Thank you for standing by. This is the conference operator. Welcome to today's special call hosted by IGM Financial. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press Star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star then zero. I would now like to turn the conference over to Kyle Martin, Treasurer and Head of Investor Relations. Please go ahead.
Thank you, Gaylene. Good morning, everyone, and thank you for joining us today to discuss IGM Financial's acquisition of a strategic equity interest in Rockefeller Capital Management. Joining me on the call today are James O'Sullivan, President and CEO of IGM Financial, Greg Fleming, President and CEO of Rockefeller Capital Management, and Keith Potter, Executive Vice President and CFO of IGM Financial. Before we get started, I would like to draw your attention to our cautions concerning forward-looking statements on slide 3 of the presentation. Slide 4 provides a summary of non-IFRS financial measures and other financial measures used in this material. I'll turn it over to James.
Thank you, Kyle, and good morning, everyone. And a special welcome, of course, to Greg Fleming. Late yesterday, we made two, I think, very important announcements. These announcements in a measured yet meaningful way, I think are gonna help shape the future of IGM Financial. First, IGM is making a strategic minority investment in Rockefeller Capital Management, a US wealth management platform with a truly iconic brand, an exceptional management team, and a proven strategy for growth. As a result, IGM's future will include more growth. In particular, more growth for our shareholders. I think Rockefeller's success is best seen by the elite financial advisor teams that they have attracted to their firm over the past five years.
It's also seen in the organic growth as advisors have added new high net worth client relationships and expanded the wealth advised for existing clientele. For IGM, this investment in Rockefeller is a risk-smart entry to the U.S. wealth management market. I use that word thoughtfully, risk-smart. How you enter a new market matters, who you partner with matters, and how you finance it matters. Today, we're partnering with owners and a management team with whom we have a shared vision and whom we have come to know very well. We look forward to continuing to engage intentionally with Rockefeller through our two board seats and other contractual rights as an owner. These rights give us a seat at the table, and they give us optionality and possibilities into the future.
A meaningful stake in a scale high-growth platform is very much the right way, the risk-smart way for IGM to enter the U.S. wealth management market. We very much see this investment as adding growth to IGM and driving shareholder value over the medium and long-term horizons. Secondly, with the sale of IPC, also announced yesterday, we will continue to maintain a conservative financial profile and a strong balance sheet. Canada Life will be a very strong owner of IPC, and I'm confident they will help IPC achieve its full potential for clients, advisors, and employees. I am genuinely excited for IPC and Canada Life. Turning to slide 6, I'll highlight just a few points. First, our 20% investment in Rockefeller strategically positions IGM to participate in the largest and deepest wealth market globally.
It advances our wealth strategy to expand our presence in the high net worth and ultra-high net worth segments. This has been a long-standing strategic ambition. Second, Rockefeller has delivered and continues to drive exceptional growth. It's a destination platform with an iconic brand. Advisors are provided with a modern, purpose-built platform and financial services infrastructure that powers their ability to continue to grow their practices. Third, this acquisition further expands on the growth levers embedded in IGM Financial. In addition to our leading IG Wealth and Mackenzie franchises, these include growth levers in China, in private markets, and in fintech. To these, we are very proud to add the high net worth and ultra-high net worth wealth segments in the United States.
Keith will speak more to the sale of IPC later. Here I will simply note that we have unlocked value, redeployed it prominently, and maintained a conservative financial posture supportive of our A category debt ratings, all the while setting the business up for success and for growth under Canada Life's strong leadership and ownership. The purchase price is approximately 13.5x 2024 adjusted EBITDA. The purchase price reflects the strong trajectory of growth over the past five years. It also reflects our conviction that if Greg and team continue to do exactly what they have been doing, they will continue to grow at very attractive rates. Rockefeller Capital Management is a platform that has fully earned what I would call the right to win.
Slide 7 adds some context to the magnitude of the growth opportunity in the U.S. wealth management industry, in particular the high net worth and ultra-high net worth segments. There are an estimated 25 million high net worth adults in the U.S., with $1 million or more in wealth, representing 39% of worldwide millionaires. There are approximately 300,000 financial advisors in the U.S., of which Rockefeller would be focused on the elite performers who share in the Rockefeller vision and who want to grow their practices. With that, I will take a moment to properly introduce Greg Fleming.
I'm sure Greg is known to many of you based on his reputation in the global financial services industry, both via Rockefeller and through his past roles as president of Morgan Stanley's wealth and asset management businesses, and prior to that, as president and chief operating officer of Merrill Lynch. Greg has led Rockefeller Capital Management since its inception in 2018 and continues to drive the vision and the purpose of the brand and the business. Greg, thank you for joining us today, and I'd invite you to share the Rockefeller Capital Management story.
Great. Thank you very much, James. Good morning, everybody. Great to be here with James, Keith, and Kyle. If you turn to slide 8, please. As always, we start with the name. Rockefeller is one of the greatest brands in the world, maybe the preeminent American name of all time. It's an iconic brand which stands for innovation, entrepreneurism, philanthropy, excellence, and integrity. The original Rock & Co was established in 1882 as the family office for the legendary John D. Rockefeller. It may be the oldest family office in the United States. It became a multifamily office in the 1970s and was bought by us in partnership with Viking Global Investors in 2018.
We rebranded it Rockefeller Capital Management to make it clear, yes, we were taking care of the Rockefellers, but also many more families across the United States. The Rockefellers are indeed our partner on multiple levels. There are over 300 in the family today in the seventh generation. Many of them are our clients. Two of them sit on our board, David Rockefeller Jr. and Peter O'Neill from the fourth and fifth generations. They are investors in Rockefeller Capital Management. As part of the transaction, the Rockefeller family is increasing its investment in Rockefeller Capital Management. We also take care of many families across the United States, though. That's why we renamed the company Rockefeller Capital Management. We wanted to make it clear that we were going to take this iconic name and build it and grow it across the United States.
One final point on this slide 8 is the incredible philanthropy of the Rockefellers over many generations, and we think this is integral to the brand that exists today. John D. Rockefeller Jr., the second generation, was one of the first great philanthropists in history, and you can see that on the slide here. The Rockefellers started Spelman College, which was named after Laura Spelman Rockefeller, the University of Chicago, the Museum of Modern Art, Lincoln Center for the Performing Arts, national parks across the country, including Grand Teton National Park, Acadia National Park in Maine. They gave the ground for the United Nations here in New York. The philanthropy on top of the business success that John D. Rockefeller Sr. had really is, goes into this incredible brand that is Rockefeller today. If you turn to slide 9.
The heart of our firm is our wealth management business, focused on high net worth and ultra-high net worth families. We offer trusted advice and a comprehensive suite of financial planning, investment, and lifestyle solutions through Rockefeller Global Family Office, our name for our wealth management business. The advice is delivered to our clients through elite private advisors that are experienced in dealing with wealthy families and the complexity that comes with multigenerational wealth. Our strategy, unique, we think, in the marketplace, is to work with these families on the totality of their needs. We start with investment planning and advice, and then we add in wealth strategies and tax planning, family office services, trust services for generational planning, and a broad cross-section of other services to meet all of their financial and related needs.
We have complementary strategic advisory and asset management capabilities that are also part of the wealth management advice offering. On strategic advisory, many Americans make their wealth through starting and running businesses. It's one of the key parts of the success of the American economy. We have experienced and talented investment bankers who can help them with advice on how best to monetize those businesses or to keep running them. We give the client the advice that's in the client's interest. On top of that, our wealth strategies group is also part of any change of control tax planning if the client that owns the business starts to think about monetizing. Regarding our asset management offerings, the core of our model in Rockefeller Global Family Office is independent advice delivered by world-class elite advisors. We are counselors to our clients, so we are completely open architecture.
Where we have great capabilities within our Rockefeller Asset Management business, we make those products and services available to our wealth management clients. You turn to slide 10, we have built a great culture at Rockefeller Capital Management that has enabled us to attract a world-class team. The culture is focused on excellence in all that we do, delivered in a collaborative, collegial environment. That is clear to every one of the 1,100 employees that works at Rockefeller Capital Management. We talk about it all the time. It is an entrepreneurial firm with everybody in every part of the firm focused on what is best for the client and on growth. We spend a lot of time working to identify and attract the best private advisors in the industry.
They are attracted to the legendary Rockefeller name, as well as our model of providing a full suite of wealth management services to our clients. Being highly selective in our recruiting efforts has enabled us to assemble the industry's finest group of private advisors and has, we believe, been instrumental to our success. For the record here, that same discerning approach has led us to the Desmarais family and IGM, and it also led them to us. Last thing on this slide, the critical part of the offering is best-in-class technology. It's 2023. You have to have it. We have an experienced, deep technology team that has been delivering a state-of-the-art technology stack to advisors, clients, and our firm.
This team is led by Mark Alexander, who did this for many years at Merrill Lynch from 1991 to 2015, many of those years overlapping with me and working closely with me there. Turning to slide 11. We set out in 2018 to take our iconic brand and bring it to major wealth centers across the United States. We started with three. We are now in 44 cities where there is concentrated wealth, including the cities that you would expect over the decades, places like New York and Los Angeles, and San Francisco, but some of the high-growth cities in the United States today as well, Austin, Nashville, Orlando. Hiring close to 100 teams since we started. We expect to double that number over the next 3-5 years.
As I said earlier, we are looking and spend a lot of time on diligence and getting to know teams for those that bring the expertise to counsel wealthy families. The cultural fit to be part of Rockefeller. All advisors, everybody who comes to this firm, are employees of Rockefeller Capital Management and embedded in our culture. They are proud of the name. They are proud of the firm. They are proud of the culture and the things that we find important here. One firm, one culture, a relentless focus on serving clients and growth. We are quite pleased with the teams we have brought to Rockefeller Capital Management over the first five years of our firm's history. We are confident we can maintain that high bar going forward. Turning to slide 12.
I want to talk about growth here. I want to be clear up front on how we categorize growth. We talk about inorganic growth, which is bringing a new team to Rockefeller Capital Management and helping them onboard the clients that they've been working with for many years. Organic growth. When we talk about organic growth, we're talking about growth away from the market, where we get a greater share of wallet with an existing client, or we get a new client, the market is on top of that. We look to grow both inorganically through recruiting new teams and organically through the teams that are now at Rockefeller. As I've said, on the inorganic side, we work closely with the teams we hire to help them transition their clients to Rockefeller as expeditiously and seamlessly as possible.
That's a big focus for us and for the teams. They come here, we work with them to get the clients on board as quickly as possible. Once that's done, our elite private advisors are all focused on growing the business. When I say all focused, we mean that because that's what we look for in the teams that we recruit, both share of wallet with existing clients and new clients. The strong two-pronged growth has fueled a 38% annual growth in clients' assets over the last 5 years and a 55% annual growth in firm revenues. Our, our two complementary businesses, strategic advisory and asset management, are part of the growth in Rockefeller Global Family Office. Elite advisors are attracted to Rockefeller Capital Management because we have an investment banking capability that's accessible to their clients.
They know that many of their clients own businesses and are building businesses. They know when they come here, our investment bankers are going to work alongside those clients and provide them advice and help them. That close connectivity is not something that's readily available in the marketplace. On the asset management side, our fixed income offering within Rockefeller Asset Management is accessed by many of our private advisors and their clients. There's a connectivity across all of our businesses with Rockefeller Global Family Office at the center in the heart of the firm, with Rockefeller Strategic Advisory and Rockefeller Asset Management working hand in glove and feeding through to those clients. On top of that, as standalone businesses, Rockefeller Strategic Advisory and Rockefeller Asset Management have clearly helped with the growth profile of Rockefeller Capital Management. Turning to slide 13.
We have grown consistently since 2020 when we put the building blocks in place to begin to recruit on a broader basis. We expect to continue to onboard $120 million of advisor production per year, recruiting elite advisors in the major wealth centers we have targeted. In some of the wealth centers that we're in, the 44 that I listed, we've just started. We might have one or two teams in some of those places, and we'll build them out and grow there. We may end up in 50 wealth centers, maybe slightly more. The United States has concentrated wealth in many places, as I mentioned earlier, in some of the traditional cities that have had wealth for many decades, and then some of the fast-growing new cities, primarily in the South and in the West.
This inorganic growth will be complemented by strong organic growth, which has been higher than industry averages. We focus across the firm on organic growth. Everybody here is focused on doing more with our existing clients and bringing in more clients that we can help with the full suite of capabilities and counsel that exists in Rockefeller Global Family Office. The continued execution of this strategy with the accompanying build-out and growth of Rockefeller Strategic Advisory and Rockefeller Asset Management will drive continued strong rates of top line and EBITDA growth. We need to keep doing what we've been doing, but there's no acceleration required. The formula is intact. I often get asked, why are your asset conversion and historical organic growth rates so high? It's not complicated, but it's very difficult to replicate. I attribute our past success and confidence in the future to four main points.
One, our brand, built on the Rockefeller name and over a century of service. The brand is a differentiator, and everybody here knows that, and our private advisors love working under that brand. The best advisors in the country, two. Three, a relentless focus on putting clients first and meaning it and having it be embedded in the, in the firm's culture so that everybody takes it on board. Four, broader and better solutions than competitors, including and importantly, world-class technology. I just want to close, and we'll take happy to be part of the Q&A at the end, reinforcing that we're quite excited about the partnership with IGM and the Desmarais family, who I've known for over 20 years. We believe this partnership over time will add to our growth potential and trajectory.
With that, I'm going to turn it over to Keith, who's going to pick up with slide 14.
Thank you, Greg, and good morning, everyone. As Greg demonstrated, Rockefeller is successfully executing on its vision and plan to consistently recruit high-quality advisor teams with a real focus on organic growth. On the left chart, it does demonstrate consistent historical growth in revenue and EBITDA with a forecast, as Greg mentioned, that simply requires the team to continue doing what they are doing to grow revenue at 30%-40% in 2023, and 25%-35% in 2024. This in turn is expected to lead to EBITDA growth 75%-80% in 2023 and 50%-65% in 2024. You know, as we look at this from a valuation perspective, the strong growth profile drives down the 2024 enterprise value to adjust EBITDA multiples of about 13.5x.
As you think forward, this trend will just continue as we head into 2025. Turning to slide 15 on the summary of the transactions. First, we have signed and closed the Rockefeller transaction yesterday, with payment due on June 2nd. You can see under point B on the Rockefeller transaction, we intend to fund the purchase with $575 million of proceeds received in connection with the sale of IPC, and the remaining amount will be funded from the issuance of senior unsecured debt. Because of the timing difference between the payment for Rockefeller and the close of IPC, we will be putting a bridge facility in place. We are very pleased with the conservative financing approach, which maintains leverage metrics supportive of a A category rating, and expect to maintain a debt-to-EBITDA ratios below 2 times once all transactions close.
In terms of earnings impact in 2023, we do expect the combination of the transactions to reduce $20 million-$25 million. That's really primarily driven by transaction financing inclusive of the short-term financing. However, with the strong growth forecast that we see, the proportionate share of RCM earnings would fully replace IPC earnings and cover the financing costs in 2025, and on that basis will be slightly accretive. Finally, IGM Financial is proud to be the second largest shareholder in Rockefeller beside Viking Global Investors.
Turning to slide 16, a few comments on the sale of IPC to Canada Life. First, we view this as a win for all parties involved. For IGM, we believe this unlocks value. It strengthens focus on IG Wealth Management in Canada, and enables us to diversify our wealth management capabilities in the U.S. through what we believe is a leading U.S. independent financial services advisor firm. For IPC employees, advisors, and their clients, they maintain strong and stable ownership, staying with our family, and benefit from being part of Canada Life, who's committed to building out their wealth management platform. For Canada Life, this transaction complements and accelerates their wealth management strategy. I'll just finish by saying we couldn't be more excited to have such a great partner in Rockefeller, Greg, and his management team. With that, I'll open up the line for questions.
Thank you. We'll now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Our first question is from Nik Priebe with CIBC Capital Markets. Please go ahead.
Thanks. Maybe a question for James. Are there any potential synergies of this investment with your existing business? Like, does Mackenzie win shelf space on this platform here? You know, are you planning to cross-sell your own investment management capabilities into that channel? Is there anything else we should be thinking about in that sense?
I would not be thinking in that direction. I think there's very much gonna be an operation, the possibility here of what I'll call collaboration of learnings moving kind of south to north and north to south. I think as we take our seats on the board and we get to work with Greg and his team ever more closely, I think the quality of what we deliver in Canada is only going to improve. I would not be thinking about asset management opportunities other than I would point out that historically, Rockefeller Asset Management has been a sub-adviser to Mackenzie Investments, and you know, that's a possibility. This is not about kind of integrating wealth management and asset management at all. That is not part of the thinking.
This is really about IGM expressing, both a long-term interest in the United States and expressing a long-term interest in Rockefeller Capital Management. There will be learnings, and there's lots that we will share, but this is not about synergies per se.
Understood. Okay. Then you'd also alluded to an option that would enable you to increase your investment in Rockefeller over time. Are you able to elaborate on that and the path towards expanding your interest?
Well, look, thank you for that, for that question. I will share with you that it is a private agreement, as you might expect. We will have and will occupy 2 seats on the board of directors. Beyond that, what we will have is what I would describe as a package of rights, a package of protections. Those will give us a seat at the table and what I would describe as some optionality as the future unfolds. I would be thinking about this, you know, kind of temporally as several years down the road. Given that we're expressing a long-term interest here, the agreement and the package of rights and protections was and is very important to us.
Okay, thanks very much. I'll pass the line.
The next question is from Scott Chan with Canaccord Genuity. Please go ahead.
Good morning. Thanks a lot. My first question refers to slide 13. Greg, you talked about organic growth. When we kinda see the AUM CAGR. I'm just trying to reconcile your organic growth when you talk about 19% in 2021, 8% 2022, and 7% forecasting. When I look at the disclosure, it seems like it's this client asset movement, but I think you talked about organic growth being just like incremental clients and net flows. Maybe you can just confirm that for me.
Thank you. What we talk about, and we measure this after we onboard a team inorganically, once they've been here for a certain amount of time and the clients that they've worked with for years are here, they're then really in steady state and moving forward, and we start to measure organic growth from that point forward. The organic growth that we're looking at there is within Rockefeller Global Family Office, and it's, again, assets brought, additional assets brought for existing clients or new clients that come on board with the market, taken out of the calculation. That's what those percentages are.
Okay.
You know, the historical ones are what they are. You know, going forward, we've said, that we can do this 7% or 8%, year in and year out, and, we believe that's the case.
Okay. That's what I thought. Then in terms of the other, big strategic, owner, Viking Global, can you give us a background on how they got their stake and, you know, if they've got board seats and, like anything in terms of, what they are, what they're thinking strategically at Rockefeller?
Sure. I started working with Viking. I left Morgan Stanley in 2016. They reached out to me, and we started looking at the wealth management industry. I was interested in doing something like this, and they were interested in backing me as the leader. When we had an opportunity to go out and buy Rockefeller & Co., we did that together. They've been a terrific partner from day one. They were an integral part of the whole transaction here to bring IGM and the Desmarais in.
They continue to own a majority of the company. They have no current plans to sell down any additional stake in any timeframe. They're quite pleased with how we're doing and the growth trajectory to date and are confident in the growth trajectory going forward. They've been with me since day one and a great partner.
Great. Just lastly, you know, just trying to reconcile, like, just the robust growth since 2018. Last year, your adjusted EBITDA margins were 15%. I can kind of see the adjusted EBITDA growth forecast for 2023 and 2024. At what point do you think or what target do you think you can get adjusted EBITDA margin? Are we kind of still at the inflection point working kind of slow growth for several years, or does it kind of top out at some point over the next few years?
You know, it does, If you look at the scale players in this market, or even the, you know, the smaller, more boutique players, at some point it obviously tops out. You know, we see margin expansion from here along with continued top-line growth. We're very focused on both sides of that. We've been investing heavily in our technology platform, which, as you've heard me say, is a key critical success factor for supporting the growth and what we're doing with clients. Over time, we expect to continue to grow on a top-line basis and to expand margins. You know, we'll see over time where they start to top out.
Okay. Thank you very much.
You're welcome.
The next question is from Tom MacKinnon with BMO Capital. Please go ahead.
Yeah, thanks very much. Good morning. Question for James and maybe Keith here. The EV/EBITDA multiple you're paying at 21 times 2023 implies, like, just through the growth assumptions you've kinda laid out in your slides, that there is some net debt you're picking up. Or not you're picking up, but there's some net debt at Rockefeller that's in that calculation. I estimate it to be around $370 million or so. I mean, the question is, first, is that right? Secondly, if I look at that $370 million net debt divided by that $88 EBITDA that you have, that's over 4 times leverage, net debt to EBITDA. That's... You are below 2 times company.
What would you say to investors that would say, "Hey, you're paying a pretty steep multiple for something that's twice as leveraged as which you guys would be looking at?" Yeah, if you can help me with that'd be great. Thanks.
Sure. Well, thank you for the question, Tom. I will start. Keith will speak to the specifics, and I'd ask Greg to speak to the trajectory of leverage if that works for you. What I would say in terms of what we paid, Tom, is this: We paid for growth. You watch client assets, you watch advisor teams revenue, adjusted EBITDA, net income. Whatever measure you choose to focus on in the quarters and years going forward, there is going to be growth, and it's gonna be considerable growth. As I said in my remarks, Greg and team only need to continue to do what they have been doing to achieve what I think is gonna be, for this industry, a very, very impressive level of growth. Second thing I would say is we paid for quality.
You know, I may have said it too many times, and I'll say it one more time. This is an iconic brand. This is, I believe, not only an iconic brand, it's an iconic global brand. It's a brand that I think, in the fullness of time, will travel very, very well. Thirdly, I'd say we paid for optionality. This is a strategic investment. It's not a financial investment. We coined the phrase risk smart very deliberately. What is the right way for IGM Financial to enter the U.S. market? I think this is the right way. One step at a time, not a giant leap into the swimming pool.
One step at a time, where we get to rely on Greg and his team, the brand, and the layers and layers of relationships that underpin this strategic investment between the Desmarais family and the Rockefeller Family, between Power Corp and Rockefeller Capital Management, and laterally, between IGM Financial and Rockefeller. I feel very, very strongly that we have bought well here. I think this is strategic. I think it's risk smart. I'm proud of what we accomplished. I really am proud of what we accomplished. I say to you, I recognize that we paid, you know, a big price. We need to deliver growth. With the, you know, leadership of Greg Fleming and his team, you will see that growth.
I'll have Keith speak to the specifics on the debt number, and then I'd ask Greg to speak to the trajectory of leverage in this business.
Yeah. Thanks, James. Hi, Tom. Yeah, you know, your math about $360 million for 2022 is pretty much bang on. You did mention about, you know, 4x leverage. You know, the one great thing about this business is they're adding 30 teams per year. When you think about, you know, what debt and leverage is required to drive this business forward is fairly moderate. You can think about that leverage, and James mentioned this and Greg can comment too, but that leverage is coming down, and it's already coming down. It's a company that's early in its years in development, has a long runway here. At 4x, it's just going to be coming down from there.
We're quite confident in the business and the business model that's not reliant on significant leverage to succeed. Maybe I'll just pause there and let Greg add to that.
Great. Thanks, Keith. Yeah, I'd say a couple of additional things here. We've been financing our growth through a combination of equity and a borrowing-based credit facility over the past four years. We've been thoughtful in executing our growth plans, and our debt coverage ratios have improved significantly over time as our business has grown. Going forward, our EBITDA is projected to grow at rates well in excess of the cash needed to finance our projected continued investment in teams. That takes me back to where Keith just ended. The leverage ratios will continue to come down going forward.
Okay, That's great. A quick follow-up here. What's this going to do to free cash flow? assuming you're going to equity account for this, you're just booking kind of non-cash earnings here. Are you getting a dividend at all? You were getting free cash flow from IPC, but you're not going to get free cash flow from RCM. But are you going to get a dividend at all? Thanks.
Yeah. Thanks, Tom. I would not expect a dividend for several years. This is a growth company, and it's very important to us that they achieve their growth plans. With respect to IPC, it's IPC of course, was generating earnings. IPC was at this, is at this very interesting point in its evolution where what Canada Life now has the opportunity to do, Tom, is invest anywhere between CAD 35 million and CAD 50 million a year in helping to put that business on a true growth trajectory. I mean, you and I have spoken about this in the past. We're at an interesting kind of spot in Canadian wealth management, demographically.
The sort of the demographic of advisors that built this industry in the 80s and in the 90s are retiring or they're ready to retire. That's presenting an opportunity for firms like IPC to create new models, to create different kind of economic structures between the house and the advisor. What we did over the last few years in IPC, and it cost us money and it suppressed earnings, is we built Pinnacle, which is the corporate advisor, the salary plus bonus advisor. That has stood up and ready to go. We built IPC One, which is the ICPM or Private Investment Council model, discretionary fee-based solutions plus advice. That's ready to go.
The real opportunity with respect to IPC is not a free cash flow opportunity because had we continued to own IPC, I think we would have put more capital into that business each year than we would have received in free cash flow. Look, we would have been happy to do it. You know, for IGM, the capital well is deep, but it's not bottomless. Tom was regularly faced with, do I invest in IG Wealth or do I invest in IPC? I think the real opportunity here for Canada Life, given their size and their scale and their leadership, is to invest in IPC, to support IPC. If they support those two platforms at IPC, at Pinnacle and IPC One, I'll tell you that I think IPC One is truly ready for liftoff.
Okay. That's great. Thanks for the color.
The next question is from Jaeme Gloyn with National Bank Financial. Please go ahead.
Thanks. Good morning. First, high-level, what are the long-term intentions for the U.S. strategy? Is this the only platform and you'll build out through Rockefeller? Are you thinking longer-term that you would have other wealth management assets in addition to Rockefeller?
Yeah, good question. No, this is the one and only. Our as I said earlier, we are expressing a long-term interest here in the U.S., and we are expressing long-term interest in Rockefeller. Rockefeller will be the vehicle through which we kind of express those strategic goals. You know, I would not be expecting anything in the United States in wealth management other than Rockefeller and perhaps over time a larger stake in Rockefeller.
Okay. Understood. Second question is, maybe more for Greg. Just want to get a sense as to the cost to attract and acquire advisors. If I'm thinking about the production that's been acquired over the past several years, would you be able to give us a sense as to the compensation, either upfront or contingent compensation to attract advisors and retain those advisors, over the last several years and how it's evolved? Like are costs going up? Are they stable? A little bit of color around that part of the business.
Sure. You know, the market is competitive for the elite teams, although candidly, we've seen players come in and out of that market. You know, there are large firms that will compete as well. Then there's been, you know, there's some other firms that are that have different models that have been active in the marketplace that have pulled back more recently given, you know, changes in their positions. It's a competitive marketplace, but we see firms come and go, but generally it stays quite competitive. We're always on a frankly more disciplined side of the financial terms to attract advisors here.
We want them to come here because of the brand, because of the leadership team and the experience that we bring, because of the technology platform, because of the broad-based set of capabilities, because they can work closely with great investment bankers if their clients own businesses. You know, these are all major points of attraction to be here rather than somewhere else. We use that quite actively in the recruiting process. We also, as I said, you know, it's not for everybody here. This is a very particular culture. You know, we're starting with this world-class name. We have this culture that I described that everybody's part of. It's one firm. Everybody works at Rockefeller Capital Management. Everybody wants to work under this iconic brand. You know, it's not for every team either.
When I put all that together and come back and answer your question on financial metrics, you know, we do put in place. We do buy the books to bring them over, and then we amortize that over long periods of time. We stretched those amortization periods when we started Rockefeller Capital Management well past where they were in the industry because we wanted advisors that wanted this to be their last stop. That's how they think about it. Frankly, the business model that they're able to implement here with their clients also leads them to, you know, to want to be here for the rest of their careers. We extended the amortization periods and we created incentives, back-end incentives, for growth.
On the upfront, you know, I think, we're in and around 2 times for the books that we bring over. We then have incentive hurdles, and some of those extend quite far out, you know, beyond 5 years, so that the teams are quite focused on growth. In the final analysis, we are careful about who we bring on board. We want them to fit into Rockefeller, the name, the culture of the firm, and we want them when they get here and they move their business over, get their clients on board to focus relentlessly on growing.
Okay. Just to clarify, when you said 2 times, that was 2 times production, would be the upfront...
Yes.
-outlay. Did I understand that correctly? Yes, you know, if I'm thinking about the forecast over the next three years, like CAD 360 million, you've just brought in CAD 620 million plus whatever the family and management is kicking in as well. The view is that you have sufficient capital today to fund this production acquisition forecast. Is that correct?
Yes. you know, the transaction with the Desmarais family and IGM is a transaction that we, you know, we entered into because it's the Desmarais family and IGM. We could have with Viking Global Investors and our existing capital structure continued to invest in and grow this business going forward. We're comfortable, as I said earlier, that our EBITDA will grow at rates well in excess of the cash needed to finance our continued investments in teams.
Okay, great. I'll re-queue. Thanks.
Thank you.
Once again, if you have a question, please press star then one. The next question is from Graham Ryding with TD Securities. Please go ahead.
Hi, good morning. Just wondering about run rate EBITDA, just given obviously there's some acquired EBITDA in 2022, and then there's some projections in 2023 for acquired EBITDA as well. Could you give us an idea of what your sort of run rate EBITDA of the business is currently?
Yeah. No, I think, Graham, what.
We're disclosing 22, 23, and 24. We're gonna limit the disclosure to those numbers.
Okay, fair enough. Then, when we sort of think about the margins, there's clearly been some margin expansion, that you've realized and are projecting. What's a realistic sort of target looking maybe out to 2025 or beyond for where you can get the margins for this business? Like, is 30%-40% a realistic target or how are you thinking about the margin outlook?
James, you want me?
Sure, please. Go ahead, Greg.
Okay. let's remember we have three pieces of Rockefeller Capital Management. Let's talk about the wealth management piece, Rockefeller Global Family Office. If you look at the scaled competitors in the marketplace here, and maybe the one I'm most familiar with having run it for five years is Morgan Stanley Wealth Management. If you look at the scaled players, they get to mid-to-high 20s on their business. You know, that's a proxy for you there. Whether we could do better than that given the way we run our firm and the quality of the technology team, et cetera, that's in front of us. Remember, Rockefeller Capital Management also has Rockefeller Strategic Advisory and Rockefeller Asset Management.
Margins in that business, as we continue to scale it, can be north of that. you know, we're right now focused on continuing to invest and expand margins, and we'll see where it starts to settle over the next few years. you know, we're not the investment in the technology platform that we're making now is quite significant. at some point you get real scale economies there, and we will. We're not trying to aggressively go after those yet because we wanna have world-class technology. But on the wealth management business itself, if I circle all the way back to where I started, you know, you can look at some of the scaled competitors here to see where they get.
Okay. That's helpful. My last question, just wanna be clear I'm understanding the message here. The projections for acquiring assets and revenue in 2023 and 2024, do you have the capital today to fund that with the business? Or would you still have to increase your debt levels to fund that, but the run rate EBITDA would be sufficient to bring leverage down?
We've got the capital.
Okay. That's it for me. Thank you.
We have a follow-up from Jaeme Gloyn with National Bank Financial. Please go ahead.
Yeah, thanks. Two follow-ups actually. On the advisor acquisition outlook, just wanted to get a sense as to where the pipeline sits today. You know, how does like conversion of that pipeline typically trend? Just to give us a little bit more confidence around that inorganic growth projection, if you can.
Sure, James, I'll take that if you're comfortable with that. Listen, the pipeline at Rockefeller Global Family Office is as strong as it's been since we started. The name, the quality of the teams that we've onboarded, the breadth of the offering that you've heard me talk about at length here, the dynamics of the competitive marketplace and, you know, challenges that exist there for others. We have a broad and deep pipeline and are in dialogue in many directions. We've set our structure up. You saw the map with the 44 cities. There are 7 regions, embedded, that those cities are embedded in, with 7 different leaders that are out recruiting in those regions. Leaders that have been in those regions for their whole careers.
Many of them recruited from places that I've worked in my past. The pipeline is broad and it's deep, and we feel quite good about it. As I said, it leads us to be discerning and careful because we're as I've said many times here, very focused on growth. The most important thing for the firm that we're building is that we get the right elite advisors in here. The short answer is it's quite strong.
Okay, great. My second question, I'm not sure who's best positioned to answer this, but thinking about, you know, two items that seem to be a drag on earnings, share-based compensation and loan amortization. Maybe you can walk through how you think about share-based compensation. Is that two advisors? Is it two management team? The loan amortization figure, like, I would interpret that, I guess, as some of that incentive consideration amortizing through the earnings. How should that build in the next few years?
Yeah. James, Keith here. I'll just start with loan amortization. Greg described how the payment to advisors works up front. It's in the form of a loan. It's an asset on the balance sheet, and that's amortized over a long period of time. You can think about that, you know, continuing to build through the course of time. In terms of the share-based compensation, there's, you know, I'd say a legacy program. There's a program in place now. Importantly, as you look to, you know, page 14 or 15, where we reference what our expected pro forma share of associate earnings are expected to be with RCM. All these numbers, the advisor base...
The amortization as well as the equity-based compensation are considered in those numbers and will be reported quarterly in our reported share of earnings. That's, you know, going to be a key metric that we're focused on to demonstrate growth. Greg, I don't know if there's anything you wanted to add to that.
No. You know, on our side, we're just gonna continue to focus on all the growth that I've talked about here, and continuing to move this forward.
Okay. Thank you very much.
Thank you.
This concludes the question and answer session. I'd like to turn the conference back over to Kyle Martens for any closing remarks.
Thank you, Gaylene, and thank you everyone for joining us this morning. With that, Gaylene, I'll ask that you close the call.
Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.