Good morning. My name is Sylvie. 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 fourth quarter of 2022. All lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a Q&A period. As a reminder, this conference call is being recorded. If you would like to ask a question during the time of Q&A, simply press star one. If you would like to withdraw your question, please press two, star two on your keypad. Thank you. Now I would like to turn the conference over to Ms. Marie-France Guay, Senior Vice President, Treasury and Investor Relations. Please go ahead.
Thank you, Sylvie. Good morning, everyone. Bonjour à tous. Bienvenue à l'appel de conférence de Fiera Capital pour discuter des résultats financiers du quatrième trimestre de l'exercice 2022. Welcome to the Fiera Capital conference call to discuss the financial results for the fourth 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 two of the presentation.
Our speakers today are Mr. Jean-Guy Desjardins, Chairman of the Board and Chief Executive Officer, and Mr. Lucas Pontillo, Executive Director and Global Chief Financial Officer. John Valentini, Executive Director and Chief Executive Officer of Private Markets, and Jean Michel, Executive Director and Chief Investment Officer of Public Markets, are also on hand to answer questions. On today's call, we will discuss our Q4 2022 results, starting with an update on our AUM, followed by our distribution and investment performance. We will review our financial performance. Following the prepared remarks, we will take your questions. With that, I will now turn the call over to Monsieur Desjardins.
Thank you, Marie-France. Good morning, everyone, and thank you for joining us. First of all, let me tell you that I'm very happy and quite excited to be back at the helm as we continue to pursue Fiera's growth ambitions and execute against our strategic plan. Last year was a difficult year in global markets, with declines in equity and fixed income markets further impacting investor outflows and rebalancing. While 2023 has started on a positive note, we remain vigilant as we continue to navigate through a threatening macroeconomic environment. Notwithstanding this, Fiera's strategic priority of growing our private markets platform, as well as the strong relative returns of our public markets investment strategy, positions us well to weather any further market volatility in 2023. Turning to our fourth quarter results.
We reported assets under management of CAD 158.5 billion for the fourth quarter of 2022. Although we benefited from the market rally in equities in the fourth quarter, outflows from a few financial intermediary clients muted the impact of the equity rebound on our public markets AUM, resulting in AUM being essentially flat versus the prior quarter. Assets under management in private markets was also flat in the quarter. We continued to see a good pace of new subscriptions across our alternative strategies, with decreases in AUM being driven by return on capital to investors rather than lost mandates. Overall, assets under management was down CAD 29.8 billion, or about 16% over the last twelve months, as we, like the rest of the industry, were impacted by the equity and fixed income market downturn.
This further precipitated outflows from client rebalancing following particularly strong investment returns in 2021. The continued volatility in financial markets through the majority of 2022 intensified withdrawals from active equities through the second and third quarters as clients tried to adjust their portfolios to maneuver through the high inflationary environment. On a positive note, the pace of rebalancing we saw through most of 2022 did slow in the fourth quarter, and we experienced some positive momentum in the form of new fixed income allocations. We are confident that our proven track record of long-term performance across our strategies will position us well for when investors begin to reallocate towards public market strategy. We saw continued growth in private markets in 2022, which ended the year at CAD 18.2 billion, resulting in year-over-year growth of 14%.
We returned CAD 1.4 billion to our clients through capital and income distributions while raising CAD 3.3 billion in new subscriptions over the same period. Our private markets platform is a key differentiator to investors looking to diversify through this period of public market volatility. We are uniquely positioned as we have been building this platform since 2005 and have established a diversified and strong performing offering across our private market strategies, which is unique in the Canadian market. In the quarter, new client mandates into our private market strategies continued to drive top-line growth, with new mandates representing 30% of the new AUM flows in the quarter, which are expected to generate 70% of the associated annualized base management fees.
Though it was a difficult year for net flows, we are encouraged by the CAD 8.2 billion of gross new mandates generated across our platforms over the year and look forward to building on that momentum in 2023 as we continue to expand our distribution capabilities globally. We'll now turn to our commercial performance across our channels and regions for the fourth quarter. In Canada, we secured major wins this quarter with fixed income mandates won from large Canadian institutions, resulting in CAD 400 million of positive net organic growth in the institutional channel. While flows in the Canadian financial intermediaries channel was challenged this quarter, with the majority of the outflows driven by the loss of certain fixed income mandates.
Our differentiated private wealth platform in Canada allows us to offer our high-net-worth clients access to our private market investment strategies via our pooled fund feeder structures. Pooled funds saw significant growth in 2022, growing from CAD 4.5 billion to CAD 5.7 billion, with CAD 1 billion of that increase attributable to organic growth. In Europe and Asia, despite the continued stress market conditions in that region, we saw modest positive net organic growth in the fourth quarter. In public markets, we secured a major LDI mandate from a large institutional client in Europe, which drove the majority of the positive net organic growth this quarter. We continue to gain momentum in the financial intermediary channel across that region with the approval of new partners for both our Atlas Global Companies and OAKS emerging market strategies.
In the U.S., lost mandates of about CAD 2 billion were driven by outflows of equity mandates, including a mandate sub-advised by StonePine. We continue to see attractive opportunities in the U.S. for our broad suite of investment capabilities. However, we still have more work to do on building out our distribution capabilities to penetrate the U.S. market more effectively, particularly with our private market strategies. As we go forward, we recognize that client needs and market dynamics are different across the regions that we operate in. It therefore becomes important to have a decentralized approach to our distribution model to ensure that we are effectively positioning our strong suite of private markets capabilities and continue to leverage the robust investment performance of our public market strategies. I will now discuss our investment platform for the fourth quarter. Starting with our private market platform.
We continued to deliver strong performance in the fourth quarter with positive returns in the majority of our private market strategies. Our Canadian and U.K. real estate strategies performance this quarter continued to reflect the downward property valuation pressures being experienced across all sectors within the industry. Asset values have decreased because of rising capitalization rates. These are viewed more as a reflection of the unfavorable macro environment rather than on the underlying fundamentals of our real estate strategies. Our real estate portfolio is at an advantage due to its weighting in industrial and multi-residential, with demand in these sectors outpacing supply and driving rental rate growth, which partly offsets the cap rate increases. Our infrastructure strategies remained resilient in the face of a challenged macroeconomic environment and generated positive returns in the fourth quarter and for all of 2022.
The inflationary hedging and fixed rate debt characteristics of the underlying assets in these strategies continue to be attractive to investors. Our private credit strategies generated strong positive returns this quarter and ended the year in positive territory, benefiting from diversification across sectors and geographies. The strongest performers were strategies with exposure to real estate debt. As mentioned in previous quarters, many of our credit strategies are benefiting from floating rate exposure, which has resulted in an increase in overall yield. Turning to our agriculture platform. The strategy has delivered a strong return in 2022 of almost 8%, with multiple partnerships being completed, being value accretive acquisitions with a strong pipeline of follow-on investment in the future, which continues to appeal to investors. The AUM for this strategy has almost doubled this year, growing from CAD 1.1 billion to CAD 1.9 billion.
Lastly, in private equity. Much of the story remains the same, with market volatility being tempered by the positive performance and resiliency of the portfolio's underlying business. The team continues to maintain a robust pipeline of transaction opportunities globally. Overall, we raised CAD 550 million in new subscriptions and deployed CAD 800 million into new investments in the fourth quarter. We have accumulated CAD 1.9 billion of committed undeployed capital, providing the necessary dry power to quickly deploy our clients' capital into attractive investment opportunities. Year-over-year, our AUM for private markets has increased CAD 2.3 billion.
Over the last three years, revenues from our private markets platform has grown at a compounded annual growth rate of 20% and continues to be accretive to our top line, with private markets driving 34% of revenues, while representing 12% of AUM in Q4. Moving on to our public equity platform. On the back of a positive rally in October and November, global equity markets ended the fourth quarter in positive territory. However, this was not enough to offset the losses of the previous quarters. As a result, full year market performance was negative, impacting the returns across most strategies. Our large cap equity strategies posted mixed results relative to their respective benchmarks for the fourth quarter. The Canadian equity strategy had an uncharacteristically weak quarter due to security selection.
However, the strategies continue to be ranked in the first quartile across the one-year and three-year time horizon. Additionally, our Atlas Global and international equity strategies both have a growth tilt, whereas strategies with value characteristics outperformed that quarter. Our U.S. small and mid-cap growth strategy has delivered sustained strong performance relative to its benchmarks across the short and long term, with a track record that continues to be attractive to clients. While relative performance was mixed across our equity strategies this quarter, the long-term track record is proof of the excellence of our investment teams. Over a three and five-year time horizon, 96% and 98% of our equity strategies are beating their benchmark at the end of the fourth quarter, respectively. Now moving to our public fixed income platform.
Our Canadian fixed income strategies continued to show resilience in the fourth quarter in the face of recessionary risk. On an absolute basis, returns were modestly positive across the board and were also positive on a relative basis to their respective benchmark. In the U.S., our fixed income tax efficient core plus and High Grade Core Intermediate strategies had mixed results this quarter. The tax efficient core plus added value for the fourth quarter, mainly due to its long duration positioning, and continues to be ranked first quartile on a three-year horizon. The High Grade Core Intermediate strategy detracted value due to the short duration positioning of these strategies, which was detrimental as the markets began to price in a slowdown in rate hikes.
In line with our equity strategies, the long-term historical performance of our fixed income platform remains strong, with 85% and 94% of our strategies beating their benchmark over three and five years, respectively, at the end of the fourth quarter. Finally, our tactical asset allocation team, which I'm very fond of, continues to deliver positive returns relative to its benchmark of 3.78% value-added over a one-year period, driven by an overweighted position on real assets, an underweighted position on bonds, as well as an underweighted position in equities, which have respectively been the strongest and weakest performing asset classes over this period.
The team continues to assume a defensive stance from an allocation perspective in light of the looming recessionary outlook with a continuation in the over weighted position in international equities, which was the main driver of the negative value add in quarter four. With that, I will turn it over to Lucas for a review of our financial performance.
Thank you, Jean-Guy. Good morning, everyone. I will now review our financial results for the fourth quarter and year-ended 2022. Across our investment platforms, we generated total revenues of nearly CAD 185 million in the current quarter, compared to CAD 242 million in the fourth quarter of 2021. The decrease was driven by lower performance fees in public markets, which returned to normalized levels in 2022, following an outsized performance year in 2021. Lower base management fees in public markets as a result of lower average AUM. Quarter-over-quarter, revenues increased by CAD 24 million or 15%, mainly because of performance fees being recognized in the fourth quarter. Despite lower average AUM for the quarter, base management fees increased quarter-over-quarter as a result of our growing share of revenues from private market strategies.
Additionally, our increased weighting of AUM invested in equity strategies benefited revenues this quarter compared to last quarter due to the equity market rally at the end of the year. While AUM decreased 16% year-over-year, full-year revenues only decreased 7% after excluding the impact of dispositions in 2021. The average fee rate of our new mandates were accretive to our current average fee rate, a testament to our continued diversified growth in our private market strategies, which offset the declines in public markets felt across equity and fixed income in 2022. Looking more closely at private market revenues for the quarter.
Private markets total revenues of CAD 62 million were down by 6% in the fourth quarter compared to CAD 66 million in the fourth quarter of last year, due to lower performance fees and share of earnings on joint venture projects in our real estate business in the U.K. compared to last year. 2021 being a banner year for the U.K. real estate business. Despite this, base management fees in private markets were up nearly 22% compared to Q4 2021, driven by additional capital deployment and sourcing across our institutional and private wealth channels. In addition, commitment and transaction fees of about CAD 9 million in Q4 from new flows and capital deployment continue to provide an additional revenue stream for this platform.
Quarter-over-quarter, total revenues were up nearly 20%, with additional commitment and transaction fees, as well as performance fees earned in Q4. On a full-year basis, base management fees in private markets were up 28% compared to the same 12-month period last year. We continue to see a growing relative share of contribution from private markets to our overall revenues, which accounted for 34% of the revenues in the fourth quarter of 2022, up from 27% in Q4 of last year, as Jean-Guy previously mentioned. Turning to a review of public market revenues.
Compared to Q4 2021, public market revenues decreased 30% to about CAD 123 million in the current quarter due to the aforementioned performance fees in 2021, as well as from lower average AUM due to the decline in financial markets and client rebalancing out of equity mandates throughout the year. Quarter-over-quarter, public market revenues increased 14%. Although ending AUM was slightly higher in Q4, average AUM for the quarter was actually lower. That being said, public market-based management fees remained stable from the previous quarter and benefited from a favorable change in asset mix weighted towards equities, which enjoyed a rally in performance in the quarter. On a full-year basis, public market revenues declined 16% to about CAD 471 million compared to the prior year.
Excluding dispositions in 2021, the revenue decrease was only 14% year-over-year. With regards to SG&A, SG&A excluding share-based compensation totaled approximately CAD 132 million in the Q4, an increase of about 14% from the prior quarter. This increase is aligned with our corresponding increase in revenue, given the variable nature of some of our compensation structures and public market strategies. On a full year basis, total SG&A expense decreased by CAD 25 million, or almost 5%. When excluding share-based compensation and dispositions, SG&A was effectively flat year-over-year. As we continue to navigate the challenging economic environment, we are closely monitoring operating expenses as we adjust to an ever-evolving market volatility. Turning to adjusted EBITDA and adjusted EBITDA margin.
We generated adjusted EBITDA of CAD 52.8 million in the current quarter, an increase of 16.8% from the prior quarter, driven largely by higher revenues from performance fees, which we typically crystallize in the fourth quarter. Year-over-year, adjusted EBITDA decreased by 43% due to the outside performance fees in 2021, which as mentioned, returned to more normal levels in 2022. Our adjusted EBITDA margin increased in Q4 from the prior quarter to 28.6%. The 12-month trend in adjusted EBITDA has remained stable through fiscal 2022, a testament to our prudent focus on profitability despite the volatile year the markets have had and their corresponding impact on the top line. Looking at net earnings and adjusted net earnings.
Company posted its eighth straight quarter of positive net earnings, with net earnings attributable to shareholders of CAD 2.5 million or CAD 0.02 per share during the fourth quarter of 2022. Adjusted net earnings were CAD 33.1 million or CAD 0.32 per share. On a trailing twelve-month basis, adjusted earnings per share was CAD 1.19. With respect to free cash flow. Last twelve months free cash flow was CAD 58.9 million for the fourth quarter of 2022. While the year-over-year decrease was obviously impacted by the decrease in adjusted EBITDA, it is also important to note that 2022 was also impacted by certain non-recurring outflows from earlier this year.
Namely, the settlement of share-based compensation plans related to the StonePine transaction, as well as the acquisition of the remaining 20% interest in Fiera Real Estate UK, which together had over a CAD 40 million drag on our last twelve months free cash flow and will continue to do so for the next few quarters. Turning to our financial leverage. Our funded debt as defined by our credit facility agreement was essentially flat year-over-year at CAD 426 million and decreased by CAD 28 million to CAD 426 million quarter-over-quarter, mainly from higher cash flows from operations in the quarter and higher cash distributions from our real estate joint venture projects in the United Kingdom. Net debt has decreased to CAD 589 million, a decrease of CAD 38 million from last quarter, largely driven by the same factors as our funded debt.
However, net debt increased CAD 88 million year-over-year. This was due to the purchase of a portion of shares from our Natixis stake sale to our share buyback, the settlement of certain purchase price obligations and put options, and the payment of accelerated share-based compensation related to StonePine. Combined, these three items alone were over CAD 75 million for the year. In 2022, we took a number of actions to prudently manage our leverage and enhance our financial flexibility, including the refinancing of our credit facility and convertible bonds. We continue to remain vigilant in the rising interest rate environment, including evaluating opportunities to hedge our interest costs. Overall, our financial ratios saw a moderate increase in 2022, due in large part to the non-recurring cash outflows previously mentioned.
We remain well-positioned to weather further economic uncertainty and market volatility with a funded debt-to-EBITDA ratio of 2.37x and a debt-debt ratio of 3.28x, down 25% and 17% since their height in March of 2020. We remain committed to delivering value to our shareholders as a fundamental pillar of our strategy. As such, we continue to return capital to our shareholders through our dividends. The board has declared a quarterly dividend of CAD 0.215 per share, payable to holders of record on March 8th, 2023. This brings our trailing twelve-month dividend to CAD 0.86 per share, up from CAD 0.845 per share comparative period last year. I'll now turn the call back to Jean-Guy for closing remarks.
Thank you, Lucas. As we continue to weather the volatility that has characterized 2022, we see positive momentum from the slowdown of the client's risk off behavior. While the financial intermediaries channel , was impacted this quarter by certain large outflows, we are encouraged by the volume of mandates we have won across our other channels through this difficult year. Our private markets platform continues to see strong returns and remains a key focus of top-line growth, generating an increasing share of revenues through every quarter of 2022. The diversification provided by our public and private market platform and our unique private wealth offering has allowed us to be resilient in a turbulent macroeconomic environment. There's no doubt that 2022 was a challenging year for the asset management industry and for Fiera. I continue to be inspired.
The capabilities of our highly talented team and I return as CEO energized, passionate about navigating our business through this complex period. Looking ahead, I believe that our laser focus of putting our clients first, all while producing innovative solutions tailored towards their specific needs, will give us a competitive advantage as we work towards achieving our strategic vision of being an efficient allocator of capital and generate value and sustain prosperity for all our stakeholders. I will now turn the call back to the operator for the question period.
Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. If you'd like to withdraw from the question queue, please press star followed by two. If you're using a speakerphone, we ask that you please lift the handset before pressing any keys. Please go ahead and press star one now if you have any questions. Your first question will be from Étienne Ricard at BMO Capital Markets.
Good morning. On private markets, could you please share how limited partners are reevaluating their allocation to alternatives in this market environment?
Well, Étienne, I'll direct the question to John on that. Thank you and welcome to the first call. I know this is your first introduction to the Fiera quarterly. John.
Client, sorry. Clients are?
Perhaps, Étienne, if you can repeat it.
Repeat the question.
Sure. My question is on private markets, could you please share how limited partners have been reevaluating their allocation to alternatives in this market environment?
When you say they're reevaluating, one of the impacts that some portfolios have had that have been fully allocated or has been the denominator effect that equities has had. Some funds have slowed the pace of making additional commitments just because of that. They've been hitting the, you know, their upper limits of the allocations. We've had some cases of that. Again, that's had a limited impact because the vast majority of investors, and particularly smaller institutional investors in the market we target are still under-allocated to private markets. We do still see, you know, demand and we will see flows. You know, to answer it, we don't, you know. We still see continued interest and increased allocations as investors.
Most investors are under-allocated or not even just starting to allocate to privates. You know, the growth will continue in this market environment.
Jean-Guy, maybe you want to add.
If I may add something to John. I was looking at the latest data year to date, and I was quite happy to see that on a monthly basis, we're generating a level of new flows into our private market strategies that's more than well in line with our expectations for the year. There has been a tilt towards the credit strategies relative to the other strategies up to now, which might be an indication of some preferences shifting as a result of, you know. It's funny, as you know, the market psychology is gradually moving right now towards expectations that rates will go up again this year.
You see numbers that fed funds will be shooting towards 6% now, which in fact is consistent with our macro view. That's another story. Our credit strategies tend to be. In fact, quite a lot of them tend. Most of them tend to be short-term duration strategies that benefit from rising interest rates. If you take our Fiera Diversified Lending Fund, for example, that uses our internal credit strategies in a diversified portfolio concept, is running at a current yield of about 8.4%. When rates go up, the return of that strategy goes up because most of the loans are floating rate loans. There might be something.
Maybe that's why we're noticing that investors and the limited partners you're referring to, are sort of reacting to the prospect of rates going up, which is beneficial for our credit strategies.
That's indicated in the investor presentation. If you look at the Q4, just the Q4 absolute return number is an indication of the returns going forward of credit. The lowest return we have in Q4 is 2.2 on the most senior credit. You have strategies close to 3% and over 3% just on a Q4 on a quarterly basis.
Appreciate those details. John, just to come back to one of your comments when you say, your limited partners are largely underinvested in alternatives. Given the denominator effect you talked about, how much do you assess your clients' portfolios are allocated to alternatives towards alternatives relative to, let's say, a year ago?
I don't have exact data to that, but I know as we discuss the different channels we have, whether it be private wealth intermediaries or even our institutional clients, we still are, I'd say, underallocated. I mean, the phenomena that I explained on certain situations where clients, the denominator effect is low. We see that. I mean, the evidence of that is really in the redemptions. We have not had. I mean, it's been de minimis. The redemptions have been de minimis this year. When we did get them, it's really because of that. Clients are overallocated and they're reducing their exposures. We've seen that last year because of what happened to the public equities. You know, it's been de minimis compared to what we know in our client base.
There still is a big void in underallocation of clients that aren't allocated. you know. Go ahead.
In our high net worth client base, we have a CAD 10 billion of high net worth clients in Canada. Based on our optimum asset allocation positioning corporate-wise, we have identified that there's an additional CAD 1.5 billion of potential from our high net worth client base to go into alternatives and have those portfolios lined up to an optimum strategic allocation. If that's the experience that we have in our base, I think we can extrapolate that across the Canadian high net worth market. It's huge. The potential is huge. We are extremely optimistic about the potential that Fiera has to become a very significant player in Canada. Just in Canada.
Let's not talk about the U.S. and Europe, but just in Canada, to be a very significant player down the road in this private market industry. You know, retail clients, you know, the retail side of the market, the high net worth side of the market, we know is very underrepresented right now. The institutional market is ahead of that, but we believe that the smaller segment of the institutional market, be it the CAD 1 billion-CAD 10 billion institutional portfolio, is currently underweighted private market strategies.
Thank you very much.
Thank you. Next question will be from Gary Ho at Desjardins Capital Markets. Please go ahead.
Great, thanks. Good morning. Maybe just start off on the outflows in the quarter. Performance, at least on a three-year basis, seems pretty solid. Jean-Guy, you know, you're now back at the helm. Any changes you might make on the distribution side? Maybe game plan to turn kind of flows around, or do you really need a more constructive market? Also, did I catch you correctly, CAD 2 billion of outflows from StonePine and all around that?
Well, I can talk about distribution. I'll let Lucas talk about the outflows. Distribution, we are moving the distribution model down into the business units. You know, we are operating three business units, private market, public market, and high net worth. High net worth was already into the high net worth business unit. The distribution is in the business unit. We are bringing down into the public market division and the private market division the distribution people that were all incorporated in a global structure.
We want those people to be operating close to the portfolio managers, to be close to the, sorry, excuse me, the investment strategies that they're representing and servicing to the clients. We're also moving to a more specialized distribution concept between public markets and private markets. Those changes are, I'd say, from a, I guess, conceptual point of view or from a distribution model point of view, meaningful, because we're specializing the distribution and client servicing people between public and private markets. We're pushing down the distribution activities into the business unit so that the people will be closer to the portfolio managers and to the culture and the substance of that business unit that they have to, that they have to represent.
So that in a way, it will be that much deeper into their blood because they're gonna be swimming into it.
Okay.
The second part of your question in terms of the outflows related to StonePine. I'll give a broader elaboration on that relationship and sort of what 2022 has looked like. Now specifically to the outflow, it was one large U.S. client at the end of Q4. It was about $1.5 billion U.S. So that accounts for that. That was the only client loss during the year. If we look at that sort of our entire client base relative to the StonePine strategies, they're down about CAD 12 billion year-over-year, and you can break that down into three categories. The first category is just effectively the market effect. You know, with the equity markets being down, about CAD 4 billion of that CAD 12 billion is explained by the market.
You had another CAD 4 billion where we still have extensive client relationships, but the clients just rebalanced and sort of repositioned their overall exposure to equity. That explains the second third. The final third is split between that one client loss that we mentioned in Q4, as well as you'll recall, the Bel Air strategic sort of rollover that we had at the beginning of the year.
Okay. I guess with StonePine now, we're roughly in that CAD 50 billion is how much they manage.
Correct. Just under CAD 50 billion. We're at CAD 49.2 billion.
Okay. Great. Second question, John. Good to have you back on the call. You know, seeing solid AUM to CAD 18 billion in revenue growth. Maybe a broader question. When you look out, you know, let's call it, you know, three-five years, where do you see AUM growing to? Is there anything missing that you'd like to add? Private markets now represent 34% of consolidated revenue. Where could you see this mix growing to over time?
I think the rate of growth we've experienced over the last couple of years, Gary, is sort of indicative of the type of growth we could experience over the next three years. I mean, we continue to see, we've experienced double-digit growth, and we continue to expect double-digit growth, both on an AUM level and revenue level going forward.
Okay. Anything missing in the strategy that you'd like to add?
Sorry?
Anything missing in the strategy of the platform that you'd like to add?
No. From a corporate development standpoint, we've, you know, we've done a lot of that over the last five, seven years. We really have a, quite a complete list of strategies. I'd say the only area that's still from a corporate development standpoint is U.S. real estate, both on equity and debt. That is really the only strategy I'd say missing from our mix. Other than that, we're basically fairly well covered in terms of strategies.
Okay. makes sense. My last questions for Lucas, maybe more of a numbers explanation question. There was a CAD 16 million provision related to certain claims. What was that related to? Also on the leverage side, didn't see the funded debt ratio move much sequentially, but the LTM EBITDA dropped roughly CAD 40 million. Just wondering why, and is it because the calculation removes performance fees?
I'll handle your second question first and then come back to your first one. On the second one, yes, the way the calculation works, it actually amortizes the performance fees over three years. To remove the volatility out of the performance fees. You're correct there. On your first question, you know, we had two client incidents which we are currently working through. We felt it prudent to provision for those amounts in the fourth quarter. These are types of activities which we carry insurance for. At this point, it's early days as we work through these items. We don't believe that they'll be material in nature. By virtue of our normal operations, we normally come across some of these incidents.
As I say, we do have insurance coverage that we're exploring at the moment as well.
Sorry, Lucas, you said that's clients related?
Two trading error issues, correct.
Okay. Got it. Okay. Those are my questions. Thank you.
Thank you. Next question will be from Jaeme Gloyn at National Bank Financial. Please go ahead.
Thanks. Good morning. First question, a couple of little ones here. On the severance this quarter, does that include any expenses tied to the CEO transition, or is that something we'll see in Q1, and can you quantify that number at this stage?
Hey, Jaeme. Thank you for your question. No, that does not include. That was a Q1 event. You'll be seeing that coming up in Q1. We can't comment on that right now as we're still in discussions, but we'll have an update at the end of the first quarter.
Okay. Understood. The shifting to the dividend, you know, six quarters now at the same dividend level. You know, obviously, free cash flow took a little bit of a dip this year but, you know, some one-time items that you would maybe not expect to see come back, next year. Just thinking through, you know, what are your thoughts on dividend growth going forward here? You know, is that something you're expecting to keep flat for the remainder of the year, or how should we be thinking about that?
You know, at this point, we remain comfortable with the current level of the dividend. As you know, we always mention, we continually stress test our cash flow. As you well pointed out, you know, we had some anomalies in 2022 which put some pressure on the current year free cash flow. You know, when we look back at a five-year historical period, and when we look forward sort of on a two-year period based on, you know, our projections and our expectations, we're still coming in with a dividend at a free cash flow ratio of under 100% and closer to 95%. We're quite comfortable at that level at the moment.
Okay. Got it. We're seeing some commentary or some, I guess, revaluations of U.K. real estate portfolios. Just wondering what are some of the potential impacts that could have in Fiera's exposures, and would that flow through the income statement for Fiera? Do you have any commentary around that U.K. and maybe other commercial real estate exposures in general?
There's been in the investor presentation, you'll see in our core fund, the Q4 return was negative 2.3%. However, we were positive 0.7% in our industrial fund. The 2.3% negative is negative, but very strong relative to our peers. Our core fund last year had a positive return. A lot of core funds had negative returns. We continue to sit in the top quartile performance of the index in Canada. The reason our core fund is also sitting very strongly is that over 50% of our fund is in industrial. The other sector that we're exposed to is multi-residential, and we have very low, if any, exposure to closed-end malls and office.
That speaks to the strong performance of our real estate strategies, where it's consistent in all of our strategies, our over-allocations of industrial, multi-residential, and very little allocation, if any, to office and closed-end retail. Performance remains strong across the board. We actually see that as a positive for continued flows in real estate, which last year, we raised well over CAD 1 billion in our real estate strategies.
Great. Got it. Thank you for that. And, just the last one, maybe a bit more philosophical or even too early to be thinking about, but, with the strength of the private market as business, you know, what kind of considerations or have you had or, you know, is it a possibility where you might look to spin out that franchise, from the public market franchise, just given the, you know, valuations that are typically applied, premium valuations applied to those alt platforms? Just wanted to get, maybe some high-level thoughts from you around, you know, potential way to surface some value in the Fiera franchise?
Well, the answer is no. I think that, I think it's important to appreciate the extent to which we have tremendous synergies between those three business units. It's I think most people must underestimate the extent to which they feed on each other. Public market is a source of significant growth to our high net worth and our private market division. The private market division is a source of growth to the other two. The high net worth division is a source of growth for public markets and private markets. It's very, very difficult to see the value added that would be created for shareholders if we were to consider spinning. You could ask the same question about any one of those three divisions.
Even, you know, you can talk about, you know, if you say that the private market business is worth so much, you know, it looks like a big number when you look at it, on its own. When you look at, the impact that it has on the overall enterprise value, forget the stock price, okay. Enterprise value, the overall enterprise value that's been or potentially can be created over the next few years as a result of that dynamic that exists between those two divisions, we believe that for the shareholders, it would not be a good thing to do.
It's not something that we are considering or that we think and the board thinks that it's appropriate to be considered, given those synergies that exist between the three divisions and how they feed into each other.
Great. Thank you for the extra color.
Thank you. As a reminder, ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. Your next question will be from Rasib Bhanji at TD Securities. Please go ahead.
Good morning. Thank you. I guess my first question would be to you, Jean-Guy. Welcome back. Just wanted to ask, is there anything specific in the broader market or with Fiera that necessitated your return as CEO? The second part of that question was about to be on if there are any changes that you would be introducing to Fiera. You spoke about the distribution model, but is there anything else that is being considered right now?
The first question, where you made reference to the general macroeconomic and market environment, you know, I think we did publicly explain why the change took place. I think the public statement was a very, very clear statement that the board made the decision. Honestly, your point is sort of right. The board made the decision to make a change, in the face of the probability associated to having the next couple of years, not just 2023, but the next couple of years, potentially facing a very difficult macroeconomic environment, which will bring about potentially significant financial market volatility. Felt more comfortable having a older, more experienced.
I like the expression more experienced more than older, you can take away the older aspect, but a more experienced CEO at the helm. That's it. I think it's a set of circumstances that I think explains that decision. Your second question about changes, yeah, I think that. Well, yeah. If you look at, we've announced, and I think I publicly expressed what the organizational structure of the firm would be. I think you must have noticed that I have recreated the private market group as an independent division. I promoted Jean Michel to be the leader of that division, we will be operating on the basis of three business units, public markets, private markets, high net worth.
I think you can see that the signal is very clear that we're moving to, I think I don't like the word, but I think I have to use it to a more decentralized structure, providing a higher degree of identity to each one of these units under clear leadership, where people will be made clearly responsible, which with very specific operating targets, with a very specific set of responsibilities, which we believe, we being the board, believes that is conducive to a very entrepreneurial culture, where people have all the freedom to express their creativity and execute that creativity through their own initiatives, because at the end, they only will be accountable, and I can tell you 200% accountable for delivering on the targets that will be given to them.
If you, if you say, "Well, is that a change?" I would say that in some ways, yes. But other than that, I've said, I think I've talked about the change in the global distribution model that we have, which basically is also being pushed down into the business units. At the top of the structure, I suspect you must have noticed that I have reallocated technology and operation to Lucas under the CFO responsibility, and I have moved the HR responsibility under Gabriel.
That basically frees up Jean-Guy to be much more involved and much closer to dealing with clients and to also deal with potential clients, which is my contribution to the growth of our business. Those are yes so organizational changes that we think will have a significant impact on the future growth of Fiera Capital. Yes.
Okay. I appreciate the answer. That's really good coverage. Just as a follow-up here, would there be any restructuring or one-time charges with the changes in either the global distribution model or any of the organizational changes?
We are working through. As part of the announcement earlier in the year, I mean, you know, you're quite right. There are some additional repercussions, but again, we'll be in a better position to comment on those after the first quarter.
Yeah. Understood. Sorry. Okay. Just my last question on the CAD 6 billion in outflows from the financial intermediaries segment, specifically public markets. I think you mentioned there was more than one mandate that was lost here. Could you give any more color on this, please? Thank you.
Yeah. As I mentioned, one of them was the StonePine kind of sub-advisory. Then we have, Jean, do you want to speak about the second one?
We had a, sort of a larger fixed income mandate, quite sizable with one of the financial intermediaries. Lower from an overall BPS perspective and impact on revenue. That one in and of itself was over CAD 3 billion. Between the two of those, they effectively make up that CAD 6 billion that you're referring to.
Okay. That's everything from me. Thank you.
Thank you. At this time, there are no further questions. Please proceed with closing remarks.
Thank you, Sylvie. Well, that concludes today's call. For more information, do not hesitate to take advantage of our website at ir.fieracapital.com. Thank you for joining us. Merci.
Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we ask that you please disconnect your lines. Have a good week.