IGM Financial Inc.

Thank you for standing by. This is the conference operator. Welcome to the IGM Financial first quarter 2026 analyst call and webcast. As a reminder, all participants are in a 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. You will hear a tone acknowledging your request. Should you need assistance during the conference call, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Kyle Martins, Senior Vice President, Corporate Development and Investor Relations. Please go ahead.

Betsy, good morning, everyone, and thank you for joining us. On the call today, we have James O'Sullivan, President and CEO of IGEM Financial, Damon Murchison, President and CEO of IG Wealth Management, CEO of McKinsey Investments, and Keith Potter, Executive Vice President and CFO, IGEM Financial. Before we get started, I would like to draw your attention to our cautions concerning forward-looking statements on slide three of the presentation. Slides four and five summarize non-IFRS financial measures and other financial measures used in this presentation. And on slide six, we provide a list of documents available on our website related to IGEM Financial's We'll take that to 5-9, and we'll turn it over to James. All right. Good morning, everyone, and thank you for joining us today. The first quarter has set 2026 up to be another strong year for IGM Financial, with well-positioned wealth and asset management businesses, record-high client assets, and an operating environment that, despite periodic market volatility, has continued to be resilient. Adjusted EPS of $1.21 is a first quarter record with strong earnings growth in both our wealth management and asset management segments, demonstrating IGM's diversified growth. During the quarter, we also returned a record amount of capital to shareholders through our quarterly dividend and a meaningful share buyback program. We also announced in February a well-planned leadership succession with Damon Murchison taking the role of President and CEO of IGM on July 1st. Most of you already know Damon from his significant contributions as the head of retail sales at McKinsey during the 2010s and as IG Wealth's CEO since 2020. He has the confidence of the board, our employees, and our advisors and is uniquely positioned to build on IGM Financial's strength and momentum. Turning to slide 10, the operating environment for our wealth and asset management businesses continues to be solid and resilient, despite periodic market volatility tied to geopolitical tensions. IGM's momentum and diversity within our core businesses and our strategic investments positions us very well for continued growth. On slide 11, IGM's year-over-year earnings growth was 20% in aggregate, with contributions, as you can see, from all segments. And combined with client assets presented on slide 12, demonstrates the diversified growth across our wealth and asset management businesses. Turning to slide 13, I want to help paint a picture of how we're thinking about and approaching artificial intelligence at IGM. First, our core businesses at IG Wealth and McKenzie have advantages that we are leveraging and extending to drive advisor productivity, investment outcomes, and client experiences. At IG, for instance, one key advantage is our starting point. With industry-leading advisor technology, with a strong foundation of system integration and proprietary data ownership. At McKinsey, our investment management teams have been using AI technology for many years, perhaps most notably in our global quantitative equity boutique, whose capabilities have been increasingly attracting the attention of the world's largest and most sophisticated investors. Across IGM, AI will also further elevate our operational effectiveness and efficiency. Looking forward, responsible AI use and oversight, fintech and global technology partners, horizontal connectivity across IGM's core businesses and strategic investments, combined with the power group ecosystem, will all serve as key enablers for IGM Financial in this rapidly evolving Age of Intelligence. With that, I'll turn it over to Damon to discuss IG's first quarter results.

Good morning, everyone, and thank you, James. We look forward to working with you in your new role. I'm confident, as ever, in the position and the strength that you're leaving IGN in. Turn to slide 15. We can demonstrate this strength and continue to manage through the first quarter at IG Wells for Rockefeller and Wells Info. IG Wells delivered another strong quarter with record quarter ending AUMA, record Q1 gross inflows and sales as well as record Q1 net sales into IGM product. This solid performance contributed to one of IG Well's best first quarter earnings on record, which Keith will speak to a little later. The quarter ended with AM&A just shy of $163 billion, up almost 15% versus Q1 of last year, and up 2% quarter record driven by strong net flows. Growth inflows were $8.2 billion and growth sales were $6.2 billion, both first quarter records. As we spoke to on our Q4 call, I'll remind everyone that these flows included non-fee-bearing assets related to our relationship with Rockefeller, and excluding those flows, growth inflows were $5.2 billion. We also continue to demonstrate that we're a new client acquisition machine, and new client growth inflows of $1.4 billion, a first quarter record, with 77% of those flows coming from masterful and high network clients, exactly the segments that we've been building this business around. The first quarter, This is our seventh consecutive quarter of positive net flows, and we'll once again rank number one in earned media share of voice amongst Canadian banks and wealth managers. It's our fifth quarter in a row in the top position. 2026 is a special year for IG. It's our 100th year anniversary, which we officially celebrated last week. Our business has evolved over the years. We're very, very proud of our past, and we're confident about our future and our ability to continue to gain market share while helping Canadians achieve their financial well-being. Therein, my section also reviews the successful quarters for both Rockefeller and Wells Temple and how they continue their strong execution of their respective growth strategies. As I move to slide 16 and beyond, my comments will focus on flows, excluding non-fee-bearing assets. Slide 16 offers a good snapshot of our momentum that we see continuing as the business and our advisors continue to execute with focusing solely on financial planning and relationships that often span generations The first quarter delivered our strongest first quarter growth inflows on record, and our clients continued to sell average costs into the market through IGM products at a record place. During the month of April, our results were also in line with seasonal trends as our advisors turned their focus to long-term tax planning, and our clients paid their annual personal taxes. Turn to slide 17. This gives an overview of our operating results, providing a window into the strength of this business. The top left, you can see strong growth in our gross inflows, which were up over 24% versus last year. On the top middle, you can see IGN products continue to represent a very strong share, approximately 88% of our total AONA, supported by strong four- and five-star Morningstar ratings. On slide 18, you can see our buyers have strong ability to attract new clients to IG Wealth, particularly massive flow and high net worth, with a record $1.4 billion in growth flows from new acquired clients. 77% of which were massive point in high net worth. I'll also remind you that during Q1 of last year, we saw a few ultra high net worth clients representing approximately $160 million onboarded. Q1 of last year was truly an exceptional quarter for us in high net worth, and despite this tough comp, our Q1 this year was also very strong. In fact, our best Q1 on record via total new client growth inflows. Turn to slide 19. The first quarter also demonstrated the continued strength in our non-AUM&A driven businesses, mortgage banking and insurance. While the mortgage business has operated in a challenging industry backdrop this quarter, as compared to the very different environment a year ago, it continued to deliver a strong performance with a two-year cumulative growth of almost 20%. Our insurance business was firing on all cylinders, setting a record first quarter of first-year commissions. All told, our new annualized insurance premiums grew by over 41% versus Q1 of last year. On slide 20, you can see the continued strength of Rockefeller, with asset growth over 30% over the past year. For the last 12 months, Rockefeller has delivered an organic growth rate of over 7% solidly within the targeted range that we provided our last year investor day. On advisor count, during the quarter, Rockefeller also refocused some components of their legacy business, to better support their global family office business, driving a slight reduction in their private advisor count. Most importantly, there were no advisors left the firm, and over the last 12-month basis, Rockefeller has added 45 new advisors, representing growth of over 10%. Turn to slide 21. You can see another exceptional, strong record quarter for Wealthsimple. Private assets were up 71% versus a year ago, driven by their highest quarterly net flows on record. and client count was up 24% versus Q1 of last year. Love Simple continues to deliver on its growth-oriented strategy, attracting new clients and gaining a higher share of wallet from existing clients, supporting its position as one of Canada's fastest-growing financial services companies. With that, I'll turn it over to Luke.

Thanks, Damon. Good morning, everyone. Turn to page 23. You'll see highlights for McKinsey and the asset management segment for the quarter. We were pleased with the continued momentum in the business during the first quarter across a number of dimensions, and this momentum has continued into our second quarter. Our AUM, which you can see at the top left, increased during the quarter driven by strong net sales, and by the end of April, our AUM had increased to a record high level of $256 billion. We had net sales of $1.7 billion in the quarter, which included $1.2 billion in institutional awards and also $729 million in investment fund net sales. investment fund net sales in four years for us, and up meaningfully from last year, driven by strong momentum in retail. This retail momentum is continuing into the second quarter, and as published earlier in the week, we are second best April investment fund net sales result ever. Actually, I'd also highlight that we had around $2 billion of institutional awards that were awarded to us during the first quarter that are going to fund in the second quarter. For this $2 billion, the wins were across both Canadian and foreign clients and reflected our global quant equity capabilities as well as Canadian equity mandates managed by our North American equity team. Under other developments, we've highlighted four new active ETF launches during the quarter, expanding our value and quant offerings within this delivery vehicle. We've also highlighted that we closed the market at the TSF a few weeks ago to celebrate the 10-year anniversary of our ETF business. We're very proud of this capability that we built in-house and which has become a core delivery vehicle for us. We're now approaching $30 billion in ETF AUM with over 60 ETFs covering a range of active, systematic, smart beta and traditional beta mandates. I'd also remind that with the launch of a number of successful active equity ETFs over the last two years, a large part of our retail net sales have been occurring within this vehicle type, and I'd remind that the pricing of these ETFs is full retail margins and aligned with their mutual fund counterparts. At the bottom of the slide, you can also see China and see a Northeast continued growth, and I'm going to speak to these on the coming slides. Journey page 24, you can see the trend in history of McKinsey's net sales. On the left, you can see in the top chart that we had a solid investment fund net sales result for the first quarter with meaningful growth over 2025 and our third best Q1 ever. In the middle, you can see momentum continued in April with our second best April ever, And at the bottom is our overall net sales result at $1.7 billion, which, as mentioned, included $900 million in institutional SMA net sales. On the right side, with the last full month trailing trend, you can see continuing momentum in retail and overall. And we're expecting this momentum to continue in the coming quarters, as we believe we have winning conditions in a number of places within our product offerings. On slide 25, I'd highlight first in the bottom left that the industry environment is healthy, and the current mutual fund net sales rate for industry peers is around 2% of assets, which you can see here in the chart. You can also see that McKinsey's overall invested fund net sales rate has moved above the industry rate, and we're gaining market share driven by momentum in retail. In the top right, we've highlighted the year-over-year growth in retail, with $700 million in retail improvements contributing to an $814 million overall improvement in investment fund net sales. And also in the top right, we did have $934 million in institutional asset main net sales in the quarter, and as mentioned, $2 billion in additional awards in the quarter funding in Q2. At the bottom right, I'd highlight the improvement in overall Morningstar ratings in the quarter with 51% of assets residing in four and five-star funds. Importantly, our share of assets in five-star funds is at its highest level in the last four years, and we're among the highest in the industry on this measure. Straight at page 26, you can see the performance and net sales for our retail investment funds by receipt. This quarter, we've reoriented the slide to better orient our fundamental equity teams between core and different style and thematic offerings. Across the slide near the top, you can see compelling performance relative to peers across many of our capabilities. I'm going to talk about quant, but beyond our global quant equity team, we've seen net sales start to improve in Q1 and into April for a number of our teams with compelling performance, like multi-asset, resources, and green chip. Towards the left, you can see the strong net sales into our global quant equity capability, where we have retail net sales of $1.9 billion during the quarter. And importantly, as mentioned last quarter, We believe we're just getting started as we trailblaze with quant in retail. We've launched 13 quant mandates in retail across mutual fund and ETF delivery vehicles. These mandates have exceptional performance and cover some very large product categories like global equity and international equity, as well as some interesting liquid oil categories like our U.S. health extension strategy. This holistic quant all-weather approach that marries AI and HI has delivered track records that are impressive in terms of the level of alpha, but also the consistency of alpha across different market environments. Turn to page 27, a few comments on the Chinese investment fund industry. Industry assets of 37 trillion yuan, or up 15% over the last year, and declined very slightly in the quarter. You can see in the bottom left that there were net redemptions of around $600 billion institutional net redemptions of passive equity ETFs of around 750 billion won. This was offset somewhat by active equity fund sales of 200 billion won, which was the highest level of active equity net sales in the last four years, following robust equity market improvements. On the right, you'll see China and C lost the market share in the period, declining to 5.6% from 6.2% and maintain its number two rank in the industry. As the leading provider of ETFs in the Chinese industry, it experienced just over $200 billion in institutional passive ETF redemptions, referenced earlier. Turning to page 28, you can see the growth in Chinese seeds a little more time. As indicated on the last slide, you can see in the bottom right, net redemptions on past ETFs of around $200 billion, referenced earlier. And I would highlight long-term investment fund assets, around 10% over the last year. And Keith will review the solid financial results and financial outlook for the company later on the call. Straight at page 29, you can see Northleaf's continued growth with a 10% increase in AUM over the last year and almost 20% cumulative annual growth since we made our investment. During the quarter, new commitments to the Northleaf funds currently in market remain solid despite a challenging macro environment. I note that Northley's offering is performing very well, and it continues to generate positive net flows and new commitments across its programs. I'll now turn the call over to Keith Potter. Thank you, Luke, and good morning, everyone. On slide 31, you can see key highlights for Q1. Adjusted EPS is $1.21, up 21% year over year. We returned $330 million to shareholders in the quarter, including $185 million in share repurchases. At the same time, we ended the quarter with unallocated capital of over $1 billion and reduced our gross leverage ratio to 1.32 times. We are maintaining expense growth guidance of 4% for 2026. And finally, I would note that we enhanced our interim MD&A in the quarter to condense and focus on material changes from the annual MD&A. Our objective was to maintain the same level of transparency and move more in line with the industry. Turning to slide 32, you can see our AUM&A and flow trend. First, as Damon noted, we have introduced the concept of non-free-bearing assets. We are providing the total AUM for completeness and excluding non-free-bearing assets to provide transparency into drivers of revenue and expenses. I will reference AUM&A excluding non-free-bearing assets throughout my remarks. For the quarter, while ending AUM&A was relatively flat, average balances increased 2.4% relative to Q4 basis. On slide 33, you can see how higher assets drove solid revenue growth and a 21% year-over-year increase in adjusted EPS at the IGM level driven by our core businesses and strategic investments. As I mentioned, we are maintaining expense growth guidance of 4%. I'll speak more to expenses for McKinsey and IG in a moment. 34% key profitability drivers for IG Wealth Management. On the left, you can see average AUM&A was up 2.5% in the last quarter. And on the right, our advisory fee rate increased 0.3 basis points during the quarter, primarily driven by year-end mutual fund distributions. As our advisors' work declines during the quarter, some of this cash has been reinvested into long-term AUM, and we expect advisory-free rates to fall by just over 0.5 basis points in Q2. Cash balance would decrease and make shifts toward high net worth. The asset-based compensation rate was up slightly in the quarter and expect a modest increase in Q2. On slide 35, IG's overall earnings of $158.9 million is a record first quarter, and we're up 23.8% year-over-year on revenue growth of 14.4%, demonstrating strong growth and positive operating leverage in the business for consecutive quarters. On point two, other financial planning revenues demonstrate growth year-over-year, supported by momentum in the mortgage and insurance businesses. And on point three, 5.9% year-over-year. Expenses would have been up just over 4%, excluding one-time seasonal expense true-up for year-end incentive programs that were favorable in 2025 relative to 2026. I would remind that Q2 is a seasonally high expense quarter for IG with advisor conferences and marketing spend and do expect expenses to Q1 2026 and then dropped in the second half of the year. Moving to slide 36, we have McKenzie's AUM by client and product type, as well as net revenue rates. On the left, average AUM was up 2.1% versus Q4, and on the right, the third-party rate, excluding Canada Life, decreased 1.1 basis points. This was less than the two basis points we got into last quarter, and the reason for this is during Q1, we earned performance fees on institutional assets of $2.8 million that increased the rate by approximately one basis point, and that partially offset the full impact of institutional onboarding and having two less days in Q1. As we look to the next quarter, we expect the third-party rate excluding Canada Life to decrease approximately 3.5 basis points for three main regions, and expected onboarding in Q2, as Luke referenced. Second, the impact of previously announced fee changes that become effective April 1st. And third, the non-recurring performance fee earned in Q1 that will not be repeated in Q2. Turning to slide 37, McKinsey earnings of 57.4 million are up 9.1% year over year. Operations and support and business development expense growth was up 8.2% relative to last year. And similar to IG, One-time seasonal expense true-offs for year-end incentive programs were favorable in 2025 versus 2026. Our expenses are also driven by technology delivery and a couple of timing items. Looking forward, we do expect McKenzie's expenses to drop in Q2 relative to Q1 2026. I would also remind that we have reclassified certain variable investment are also retrospectively restated for 2025 throughout our disclosure documents. Slide 38 has China NC results. Luke's already commented on AUM. China NC did deliver strong Q1 earnings of $34.6 million. For the full year 2026, we expect earnings growth in the mid-single million in the quarter. Slide 39 has earnings contribution from companies in each segment, and I'll make a couple of comments. First, Rockefeller earnings of minus 1.8 million is in line with guidance from last quarter. As a reminder, Q1 has seasonally higher expenses, and as discussed on the last call, we would expect Rockefeller to move into positive earnings in the second half of 2026. For North, we have Q1 earnings of $6 million net of non-controlling interest reflects the positive impact of annual incentive fees, but they were partially offset by negative foreign exchange relative to the U.S. dollar. And looking forward, $4.5 to $5 million net of NCIs is a reasonable expectation for average quarterly earnings in 2026, with expected quarterly variability. On slide 40, we continue to make progress against our capital allocation priorities, We returned $330 million in capital to shareholders in Q1, which is an all-time high for any quarter. And at the same time, we've maintained approximately $1 billion in unallocated capital. Our gross leverage ratio also ended the quarter lower at 1.32 times. On page 41, as we interviewed last quarter, we presented a framework on how management views the buildup of IGN's indicative value, now at approximately $85 per share. As a reminder, we derived the indicative value of our core operating companies using average PE multiples from a diversified group of wealth managers for IG and asset managers for McKinsey as of market close on April 30th. The indicative value of our strategic investments is based on our historical approach to disclosures and listed on the page. And while IGN's share price has strengthened in the quarter, this framework continues to demonstrate prepared remarks and we'll open up and call for questions.

We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. Thank you for your patience. The first question today comes from Scott Fletcher with CIBC. Please go ahead.

Hi, good morning, everyone. I wanted to ask a question. maybe both for both sides of the core business, just on investor behavior and what you're seeing. I know you mentioned volatility in the markets impacting how people are dealing with their savings, but I'm just curious how you're seeing that through the first four months of the year and whether that's going to impact any of the fee rates or any of the way that it hits the bottom line of the business.

Hey, Scott, it's Damon. I would say what we've seen in the first quarter is that a lot of our clients have been desensitized to what they're reading and what they're seeing. We didn't see much change in investor behavior, as a matter of fact. I mean, we're an organization that just continues to talk to our clients about dollar average costing into the markets, and that's exactly what they've been doing. And we expect that to continue.

Yeah, Luke, I'll echo that. That one slide actually showed the net sales rate for the industry tracking about 2% of assets. We've characterized that as solid and normal. It's kind of normal conditions when you look at the competition by asset class and just the level of contributions is really normal.

Okay, thanks. That's good to hear. And then maybe one for Damon. Just on the wealth and the growth of the clients, it seems like the momentum is still quite strong there. Is there anything to call out in terms of what's driving that or if it's more just more execution on the same plan?

Well, to be honest, it's an intercession of the value that we're providing to our clients and where there's demand in the marketplace. What we find is more and more Canadians that we're meeting with are looking for advice that extends beyond just investment advice. They want to help us navigate their wealth and how they're going to explain their wealth to their kids. They want us to help navigate how am I going to pass on this wealth efficiently and effectively to who I want it to go to. They're talking to us about how they want to leave a legacy. I mean, it's all the things that we've spoke about in the past that's coming to fruition. So for us, it's really that intersection of where the traffic is.

Okay, great. Thank you. I'll pass the mic.

The next question comes from Graham Riding with TD Securities. Please go ahead.

Hi, good morning. Maybe, Luke, I'll start with you. Slide 25, I think it shows an encouraging trend there for McKenzie's flows rate. I just want to make sure I'm understanding it correctly. The 1.8% for the industry, is that mutual funds all rate? That's excluding ETFs. And then your flows rate, are you including ETFs in your flows rate?

Good question, Brad. So, yeah, ours, the industry is mutual fund. Ours includes our ETFs. And, of course, our ETFs are just retail. What I would say is we are working with firms like Investor Economics on getting better industry reporting for ETFs. A lot of the data that you see on ETFs includes what I'll call the interest of mutual funds investing in ETFs. And so unpacking the institutional and mutual fund investment from the ETFs is important to get a proper view of ETF net sales. But I would say we are working on that view to be able to present what's being purchased in ETFs in retail. But yeah, ours does include our ETF net sales.

Okay, understood. Just want to make sure I'm... understanding that chart, but don't get me wrong, it's still a positive chart. The outflows at China AMC, it seemed to be outsized relative to the Chinese fund industry. I didn't quite get all your information there. Can you remind me or can you explain what drove the outsized outflows at China AMC relative to the industry?

Yeah, absolutely. So for the industry, we had about – So there's $600 billion in net outflows in long-term funds for the industry, and this was a consequence of $750 billion of redemptions from past ETFs. China MC is the largest ETF provider in the industry, and of that $750 billion in industry net outflows in past ETFs, China MC had just over $200 billion of it. I would also comment, it's been reported, China's national team, as they call it, has been engaged in financial market stabilization for about two or three years. And in the quarter, it's been reported that there was redemptions from that stabilization team as a consequence of robust equity market improvements. So we view it as a big show of confidence, and indeed there were a lot of net sales into active equity funds during the period. But that's what you're seeing in the industry there. It was about $750 billion of past ETFs that were redeemed, and China is the largest ETF provider, experienced about $200 billion of that.

The next question comes from Rommel Sabat with Jefferies. Please go ahead.

Hi, thank you for taking the questions. So my first question is on the non-fee-bearing capital. Could you give us some color on who they are? What is the capital invested in? And what's the long-term strategy on the non-fee-bearing capital? Like are they expected to be converted into fee-bearing capital over time?

Yeah, so it's a statement here. So that is what I would call a special circumstance where we're working with Rockefeller. They've got a number of ultra-high network families that have Canadian assets, and they're in individual securities. And we're working with Rockefeller to make sure that we do what's right by those clients here. So over time, I think there is maybe an opportunity to diversify into some fee-bearing assets, focus primarily on that, quite frankly. You know, if I step back, what the real opportunity is with Rockefeller, and we always talk about horizontal connectivity, is really a cross-border advisory services program or service that we do in conjunction with Rockefeller, by which we refer them clients, you know, our clients that are working in the U.S., that have assets in the U.S., that are high net worth and opportunistically I network and they work with them and they do the same thing with IG Wealth. This would drive our fee-bearing business, our traditional business. So that's what we're focused on and there's a real opportunity there long-term.

Okay, yeah, that makes sense. And then my next question is a two-part question on Wealthsimple. Could you give us a rough timeline as to when we should expect earnings contribution from Wealthsimple? And the second part is maybe you could explain how the synergies from Wealthsimple with the core business will be realized? Like how would Wealthsimple help boost revenues for the wealth management and asset management businesses?

Sure. James, I'll start on that. So I think the first thing to point out is that the momentum absolutely continues. Indeed, it feels like the momentum at Wealthsimple is accelerating. March was their best month ever for flows. And Q1 was their best quarter ever for flows. So the business is very, very strong. In terms of profitability, you know, I think Wealthsymbol needs to take advantage of this momentum. I think they need to continue to build share. They've got a great engine now for acquiring clients. They've got a great revenue model. But for so long as they can attract clients at the pace at which they're attracting clients, I'm not focused on profitability. The profitability will come. But I think they've got a window here to achieve a very meaningful position alongside the Canadian banks, alongside all of the major Canadian financial institutions, and I am wholeheartedly encouraging them to focus on acquiring share, continue to develop their offering, and continuing to develop their revenue model. Profitability will follow in due course. Okay. May I ask that McKinsey obviously helps fuel the product operator Wealthsimple. So we're a proud supplier of ETS to Wealthsimple as an investment platform.

Okay. Okay, make sense. Thank you so much.

The next question comes from Bart Zasky with RVC Capital Markets. Please go ahead.

Great, thanks, and good morning, everyone. I guess just sticking with Wealthsimple. So a couple weeks back, Robinhood had announced that they're planning on launching a crypto offering in Canada later this year. So could you maybe just speak to, one, what is the crypto exposure for Wealthsimple from a business mix perspective and just kind of how you think about the competitive environment with a new entrant coming in? Thanks.

Yeah, it's Keith here. That's the first question, crypto exposure. You can see the AUM is about $125 billion. Crypto would be called less than 2% of total AUM. I commented on the last call when you look at what differentiates Wealthsimple. It was a very, very diversified business, a diverse in Q1. A lot of that was due to exposure to crypto and general trading activity. So, you know, Wealthsimple is structured quite differently and it's quite a different business with diversified revenue. And this is one of the core reasons that we've maintained the fair value of $2.3 billion in the quarter. And I just add, Bart, I don't think anyone in the Canadian market innovates as quickly as Wealthsimple. And I don't expect that to change. There will be competition to be sure. There will be new entrants to be sure. But I can't think of a business that's better positioned to face the marketplace and deliver for clients than Wealthsimple.

Okay, great. Thanks for that. And then I have a question on Northleaf. Maybe it's a bit of a mechanical one, but when I look at the Northleaf AUM bridge, there's fundraising, return of capital, and FX. And normally for an alt manager in an AUM bridge, you see fair value gains. So Am I missing something in that bridge? Should that be included? And if not, like what's been the historical moeck, if you will, for Northleaf's portfolio?

Great question. I'll take that. I guess Keith could. It's Luke. So on that bridge, the way we presented AUM as a choice, we used the measure of AUM that reflects the base upon which they earn revenue. And for most of the North Week mandates, they don't earn revenue as a percent of fair value. They earn it based upon what's funded. So that's why you don't see any market returns as part of that bridge. Oh, so it's fee-paying AUM?

Yes. Okay, got it. Okay. Okay, thanks for taking my questions. And, James, congrats on your tenure with IGM. Thank you.

The next question comes from Jamie Goyne with National Bank Financial. Please go ahead.

Yeah, thanks. I just wanted to, you know, clarify or just dig in into the expense guidance. You know, pretty large growth rate in Q1, and then it requires a pretty decent step down in upcoming quarters. So just wanted to get your thoughts. a rationale for the confidence in that step down and, uh, and the trajectory, I suppose of, uh, I expect that to flow as a more back house weighted. Thank you.

Yeah. Thanks, James. It's, uh, it's Keith here. Yeah. You know, as I mentioned, you know, part of the higher expense in Q1 was seasonal, uh, related to the incentive true up, um, a little bit higher tech spend. If you look back to Q1 of, of, um, 2025 we didn't have as high a tech delivery what I would say is you can expect McKenzie expenses to drop in the next quarter throughout the year and then similar to what I said at IG where it's usually high next quarter but you can expect to drop in the second half of the year But I would say that, you know, this was in line with what we expected for Q1 and are sticking with 4% guidance and our confidence in 4% for the rest of the year.

As a reminder, if you would like to ask a question, please press star and 1 to join the question queue. The next question comes from Tom McKinnon with BMO. Please go ahead.

Yeah, thanks. Good morning. Just a question on some of the marks you put on China AMC. You know, it's based on kind of the run rate of the earnings. You suggest you're carrying it at 17 times earnings. These are like BlackRock-type valuations here. There is, has been some pressure perhaps in terms of an outlook for the name. How should we be, can you remind us how those, how this 2.1 billion carrying value is developed and if any, do you look at peers, what goes on in that? Thanks.

Yeah, I'll take that. So for Chinese, it's really the carrying value is based on equity method of accounting. And so that is the carrying value at the $2.1 billion. So we would, you know, increase it by earnings reported and decrease it by the dividends paid. So that's the actual carrying value, which is based on the equity accounting. You know, when you think about China and China, and their future potential and potential growth as the second largest player in the mutual fund industry and have a diversified business as it relates to institutional. So they have a very, very strong position within the China asset management industry and we're comfortable with future growth with the company.

Okay, so thanks for clarifying that. And then just following up on the wealth simple, this... The mark you have there is associated with that round that was done in October. You know, even take your point on Robinhood. You know Robinhood, and that's down quite a bit. But even a company like Schwab, which is reporting very strong, March is down like, you know, 15% or so. It may be you can – can you describe – your process in assessing this fair value mark each quarter on Wealthsimple?

Yeah, I'm not sure it's a key period yet. So as you mentioned, we certainly have two relevant transactions for the fourth quarter that we look to that really demonstrated value at that time. When you look at Wealthsimple performance this period, it was exceptional. You know, James mentioned it had a record march for net flows They had a record Q1 for net flows, and you can see the substantial growth in AM, and that also translates into revenue. So despite the fact we have seen fintech multiples come down in the quarter, and it wasn't just Schwab, it was others, Wealthsimple just has outgrown any downward pressure that we've seen in market multiples in the quarter. And, you know, Tom, I mean, valuing private companies within fintech, ourselves and to those that review our work including Deloitte. The other thing we pay a great deal of attention to as well as simple financial plans and how they're doing relative to plan and what the fair value of the company is as we DCF those cash flows and they continue to surprise to the outside and those are and so while the publicly traded costs are very visible What's not as visible is their aggressive plan and how well they're doing at beating their aggressive plan, and that has value implications as well.

Okay, thanks. And, James, congrats on good tenure at IGM, and best of luck as you move on to power. Thanks.

Thank you, Tom.

This concludes the question and answer session. I would like to turn the conference back over to Kyle Martins for any closing remarks.

Thank you, Betsy. We'd once again just like to thank everyone for joining us this morning on the call, and Betsy, with that, we can end the conference call.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.