in Q1 2022, CAD 43.7 million increase year-over-year. Also of note is last 12 months dividends represents 60% of this amount.
We believe that LTM free cash flow is a meaningful measure as it provides further insight into the available cash that the company could allocate to return capital for shareholders, deploy capital for reinvestment in the business or to reduce leverage. We hope this will provide investors greater clarity on the state of our business, our opportunities, and our progress. Turning to our financial leverage ratios. During the first quarter of 2022, we lowered our net debt by CAD 12.3 million, or 2.1% when compared to the prior year period. Net debt, which includes our convertible and hybrid instruments, excludes cash, was CAD 569.9 million as of March 31st.
Likewise, our funded debt as calculated per our credit facility was CAD 460.8 million at the end of the quarter, a marginal increase to the same quarter a year ago. Our funded debt to EBITDA ratio was 2.18x as of March 31, 2022. This is the fifth consecutive quarter where this ratio has been below the 2.5x mark. Following quarter end, on April 20, we announced the amendment and extension of our credit facility from June 2023 to April 2026, which provides for increase in borrowing capacity from CAD 600 million to CAD 700 million. This will provide us with additional flexibility to deal with the upcoming maturity of our convertible debt. We are pleased with the continued improvement of our financial metrics and leverage position.
In addition to reducing our financial leverage, we remain committed to delivering value to our shareholders as a fundamental pillar of our strategy with strategic and efficient capital allocation. As mentioned in our last earnings call, earlier this year, we renewed our distribution agreement with Natixis Investment Managers and repurchased for cancellation 3.56 million Class A shares. This allowed us to return CAD 34.9 million to shareholders via the buyback. Moving on to our dividend. Our shareholders continue to benefit from an attractive dividend yield. I'm also pleased to announce that the board has approved a dividend of CAD 0.215 per share, payable to shareholders on June 13th. I'll now turn the call back to Jean-Philippe for closing remarks.
Thank you, Lucas. We are encouraged by this quarter's results despite the challenging headwinds which reflect the continued execution of our strategic priorities, including the expanded distribution of our private markets investment solutions, the continued build-out of our distribution capabilities, and the streamlining and scaling of our operations. Going forward, our aim is to continue to evolve Fiera Capital into a solution-oriented, diversified global asset management firm that is committed to serving our clients with sophistication and care, and to championing our industry as efficient allocators of capital. We plan to continue to evolve our flagship public market offering while also investing in our private market capabilities.
As we continue to navigate the ongoing market volatility and uncertainty, our wide array of public and private market solutions provide the breadth and scale of capabilities to ensure that we continue to be efficient allocators of capital for our clients in achieving their targeted investment outcomes. Despite the challenging macroeconomic backdrop, we're confident in the strength of our long-term performance and gross sales pipeline for the second quarter of 2022. As always, we remain committed to delivering long-term value and fostering sustainable prosperity for our shareholders. The recent refinancing of our credit facility demonstrates how we are allocating capital efficiently for the benefit of our shareholders as it allows greater flexibility to weather market uncertainty. I will now turn the call back to the operator.
Thank you, sir. Ladies and gentlemen, we now conduct the question and answer session. If you'd like to ask a question, press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press star two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please, for your first question. Your first question comes from Geoff Kwan with RBC Capital Markets. Please go ahead.
Hi, good morning.
Good morning.
Thanks for the color on kind of the net sales performance in the quarter by the segments and geographies and whatnot. I just was wondering with obviously the market and macro environment changing, you know, how is this impacting both on the net sales side on the public strategies as well as fundraising on the private side within, you know, the institutional financial institution and private wealth segments?
Thank you, Geoff. Actually, well, two aspects to your question, Geoff. First of all, the outlook, the macro outlook in the current situation that we are experiencing right now are actually providing a tailwind to our fundraising on the private market, on the private market side. Specifically speaking about our real assets and private credit, all of these strategies are actually very well positioned to navigate these types of situation in these types of environments. Like I alluded to in my prepared remarks, we're seeing continued momentum in terms of activity pipeline and opportunities, as we are navigating the situation from a fundraising standpoint.
On the public market side, I also articulated in my prepared remarks that, given the heightened valuations that we had towards the end of last year, you know, systematic rebalancing of our clients at their portfolio level really kind of rebalancing the overweight of equities of equity weights experiencing through that. They started to actually rebalance and sell those, like net contribution negative on those assets and to reallocate to other asset classes. We've seen that accelerate at the beginning of the year. Over the past few months, we really saw a decrease in deceleration of that. Who knows, depending on where markets are going, we might experience the opposite effect as well, right?
If it comes to that in lower market levels. That's the. Yeah, these are my comments, Geoff. Hope it helps.
Okay. When you kind of think about the overall level of net sales performance, in terms of getting more consistent positive net sales, do you think it's more around increasing the gross sales that you're getting or is it, you know, trying to the extent that you can kind of limit or reduce the redemptions that you're experiencing?
We're obviously working on both sides of the coin. Our initiatives and resources that we're deploying in our distribution teams globally have clear accountabilities and responsibilities in fundraising. That's our focus there. At the same time, we're also very focused on having the proper resources and types of engagement with our clients that minimize asset losses or maximize retention, if you will. We're really working on those two sides at the same time. We're also adapting that strategy, Geoff, depending on the region. When I think about our Canadian presence with probably around CAD 115 billion of AUM across public and privates, you know, we have long-standing relationships, and we're very well positioned in the market.
The retention aspect is a big focus as well as growth, right? But when I think about the U.S. market or Europe and Asia, the tilt there and the focus is really more on the gross new sales, as opposed to retention given the nature of our more nascent presence, if I can comment that way. We're working at both sides of the equation.
Okay, great. Thank you.
Thank you. Your next question comes from Gary Ho with Desjardins Capital Markets. Please go ahead.
Thanks. Good morning. JP, just maybe on the fund performance and AUM side, you know, the three-year performance on the equity strategies, beating benchmark dropped to 86% this quarter from 95%. Wondering if you can provide some comments there and any concerns there to watch out for. Then on the fixed income side, I think you've given us some interest rate sensitivities before. I think it was 25 basis points change in rates impacts annualized revenue by CAD 1.7 million. Just wondering if that number has changed and maybe get an update there as well.
Thank you. Thank you, Gary. On the relative performance of our equity platform, we obviously on the non-domestic have a growth quality tilt in terms of the active style. We are, you know, performing as expected, given this rotation from growth to value that we are experiencing in these interest rates and inflation environment. If I take an institutional perspective, the expected behavior of the performance is directly in line with our investment style, and our teams are continuing to follow their investment process.
The way we think about that is a question of how persistent that rotation will be through time, the amplitude and the length of the potential decoupling between the performance and value and growth, and to what extent eventually institutions will diversify again from a style standpoint. In any event, we don't expect this relative performance at this point to become a negative business headwind, I would say. It's more a question of how we evolve the platform going forward if there's a longer-term rotation from growth to value. That's really how we think about it. In the short term, we don't see a you know, business pressure on that front. That's on the public equity side.
As it relates to the question on fixed income, I'll give you an update, an updated sensitivity, maybe with a different lens. Over the quarter, our fixed income AUM decreased by about CAD 5.7 billion. That represents about 7.6% of our AUM at the beginning of the quarter. You know, overall universe rates average yield have increased by about 1.1%. If you do the math, it's about, you know, seven-year duration on our fixed income assets under management. Obviously, that evolves, right? The shift in rates was pretty dramatic.
The duration will likely decrease a bit. I don't want to get too technical here, but that's, I think I would think about the sensitivity of the AUM. Overall our fixed income revenues on an annualized basis is around CAD 100 million. You can use that for your purposes.
Okay. Okay, great. Also just maybe to follow on the net flows discussion, CAD 1.1 billion public markets outflows this quarter. How much of that, if any, was related to the StonePine AUM? I think you mentioned in your prepared remarks there's one client that pulled out some funds there. Maybe you can elaborate on other initiatives you're working with the team there. I know it's still early days.
Yeah. Thank you, Gary. Just to give a bit more precision on the net flow. The reasoning behind most of the net flows on the equity side is really related to the profit-taking, as I explained earlier. Out of the CAD 1.3 you're quoting, around half of it is from our global strategies managed by StonePine. Really it's a structural observation of outflows, negative contribution, as I explained earlier. That's on that front. In terms of the partnership, I mean, everything is going well, and actually a bit better than as planned. We're continuing to work constructively together to you know continue to partner together going forward.
There's no other clients that have indicated to you that they could potentially redeem?
Okay. Yeah, I forgot about coming back on that part of your question. Thank you for reminding me, Gary. Just to be clear, the one client that we're quoting that left actually left in Q4. That was already. I think we already disclosed that in our past calls. In this quarter, no material client left that was really related to net contribution negative that I explained. From a client stability standpoint, you know, it's hard to predict, but at this point, you know, we have very good dialogue with our clients and, you know, we're not foreseeing in the short term, you know, significant movement out.
Okay, great. Then last question for me, Lucas. Just going back to that share-based comp number. Just wanna make sure I understand this. You mentioned CAD 11.6 million additional expense from the Global Equity team, and that's two-thirds of the quarter that's captured here. Does that mean if I look out, that's gonna be a CAD 17.4 million hit for a full quarter? How does this compare to the CAD 5 million-CAD 7 million you've previously identified in kind of last few conference calls?
Thanks for the question, Gary. It's probably the first quarter where the explanation will be a bit easier relative to that CAD 11.6 million because the previous numbers we discussed were always in relation to sort of rolling three-year plans, and it was three years worth of plans extending. In any one year, you had three years. What's a bit cleaner for this quarter in the disclosure is that that CAD 11.6 million effectively represents, you know, the grant for a one-year period, and it's been accelerated in one year. You can almost take that expense as a run rate expense for a full year and think about that assuming that the economics were to stay the same as they were at the end of December 31st.
That is to say, those AUM levels, that would be a reasonable amount to assume that would be moving from below the line to above the line in our P&L, if you will.
Okay. That number will jump to that CAD 17 million in Q2 then?
No, no. That number actually represents a full year. You can almost think about it as CAD 3 million per quarter.
Okay. How should I think about this running off over time?
You shouldn't think of it running off over time because at the end of the day, it's structural at this point, right? It's just embedded in the sub-advisory fee at this point in terms of economics. That was originally when we disclosed and said there's really no change in economics. It's not a run-off number at this point.
Okay. Got it. Those are my questions. Thank you.
Thanks, Gary.
Thank you. Your next question comes from Graham Ryding with TD Securities. Please go ahead.
Maybe just to follow up on that, what's the expected run rate now going forward for share-based comp?
For the current quarter, you can think about it, you know, right now as things stand, it'll probably be about CAD 3 million. That, you know, that doesn't include any new hires or any new, you know, transactions that we might do going forward. At steady state, it's at about CAD 3 million.
Okay, perfect. Thank you. Then if I think about, you know, your margins now in light of, obviously you're incorporating StonePine, but also there's been some recent market volatility. Is there any color you can provide or expectation of what you think you can achieve for 2022 for an EBITDA margin?
Yeah. I mean, I would say sort of it's two elements, both of which are structural. You know, the StonePine, as you mentioned, I think it's pretty clear what the impact on that'll be in terms of it going, you know, from below the line to above the line. The other one, you know, the market at this point, obviously there's been a lot of uncertainty in Q1 in the markets. It was exacerbated further in the month of April. It's something that we're definitely watching. I think you have an idea of what the overall sensitivity is in terms of, you know, for us, if you look, you know, JP commented on the fixed income book, I could comment on the equity book.
On base management fees, we're running at about CAD 400 million of annual revenue in base management fees from equities. You assume a 10% correction that's worth about CAD 40 million of revenue on an annual basis. Again, I think you can use that as a guide in terms of what the market sensitivities might be going forward. The offset to all of that, however, is that, you know, as we continue to move more into private market strategies, and hence why we're going out of our way again to try to break out the revenue components of that. The relative contribution of private market assets certainly helps the margin as well.
That's one sort of tailwind that we have as we continue to keep the distribution momentum and growth of that platform. I would say those are sort of three catalysts that you should think about as you look at our model.
How much flexibility do you have or room do you have on the SG&A side? Like, does compensation move somewhat with the direction of average AUM or revenue, or is it fairly fixed, that SG&A piece?
Well, there's two components. I mean, the investment teams, you know, there is a revenue-sharing arrangement in there. Again, there's a shock absorber mechanism to that for sure, in terms of compensation. They share in the upside, but likewise, you know, we get to share in the downside in terms of offset the SG&A. Then in terms of expenses, you know, just overall fixed comp structure. You know, I'll reiterate again what I did in Q1 2020, which is, you know, we're not going to knee-jerk react to our longer-term strategy for the business, you know, based on what could be some shorter-term market volatility. I think we demonstrated at the beginning of the pandemic that we monitor the situations closely, we're constantly stress testing.
By the same token, we want to make sure that we're doing the right things by the business for the long term, which would mean, in our perspective, continuing to invest in our distribution capabilities, continuing to invest in our private market capabilities. It's sort of that's where we're looking at it from both perspectives in that regard.
Yeah. That was the piece that I wanted to sort of get some comfort on was the revenue share piece on the investment team side. That's perfect. My last question would just be on the outlook for your own sort of effective interest rate on the debt side. Can you just remind us, you know, how you approach that? I know in the past you've hedged some of that variable rate exposure. Can you give us an update on, you know, how sensitive you are, how much impact you might feel on the interest expense side from the move higher in rates.
For the moment, the hedge actually is still in place for one more week in terms of the expiring program, and we have not taken a position at this point in terms of the renewed facility. You know, the reality is we looked at it at this point and felt that that there's a fair bid priced into the curve, at least for the next two years. Again, rather than knee-jerk reacting to the volatile movements that have happened over the last month, we wanna take a bit of time to really understand and get a view on what we do with a hedging strategy relative to our facility at this point. You know, the--
If you look at it the other way, think about it as CAD 400 million on the facility is variable, you know, effective in a week or two, and then you still have just over CAD 200 million on the other two, which are effectively fixed on the convertible and the hybrid instrument. We'll determine what the optimal mix is on an overall hedge at that point, depending where we end up on the overall capital structure.
Understood. You may look to hedge some of that variable component in the future, but you're gonna wait to see how sort of the markets settle out. Is that?
Correct.
Okay.
We're also in the process of figuring out what we do with our convertibles, which will become short-term at the end of June. Hence the idea behind increasing the facility by CAD 100 million to give us that flexibility and so they're not being pushed by timing to do something and really thinking about the optimal date.
Okay, great. My last question is just a bit there. Historically, or last quarter, and over last year, the fairly big delta between that weighted average basic shares and your diluted shares, but it reduced quite materially this quarter. What's driving that big shift in the delta between those two amounts?
The buyback in particular that we did at the beginning of Q1, and I know it seems like ancient history at this point, but it was at the beginning of the first quarter, when we bought back the 3.56 million shares from Natixis. That did go a long way to reduce our overall share count in terms of minimizing the dilution on the outstanding number.
Okay. That's it for me. Thank you.
Thank you.
Thank you.
Thank you. Your next question comes from Jaeme Gloyn with National Bank Financial. Please go ahead.
Yeah, thanks. Just a few clarification questions back on the share-based comps of CAD 3 million per quarter run rate. Each year for the next couple of years, we should have a StonePine share-based comp flow through that line, or will that all just get covered into the SG&A cost?
No, that's all.
Sorry, I spoke over you. Start again, Lucas. I apologize.
No. That'll effectively go into the run rate, Jaeme. There's no more share-based comp. I say no more. There's a stub period because the deal only got papered on February first instead of January first. There's one more month that we'll take care of in Q2. It's gonna be a very small amount. Really how you should think about that now is that. Let's say, I think that last share-based payment that was accelerated for one year is a good proxy for what an annual expense is at this stage, and that effectively moves above the line.
Okay. It wasn't in SG&A in Q1 2022, but it will move into SG&A in Q2 going forward.
Correct.
On an annual basis. Okay. That's clear. Thank you. In terms of the performance fees on the private market business, just wanna get a sense on cadence and timing. Is it gonna be similar to the public market where Q4 is the big quarter, or is this gonna be lumpy and it comes as it comes and goes as it goes? How should we think about performance fees from the private market business?
Maybe I'll take that one and give some comments. To perspective, I think it's gonna come and go by quarter, and the amplitude will vary in general terms, and I think over the next few quarters. The other comment I would like to make is some of our strategies, if I think about, let's say, the agriculture strategy, which we launched a few years back, are very long-term in nature. It really takes a long period of time, like multi-year, to start crystallizing and creating the value to actually extract and benefit from carry in those strategies.
If I take a longer-term perspective, the more our platform will mature through time, you will see less, I would say, bumps in the values quarter by quarter, and we're gonna start to see a better pattern as we mature the different platforms. I think it's a question of horizon.
Okay. Got it. Last one, just on the free cash flow disclosure. I've only tried to replicate it really quick, but I'm not getting a similar number to you. Is this something I can calculate with the publicly disclosed financial statement data, or is there something else that might be behind the scenes?
No.
I apologize if-
No, absolutely.
I'm just doing it quick, so.
No, you should absolutely be able to do it if you refer to our management discussion and analysis. We have it laid out in terms of what's in there, the different component parts. Again, you start with operating cash flow, and you can just work your way there from all the elements are financial statement disclosed, so you should be able to get at that with no issue.
Okay, great. With that, actually, in terms of, like, the buyback activity, where the shares are trading now, where leverage is, where cash flow is that the most appropriate use of the, let's say, the excess cash flow over the dividend right now? Would you expect to ramp that up on the buyback, that is?
Well, I mean, Q1 was already a big quarter in terms of it's the largest, you know, amount that we've ever done in one quarter, obviously, you know, through a closed transaction with Natixis, but it was still a fairly large amount. At this point, coming back to my earlier comment just about, you know, the market volatility that we're experiencing, we're just, you know, trying to get a better sense of where things are going and prioritizing, you know, opportunities and things we wanna look at. Again, we feel that at this point, at least for the first quarter, there was a good amount deployed in terms of share buybacks. We're not feeling any pressure to do anything additional there.
Depending on, as I say, how priorities shape up for the balance of the year, depending on some of the vol that we've seen, we may do some more.
Okay. In terms of priorities, would you rank buyback above dividends? Or maybe just a quick refresh on the capital allocation priorities.
I think, again, you know, the dividend is our first priority. Above that, we look to share buybacks as an additional trade-off to return to shareholders in the current environment. I would say that, you know, we're always monitoring things.
Okay, thanks very much. That's it for me.
Thank you.
Thank you. There are no further questions at this time. Ms. Guay, I'll turn the call back over to you.
Thank you, operator. This concludes today's call. Thank you for joining. Merci.
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