LifeMD (LFMD) 22 Mar 232023 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2023 AGF Management Limited Earnings Conference Call. [Operator Instructions].

I would now like to introduce your host for today's conference. Ms. Quinn, you may begin.

good and operator, you, morning, everyone. Thank Quinn, of AGF Jenny Vice President Officer Financial Chief Interim Management and I'm Limited. Today, we quarter first results for will be discussing of the fiscal financial the XXXX. the and be today's agf.com. webcast supporting section of call found Slides in Investor Relations can

call Also Officer. Kevin McCreadie, Chief will Chief speaking today, be Officer Executive on and the Investment

Head address with will also Distribution, period question-and-answer the questions. the Global analysts following presentation, available of to Judy For investment Goldring, President and be

for Turning to today's provide agenda X. Slide call. I'll the

XXXX, capital provide for of close QX to update position, We on our the segments will of our the discuss finally, key an our After happy XXXX. take financial prepared the highlights questions. focus and of outlining by results, and remarks, review remainder be business, we discuss our liquidity will

the to now With Kevin. will that, I call over turn

volatility, our reported as S&P banking flat the same the QX, XXX QX for Jenny, into down was you, quarter first volatility XXXX, Thank joining assets for thank This the and end overall we billion momentum Despite the is AUM everyone, of which earning and from XXXX. state X% March, In over the will of long has and of us economy volatility. strong of the today. remain and uncertainty about system. markets as That continued business as $XX.X reflects the fee experienced at was the there of comparative you, likely period.

gross performance. category our peers fees, business performance. before tenth to first our fund measures within fund Supporting strong reported of being net million the the the mutual was percentile by relative the fund consecutive possible fund performance AGF mutual Our positive best marking sales investment flows same comparing mutual positive the of with returns $XXX in net quarter quarter, sales.

XX X average with F ranking X- over of rating. percentile and overall We the At over average our was percentile QX, our percentile X-year XX% X XXrd of XX% the and percentile X-star X funds past peers years, Morningstar end ranking year, of XX% the any a in an the versus or past over having years. the target period the over Series

also are is X-year XX% basis peers. basis of outperformed a QX, that XX% on pleased at We to strategy the on a of and our end X-year report our

In X shown AGF Fund performance Select $X.XX funds, Bond AGF to throughout Growth EPS their and Convertible Income risk-adjusted which our the annually given addition, quarter and the Plus Awards, Fixed consistent AGF of in share. outstanding AGF the are per Fund, Global investment Global Fund FundGrade funds have year. who American Diluted A+ are managers was the Class, for

where declared year, share XX, our and the strong April business approach. for consecutive position, $X.XX for This representing shareholders QX in is increased capital line we is record balanced and recognition our our dividend. increase. the momentum is Finally, have with dividend per The increase third of a allocation Board on capital dividend XXXX XX% in of an of

and fee will AUM we business a mutual comparisons AUM and the I'll provide business our X% MD&A, assets prior down updates earning color On performance. we increased our X, some on year-over-year. this Slide fund our Mutual in moment. slide, on in Starting our the in break disclosed year. provide categories total to on show fund

due by decreased and to the market. compared AUM X% mainly ETF sub-advisory Institutional, to the prior year,

over to the one strategy positive platforms grow this AUM U.S. continued strategies one relationships onboarding, time. as expand flows, in in Our the largest currently and our business. to to SMA of we of on generate U.S. management wealth to U.S. expect continue SMA our the category gradually We're

market-neutral by quantitative investors to positive for to strategic their this or Anti-Beta U.S., in $XXX over of Managed a end has and in downturn. tactical the increased the hedge preserve by capital, strategy to generate attract strategy continue quarter, who our past At our is AUM year. alternative volatile designed XX% liquid returns portfolios. markets a are for million the in for Our interest products from looking the team

Finally, institutional bodes investors future jurisdictions, to across from which continue interest multiple we and see sales. for strategies well

private X% to demonstrate business resiliency declines. Our wealth due with continues market to decreasing AUM year-over-year

one private our Our our emerging in and leaders at of of capital private markets private $X.X to It were investing. fee markets grow end quarter. is earning business, AUM diversify to and billion assets goal the and the be Canada's

a ensure evaluating capital take in a that opportunities alignment are to deliver opportunities and continue our pipeline plan private and have of to shareholder We to to an the we'll approach value. measured we working strategic through,

sales. Turning to fund business fund remained industry in some on strong brand to the experienced is outperformance our redemptions our the sales AGF's consecutive to tenth business. details our industry of Slide our performance, efforts $X.X Mutual the and the backdrop, $XXX of continued X, billion. consecutive quarter, net for of I key team's our relationships our outflows with partners. investment Despite recorded to net challenging and reporting attributable mutual fund diversity the and approximately for channels net quarter net industry build the will inflows strong fourth provide and million clients positive

back turn will the to With that, call over I Jenny.

quarter million financial lower before was with $XX.X $XX.X quarter comparisons. for of the X year. reflects for and $X.X our QX quarter commissions the lower EBITDA than a sequential than current the and prior XXXX year-over-year Slide Kevin. first million, Thanks, results summary million

million a to $X.X As of results transfer related included previously QX interest income a resolved reminder, matter. pricing XXXX

investment as trailing related admin key levels and fees our are AUM into fees, our performance indicator quarter, directly to advisory of commissions this relevant is management structures. key a more In we measure, to to continues have management, Net expand presented and advisory fees. business and various net

million, fee private to average separately management was X. net other This net last year, QX. by $XX rate. and revenue are as with which and was for fees does not line compared management mutual which of $X revenue assets fees the QX quarter capital business, increase Net mutual other fund SG&A on decreased the lower due in the from to income, include the shown a fund in revenue Slide million Compared to assets lower average management

for was million. SG&A $XX the quarter

for $XX.X than million higher million quarter million, is the year. first QX impact of The Excluding increase government-regulated timing prior $X benefit million and was annually SG&A $X.X QX severance, a quarter. paid the than which employee are higher $X.X against in higher expenses, which includes

performance in rating, an improving SG&A XX%. compensation, to by in strong reflecting at X-year XX% with investor also percentile was average year-end quarter stock-based performance the influenced from

increase investments into XX% continue $X.X AGF.B reflects QX execute the lower the saw EBITDA Private a in year-over-year lower as against quarter, million we share QX. is million contributed business, $X.X In and addition, $X we increase in expense than which strategy. to the of than million AGF price. our The also Capital

interest performance EBITDA by from investments in long-term our one recognizing carried private SAF. managed strong capital of of private this $XXX,XXX revenue, quarter included managers capital

EBITDA and in increases benefiting funds, capital participate $X.X last can capital the variable and QX the timing impacted of quarter-to-quarter which a by distributions funds valuation As in results million an private units monetization. million, is reminder, AGF compared was which interest the lower of in to $X included LP from $X.X of QX carried private QX from be funds, of year. as LP investor revenue. million both

this in was to which EPS prior decrease XX% of from be purchase $X.XX QX in compared year $X.XX $X.XX returns The and deferred effect which private capital The option, in June funds, QX is due year. to expect of to we basis, long-term can private earn last Diluted into contribution lumpy. increase came LP. was a investing from mainly elimination the to quarter QX X, lower supported commission On against of against XXXX. the capital LP by selling X%

EBITDA walk percentage fees, business X, before the AUM average in quarter will XX-month I yield of you to quarter, and net sequential terms well the points. expenses our our This commissions Slide as a operating view. as as on management trailing slide through of current Turning basis shows on and

more business view as related other as reminder, We've the and yield of severance revenue, a well and to we DSC normalized development a private to As costs. results capital excluded corporate earn. AUM provide income, the

of is point and prior the flat QX versus The XX of XX trailing months. mutual products percentage XX driven net by basis to in the the decline fee fund The underlying trailing points, basis the series. mix is net months is quarter management and assets The the impacted than by series and product those management yield rate assets. fee XXXX within X more which is mix

revenue. will rate ban trailing and various increase will our our strategic DSC commission and fee trailing rate schedule, assets help rate. the our years, the front-end impact move come products over with decline on across partners, AUM to Scaling off as offset Gradually, specifically commission structures X the

monitor to continue will We this.

EBITDA points QX percentage employee SG&A and by XX for as in performance of X and investments of basis the regulated higher into than was a Adjusted QX X of benefit yield compensation, impact due yield this EBITDA driven to increased impact SG&A, the a months, than X mentioned. points in lower quarter. line with previously. points business basis as additional XX quarter, higher previously AUM than points the QX. combination trailing was points timing which the basis of basis the government is XX timing mentioned timing basis

a quarters represents a leases. This free out basis, XX-month trailing line as of of free and as the last by Slide orange cash flow was will on capital I to percentage the that Turning the discuss XX, bars the cash black flow The flow X chart. represents dividend. on free consolidated paid shown cash slide

million payout million $XX that Our period, under November In the $XX dividend XXXX. million issuer IP $XX and the [indiscernible] trailing substantial ratio free bid dividends, cash shareholders, XX-month to was share our repurchases and flow in was we includes our returned completed same XX%.

shareholders. monetization XXXX, the the of investment fall our returned in of S&W our to we $XXX in Since million have

remaining of $XX short long-term had Our cash had We $XXX on million provides February credit end at maximum $XXX the million, which and million we credit million. in and sale $XXX investments. facility, balance of our was

increasing to EBITDA X.Xx up We to the to are our debt comfortable device. opportunity net right

Not Capital commitments in future help also from further private commitments. is anticipated be there flow, million. $XX will capital commitment commitment monetizations will third capital, the of cash may is as fund keep free remaining managed of our Our to Instar. fund funded upcoming XX mind, with this to USD be business occur, our which but recycling in included excess million by capital

that have all excess account, into we capital currently Taking available.

will a and recurring of dividend, well share priority. as capital on returning allocation generate to have excess includes capital areas Redeploying on in to strategic coming as in quarters. earnings buybacks, our a key as investing future further updates We'll capital this shareholders balanced Our be growth.

Turning it call. to wrap up to Kevin back Slide over to XX, turn I today's will

the Despite Thanks, environment, progress against resilient. market objectives. continued assets make number Jenny. In earning to and our the first of remained quarter, we our AUM a strategic fee

outperform We continue and flows. net the mutual fund the consecutive recorded industry to positive tenth quarter of

also investment risk our on focus continued and strong disciplined We through to performance management. processes deliver

quarterly dividend the declared of of Finally, $X.XX representing Board per a an XX%. share, increase

on through quarter call, past the As in momentum over navigate, communicated we creating we SG&A long in million. guidance continue and few years, for of our for risks we the the the XXXX term. fiscal building and to On our results on the market, value the shareholders fourth remained uncertainties $XXX focused managing our

in these to AGF at Our compensation variable performance stock areas compensation, the and certain and a and change not stock-based result sales changes related to costs performance, of of assumed corporate guidance does Due the expenses. can severance development to investment level. variable nature in include and a any price

At of million to $XXX holding we monitor for trends. expense the year, continue point, we as this guidance are the

enhance sustainability momentum while and inflows, generate investment our consistent deliver are As markets and guidance a programs. maintain continue business to building meet strategic to sales performance, corporate our invest areas our key repeatable and growth a expense and private continue diversified net in to reminder, priorities will our

strong have capital to capital shareholders. We strategically redeploy balance return invest earnings excess to sheet and to recurring and generate a

hard I want to Finally, work. thank all their for AGF everyone team the on

your take questions. now will We

from coming Ho Group. Gary [Operator with And question the Desjardins our first Instructions]. line

value $XXX million put in into? increase Kevin, year, there talk was capital Or XX% quarter X% the well, And was just little that any capital And something seed bit just adjustment on through versus about $XXX million on higher return that fair this then expecting calls? it strategy last marks still this as year. light at rate running like sounds term? on you're long can a else the seed are QX. over to other What in imminent versus that assets the there that's in to the capital, a those are It you environment? given line

Thanks, Gary.

two one have our with did were and then the funds. we capital one new Yes, order. Ventures strategies, -- capital first two one calls that in investments on that were infrastructure check me on Let with partnership two on of that calls, made calls our different of

in you was that reason line. the So saw the the increase alternative

of audited financials always lumpy little is terms QX waited their in. to marks, because upon In get of our some a the we GPs

And to line to be so, is of a an $X is item it as quarter, million we've that of think always We kind time average said, to lumpy the year. this from $X still per way think time. million for will

through So or to one. $XX -- think as per million $XX that $XX year million it of million

line, et investment Got price, be mentioned bit question, the to just including several second that it. then quarter. cetera. SG&A AGF And know And you your higher QX move Kevin, can on share Okay. I performance, this moving items that SG&A could a lumpy.

it's you full gives year year that $XX you'll the early that right what still know, guidance? I in So million now? hit confidence

things. of we to couple the are performance, is in year. that probably the variable. softens a the One which strong drivers it Two, early investment control, same have remains It can't big A the sales X obviously, right the have it's and continues if running bit, obviously, time, it other way are a industry-leading accelerate, we now. too. a will At variable, could that

it to But that continues it, those comes tracking. would right we to it can't for if be say a that control. we of the higher now, I two if that, pace than So, rest will looks are budgeted the while have potential. in

guidance okay And thoughts have we're we're that? any Jenny, with at. the that why you that's do So on

the there was say quarter in No, seasonality. core some just the in to first too,

So aware you by $XXX can't you're million divide and of, take that know it just which X, Gary. I

in $X saw EI QX about and So, it payments that quarter. in the we of higher make that the first we million related CBP those increase to

flow, And I'm are funding you of the the March. then just kind in as on if sales, the where terms maybe well to sure, of cash then, And Kevin, Got you on is the in not seeing so one. few able the quantify a weeks, last but Okay. the net retail you over little past it. line, just noise Judy have are for maybe given seen sidelines, sit gross bit side, into. clients And clients more? far

really, said, came look you in about XX%. also they're look really but When we was down down performing was how February we I pointed net at hit it's your of And, sales. soft. this proud our consecutive Yes. handful were Kevin opportunity to Thanks, of just think $XXX of million team season, we Gary. well, XX%, the net as out regard. to really I the basis firms January quarter is and the in going the the for report sales quarter, back, about the when season as and emphasize obviously, for mean of notable take quarter. I'm tenth positive And did on really RSP net as positive industry a a you that one of that we're for

continue but much is tracking. that So we of, we're something outperform, which very proud again, we're to

million. flows that month-to-date we flows of So seeing all -- month across we're across the remain for positive And March, client all of segments in well. positive as that positive $XX

feeling about again, pretty now. mean, Kevin? you We're fairly markets. So right talk I the optimistic, can strong but

one environment if tough I well. out our really we not we're of it's of the what that Which positive echo you It you it's to fact seeing, in think, will. the that manage continue through channels tells Judy everywhere. there. I'd business, said. mean, area are flow. a Gary, health all I Yes, And is it's The

of that nervousness probably week. is on large that's there's out that, number last I terms the cash go back. sentiment, There market, meetings -- right to was In waiting on Having that's the lot also multiple and a sitting West some out, about I investor advisers the saw out come of now. has said of side

event this up week's sets a year. the that U.S. in in that I has means, recession. extent of the sooner, forward forward for flows move to think market a well I can the pulled And idea those later to of some the think return So, banking sector last maybe around the that

period, that see, were weakened where don't and seeing Obviously, That banking be that's to would change we further the greater contracted some we was which way. financial type view, we're but if contagion, sector in much what of a sustained today. the not

It's it's In product a terms coming It's it's of from, thing. Gary, well not things. pretty where one I products, U.S. think good the pretty breadth of as really broad-based.

And coming of Capital. the RBC question line from next our Geoff Kwan from

side. Gary's SG&A just expand the Maybe to on on question

of performance under in the the price the guidance. that for of it maybe would when bit the have -- so, you share through But different and mentioned, things look, be I $XXX than influence in QX you it closed way, you year. can obviously, saw that did just SG&A through the net a move even to the the ballpark had you performance the sales, if were a the you share maintain have kind you momentum stayed do stays yesterday, your sales the a have of would up? how QX, would much of that but I price Presumably, end and higher As where adjust if is the million, are control year. the when ask And if have same rest seasonality that you

Yes.

point, exposure. of compensation, -- the or share this year. hedged, not large Let Geoff, first. going which share-based to that, of shares I'll a chunk some on to we're our hedged to backwards That's is XX% cover that our which me price take We've going off try probably

quarter is , variability and the -- what jump impact. of So, last from the something piece sharp It to the we was that right? on material unhedged lot from was that was more big a won't That here. ended have a

So something that's, be I repeated. think, is not should you

some accelerate, the I of the same okay. we're tracking to In if there be to think continues there, with investment performance, variability what the just could terms they're we If then saw, it sales.

that -- But right it, that unfortunately, obviously, that that we it's think today. million. be be that. where soon It's have the tell, variable soon should news too you're about would $XXX to pacing where to it's make the way. is call against in they it problem, good again, a roughly right thinking we control. goes to But one accelerate, we are, a they're If too we but can't they If but

Okay.

the update if any kind and On institutional and RFPs just whatnot wondering of side, pipeline outlook there's the how on the today? look like for

of Yes. Geoff, we as activity, RFP Thanks. well those do We pan to how out. strong Middle great very one, in are and Asian SMA particularly I'll take number of We'll the and platforms. our the in to internationally remain in terms the communities -- as TAM getting a U.S. have in activity on see that teams countries, some East.

And mentioned SmartX activity the of as well, of U.S. so momentum . to terms And key few in we more. couple a get the in relationships as on to real on We're those partner see a we've in looking a with grow and past, continue to we're pickup do expect and

out U.S. and very around we push And so the to that we're optimistic continue business, particularly in just

been tough flows, I add is, which would that thing U.S. reading One Judy too. despite in even how what on has you're our to Geoff, environment said business,

been has flows. in business terms strong U.S. actually Our pretty of

U.S. impact point. but global headlines of broader at it the institutional, again, haven't not issues, about at market business, seen just which flows, you it's look So this our when our we a some the

other those factor for the not that the in this words, numbers. number when number some the just larger you a more as the that can of you your number housekeeping In Okay. then and institutional When was the historically of you out thing. reported kind numbers, transactions also of reported backing institutional into quarter? net, one And had number was come total large the a sometimes retail retail last was adjust

Yes.

small of million number $XXX on an is from reported redemption Our actually client. for adjusted million institutional $X

So million. I $XXX it's guess, unadjusted,

from line One our And Priebe next next the moment coming of please Nik with to question CIBC. our question.

and continues towards performance when here? biggest The trailing asset of analysis attribution you between really to it, performance XX-month you When is have you do selection? Or the investment the a down what on Do the bias that allocation are improve. performance, there stands defensive security break that drivers anything positioning? out investment it driving

very obviously Yes, is entire each Nik, right? that we that's we When number, at complex. the strategy look report different,

So think strategies of of in XX-plus close to or XX something there.

it whether growth-tilted. be So, more all different flavor value-tilted, styles, more

hard attribution from it's So an answer lumping and selection you're because things. security in XX to

our we suite, that when we defensive. say, driven by -- has look it, would been it at year, balance the we're on fact I last

in using in about more differently. So sitting there, alternative liquid on some to real market asset a using product using hedges think more ways the cash, there, bond

credit there. private have products Some in

obviously, a So a also things. the positioning, on was mix defensive of but balance, it

strategies, conscious obviously, a we had good on last risk Individual pretty year.

our So aggressive this discussion across was rate board, about the hiking cycle.

Some from to of away able cyclicality the manage thanks our growth, more cyclical and shift were managers to the things. more

one particular it's I defensive So, it's -- attribution said, in broad But I based, of say it really being around hard to things. I'd answer the more XX security the probably across suite broadly, not selection it's positioning things. was across think, and strategy, and as

strategies. your towards global AUM And mix the equity skew U.S. and enough. Fair does

specifically? strategies different is to to anything and that have describe But mandates. -- to Just to Like end? cognizant investment a are are quarter variety of in impact there performance that how that would you U.S. may you able you there different I'm notable regional describe, subsequent the you context, banks positioned able fact of relative and be

Yes.

me Let quick you there. a give up

None portfolios. those the the none -- across of regional banks. European. went fixed portfolios. global of bonds In exposure that any had are or X in We mandates. any CS of our or have to X exposure our ATX We've that of income bonds no any Suisse no to of Credit in We Tier to our of

of the of weeks So will whatever we not saw couple any just the last portfolios. over impact

[Operator Instructions].

BMO of line the from coming question Tom Capital. MacKinnon next from Our

you looking Kevin, them. with markets. of be should would you have certainly target from billion stop $XXX volatility increased there. seed were $X could that increasing capital build be private come that that look then, you how talked And at do if billion? Wondering the for to the to that million, we the at with the perhaps to how out like I'll respect And favorably you alternatives go that? balancing pipelines we with $X investment? where, just, Question seeing current

Thanks, lot, start me billion. Page and still Tom X. Yes. a with let We're $X on

As I achievable. better have timing, said, market at environment of people, ago, in was couple better jam terms buyers pretty quarters still conditions to log looking valuations. feel just of we of, impact but going there gotten the XXXX is like are comfortable it's Market a again, again, a us not

a I middle. argue, as environment the the at They'll past buyer. are better obviously So meet the looking Sellers valuations. would is in

at we're very, things of pipeline that strong. is looking very Our

strategy I'd it's execute is place in probably so, And say a the to than better ever been.

markets of In assets. individual at marks, terms private you the to look the I like have think

you'd questioning has in that were type equity that's that of again, here its not buyout third class, to fourth appropriately they're been do you're thinking be we're gone given stuff late-stage we go to about playing. about and if public, don't round, through or exposure in asset any leveraging you if up where have whether or in world again, something, the growth So, marked kind

our where in mix of tend have about think I infrastructure of to correlation assets, inflation. assets which some is current to type

to related inflation. surcharges So what increases, report

underwriting. have a who pretty player actually there, with where long-term private a infrastructure about partner great been credit, Think up has holds done also core well. great So we with

it's time a never private credit. So better for been

have the don't you And will be So, what underwriters I about better, terms. saw, from have as great create banks, industry. lending, are going would worry there. an that especially the the see going gone we borrowers Think the to ability fact to we're probably that pulling marks credits be the about that to the back banks just from are to the probably, underwriting

are we're where those playing So today.

classes in I now. issues about are for as So market asset who different I some right playing worry don't much others the would as

as out time so be of to build going really are he's that to a a platform obviously, long-term our And out, is to to been the over institutional it opportunistic. clients. we appealing that has, build year we're Again, Ash only see things advisers and view

So situation. current today, an -- about I'm standpoint concerned exposure market-to-market not but from the

in And you the as that of where build capital, out? seed would terms where would the would fee this go, double,

you lot about guys the over talked we've couple years. Yes, of last this with a

build seeding. that platform will be be some out, we'll As there we things

think monetize I number years. over going $XXX to next the a few to back. probably So, But it's is still come were that million and million $XXX things

is number towards funds couple a on that as high that the feels side, probably later -- our So even are of of the parts their lives.

double basis. see may that have to front. you'll temporary that's build on faster certainly time monetizations that back. But and cash we that flows The how, we be a coming So on it out, get I to think it won't

in gentlemen, AGF's conference. this and June questions you time. this place further concludes take showing at earnings next today's call participating. I'm on Now Thank Ladies queue not for XX, XXXX. any will

disconnect. now may You