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Operator
Welcome to ONIC's fourth quarter and full year 2023 conference call and webcast. During the presentation, 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 this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Joe Hominick, Managing Director, Shareholder Relations and Communications at ONIX. Please go ahead.
Joe Hominick
Thank you. Good morning, everyone, and thanks for joining us.
spk06
We're broadcasting this call on our website. Hosting the call today are Bobby LeBlanc, ONIX's Chief Executive Officer, and Chris Gevin, our Chief Financial Officer. Earlier this morning, we issued our fourth quarter and full year 2023 press release, MD&A, and consolidated financial statements, which are available on the shareholder section of our website and have also been filed on CDAR. Our supplemental information package is also available on our website. As a reminder, all references to dollar amounts on this call are in U.S. unless otherwise stated. I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward-looking statements contained in today's presentation and remarks. With that, I'll now turn the call over to Bobby.
Bobby LeBlanc
Good morning, everyone. Honest delivered solid performance in 2023, driven by good investment results, positive deployment and realization activity, and continued progress on our strategic initiatives. We capped off the year with a strong quarter of investing gains, as investing capital per share returned 4% in Q4 and 11% for the year. With the leadership transition came a renewed determination by our team to accelerate decision-making and streamline execution. This includes a commitment to more disciplined expense management and a focus on profitability across all business lines. We entered 2024 with a solid operational foundation, a strong balance sheet, and a commitment to grow shareholder value. In private equity, we had a productive year as we focused on value creation within our operating companies and return of capital. Across PE, we deployed a total of $800 million in 2023 and realized a total of $1.7 billion for ONIX and our limited partners. The expected completion of the ASM sale would return about another $850 million to ONIX and our LPs. With the ONIX Partners 5 investment in Morrison Group and the pending accredited transaction, which we see is shareholder approval and is expected to close in Q2, we completed the initial investing period for OP5. Concurrently, we appointed Tawfiq Papatia and Nigel Wright, two of ONIX's most trusted and respected leaders, as co-heads of ONIX Partners. Their appointment allows me to focus more of my time on ensuring operational excellence and the execution of strategic initiatives. ONCAP had a very active year in 2023, completing investing for ONCAP 4 and securing the first two investments in ONCAP 5. The team also completed 11 add-on acquisitions for ONCAP operating companies, and its realization of Hopkins manufacturing delivered a gross MOIC of 5.1 times in U.S. dollars. Both OP5 and ONCAP4 delivered strong overall investment results last year. Fundraising for ONCAP5 is proceeding well, and we are making progress on a bridge fund for ONIX partners. We expect to have updates on both next quarter. Turning to credit, we raised over $2.8 billion of fee-generating AUM last year and earned a 24% return on ONIX's investing capital within credit. We issued seven new CLOs in 2023, five in the U.S. and two in Europe. CLOs continue to be a valuable part of our business, and the team is delivering excellent performance. This is reflected in our top quartile rankings for both portfolio risk and diversity metrics. We are making good progress with our ability to begin marketing our liquid and private products within the Canadian high net worth markets. We're optimistic that we'll see a slow rebuild of our FGAUM starting later in Q2 within this channel as we ramp up our marketing efforts with our distribution partners. As I mentioned at investor day, enhancing our marketing and fundraising expertise is a top priority. We were pleased to welcome Peter Brown as head of client and product solutions. Peter is an experienced leader with substantial experience in fundraising and the management of distribution teams. His experience will be important as we begin to broaden our fundraising efforts and take a more innovative approach to developing client solutions in areas where we have a right to compete. As I look ahead, my conviction and my commitment to our shareholders is to ensure all businesses operate profitably and contribute to growth and enterprise value. This helped drive some of the decisions we made last year particularly around more efficient expense management. We are already beginning to see the benefits of those decisions. I want to thank our shareholders again for your support of ONIX. Last year was transformational for our organization with several positive outcomes. We were pleased to begin to see that better reflected in our share price. However, it remains well below the intrinsic value of our business and our future potential. The team is working hard to deliver on our commitments and to drive long-term shareholder value. I'll now turn it over to Chris.
Tawfiq Papatia
Thanks, Bobby, and good morning, everyone. We ended the fourth quarter with investing capital per share of $107.82, a return of 4% in the quarter and 11% for the year. In Canadian dollars, investing capital was over $142 per share, a return of 9% year-over-year, reflecting a strengthening of the Canadian dollar. Overall, investing capital has provided shareholders a compound annual return of 14% over the last five years. Onyx repurchased just over 800,000 shares from the end of Q3 through mid-February. Total buybacks in 2023 amounted to 3.5 million shares. capturing about 225 million Canadian dollars of hard NAV for our continuing shareholders. As we've indicated before, share buybacks will remain part of our capital allocation plans when the shares trade at a wide discount. We ended the year with cash and near cash of $1.5 billion, representing 17% of investing capital. That's an increase of approximately $400 million from year-end 2022, even after deploying about $350 million across our PE platforms and the share buybacks during the year. Looking forward, liquidity will remain strong with the pending sale of ASM in ONIX Partners 4 expected to provide net proceeds to ONIX of about $275 million, which will more than offset our share of OP5's recent investment in the Morrison Group and the pending acquisition of Accredited. Onyx received just over $1 billion from PE realizations and distributions in 2023. And with market conditions beginning to stabilize, we're optimistic the environment will support further realization activity this year. Looking at private equity, our PE portfolio delivered a solid fourth quarter with an overall return of 5%, which brought the full year return to 12%. Onyx's private equity returns continue to be less volatile than the public markets and have also been broad-based from a well-diversified portfolio. Only two operating companies represent more than 5% of our investing capital, and the top 10 represent less than 40%. Turning to credit investing, performance remains strong across our credit strategies with a $67 million net gain or 8% return in Q4. Our results were supported by a very strong leverage loan market and amplified by the structural leverage employed in our CLOs. Overall, our credit investments had a very strong year with a return of 24% in 2023.
Bobby
Now let's turn to the asset management side of the business.
Tawfiq Papatia
ONIX ended the quarter with $33.7 billion of fee generating AUM, down 1% from both Q3 and the last year end. In 2023, our teams raised $3.7 billion of new FGAUM, predominantly from seven CLOs and the Ryan Continuation Fund. But this was offset by client redemptions from liquid strategies related to the wind down of Gluskin Chef. At the end of January, we have over Canadian $4 billion of FGAUM with private wealth clients, substantially all of which is invested in closed-end alternative asset products, or, in the case of liquid strategies, has been successfully transferred in-kind and remains invested in our funds. With the client transition substantially complete, we see this as a relatively stable base from which to build. As Bobby mentioned, the team is making good progress preparing our platform to market more broadly to private world clients. and we're optimistic that new inflows will begin ramping up during the year. The tough fundraising market for many of our products and the transition of our private wealth business in the past year has unfortunately masked a very strong year for our structured credit platform. We raised just shy of $2.7 billion of new FGAUM in structure during 2023, over 35% more than planned. Those results have us entering 2024 with almost $16 billion of FGAUM and $65 million of run rate management fees, a very substantial portion of which relates to sticky and long-lived CLO AUM. And as much as we're grateful for the strong returns the CLO team delivered on our invested capital last year, the improvement in the CLO platform's capital efficiency since we changed leadership in 2020 has been tremendous. ONIX has gone from holding over 85% of our CLO's equity to just over 50%. Put another way, FGAUM has grown over 50% in the three plus year period, while ONIX's CLO equity exposure actually decreased by 25% or over $100 million. Our structured business is a bit of a hidden gem And as you know, its value is not at all reflected in our hard NAB.
Bobby
Turning to fee-related and distributable earnings.
Tawfiq Papatia
Fourth quarter total FRE was a loss of $2 million with $3 million of positive contribution from the asset management platform. For the year, total FRE was a loss of $14 million with a positive contribution of $12 million from asset management. FRE in 2023 benefited from the restructuring and efficiency efforts that we undertook throughout the year and discussed at Investor Day. As I mentioned last quarter, we actioned approximately $40 million of run rate cost savings last year and continue to closely manage expenses across the firm. We also enjoyed a timing benefit from a reduction in Gluskin chef costs that ran ahead of the reduction in revenues as we transitioned our distribution strategy. Looking ahead to 2024, while we will continue to see the benefit of our cost reduction initiatives play out, this will be more than offset by the full-year impact of management fee reductions associated with the transition of our private wealth strategy and the end of OP5's commitment period. Although this means we expect full-year FRE performance to decline in 2024, our fundraising plans should drive progress in run rate FRE over the course of the year. credit run rate management fees were $115 million at year end and reflect the new fee structure for our private wealth strategy, which is now focused on third-party distribution. As we previously mentioned, a large portion of the decrease in these revenues is offset by the lower cost of the distribution strategy. And as we raise new private wealth at GAUM, we will leverage our existing cost base, which means it should be quite accretive. Looking at distributable earnings, we generated DE of $139 million in Q4 and just shy of $800 million in 2023, driven by realizations and distributions from our private equity and credit platforms. We're really pleased with these results, given the challenging realization environment in 2023. Finally, an update on ONIX's carried interest opportunity. We ended the quarter with $281 million of unrealized carried interest, up $41 million from Q3. Most of this increase was driven by net gains within OP5. As a reminder, Onyx has about $29 billion of private equity and credit AUM subject to carry. All in all, it was another good quarter, and we continue to make progress towards the objectives we laid out at Investor Day. Sustained compounding of our investing capital while enhancing the profitability of our asset management platform will generate meaningful value for shareholders. That concludes the prepared remarks, so we'll be happy to take any questions.
Operator
Certainly, and as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone.
spk03
One moment for our first question. And our first question. comes from the line of Jeffrey Kwan from RBC. Your question, please.
Jeffrey Kwan
Hi, good morning. My first question was, as Chris, I think you mentioned, last year wasn't a great year for monetization activity, although you were able to monetize some investments. But if we're heading into an environment where monetizations are more failable or easy to do, and you use what I think is often the typical hold period of private equity investments of, say, four to six years, When I look at your investment portfolio within Onyx Partners, you have a fair number of companies that kind of fit within that timeframe in terms of at least how long you've owned them. So if the monetizations do normalize, you know, is it fair to say that there's a good number of investments that could be in a position to be monetized and would they actually be in a position given where your investment thesis was and where it's played out so far?
Chris
Hey, Jeff, it's Bobby.
Bobby LeBlanc
Yeah, look, the M&A environment for PE has been slower over the last 18 months or so. Activity seems to be picking up now. Some of it based upon people thinking rates are stabilizing are going to begin to decrease a bit. I think it'll be a little while before the pipeline gets full. Most of what the PE world has been doing lately is making sure they're trying to shore up balance sheets as rates have declined. And we do have a couple of things in the pipeline that I think will return capital in the near term. But I do think if rates stay where they are and the activity that I'm beginning to see begins to be the new norm, you should be able to see not only more return of capital, but deployment of capital. Our pipeline is still somewhat muted relative to the norm, just like our realizations are. But again, I think you'll see a couple of more in the near term. If things stay like they are, we expect it to get better as the year goes on.
Jeffrey Kwan
Okay, thanks for that, Bobby. And maybe you want more on a specific investment. Looking at Convex, that was an investment, obviously, that was done at a very early stage, more atypical of when Onyx typically makes the investment, but made sense given your industry experience and obviously the founders of the business. So my question would be, is you know, the fundamentals would have been seeming or the industry fundamentals seem to have been favorable for the business. Just trying to understand is whenever a monetization event happens for that business, given what's been going on, what I think may be going on with the company and the industry, could that monetization timeline be a bit faster than usual or would it still take a bit kind of a normal given how early stage you made that investment?
Bobby LeBlanc
Yeah, so look, we started Convex de Novo, God, I guess a little over four years ago. You know, the company has clearly grown in to its expense base. We still have more operating leverage to come. But that business did $450 million of net income, net income at EBITDA, Jeff, last year. And I expect 2024 to have a meaningful improvement there. above that you know absent some weird things happening in the cat world so i think we've got in that case the timing of um the market right and importantly legacy insurers that um we all steven catlin paul and i all believe um which are under reserved um where we've been taking advantage of that through you know a hard rate environment um which which helps a business like that if you get paid more incrementally each year for the same unit of risk so Just given the de novo state of that and where that business is right now, I would expect there to be multiple avenues of interest in that business over time, depending if that performance continues to go. That could be IPO, that could be strategic, that could be dividends being paid. It could be all kinds of different things, but risk adjusted because that business has no debt and its returns are north of 20 so far. And again, with the drag of the losses in the beginning, I'm pretty optimistic that that's going to turn out to be a very good risk-adjusted return. Timing, unclear, but I think there'll be multiple paths of liquidity.
Jeffrey Kwan
Okay, perfect. Thank you.
spk01
Thank you.
spk03
One moment for our next question. And our next question. comes from the line of Graham Writing from TD Securities.
Operator
Your question, please.
Bobby LeBlanc
Hi, good morning. Maybe you can just start, Chris, with your run rate management fees. I think you flagged $191 million in the slide deck. Is that fully reflected now of the OP5 fund transitioning to that invested phase and any notable sort of step-ups or declines from that level that we should be expecting here?
Tawfiq Papatia
Yes, it fully reflects the step down in fees at OP5. And so there's really nothing specific on the horizon that's going to change that run rate, other than obviously expectations around fundraising in 2024. But otherwise, that run rate is a good number, and it has all the noise associated with OP5 and the Gluskin-Cheff one down out of it.
Bobby LeBlanc
Okay, understood. And it seemed to me that the on-cap five committed fund, there was a reduction in that fee, 20 basis points from Q3 level.
Deirdre G
Is that accurate or am I misreading that?
Tawfiq Papatia
I'm not aware of that, Graham. I'll have to take a look at the disclosure and then you get back to you, but I'm not aware.
Bobby LeBlanc
I don't know anything that wouldn't, I don't think that's accurate, but we will get back to you. I don't think that's accurate. Deirdre G Snyder- Okay i'm sorry about expenses at on the private equity side they seem to move up a little bit quarter of a quarter was anything specific, you would call it that's driving that I just want to. Deirdre G Snyder- You know I thought after the restructuring they were sort of going to be a lower run rate.
Deirdre G
Deirdre G Snyder- On the expense of the private equity side.
Tawfiq Papatia
Deirdre G Snyder- yeah so. What you're seeing is lower costs in the ONIX Partners platform being offset by the final build-out of the ONIX Transportation platform and some growth at ONCAP. So there are savings in there at the ONIX Partners platform, but given changes in ONIX Transportation and ONCAP, it's sort of a wash.
Bobby LeBlanc
Okay. Got it. And then maybe Bobby, just my last question, if I could, could you just sort of help us frame your expectations here for fundraising in 2024 when you're looking both at your credit platform and your private equity?
Deirdre G
What are you sort of targeting and expecting?
Bobby LeBlanc
Yeah, so I'll start on the credit side. Again, Chris alluded to it, our ability to raise equity when we form a CLO and to sell equity accretively has gone really, really well over the last couple of years and it has made it a less capital intensive business for them. So that fundraising is going well. ONCAP is making progress slower than we're all used to with them given their outstanding track record, but they are making good progress. The Bridge Fund, as Chris mentioned, also making progress. We'll have an update for you, a more formal update for you, hopefully next quarter on that. Falcon is also slower than normal. Peter Brown, the new person that we hired to run our sales and distribution team, has told me that the average length of time in market is around 22, 23 months. We're certainly feeling that with some of our platforms. Falcon included. But again, Falcon's risk-adjusted returns and quartile performance leaves me scratching my head a little bit, but that one for sure is going slower than we thought. I would expect OSCO, our structured credit fund, to have a second fund in market in the back half of the year. And like Ryan with our CVs, which is another form of fundraising and fee extension, I wouldn't be surprised if you see another one coming out of the the overall PE platform in the not too distant future.
Deirdre G
Okay, excellent. Thanks, Nicola.
Operator
Thank you. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Bobby LeBlanc for any further remarks.
Bobby LeBlanc
Thank you for taking the time for being with us today. I hope you all have a good weekend. And if you have any questions, reach out to Jill, Chris, or me, and we'll be happy to meet with you or chat with you. Thanks a lot.
Operator
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program.
spk01
You may now disconnect. Good day. you Thank you.
spk00
Thank you. Thank you. Welcome to ONIC's fourth quarter and full year 2023 conference call and webcast.
Operator
During the presentation, 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 this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Jill Hominick, Managing Director, Shareholder Relations and Communications at Onyx. Please go ahead.
Joe Hominick
Thank you. Good morning, everyone, and thanks for joining us.
spk06
We're broadcasting this call on our website. Hosting the call today are Bobby LeBlanc, ONIX's Chief Executive Officer, and Chris Govan, our Chief Financial Officer. Earlier this morning, we issued our fourth quarter and full year 2023 press release, MD&A, and consolidated financial statements, which are available on the shareholder section of our website and have also been filed on CDARC. Our supplemental information package is also available on our website. As a reminder, all references to dollar amounts on this call are in U.S. unless otherwise stated. I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward-looking statements contained in today's presentation and remarks. With that, I'll now turn the call over to Bobby.
Bobby LeBlanc
Good morning, everyone. Honest delivered solid performance in 2023, driven by good investment results, positive deployment and realization activity, and continued progress on our strategic initiatives. We capped off the year with a strong quarter of investing gains, as investing capital per share returned 4% in Q4 and 11% for the year. With the leadership transition came a renewed determination by our team to accelerate decision-making and streamline execution. This includes a commitment to more disciplined expense management and a focus on profitability across all business lines. We entered 2024 with a solid operational foundation, a strong balance sheet, and a commitment to grow shareholder value. In private equity, we had a productive year. as we focus on value creation within our operating companies and return of capital. Across PE, we deployed a total of $800 million in 2023 and realized a total of $1.7 billion for ONIX and our limited partners. The expected completion of the ASM sale would return about another $850 million to ONIX and our LPs. With the ONIX Partners 5 investment in Morrison Group and the pending accredited transaction, which we see is shareholder approval and is expected to close in Q2, we completed the initial investing period for OP5. Concurrently, we appointed Tawfik Papatia and Nigel Wright, two of ONIX's most trusted and respected leaders, as co-heads of ONIX Partners. Their appointment allows me to focus more of my time on ensuring operational excellence and the execution of strategic initiatives. ONCAP had a very active year in 2023, completing investing for ONCAP 4 and securing the first two investments in ONCAP 5. The team also completed 11 add-on acquisitions for ONCAP operating companies, and its realization of Hopkins manufacturing delivered a gross MOIC of 5.1 times in U.S. dollars. Both OP5 and ONCAP4 delivered strong overall investment results last year. Fundraising for ONCAP5 is proceeding well, and we are making progress on a bridge fund for ONIX partners. We expect to have updates on both next quarter. Turning to credit, we raised over $2.8 billion of fee-generating AUM last year and earned a 24% return on ONIX's investing capital within credit. We issued seven new CLOs in 2023, five in the U.S. and two in Europe. CLOs continue to be a valuable part of our business, and the team is delivering excellent performance. This is reflected in our top quartile rankings for both portfolio risk and diversity metrics. We are making good progress with our ability to begin marketing our liquid and private products within the Canadian high net worth market. We're optimistic that we'll see a slow rebuild of our FGAUM starting later in Q2 within this channel as we ramp up our marketing efforts with our distribution partners. As I mentioned at investor day, enhancing our marketing and fundraising expertise is a top priority. We were pleased to welcome Peter Brown as head of client and product solutions. Peter is an experienced leader with substantial experience in fundraising and the management of distribution teams. His experience will be important as we begin to broaden our fundraising efforts and take a more innovative approach to developing client solutions in areas where we have a right to compete. As I look ahead, my conviction and my commitment to our shareholders is to ensure all businesses operate profitably and contribute to growth and enterprise value. This helped drive some of the decisions we made last year particularly around more efficient expense management. We are already beginning to see the benefits of those decisions. I want to thank our shareholders again for your support of ONIX. Last year was transformational for our organization with several positive outcomes. We were pleased to begin to see that better reflected in our share price. However, it remains well below the intrinsic value of our business and our future potential. The team is working hard to deliver on our commitments and to drive long-term shareholder value. I'll now turn it over to Chris.
Tawfiq Papatia
Thanks, Bobby, and good morning, everyone. We ended the fourth quarter with investing capital per share of $107.82, a return of 4% in the quarter and 11% for the year. In Canadian dollars, investing capital was over $142 per share, a return of 9% year-over-year, reflecting a strengthening of the Canadian dollar. Overall, investing capital has provided shareholders a compound annual return of 14% over the last five years. Onyx repurchased just over 800,000 shares from the end of Q3 through mid-February. Total buybacks in 2023 amounted to 3.5 million shares. capturing about 225 million Canadian dollars of hard NAV for our continuing shareholders. As we've indicated before, share buybacks will remain part of our capital allocation plans when the shares trade at a wide discount. We ended the year with cash and near cash of $1.5 billion, representing 17% of investing capital. That's an increase of approximately $400 million from year-end 2022, even after deploying about $350 million across our PE platforms and the share buybacks during the year. Looking forward, liquidity will remain strong with the pending sale of ASM in ONIX Partners 4 expected to provide net proceeds to ONIX of about $275 million, which will more than offset our share of OP5's recent investment in the Morrison Group and the pending acquisition of Accredited. Onyx received just over $1 billion from PE realizations and distributions in 2023. And with market conditions beginning to stabilize, we're optimistic the environment will support further realization activity this year. Looking at private equity, our PE portfolio delivered a solid fourth quarter with an overall return of 5%, which brought the full year return to 12%. Onyx's private equity returns continue to be less volatile than the public markets and have also been broad-based from a well-diversified portfolio. Only two operating companies represent more than 5% of our investing capital, and the top 10 represent less than 40%. Turning to credit investing, performance remains strong across our credit strategies with a $67 million net gain or 8% return in Q4. Our results were supported by a very strong leveraged loan market and amplified by the structural leverage employed in our CLOs. Overall, our credit investments had a very strong year with a return of 24% in 2023.
Bobby
Now let's turn to the asset management side of the business.
Tawfiq Papatia
ONIX ended the quarter with $33.7 billion of fee-generating AUM, down 1% from both Q3 and the last year end. In 2023, our teams raised $3.7 billion of new FGAUM, predominantly from seven CLOs and the Ryan Continuation Fund. But this was offset by client redemptions from liquid strategies related to the wind down of Gluskin Chef. At the end of January, we have over Canadian $4 billion of FGAUM with private wealth clients, substantially all of which is invested in closed-end alternative asset products, or, in the case of liquid strategies, has been successfully transferred in-kind and remains invested in our funds. With the client transition substantially complete, we see this as a relatively stable base from which to build. As Bobby mentioned, the team is making good progress preparing our platform to market more broadly to private law clients. and we're optimistic that new inflows will begin ramping up during the year. The tough fundraising market for many of our products and the transition of our private wealth business in the past year has unfortunately masked a very strong year for our structured credit platform. We raised just shy of $2.7 billion of new FGAUM in structure during 2023, over 35% more than planned, Those results have us entering 2024 with almost $16 billion of FGAUM and $65 million of run rate management fees, a very substantial portion of which relates to sticky and long-lived CLO AUM. And as much as we're grateful for the strong returns the CLO team delivered on our invested capital last year, the improvement in the CLO platform's capital efficiency since we changed leadership in 2020 has been tremendous. ONIX has gone from holding over 85% of our CLO's equity to just over 50%. Put another way, FGAUM has grown over 50% in the three-plus-year period, while ONIX's CLO equity exposure actually decreased by 25%, or over $100 million. Our structured business is a bit of a hidden gem, And as you know, its value is not at all reflected in our hard NAB.
Bobby
Turning to fee-related and distributable earnings.
Tawfiq Papatia
Fourth quarter total FRE was a loss of $2 million, with $3 million of positive contribution from the asset management platform. For the year, total FRE was a loss of $14 million, with a positive contribution of $12 million from asset management. FRE in 2023 benefited from the restructuring and efficiency efforts that we undertook throughout the year and discussed at Investor Day. As I mentioned last quarter, we actioned approximately $40 million of run rate cost savings last year and continue to closely manage expenses across the firm. We also enjoyed a timing benefit from a reduction in Gluskin chef costs that ran ahead of the reduction in revenues as we transitioned our distribution strategy. Looking ahead to 2024, while we will continue to see the benefit of our cost reduction initiatives play out, this will be more than offset by the full-year impact of management fee reductions associated with the transition of our private wealth strategy and the end of OP5's commitment period. Although this means we expect full-year FRE performance to decline in 2024, our fundraising plans should drive progress in run rate FRE over the course of the year. credit run rate management fees were $115 million at year end and reflect the new fee structure for our private wealth strategy, which is now focused on third-party distribution. As we previously mentioned, a large portion of the decrease in these revenues is offset by the lower cost of the distribution strategy. And as we raise new private wealth at GAUM, we will leverage our existing cost base, which means it should be quite accretive. Looking at distributive earnings, we generated DE of $139 million in Q4 and just shy of $800 million in 2023, driven by realizations and distributions from our private equity and credit platforms. We're really pleased with these results, given the challenging realization environment in 2023. Finally, an update on ONIX's carried interest opportunity. We ended the quarter with $281 million of unrealized carried interest, up $41 million from Q3. Most of this increase was driven by net gains within OP5. As a reminder, ONIX has about $29 billion of private equity and credit AUM subject to carry. All in all, it was another good quarter, and we continue to make progress towards the objectives we laid out at Investor Day. Sustained compounding of our investing capital while enhancing the profitability of our asset management platform will generate meaningful value for shareholders. That concludes the prepared remarks, so we'll be happy to take any questions.
Operator
Certainly, and as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone.
spk03
One moment for our first question. And our first question. comes from the line of Jeffrey Kwan from RBC. Your question, please.
Jeffrey Kwan
Hi, good morning. My first question was, as Chris, I think you mentioned, last year wasn't a great year for monetization activity, although you were able to monetize some investments. But if we're heading into an environment where monetizations are more failable or easy to do, and you use what I think is often the typical hold period of private equity investments of, say, four to six years, When I look at your investment portfolio within Onyx Partners, you have a fair number of companies that kind of fit within that timeframe in terms of at least how long you've owned them. So if the monetizations do normalize, you know, is it fair to say that there's a good number of investments that could be in a position to be monetized and would they actually be in a position given where your investment thesis was and where it's played out so far?
Chris
Hey, Jeff, it's Bobby.
Bobby LeBlanc
Yeah, look, the M&A environment for PE has been slower over the last 18 months or so. Activity seems to be picking up now. Some of it based upon people thinking rates are stabilizing are going to begin to decrease a bit. I think it'll be a little while before the pipeline gets full. Most of what the PE world has been doing lately is making sure they're trying to shore up balance sheets as rates have declined. And we do have a couple of things in the pipeline that I think will return capital in the near term. But I do think if rates stay where they are and the activity that I'm beginning to see begins to be the new norm, you should be able to see not only more return of capital, but deployment of capital. Our pipeline is still somewhat muted relative to the norm, just like our realizations are. But again, I think you'll see a couple of more in the near term. if things stay like they are, we expect it to get better as the year goes on.
Jeffrey Kwan
Okay. Thanks for that, Bobby. And maybe you want more on a specific investment. Looking at Convex, that was an investment, obviously, that was done at a very early stage, more atypical of when Onyx typically makes the investment, but made sense given your industry experience and obviously the founders of the business. So my question would be, is you know, the fundamentals would have been seeming or the industry fundamentals seem to have been favorable for the business. Just trying to understand is whenever a monetization event happens for that business, given what's been going on, what I think may be going on with the company and the industry, could that monetization timeline be a bit faster than usual or would it still take a bit kind of a normal given how early stage you made that investment?
Bobby LeBlanc
Yeah, so look, we started Convex de Novo, God, I guess a little over four years ago. You know, the company has clearly grown in to its expense base. We still have more operating leverage to come. But that business did $450 million of net income, net income at EBITDA, Jeff, last year. And I expect 2024 to have a meaningful improvement there. above that, you know, absent some weird things happening in the cat world. So I think we've got, in that case, the timing of the market right. And importantly, legacy insurers that we all, Stephen, Katlyn, Paul, and I all believe, which are under-reserved, we've been taking advantage of that through, you know, a hard rate environment, which helps a business like that if you get paid more incrementally each year for the same unit of risk. So Just given the de novo state of that and where that business is right now, I would expect there to be multiple avenues of interest in that business over time, depending if that performance continues to go. That could be IPO, that could be strategic, that could be dividends being paid. It could be all kinds of different things, but risk adjusted because that business has no debt and its returns are north of 20 so far. And again, with the drag of the losses in the beginning, I'm pretty optimistic that that's going to turn out to be a very good risk-adjusted return. Timing, unclear, but I think there'll be multiple paths of liquidity.
Jeffrey Kwan
Okay, perfect.
spk01
Thank you. Thank you.
spk03
One moment for our next question. And our next question. comes from the line of Graham Writing from TD Securities.
Operator
Your question, please.
Bobby LeBlanc
Hi, good morning. Maybe you can just start, Chris, with your run rate management fees. I think you flagged $191 million in the slide deck. Is that fully reflected now of the OP5 fund transitioning to that invested phase and any notable sort of step-ups or declines from that level that we should be expecting here?
Tawfiq Papatia
Yes, it fully reflects the step down in fees at OP5. And so there's really nothing specific on the horizon that's going to change that run rate other than obviously expectations around fundraising in 2024. But otherwise, that run rate is a good number and it has all the noise associated with OP5 and the bus can chef one down out of it.
Bobby LeBlanc
Okay, understood. And it seemed to me that the ONCAP 5 committed fund, there was a reduction in that fee, 20 basis points from Q3 level.
Deirdre G
Is that accurate or am I misreading that?
Tawfiq Papatia
I'm not aware of that, Graham. I'll have to take a look at the disclosure and then you get back to you, but I'm not aware.
Bobby LeBlanc
I don't know anything that would, I don't think that's accurate, but we will get back to you. I don't think that's accurate. Deirdre G Snyder- Okay i'm sorry about expenses at on the private equity side they seem to move up a little bit quarter of a quarter was anything specific, you would call it that's driving that I just want to. Deirdre G Snyder- You know I thought after the restructuring they were sort of going to be a lower run rate.
Deirdre G
Deirdre G Snyder- On the expense of the private equity side.
Tawfiq Papatia
Deirdre G Snyder- yeah so. What you're seeing is lower costs in the ONIX Partners platform being offset by the final build-out of the ONIX Transportation platform and some growth at ONCAP. So there are savings in there at the ONIX Partners platform, but given changes in ONIX Transportation and ONCAP, it's sort of a wash.
Chris
Okay.
Bobby LeBlanc
Got it. And then maybe Bobby, just my last question, if I could, could you just sort of help us frame your expectations here for fundraising in 2024 when you're looking both at your credit platform and your private equity?
Deirdre G
What are you sort of targeting and expecting?
Bobby LeBlanc
Yeah, so I'll start on the credit side. Again, Chris alluded to it, our ability to raise equity when we form a CLO and to sell equity accretively has gone really, really well over the last couple of years and it has made it a less capital intensive business for them. So that fundraising is going well. ONCAP is making progress slower than we're all used to with them given their outstanding track record, but they are making good progress. The bridge fund, as Chris mentioned, also making progress. We'll have an update for you, a more formal update for you, hopefully next quarter on that. Falcon is also slower than normal. Peter Brown, the new person that we hired to run our sales and distribution team, has told me that the average length of time in market is around 22, 23 months. We're certainly feeling that with some of our platforms. Falcon included. But again, Falcon's risk-adjusted returns and quartile performance leaves me scratching my head a little bit, but that one for sure is going slower than we thought. I would expect OSCO, our structured credit fund, to have a second fund in market in the back half of the year. And like Ryan with our CVs, which is another form of fundraising and fee extension, I wouldn't be surprised if you see another one coming out of the the overall PE platform in the not too distant future.
Deirdre G
Okay, excellent. Thanks, Nicola.
Operator
Thank you. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Bobby LeBlanc for any further remarks.
Bobby LeBlanc
Thank you for taking the time for being with us today. I hope you all have a good weekend. And if you have any questions, reach out to Jill, Chris, or me, and we'll be happy to meet with you or chat with you. Thanks a lot.
Operator
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
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