Ladies and gentlemen, thank you for standing by and welcome to Power Corporation's third quarter 2020 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded, and if you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Mr. Jeffrey Orr, President and Chief Executive Officer of Power Corporation. Please go ahead.
Thank you, Operator, and welcome everyone to our quarterly analyst and investor call. It's great to have you with us today. Thanks for joining us. We'll just open it up with the regular disclaimer statements on forward-looking statements on page two, and also a disclaimer on page three regarding non-IFRS measures, and so today, in addition to myself, I've got Greg Tretiak, Executive Vice President and Chief Financial Officer of Power Corporation, and I will just open the comment up by talking a bit about the third quarter. No question, this was a quarter where Power and its major operating businesses made really big strides in advancing our value creation agenda.
Our major public companies had strong financial results in the face of COVID-19, and at the same time, announced a number of highly attractive transactions that are not only strategic but very accretive to earnings on the whole and value-enhancing. At the Power level, we continued to make good progress in building out our investment management platforms as well as enhancing the value of our standalone businesses. And all the while across the group, at the public operating companies and at Power, we continued to push forward on our efforts to enhance our communication to market participants, both in terms of the content, the way we present, and in terms of the frequency of the meetings.
So on page six, you've got the fact that each of Great-West Life, IGM, and GBL have had their earnings out in their own calls or releases, and the point of this call is not to repeat the material that was presented by them. Rather than that, what we're going to do is provide our perspective on some of the key developments and then talk about some of the developments at the Power Corp level itself. Moving along to slide seven, I think the word "frenetic" is probably not inappropriate when you talk about what's been announced over the last few months. There were five pretty significant transactions for them at the operating companies, plus the little simple announcement just after the quarter end. And really significant, I think, in these deals in many ways.
I'm going to address them in the pages that follow, so I'm not going to go through them on this page, but you can just see the pace of activity. This didn't all happen, obviously, in the third quarter. People at Great- West, at IGM, across Power have really been working extremely hard on many of these, and they fell into place in this quarter. Lots of people have been working for a long time to make all of this a success. I do want to point out one thing on the page, which is not a transactional announcement, but the leadership changes at IGM and my first chance to kind of publicly acknowledge what went on there at IGM. First of all, thank Jeff Carney and recognize what Jeff did from 2013 to September when we announced his retirement as CEO of IGM.
What he did really for IGM was fantastic in terms of helping to reposition Mackenzie in its leadership position, something that Barry McInerney and the team have done a great job of continuing to build on, really setting IG Wealth up for future success, putting in place an incredible team. Then finally, when he was diagnosed with early-onset Alzheimer's, dealing with that in a way that allowed us to go out and properly plan how we were going to replace him and, in effect, build on what he had done. So Jeff has done an incredible job, and we're lucky that although he's no longer in a management position, we're going to benefit from his ongoing counsel and as an advisor to IGM and to the group.
Very happy with what we now have as a leadership team, very fortunate and thrilled to have James O'Sullivan join us as a full-time dedicated CEO of IGM. And then with the strength of the team at IGM, we've got Damon Murchison as CEO of IG Wealth, and of course, Barry McInerney and Chris Reynolds carrying on in the job they're doing in building out Mackenzie and IPC. So the whole thing, we're thrilled with the management team, and I just want to acknowledge that here on this call. Okay, let me move along then and pass it over to Greg Tretiak to walk us through the next few slides and talk about the quarterly results.
Great, thank you, Jeff. I'll take you straight to page nine and begin with the overview of the change in PCC's net asset value. So looking at the bottom of the table charts, you can see at September 30th, CAD 34.94 is the share per, I should say the NAV per share compared to CAD 30.79 in March. That's up 13.5%. When I looked this morning, I think we're since then, since September 30th, I think we're up another 11%. So good strength in the NAV appreciation over the course of the last little while. Looking at the publicly traded companies, you can see that they were up 12.4% as a group. I just mentioned Pargesa and GBL, that transaction to eliminate Pargesa moving well along. And you can see that the NAV has increased from March as well there.
Their net asset value at GBL on March 31st was something like $15.9 billion, and on September 30th, it was $18 billion. A couple of other things to call out on the slide if I could, and that would be take your eyes down to Power Pacific. Power Pacific almost at a billion dollars. You can see that it's up 37.4%, outperformed the CSI 300 by some 20% during the quarter. We have a slide on that, and we'll speak to it in more detail a little later on. A little further down the line, you can see the fintech investments, and that appreciation there, you can see at 78.9%, is reflecting basically the transaction that Wealthsimple announced in October where they raised capital at a value of $1.4 billion pre-money for Wealthsimple.
And the only other comment I would have on this slide would be that I'll just remind folks that not everything is marked to market on a regular basis as we do all the publicly traded securities. In particular, I'd call out China Asset Management, which is basically carried at its equity-accounted value. With that, I'd go to page 10 and just a brief overview of the results. A couple of comments. One, this is a new presentation that we've used here and trying to live up to our initiative to simplify things and actually be a little more transparent. And so we've done that not only in this particular presentation of our results, but also in our press release and in our MD&As. And the one thing you would have seen is the way we're presenting the contribution from Great-West Lifeco, IGM, and Pargesa.
We used to allocate all the consolidated entries to those entities, and what we've done and chosen to do is actually show the three as they reported their earnings, so it's much easier to go from their earnings to our share of their earnings with no adjustments, so it'd be very clean and should be very obvious to you, and you would have seen this in their reported results, so looking at the consolidated entries, there's a number of consolidated entries in there. One in particular that we're going to call out, and it's called out in that bullet at the, I guess, the sub-bullet right in the top, the remeasurement of the put liability on the non-controlling interest in Wealthsimple and Webhelp. As I mentioned earlier, there's a significant increase in value in Wealthsimple and also at Webhelp, and that led to obviously a fairly significant gain.
However, when there are consolidated entities, those gains are not reflected in the P&L, and that's not like it used to be. Now I'm showing my age, quite frankly. There used to be something called dilution gains, but since we've adopted IFRS, there are no such things, and gains when you have a consolidated entity do not flow through the P&L. So that will be recognized in equity in the fourth quarter. However, associated with that is put rights that we have to revalue in the current period, and those put rights are in relation to options held by Wealthsimple shareholders, namely the non-controlling interest, quite frankly, not shareholders plural, but just the non-controlling shareholders. And those put rights have to be marked and reflected in the P&L.
and in the current period, we did that, and it's resulted obviously in an expense in the P&L, and it represents CAD 0.16, CAD 0.10 for the Wealthsimple mark, and CAD 0.06 for the Webhelp mark. and when you look at this presentation, you'll find the CAD 0.06 affects the Pargesa line, CAD 0.05 in the consolidated entry, that's Lifeco and IGM's share of Wealthsimple's mark, and CAD 0.05 at PFC. and so when you look at these results, we think you should take into consideration that obviously that CAD 0.16 added back to the CAD 0.65 would have reflected a CAD 0.81 quarter, which is more comparable to the Q3 result. We have slides later in the deck that address the platform contribution, also China AMC, and also the corporate operations. and so I will turn it back to Jeff, and we will address those individually.
Okay, thank you, Greg. So I'll turn over to the next page, which is a restatement of our strategy, and you've seen this slide before, but it's still relatively new, so I'm going to keep repeating it for a while so that it's well understood. The strategy of Power Corporation is one that is focused on financial services, not diversification. The public operating companies, which after all represent some 79%-80% of the gross asset value of Power Corporation, are a very important part of our strategy, and they are continuing to pursue their strategies with our involvement and support to grow their value through organic and M&A transactions, but at the power level, if I can kind of describe the words that are there, we're going to streamline and simplify at the power level, and we're going to build value through the investment management platforms that we have.
And if I can create a vision for where we see it being several years out, you're going to have a much simpler company with investment platforms that have seed capital that we'll be able to show you and show you what we're earning on the seed capital, and have investment management companies that have revenues and expenses and contributions, and we're able to show you that. And we think not only is that a recipe for creating value, but it's one that investors will be able to understand and hopefully value much more easily. And if we continue to push forward on our strategy to communicate clearly and enhance the clarity of our disclosure and the frequency of our interactions, we think that we will create value added at the Power Corporation level that will be enhancing what we're doing at the operating companies, the public operating companies.
Page 12 is really just another representation, but we like to think of it in terms of how we organize our strategies around the three levers. You've seen them before: the opco organic levers, the use of M&A, and then what we're doing at the holding company to enhance the value. So I won't spend any time on this slide. I would like to spend the next few moments just not going through the description of the transactions we announced because they've all been publicly described, and you will have seen them before. I would like to just very briefly on each give you our perspectives on why we think they're exciting and why they add to the group and, in effect, why we did them.
I'm on page 13, which is the Mackenzie acquisition of GLC Asset Management, and at the same time, you have the contracts from Quadrus going back from Mackenzie to Canada Life. This does three things for the group. It enhances Mackenzie's leadership position in the asset management business in Canada. It also gives Mackenzie access to two channels, much greater access to the Canada Life retail channels, but importantly, for the first time, access into the defined contribution retirement channel in Canada. And so very important for Mackenzie, two important new distribution channels for them to pursue.
And then, from the Canada Life perspective, a much stronger position in the wealth management market as they, in effect, have a prime supplier with much greater and broader capabilities and are, through this transaction, also have complete freedom to go out and use third-party suppliers as they have in the past, but this, in fact, facilitates that to be able to provide the very best products for the Canada Life clients. So we think those three things are the win all around for both IGM and Great-West. Let me turn then to page 14. So just on the, I guess, two days before the end of Q2, we announced the Personal Capital transaction. It actually closed. We got our approvals very quickly. You see at the bottom of the page, it closed on August the 17th. This transaction, I think, is really, really exciting.
It does three things for Empower, Great-West Lifeco's U.S. retirement defined contribution player. It adds a best-in-class digital wealth management platform. Personal Capital is a California-based digital hybrid wealth management business which has outstanding technology, client experience, and value, and it's quickly growing. So it's a direct-to-consumer business now that Empower has in wealth management. Secondly, Empower was already very focused on building their retail business on the money that comes out of their defined contribution business, the so-called rollover and roll-in money. The Personal Capital tools and technology implanted into that is going to enhance that business significantly. And finally, the Personal Capital tools and experience embedded in Empower's defined contribution business itself will enhance the experience and enhance the growth prospects of that business. Very exciting.
Before I leave the page, I want to make a point that we've talked a lot about Power's in the past fintech strategy, and there were really two major investments that were the most significant capital investments across the group. One of them was Personal Capital, which IGM put about $145 million into over four years. The other was Wealthsimple. The rest of the fintech strategy, while very exciting, the Portage strategy and the Diagram strategy, really didn't take not a lot of capital. Those were really more people build-ups, but the capital went into Personal Capital, and it went into Wealthsimple. And this transaction validated that move because it turned out for IGM that they made a very good return on their money.
As the auction came, we were able, through Empower, to now have Personal Capital as a real value-added piece of the Great-West Lifeco platform. So this is one of two fintech investments we made, and this turned out very, very well. Okay, turning to page 15, really the biggest transaction by far and the most meaningful over the last few months that we've announced is the MassMutual transaction. It does, in my view, four things for the company. It solidifies and strengthens Empower's position as the number two provider in the growing retirement business in the U.S. It's an $8 trillion market. It's still ripe for consolidation, I think, over the next 10 years, and we are a clear number two to the industry leader, Fidelity, through this transaction. It's highly accretive financially. This is a classic Great-West Lifeco low-cost synergy play.
We know exactly how to do these, and so the deal is on very attractive terms that will be highly accretive to the earnings of Great-West Lifeco as those synergies are realized over the next 18 months following closing, which we expect right around the end of the year. Thirdly, Empower becomes very important to Great-West Lifeco. Once we've done this, in addition to the growth and the earnings we have at Empower already, Empower will be somewhere in the low 20% of the earnings and contributions of Great-West Lifeco as you look out, say, three years from now. So this transforms Empower from an attractive business to an attractive business that's very, very important to Great-West Lifeco.
And then the final thing is that together with the Personal Capital acquisition that I mentioned on the previous page, this gets Empower into a position where it can really attack the retail wealth management business. So it transforms it from a DC group player into a company that has a real retail business going as well. Very excited about this transaction. Page 16 is the Northleaf transaction that was announced on September 17th. And again, this is going to be a very attractive transaction. It'll be accretive to earnings, but more importantly, I think it's really going to help the strength of our franchises. The first thing it does is for IGM, both Mackenzie and IG, provides them with very interesting products to go after new client bases, but also augment the returns in many of the products for their existing clients.
For Great-West Lifeco, it does the same. They can embed some of these products in the products that they distribute to their clients as well. Their own balance sheet is looking for these kinds of products, and it provides them with direct access to Northleaf's products. And finally, for Northleaf, association with this distribution, with Great-West Lifeco balance sheet and with our group, will augment their growth, which has already been significant. Really high-quality company. We're just thrilled that we were able to come to an agreement, and I think everybody's very excited on both sides to pursue this partnership with Northleaf. Page 17, after the quarter ended, Wealthsimple announced their financing. Greg's already mentioned it.
I won't belabor it other than to say, from a financial point of view, our group put CAD 315 million over the past four or five years into Wealthsimple, but a third of that roughly was at the Power Financial level, and the bulk of the rest was at the IGM level, a little bit at Great- West Life. This transaction values that at CAD 934 million, so a triple, and on an IRR basis, it's about 44% annual return. So that validates from a valuation point of view the other big investment we made in the fintech space. And at the same time, it's also going to provide Wealthsimple with another hundred and so odd million to continue funds to continue to build out their platform. And the shareholders were the leading technology investors in the U.S. here, and they are going to participate. There's some board seats there.
We get the benefit of their knowledge, their experience on realizing value and augmenting value in these businesses. So again, it's a win all around. You see along the bottom of the page some barometers there about the success that Wealthsimple continues to enjoy. It's much more than just an investment business right now. They have a trading business. They've made an acquisition and are offering tax services to their clients and the existing clients that have existed in that business. I think they've got 1.5 million Canadians right now doing business with Wealthsimple. It's a very impressive story. Okay, let me turn then on to page 18, and we're going to continue to highlight the investment management platforms of Sagard Holdings and Power Sustainable.
Don't really have time on a quarterly call like this, particularly with all the stuff that went on in this quarter, to spend as much time as we would like to on this, but we will continue to do so in the quarters ahead and through other forums that we will create. But a good progress. This just gives you on page 18 a quick snapshot. We have on the left-hand side, bottom of the page, $7.3 billion of assets under management or committed. The blue 5.3 is actually funds that are deployed, and there's another $2 billion that are committed but are unfunded at this point. Of the 5.3 billion that's committed, you can see the dark blue at the bottom. $2.8 billion is from Power Corporation, and $2.5 billion is from other parties. Of the uncommitted $2 billion, 75% of that is from third parties.
Our emphasis going forward here is it's third parties that are funding it. And as you move towards the right side of the page, you see Sagard Holdings, which is the Sagard Europe private equity, the private credit business, venture capital, which is really a lot of that is the fintech Portage portfolios and our healthcare business. That is already primarily third party. And Power Sustainable Capital, which is Power Pacific, which Greg mentioned earlier having fantastic returns, and Power Energy that at this point is all 100% Power Corporation capital, but they're hard at work bringing in third-party investors. And the next couple of pages, I won't dwell on them. Just quickly on 19, you get a little more profile on Sagard Holdings. You see the number of LPs they have, the number of investments, the number of people where they're located.
And on page 20, you have some facts on Power Sustainable Capital and what they're doing both in the energy space, the capital they have, some of the returns that they're targeting, and then the Power Sustainable Capital position that Greg mentioned. So we'll come back and continue to provide more and more information on these businesses. I'll quickly then run through before wrapping it up our other important investments. China Asset Management continues to do extremely well. As you know, we have, I think, 13.9% of this business. IGM has another 13.9%, so we're collectively the second biggest shareholder. This is, in my view, the premier company in the Chinese market. It is the number two long-term mutual fund player. It's the number one ETF player. It's got a very important institutional business not mentioned on this page.
You can see the growth over the last year at the bottom right of the profitability. Next to it, you can see the growth in assets under management. Profits up 31% year over year. Power Corporation's share in the quarter of that profitability was CAD 11 million. IGM, of course, would have had a comparable number. It's not making big contributions to earnings at this point, but it's growing very quickly, and it's obviously in a market that is doing exceptionally well and in an economy that's huge and growing and is undersaved.
Page 22, what we've said all along, I mean, while the businesses on this page and standalone businesses are not on strategy for the business of Power Corporation in the future, we are going to continue to work with our partners in these businesses and manage these businesses to maximize value and realize value in a way that works for Power Corporation and in a way that works for our partners. We've got some attractive businesses here. There were some good developments in these businesses in the quarter. I'll point out two in particular. Peak sold its Easton Diamond business. It's a baseball bat business to Rawlings Sporting Goods. Lion, which is an electric vehicle manufacturer based here in Quebec, and it's basically trucks and buses. Obviously, a very fast-growing area. They entered into agreements with some major companies, including Amazon, to provide them with vehicles.
They're already in a manufacturing state this company. It's not just a field of dreams, and some really exciting developments there, and we think there's some good potential for value creation in this business in the period ahead. On 23, we're committed to reducing our expenses. Not a big change in the run rate this quarter, but no change in our plans to reduce our run rate expense of about CAD 50 million. Just two more slides I'll focus on, and then we'll open it up for questions. Page 24 is so important to us, and I'm pleased to say over the past few quarters, we've made progress across each of Great-West Lifeco, IGM, and Power Corporation in our communication. Great-West Lifeco introduced the base earnings metric in the first quarter. It's been well received by the market, all the feedback I've received and they've received.
They have a new segment disclosure as they announce their new management lineup in the first quarter, and they enhanced their source of earnings in the disclosure with greater granularity in the second quarter. IGM, I'm really excited about their new disclosure. IGM continually gets lumped in as an asset manager. While that's true, it's an asset manager. We've been saying for a long time that the asset management piece of the value chain is a relatively small piece of it. It's much more of a wealth management business. And with the new disclosure and with the agreement with both IG Wealth and with Canada Life on commercial terms, we now are able to break out very clearly IG Wealth and IPC. This is what we make as a wealth manager, and here's Mackenzie, and here's what they make as an asset manager.
And then finally, and just as importantly, there's another strategic bucket of assets that many of them shouldn't really be valued on an earnings basis, and so it should really be a sum of the parts. And here's what they're valued, and here's their progress. And so this is an important first step in IGM, being able to explain to the marketplace how they make money and how the businesses work. So very pleased about that. And then here at Power Corporation, we continue with what started in the first quarter, our first earnings call. We've been extremely active in reaching out to investors, and you see at the very bottom of the page, including it says 31 one-on-ones with mostly investors and some analysts since the end of Q2. It's actually since, I think, September 8th. That's all after the MassMutual announcement.
We've been very busy reaching out to our shareholders and to our analysts. And I'll pull it all together on page 25. This is the same three levers, but kind of giving it a little bit of additional life here. And in a nutshell, what are we trying to do? In the first two levers, which is the operating businesses, we're trying to drive higher earnings. In the first instance, turning the very significant investments we've made over the last number of years to improve those companies' competitive positions, turning that into stronger earnings growth. Then adding to that through the use of M&A. And what can I say? This quarter, kind of it all kind of fell into place in one quarter.
Lots of good things happening so that we have higher earnings and we have a higher trajectory of earnings that the market sees because we're communicating it and they gain confidence in what we see as the earnings prospect. That has the possibility not only of benefiting from the higher earnings, but potentially higher multiples, because when we look at the multiples, we think that they reflect very low implied growth rates into the future. And then at the Power Corporation level, we are also working on increasing our net asset value, in some cases realizing on that value and returning money to shareholders and simplifying it and communicating it so investors can understand it. When you add all that up, it's higher earnings, potentially higher multiples, higher NAV, and potentially a lower discount if we do a good job in communicating it.
So even without the revaluation, it's an exciting story. If you add revaluation to it, it's an extremely exciting story, which is why we're very pumped up about it and why we're very focused on executing the strategy. And so I won't go to the last page. It just kind of summarizes where we are in the quarter. I think with that, I'll conclude my remarks, and I would ask the operator to open the lines up for questions from those that are on the line.
Absolutely. As a reminder to ask a question, you will need to press star one on your telephone. To withdraw a question, you will need to press the pound key. Your first question will come from the line of Geoff Kwan of RBC. Please go ahead.
Hi, good afternoon. When I kind of think about what you've done over the past couple of years, I mean, you've done a bunch of different things to simplify the structure, optimize capital structure. If we're thinking about going forward, are there things you can do to simplify the structure, the story, disclosures, whatever else like that that could surface value but not including, say, for example, doing acquisitions? How do you feel like right now where we are in terms of the beginning of the ballgame of what you think right now you'd like to do?
Okay, so on the point of simplification, because I think the value creation is also one of, at the operating businesses, getting belief in the marketplace on the organic earnings prospects as well as adding to it through M&A. That's a big part of the equation. But your question is on the simplification piece of it, which is additive but not the whole thing, right? So on the simplification piece, I think that structurally we have combined. We've done two deals, as you mentioned, Power Corporation, Power Financial came together, and GBL and Pargesa. But when you look at all my communications with shareholders and investors and analysts, when you look at Power Corporation itself and you look at the string of investments we have, people don't understand them and they don't know how to value them. And most of them are not earnings-driven valuation.
They're net asset valuation, unlike Great-West and IGM, which are principally earnings-driven, and so we have a complicated, long list of companies that people don't appreciate, can't value, don't know how to put metrics around, so I think the simplification that I talk about over the next couple of years will be less about structurally simplifying and actually simplifying the business itself so that if you, again, envision if we're successful in transferring this into, say, a few years out, all we have is the investment platforms, you would have two things to look at. You would have seed capital that we could go to the market to say, "We have CAD X billion in seed capital supporting all these strategies, and we're earning a rate of approximately 8% or 10%," or it'll depend on the mix between what those strategies are, and that's what we have.
That's the value. That's what we're earning. And secondly, we have investment management platforms that have revenues of X and costs of this. And this is what they're contributing. And I think when we get to that point, it will be a much simpler story to explain and to value. And I think if we do a good job of communicating that, that will enhance our value because as opposed to right now, I think it contributes to the discount quite a bit. So I don't know if I answered your question. If you want to, I don't know if that answered your question, Jeff.
No, it didn't.
It seems disposing of assets. I mean, ultimately, I'm talking about disposing of assets at the Power level.
Right. Okay. And then on your asset management platform, do you have a mix in terms of the types of investors you've been able to attract into your various strategies? And also too, is there much in the way of cross-sell of them investing in multiple strategies that you offer?
Yeah, good point. And the answer is I don't have all of those facts in front of you. You do have on—I forget the page number—on Sagard Holdings, which is where the third-party capital currently is. I think they have a list of 200 LPs, if you see there. And I know there are investors who are multiple investors. And those are a mix of FIs, institutions. It's a broad list of institutional investors. Greg, you want to.
Geographically.
Geographically as well, for sure. Because some of it is Sagard France. But even then in the businesses of our fintech businesses and in the businesses of our royalties, those have really gone out. And our credit funds, there are third-party investors from around the world in those investors. So I don't have that. I think what's best there is as we give exposure to those strategies, which is tough to do on a call like that, we'll either have a session on the platforms themselves, whether it's an investor day, or we do it as part of an investor roadshow and really highlight what's being done there, Jeff.
Okay. No, that would be helpful.
Yeah.
Okay. Thanks.
Thank you.
Your next question will come from the line of Graham Ryding of TD Securities. Please go ahead.
Hi, Graham. On a similar sort of topic, just there was an acquisition, I think, of Grayhawk recently. Just maybe could you provide some color on the thought process there? Is this a natural distribution channel that you're trying to sort of build and create around your alternatives platform in addition to your historically what's probably been the institutional client base?
Yeah. Thank you. Very good question. So if you think about the private investment space and you think about the strategies, whether it's classic private equity, whether it's real estate, which we're not in at the Power Corporation level, whether it's infrastructure, all of these asset classes have historically had, as their market, as you point out, institutions and then family offices, ultra-high net worth. And so those remain important sources of demand. Then we believe through, and you see that through the Northleaf deal, that there's going to, an overused word, but it's true, democratization of alternatives, which is essentially finding ways and vehicles through which you can bring non-liquid investments to a broader part of the market into high net worth and into even mass affluent.
And there's lots of strategies one can do so with, which IGM and Mackenzie and Canada Life and other parts across our group will be doing. However, the ultra-high net worth and the family office opportunity is still a very important distribution channel for that. So in Sagard Holdings going out and effectively buying what is a platform that accesses family offices and high net worth, they are looking to create a vehicle to distribute their products into that marketplace in Canada. And that's not a big dollar ticket, or it would have been disclosed, of course, but nonetheless, a very interesting group that is intended to provide them with greater distribution.
Okay. Understood. And then there's obviously been lots of activity, both with acquisitions and some investments at Great-West and IGM. Should we expect a period here of less activity over the near term as you sort of focus on integration and whatnot, or do you feel like you get the balance sheet capacity to stay active, or are you going to pull back a little bit on the activity and focus on integrating these deals where it's mostly expected?
Yeah. I think we'll continue to be looking very actively. There's no doubt that from a capital position or from a firepower position, Great- West Life is going to be focused on repayment of debt. Fortunately, the MassMutual deal is not only accretive but very cash flow positive. So that'll put a bit of a hamper on what they can do for the immediate, I think we said it'll be a couple of years before we're back down to that level that we started, and Great- West will be right back where they were. They got lots of capital, but they did utilize debt and cash to make the acquisition. So I think that from a Great- West point of view, we'd say you're not likely going to see a great big cash transaction. It's not all that likely in the next period of time.
But when you start to get to the point where you can see yourself getting yourself down to the right leverage level, these deals take a while to get done. So it doesn't mean we won't be looking ahead of time. But at the same time, we'll continue to look at other areas where we can make acquisitions. And there's lots of them that we're active on. They may be of a lesser size than a MassMutual, but across Great-West and IGM, we're looking at opportunities. Greg, please add to that.
Yeah. I'd just add to that, Graham. We tend to historically think of all the resources at Great-West Life and IGM being concentrated. But I think one of the things you have to think about these days as well is that we've developed management teams—or Lifeco himself has developed management teams in several different geographies that stand up themselves, right? And so their capacity and their capability to take on M&A projects opportunistically has increased quite dramatically in the last several years. And the same thing I would say about IGM. So I just want to make sure you're.
That's a good addition, Greg. Thank you. So to follow on Greg's comment, you're not likely going to see Empower make a big VC acquisition in the next 12 months. That would be highly unlikely given that that team is involved in the MassMutual, but there's lots of other teams across the group and the different businesses that could take on activity.
Can I ask you a question, Greg? Yeah. Yeah, it does. And one last quick one, if I could. There was just, there was a gain from your standalone businesses in the quarter. Was there something went off there or what was behind that?
Yeah. Really small holding, Graham, Jaguar Health. And it was not really a gain. It was a recovery of a previous write-down. So I think we realized something like $16 million on the transaction or something.
Okay. That's it for me. Thank you.
Okay. Thank you.
Your next question will come from the line of Nick Stogdill with Credit Suisse. Please go ahead.
Okay. Good afternoon.
Hello.
Hi, Nick.
Good. Modest progress on planned expense reductions in the quarter. I was wondering if you could just update us on the status of those efforts. What's left to get from 47% to 100? Just some color around that objective would be helpful.
Yeah. So we had lots of focuses this quarter. When we announced that we had a whole list of items that we were planning to follow up, I would say a little bit of COVID-19 related. I mean, some of it is looking at our space utilization, and it's maybe not the best time to be looking at space utilization in a market where everybody's working from home and nobody's looking for space. So there's a little bit of that that I would say is COVID-19 related. I'll turn it over to Greg. Why don't you take a swing at this?
Sure. Yeah. So, Nick, one of the things that we had initially looked at was certainly, as Jeff was saying, our footprint. And you may or may not know this, but we have a real estate business as well that flies under the radar, if you will. And part of that is looking at selling some of the properties that we hold. And we are making some progress there, quite a bit of progress, quite frankly, in this environment. And so that's a big component of what we have to do going forward. So hopefully, in the coming quarters, we'll have more news on that. But the team has been hard at work at looking at opportunities there to look at the portfolio and take it down to a size where we're operating in those premises by ourselves and only our own people.
That will be concluded over the coming quarters. The other thing I'd say is that we have a fleet of planes that we use. I shouldn't say a fleet, but we have a couple of planes that we use. And we certainly aren't using those these days. And we're looking at ways that post-COVID, the world is changing and will change. And so we think there's opportunities there too in the way that we're organized and we work.
And again, that was part of the initial plan that we were going to be more efficient there, also going from three CEOs to one. But also just we were looking at our travel and how we do it more effectively. And that's kind of been sidelined a little bit right now. Our run rate expenses are actually way down in that regard, obviously, in 2020 because of COVID-19, but we're not trying to take credit for that. We're trying to take credit for stuff which is kind of permanently embedded into our cost base, even in a post-COVID-19 environment.
Got it. Okay. That's helpful, and then liquidity ended the quarter at CAD 1.2 billion. Still very healthy. I think you signaled that you do intend to deploy that capital through the repurchase of preferred shares. Can you just give us a sense of how comfortable you're getting, given the evolving macro backdrop, with drawing down on that capital at the holding company level next? Some of those initiatives that you outlined late last year.
Yeah. So our plan very much is to do share buybacks and to redeem the preferred shares. And with the onset of COVID-19, we decided that at a holding company, keeping liquidity in that kind of environment was the right thing to do. And we're still in that mode right now. And I think we're just going to continue to watch how the pandemic progresses and how the medical side progresses and what impact that can have on the economy. So we're not in a position where we're changing gears, but we're monitoring it.
And the plan would be, when we can kind of see our way through the back half with enough confidence, that we would then be in a position to look at redeeming prefs and start to do share buybacks and resume the share buybacks that we had started at the start of the year that we suspended. So I don't know if I'm answering your question, but I'm kind of saying no change in our current stance for the moment, but watching it actively and very much have in our plan going forward share buybacks and the redemption of prefs.
Okay. Okay. Fair enough. Last question on the investment management platforms. I think you alluded to the fact that you're in the market doing some fundraising for both the Sagard Holdings and the Power Sustainable Capital platforms. I'm just wondering, would Power Corporation expect to participate and commit some amount of capital to the next round of fundraising, or are you starting to back away from that as you emphasize the growth of third-party capital for those platforms?
Yeah. Really good question. And just on your first point, in the material here, you see that Sagard Holdings announced a closing of CAD 450 million on their second credit fund. And so there's an example of recent fundraising, and the energy group is also actively discussing, as is the Power Pacific Capital. You also saw on the slide that currently 50% or so of the capital is at work as Power Corp. And I mentioned in my remarks that of the CAD 2 billion that's unfunded but committed, that's 25% Power money. And going forward, we would expect that to be lower than that. What's the ideal amount? I think it'll depend on the strategy and the stage of development. If we're launching a new strategy, investors are going to expect that they're going to want Power to put up more money.
If it's a third fund of an existing strategy, it doesn't require much. So if you look on that page, I can't remember the number, 17 or 18, you'll see, for example, in the credit strategy that we don't have a lot of capital in those. So it depends, but it's going down and lower and lower. And as the platform gets more and more mature, we expect we will need to put less capital into the strategies.
Yeah. That was great, Greg.
Okay.
Okay. Very helpful. Thanks for taking my question.
Okay, Nick. Thanks.
Your next question will come from the line of Tom MacKinnon of BMO. Please go ahead.
Yeah. Thanks very much. Good afternoon. A couple of questions. Just what struck me when you, Jeff, when you talked about potentially buying back stock. Nearly 70% of your NAV is life insurance company, and all these life insurance companies aren't allowed to buy back stock. So I'm just wondering, there, you've got a holding company here on top of a life insurance company that can kind of, I guess, get around that rule to some extent. But is that in keeping with spirit? I mean, how do you juggle that internally there?
Yeah, the first thing is we're not buying back stock right now, but it's not because OSFI said no. It's because as a holding company, we have been prudent with liquidity. At the operating companies, because you look at their financial positions, they've been taking advantage of the environment, quite frankly, to make acquisitions. But at the holding company level, we've been prudent with our liquidity, and we're not buying back stock. I think if we got back into a mode of buying back stock, I do not believe it applies at the Power Corp level. And I don't think it does not. I don't think it's infringing. It's in step with the spirit of it. And it's not quite 70, by the way, just to correct your number. I think it's maybe something down around 60 is where it is.
But I don't. Interesting question. It's not something that we think we're restricted by. But it's sort of an academic question without me being insulting, Tom, at this point, because we're not in the market right now in this environment buying back shares.
I'd also say that when the second wave, once they get, hopefully, everybody gets through the second wave in a short period of time and some of the darker skies start to move away, then I think attitudinally, everybody will have a different perspective on those things. So.
Very good.
That's one thing that we keep in mind.
Yeah. Good point, Greg.
That's great. Just the cash itself quarter over quarter, I think in the area of CAD 150 million almost. What was driving that? Was some of those, did you take cash out and put it into some of the alternative platforms or invest it somewhere else?
No. When you say the change in cash, you're talking about the-
590.
About 150. Yeah. That would have just been funding some of our commitments to the platforms, Tom, in the quarter. Nothing unusual, quite frankly.
So when we see the fair value for an alternative go up, if you took 150 out of cash and put it in one of the alternatives, would then the fair value of the alternative go up 150 and the cash go down by 150?
That would generally be the accounting. Yes. We may have used some of that for other assets as well. It goes through all uses that the corporation would have, right? Don't forget that when it comes to paying out dividends, we pay out pretty much everything that we get from our subsidiary companies. So at times, we will be drawing down our cash to fund virtually everything. So it doesn't necessarily mean that it's all going into those platforms.
Okay. Good point. What was driving the, if you take out all the noise around the Wealthsimple put stuff, maybe you could just, if we look at the alternative investment platforms, what sort of drove the, which one in particular was driving the investment income that you got that you recorded? Which one of the alternative platforms was probably the bigger driver of that?
Sure. So I'll give you, actually, both of them contributed this time in different ways. If you look at Sagard Holdings, and I mentioned this to Nick, one of the realizations there was the sale of Jaguar Health, which is in there. But also, there was a good profit from Peak. Peak is in the hockey business, and it's seasonally strong at this period of time. So that was one contributor. But then at Power Sustainable and Power Energy itself, quite frankly, it was a contributor in the quarter. As you know, there's a lot of depreciation in that business, but its revenues were strong, expenses down in the quarter. And so it contributed more than it would have in a normal quarter. And going forward, when you see those things, you have to be cognizant of the accounting for these entities.
Certainly, when you're in the funds like Sagard Holdings, most of that stuff comes through as realizations when we have a significant influence or we've sold a property that's just a portfolio holding. So we only recognize that when we realize things. And that's the same as it would be when you look at Power Pacific. But for Power Energy, that's an operating business, and we pick up that basically in a full consolidation. So there's different drivers to the revenue streams on that. And thinking of topics for a special section or a special theme one time, not that everybody was going to put up their hand and want to attend this one, but the accounting for some of those properties is a little complicated. But we're trying to be more and more transparent on that as well.
So we're going to see if we can't put something together to give you more of an understanding of how that does move.
Yeah. That would be great. I mean, you've got, I mean, you end up having these fair value adjustments that are put in here for these fair values, and there's predominantly Level 3 assets. I mean, does someone at Sagard Holdings tell you that this is the value of it, and then you put that in? Maybe you just give just a quick highlight or just quick overview as to how you get some of the fair values for Sagard Holdings and Power Sustainable. I know that we could spend hours on it, but do you have any quick way or do you have any quick summary that you can share with us just so investors feel comfortable with the value that is better on these things?
Sure. Yeah. Sure. Absolutely. And quite frankly, Tom, yeah, one of the things that, one of the things that you'll recall is that we did a full valuation when we did Project Next, and we took PFC private. So the marks there were basically right on top of where we had been marking our portfolios all along. And that was only, it seems like it was years ago, but it was only about six months ago, quite frankly. So.
It was in the RBC, frankly speaking, then.
It was. Yes. It was. But we have a very disciplined process when it comes to doing the marks. Each one of the platforms is governed by a board of directors with valuation committees and gets independent audited financial statements. They are, quite frankly, distributing their products to LP investors. So they have to be disciplined about their marks, and there is a disciplined process around it. So it's one that happens every quarter. So when you are looking at the funds in particular, including Power Pacific, which is publicly traded, quite frankly, so that's not hard to value, there is a lot of discipline around it. Not to say there isn't discipline around the rest of the marks, but there isn't much left after that other than Power Energy and China Asset Management, and that was what I was cautioning when I went through the NAV table.
China Asset Management is carried at its equity accounting value. We don't mark it on a regular basis to market. We certainly can give some indication, quite frankly, of market values, and I'm sure you would understand the market value of asset managers, especially in a high-growth theater like China. So we think that's a low mark, quite frankly. We have a big strategic partner, and they do not make those marks and those valuations public. I'm sure they do them themselves, but we have to follow the lead of the company and also our partner when it comes to that. And when it comes to Power Energy, as I said, it's an operating business. And right now, we do test the value every quarter because it's a significant amount of money. And we, at this point, test it more for any impairment that might be in the property.
That's not because we think that the business is not doing well, but we don't do a quarterly mark on that one either. We do that every year, and we do that in a rigorous basis because of the management needs to have a mark for compensation. So accordingly, we mark it every year. That gives you a very high and quick, dirty summary on it, but I'd be pleased to pull something together that's more specific for you.
Is there anything on Sagard? I mean, you mentioned the others. Did you mention Sagard Holdings? How were those marks determined?
Yeah. I did mention Sagard Holdings. I did. Yes.
And that's where you said there's 200 LPs, if you look on page 19 or whatever it is, that are in those funds. Now, there's all majority outside money, and they're sophisticated money. So you're not raising money from third parties. And when the LPs ask, "How's the valuation?" you kind of do it this way, whatever. There's a lot of scrutiny if you're in the business of raising institutional money. But I think this is a great topic, and I think all the questions here around profitability, around the marks, around these businesses are great and set up. I think some future sessions where we can go into greater detail. We need to because this is where we're building out the business. And we won't advertise it as an accounting lesson, because then we won't have any attendance other than Tom and Greg.
Okay. Thanks for that.
Next question will come from the line of Doug Young of Desjardins. Please go ahead.
Hi. Good afternoon.
Hi, Doug.
I guess the question, my first area, just around the area of simplification, and hopefully, a lot of these will be pretty quick, but is there any restrictions on moving or selling China AMC down to IGM? Because I know the original investment was done at Power level. The secondary investment was done at IGM. Is there any restriction on moving that down?
There's no restriction per se. The process, if we were to want to do that, would not be one that you would just simply move it. However, there's lots of parties that would need to be involved in that process, starting all the way from parties in China and regulators in China to boards of directors and management teams at Power and at IGM and independent directors and no doubt financial advisors and legal advisors. So the process would not be. There's no restrictions, but the process would be one that would be highly scrutinized and would take a lot of effort. It is something that we are. That is out there as a question to answer. Are we in the best position to have the China AMC holding in two spots? Are we better to unify it in one spot?
And do we get better value recognition by putting it in a single spot? We're well aware of that as a question. We've been pretty busy, as you can see from what we've been up to in the last few quarters. But it's something we're going to be turning our attention to at some point here and looking at is where is the best spot? And you're quite right just to repeat for other shareholders or others on the line who may not know the history. When the first piece became available of China Asset Management in 2011, we were provided an opportunity to buy with that first chunk. And we had a discussion of whether IGM wasn't the best place to put it. But at the time, Power was an accredited investor in China, and IGM was not. And IGM was not eligible. Things changed over time.
And so now we end up, and so when other opportunities came, we balanced the position out and was now jointly owned. So it's timely, and we're asking ourselves the question, where does it best belong?
I mean, it's the same kind of idea. It sounds like you're quite focused on Sagard and building this out. When I think of simplification of the structure, the Northleaf transaction, the Grayhawk transaction, would that be better suited to be down at IGM? Or why wouldn't it make sense to have that down at IGM?
So the buying into the high-net-worth business, as per the earlier question, Grayhawk, that was initiated out of Sagard with relationships to Sagard, and Sagard was looking to build out their distribution platform for their funds. And so they saw that opportunity, had the discussions with the parties, came to agreement on it, and did that transaction. So we're not in the business of saying when they're doing that, "Oh, by the way, thanks for negotiating all that. I think it belongs in IGM." I don't know whether the Grayhawk management would have even done that deal. That's not the way the transaction happened or the agreement happened. So that's how that happened. You're asking a broader question, and it's maybe not your question, but I'll turn your question into this.
We have private investments going on at Power, and we have them going on within Great-West Life and real estate and other alternative areas, and we have them going on at Northleaf that IGM and Great-West have purchased. It's a big world in private investments. It's a very, very big world, and there's lots of different strategies. And Power Corp is not going to satisfy all of IGM's or Great-West Life's needs. And those companies are public companies, and they're free to pursue their strategies how they want to go out and get a presence in these asset classes for their own clients or, in the Great-West Life case, for their own balance sheet as well. And Power's very good in certain asset classes, very competitive in certain asset classes. Northleaf is competitive in others. So the companies are. It is what it is.
We've got different businesses, different public companies, and they're all pursuing their strategies. And I think in private investments, there's many, many years of high growth to come in these areas and lots of opportunities for our group to play in different ways. I don't know if I answered your question, but acknowledging we have it in different places, and that is the way it is. And I think we'll be that way for some time.
Yeah. Now, my question, and you kind of gave me a bit of a flavor, now, my question more was just like Sagard as a whole. Within that structure, then what it does, would it be better suited to be down at one of the operating companies? And it sounds like, no, that's not necessarily your thought process. I mean, there's a lot that can be done with those investment classes to back long-duration liabilities and whatnot. And so my question was, does it make sense to have Sagard at the top, or does it make sense to have it down at the back?
Yeah. Okay. Sorry if I misunderstood it. I sort of addressed it indirectly, maybe. But these are all people businesses when you get right down. They're people businesses. So the people that joined Sagard Europe initially 20 years ago in France and the people that have joined up to the FinTech strategy and the people that have joined up to the teams that are in Sagard joined a team. It was part of Power. The people are operating the business just like Olivier is on the Power Sustainable Capital side. They joined that. They joined those teams. They got excited by what it was about. And then part of the opportunity is also to distribute through IGM or Great-West when IGM or Great-West wants to do it because there's no way we can try to force them. That's what they signed up for.
They're at a company that they're working for. So you turn around and say, "Hey, well, it makes more sense to have it in IGM." A lot of people that came to work didn't. That's not what they joined. Just like the people at Northleaf joined Northleaf and are part of that group. So some of these things on paper, when you look at them, you might say, theoretically, it makes more sense to put it here. But they're actually people businesses, and you do a lot of damage, and you can, quite frankly, destroy what you have by trying to do things that might look like they might be more logical in another place. I would add that to my answer, Doug.
Okay. And then just lastly, why wouldn't you back out the CAD 69 million put option liability? For me, that would be a completely unusual item. So why not back that out of operating EPS and earnings?
I guess that's a really good question, Doug. And we'd like to take it to the AMF and ask why we can't do it as well. But the regulators are pretty fussy about when you back out items and when you don't. And it was our view, not that we didn't go to the regulators to ask them the question, but it was our view that this was explainable, that everybody would see it as you just captured it and therefore treat it accordingly. And that way, we could be consistent with what, if you will, the spirit of the regulation when it comes to things that these things are, I think most people would say, part of that genre of business where they're startup companies that need to attract capital, need to have owners that have an interest in the business.
When you're in that business, it's part of the business. It's hard to argue that that's not going to be a one-time event. That's how we got there. For what it's worth, that's why we flagged it out. We called it out, and we thought, "You're intimating." Like, "Well, geez, it makes sense to not have it there, so why not?" That's how it went.
Okay. Great. Thank you. Yep. Thank you very much.
Okay. Thanks, Doug.
We have no further questions. I'll now turn the call back over to the presenters for closing remarks.
Okay. Thank you, Operator. And again, thank you each for participating. And we will get lots of good questions here and lots of food for thought as to how we follow up some of these questions with some further presentations. And we look forward to talking to everyone soon and have a great day. Thank you.
This concludes today's conference call. You may now disconnect.