Alaris Equity Partners Income Trust

which continues to be a record for Alaris. This brings the six-month increase in net book value to 90 cents per unit. Alaris' partner distribution and transaction fee revenue of 42.1 million was ahead of previous guidance of 33.9 and Q2 of 2023's 36.9. This was driven by the follow-on investments in the quarter, a higher than expected FX rate, and higher than anticipated common dividends. Common distributions in Q2 24 were $3.7 million as compared to $1.2 million in the comparable quarter last year, with year-to-date dividends of $4.3 million as compared to $2.1 million in six months ended 2023. This was driven most notably by Edgewater's common distribution of $2.8 million. Alaris's net distributable cash flow to date in 2024 has increased by 14% to $55.2 million, or $1.21 per unit, from $48.5 million and $1.07 per unit in the same period of 2023, after adjusting the comparable period for non-recurring settlement and litigation costs to curb. The actual payout ratio for the quarter was 56%, driven lower in part by the common dividends received. Subsequent to the quarter, Stride redeemed Alaris' investment for gross proceeds of $4.1 million U.S., bringing the total number of partner investments exited by Alaris to 22 and an overall total return from exited investments of 65% and a median IRR of 19%. Year-to-date, Alaris has invested $77.5 million, including an additional $27.5 million U.S. of preferred equity into Shipyard, 20 million US in new partner Cressa and 35 million US into FNP just this quarter. With regards to partners, our portfolio continues to perform well and has maintained its weighted average ECR of approximately 1.5 times with 10 out of 19 partners continuing to be above this threshold. With regards to partner performance, it was a quiet quarter for fair value as we were essentially flat. Shipyard used proceeds of our follow-on investment in the quarter for an acquisition, and as a result of both this and increases in the base business's forecasted EBITDA, the fair value of the common increased by 1.4 million U.S. During the quarter, Edgewater paid a significant dividend, resulting in receipt of US$2.1 million by Alaris. The payment of this dividend impacted the net debt position of Edgewater, and in turn the fair value. As a result of this realization, the fair value of Alaris' interest decreased in the quarter by US$1.4 million, although year-to-date Edgewater's fair value continues to be up US$900,000. With relief to U.S. interest rates pushed back from expectations at the start of the year, DNM is seeing a slower recovery to lease volumes than originally forecast. As a result of the updated reset metrics and anticipated EBITDA, there was a decrease in fair value of $800,000 U.S. for both the common and preferred units. Other less significant impacts to fair value in the corridor were driven by OHANA and Cary Electric. Of our 19 partners, 11 have either no or less than one turn of debt as compared to EBITDA. Our current outlook calls for $38.7 million of revenue in Q3, as this period sees generally lower common distributions. That said, the 12-month run rate of $163 million is up from $158 million last quarter, partially due to higher annual common expectations. Our G&A outlook remains at $16.5 million. And on that note, I'll turn it over to Steve.

Great. Thanks, Amanda. As she just said, our second quarter came in slightly ahead of where we had expected, but generally on plan. The last few months saw the addition of a great new partner in Cressa, a commercial real estate broker with offices around the world. And we expect them to be very active with acquisitions over the coming years. We also saw the redemption of Stride, our smallest investment, at just $4 million. Of our 19 partners, I would highlight Cressa, The Shipyard, Ohana, 3E, Sagamore, DNM, and Edgewater as partners that we expect to have opportunities for growth investments in over the coming months. And obviously, seven out of the 19, it has become a bigger and bigger focus for us in our investment criteria to find partners that have ongoing acquisition and growth opportunities, especially now that we have common equity in those partners. Stride is a great example actually of the power of our structure and how it reduces the risk in our investment returns. During our years of Stride, the company enjoyed some success but over the last few years has seen a contraction in their business. Despite their revenue and earnings being well below where they were when we invested, we were able to record a reasonable 15% IRR over the course of our investment. While that's below the roughly 20% IRR that we target for new investments, it was a positive result overall. and no other redemptions are imminent, but we do expect to see two or three over the next 12 months. As for new partner deployment, we do expect an active second half of the year. With more than 75 million deployed in the first six months, we hope to beat that number in the second half based on current partner opportunities as well as potential new partner ads. With two rate cuts in Canada already, where we procure our debt and our equity capital, we're in a really good position given that we generate almost all of our investment opportunities in the U.S. who have not cut their rates yet. The U.S. investment environment is highlighted by higher growth and higher returns on structured capital like ours. So, Amy, with that, I'll turn it over to any questions that the field has.

Thank you. And as a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of Jeffrey Kwan with RBC Capital Markets. Your line is open. Hello, Jeffrey. Your line is open. If you're on mute, please unmute your line. Please stand by for our next question. Our next question comes from Nick Preby with CIBC Capital Markets. Your line is open.