AGF Management Q1 2026 Earnings Call: Complete Transcript

On Tuesday, AGF Management (TSX:AGF) discussed first-quarter financial results during its earnings call. The full transcript is provided below. Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more. View the webcast at https://edge.media-server.com/mmc/p/pdxua75r/ Summary AGF Management reported a 12% year-over-year increase in assets under management (AUM) and fee-earning assets, totaling over $60 billion by the end of Q1 2026. The company announced a new Chief Investment Officer, John Porter, effective May 1, 2026, bringing decades of investment management experience. Strong free cash flow of $36 million was recorded for the quarter, up 14% from the previous quarter, supporting an 8% increase in the quarterly dividend. Adjusted EPS, excluding the impact from AGS Capital Partners, was $0.35, up 21% year-over-year, but adjusted EPS including AGS was negative $0.05 per share. Revenue from long-term investments decreased, leading to a negative $10.6 million impact due to a 2.5% decline in the value of these investments. The company continues to see strong interest in its strategies within the institutional space, with recent inflows of $350 million from an institutional client. AGF Management's Canadian mutual fund AUM grew by 15% year-over-year, and its ETF and SMA AUM saw a 54% increase globally. The company remains disciplined in expense management while investing for growth, with a strong balance sheet featuring $432 million in investments and $160 million available on its credit facility. Full Transcript OPERATOR Thank you for standing by and welcome to the Q1 2026 AGF Management Limited earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference. Mr. Tseng, you may begin. Ken Tsang (Chief Financial Officer) Thank you Operator and good morning everyone. I'm Ken Tsang, Chief Financial Officer of AGF Management Ltd. Today we will be discussing the financial results for the first quarter of 2026. Slides supporting today's call and webcast can be found in the Investor relations section of ajf.com also speaking on the call today will be Judy Goldring, Chief Executive Officer for the Q and A period following the presentation, Ash Lawrence, Head of AGF Capital Partners and David Stonehouse, Interim Chief Investment Officer will also be available to address questions. Slide 4 provides the agenda for today's call. After the prepared remarks, we will be happy to take questions. Judy Goldring (Chief Executive Officer) With that, I will now turn the call over to Judy. Good morning and thank you for joining us. Before we get into the specifics of the quarter, I'd like to touch on some exciting news for AGF Investments announced late yesterday. Following a comprehensive global search, we are thrilled to welcome John Porter as Chief Investment Officer for ags Investments effective May 1, 2026. John brings decades of investment management and leadership experience overseeing investment management teams across markets and asset classes. John will also join AGF's executive management team and will report directly to me. I want to sincerely thank David Stonehouse for his contributions as Interim Chief Investment Officer. David provided steady leadership that helped ensure disciplined execution and oversight of the investment management team during a pivotal period for the firm. Looking ahead, I am confident that under John's leadership, the investment team culture of high performance, collaboration and risk management will continue positioning the firm for future growth. Continuing with our Q1 highlights against the backdrop of significant market volatility, AGF continued to demonstrate the durability of our business outside of the impact of long term investments which I will speak to shortly. Q1 was a solid quarter. AUM and Fee earning assets were over $60 billion at the end of Q1, up 12% from a year ago. AGF Investment's retail mutual fund business reported net sales of $237 million in the quarter, marking our seventh consecutive quarter of positive retail mutual fund net sales. 7 of AGF Investment funds earned fund Grade A awards which are given annually to investment funds that have delivered consistent outstanding risk adjusted performance throughout the year. The seven award winning funds span across our suite of equities, balanced and fixed income strategies. We continue to generate strong free cash flows totaling $36 million in the quarter which is up 14% from last quarter. Free cash flows were $122 million over the trailing 12 months. Our balance sheet remains strong with $432 million in short and long term investments. Net debt of $48 million with $160 million available on our credit facility. The strength of our balance sheet and capital position provides us with flexibility to deploy capital thoughtfully in line with our strategic priorities. On the back of our strong capital position, the Board unanimously declared a 13.5 cent per share quarterly dividend for Q1 2026 representing an 8% increase. This is the sixth consecutive year where we have increased our dividend. Following the quarter we were pleased to see AGF added to the NASDAQ Broad Canadian Dividend Achievers Index reflecting our track record of consistent dividend growth and our ongoing focus on returning capital to shareholders. During the quarter we did see revenue from our long term investments decrease to negative 10.6 million. This represents a 2.5% decline in the value of our long term investments during the period. As a consequence, our adjusted EPS from AGF Capital Partners was negative $0.05 per share excluding AGF Capital Partners. Adjusted EPS was $0.35 which is up 21% year over year and our adjusted diluted EPS was $0.30 in the quarter. Starting on Slide 6, we will provide updates on our business performance. On this slide we break down our total AUM and fee earning assets in the categories disclosed in our MDA and show comparisons to the prior year AGF investments. Canadian Mutual fund AUM was $36 billion up 15% year over year outpacing the industry increase of 14%. The growth of our ETF and SMA AUM globally remained strong up 54% year over year. I'll provide more color on our mutual fund sales and ETFs and SMA AUM in a moment. Segregated accounts and sub Advisory AUM decreased by 9% compared to the prior year. The decrease is driven by the redemptions from two institutional clients as disclosed in previous quarters. Subsequent to quarter end we saw inflows of 350 million from an institutional client. We continue to see strong interest in our strategies in the institutional space with a number of existing clients. Our private wealth AUM increased by 13% compared to prior year to approximately $10 billion and our AGF Capital partners AUM and fee earning assets were 4.5 billion at the end of the quarter. As a reminder, New Holland Capital's aum of approximately $10 billion is not consolidated into AGF's total AUM and fee earning assets at this time. Turning to slide 7, I'll provide some details on mutual fund sales. The mutual fund industry in Canada saw net positive sales of $19 billion in the quarter. AGF Investments retail mutual funds delivered the seventh consecutive quarter of positive net sales totaling $237 million in line with the industry net sales rate of 0.7% of AUM. Since Q1 2024, the Canadian mutual fund industry has recorded approximately $55 billion of net sales representing 2.5% of AUM. Over that same time period, AGF's retail mutual fund business generated roughly $1 billion of net sales or 3.3% of AUM, demonstrating our ability to continually grow market share. The strength of our retail mutual fund sales reflects the successful execution of our distribution strategy and our strong investment performance. Let me provide a brief update on our investment performance. AGF Investments measures mutual fund performance by comparing gross returns before fees relative to peers within the same category with the 1st percentile being the best possible performance. Our 1 year performance was in the 35th percentile, our 3 year performance was in the 46th percentile, our 5 year performance was in the 39th percentile and nearly 2/3 of our funds are outperforming our peers on the three and five year basis. Turning now to Slide eight In addition to our retail mutual fund net flows of $237 million, the AUM in our ETF and SMA vehicles, which has now reached 4.5 billion, have grown at 64% on a compounded basis over the last two years. We continue to see consistent growth and momentum in our SMA vehicles across U.S. canada and Asia where many of our strategies are available on leading wealth management platforms. In January we launched ETF series of AGF Global select and AGF American Growth Fund here in Canada, two funds with long standing and proven track records. The launch expands our Canadian ETF lineup and addresses growing advisor demand for more choice in how they access our capabilities for investors. I will now pass it over to Ken to discuss our financial results. Ken Tsang (Chief Financial Officer) Thanks Judy. Slide 9 reflects a summary of our financial results with sequential quarter and year over year comparisons. The financial results in these periods are adjusted to exclude severance, corporate development, non cash acquisition related expenses as well as other adjustments. As noted in our MD&A adjusted EBITDA for the quarter was $30 million, down $22 million from the prior quarter and $18 million from the prior year, primarily reflecting lower net revenues from AGF Capital Partners long term investments which we will expand on in a moment. SG&A was $65 million, down 3 million from the prior quarter and up 1 million from the prior year. The decrease from the prior quarter was attributable to lower non compensation and performance based compensation offset in part by the seasonally higher government benefits recorded in this quarter. The increase from the prior year was primarily due to higher non compensation expenses reflecting the impact of inflation as well as increased sales and marketing and other AUM driven costs. Net income attributable to equity owners for the quarter was $20 million and adjusted diluted EPS was $0.30. Free cash flows for the quarter was $36 million which is $4.5 million higher than a prior year and prior quarter reflecting strong cash generation. As a reminder, free cash flows excludes non cash items such as fair value Mark-to-Market Adjustments on Our Long term Investments slide 10 provides a further breakdown of our net revenues within our traditional asset and wealth management businesses. Net management fees were $93 million for the quarter which is $2 million lower than the prior quarter and $7 million higher than the prior year. Sequential quarter decrease in net revenue rates reflect the timing of fund expenses as well as one less day in the quarter. Revenue from AGF Capital Partners was 0.8 million this quarter which decreased by $22 million against the prior quarter and $23 million against the prior year driven primarily by lower revenues in our long term investments. This quarter we recorded a negative $16.8 million fair value adjustment of long term investments partially offset by $6.6 million in distribution income resulting in revenues from long term investments of negative $10.6 million. This was primarily driven by our legacy long term investments in the infrastructure space. While these investments have returned over $36 million in distributions over the last 36 months, the sector has not been immune from the economic and trade environment. As a reminder, AGF is an investor in these legacy long term investments where we also have retained an economic interest but not the management of the funds. We view these as long dated investments and as we have seen in prior quarters, fair value adjustments can be lumpy but we remain pleased with the long term performance. Since inception these investments have generated returns over 11% per annum exceeding our target annual returns of 8 to 10%. In addition, this quarter we recorded $4.6 million in other fair value and income mostly related to our share of the 2025 profits earned at New Holland Capital. On slide 11 we outline adjustments to our EBITDA. As you might recall, M and A transactions in the AGF Capital Partners business gives rise to various LTIP contingent consideration and put obligation liabilities. These liabilities are fair valued each quarter with the difference flowing through to the P and L. These accruals and fair value adjustments have no immediate cash impact, which is why we've adjusted for these items to facilitate easier comparisons of our quarterly results. Adjusting for these items along with severance and other adjustments, Our adjusted EBITDA for this quarter is $30 million. Turning to Slide 12, I will walk through the yield on our business in terms of basis points. This slide shows our average aum, net management fees, adjusted SG&A and EBITDA as basis points on our average AUM in the current quarter, previous quarter and trailing twelve months. This view excludes AUM and related results from AGF Capital Partners as well as DSE revenues, other income and any other one time adjustments. The EBITDA yield this quarter was 24 basis points which is consistent with the prior quarter and trailing 12 months. Turning to slide 13, I will discuss our free cash flows and capital uses. This slide represents the last 5/4 of consolidated free cash flows on a trailing 12 month basis as shown by the orange bars on the chart. The black line represents the percentage of free cash flows that was paid out as dividends. Our trailing twelve month free cash flows was $122 million and our dividend paid as a percentage of free cash flows was 26%. In the same period we returned $71 million to shareholders consisting of 32 million in dividends and 39 million in share buybacks. During the quarter we repurchased over 1 million shares under our NCIB. We ended the quarter with net debt of $48 million. We also have $432 million in short term and long term investments and have $160 million remaining on our credit facility which provides credit to a maximum of $250 million. Our future capital allocation will be balanced and includes return of capital to shareholders in the form of dividends, share buybacks as well as investing in areas of growth. Before I pass it back to Judy, let me take a minute on slide 14 to look at our valuation. AGF's current enterprise value is approximately $1.3 billion, taking into account our 432 million of short and long term investments with a conservative 10% discount. Our remaining enterprise value is about $945 million. This implies a 7 times EV to EBITDA multiple on our fiscal 2025 adjusted EBITDA excluding income from our long term and short term investments. Comparing this multiple to those of other traditional and alternative asset managers and recent acquisitions would suggest further potential upside to our valuation. Despite the strong positive share movement over the past few quarters, when we do see volatility in our stock, we continue to be very active and will continue to look for opportunities to buy back shares opportunistically. I will now pass it back to Judy to close out the presentation. Judy Goldring (Chief Executive Officer) To sum up this first quarter, we continue to make progress against our strategic objectives. Our traditional asset and wealth management business remains strong. Our AUM and fee earning assets continue to climb reaching over 60 billion or 12% higher from prior year. Our investment performance remains solid and our sales momentum remains strong. We are confident in the progress and direction of our private capital and alternatives business, notably its contribution to the diversification of AGF's overall business. We remain disciplined in our expense management while investing for growth. We increased our quarterly dividend by 8%, continuing a six year track record of dividend growth. And the strength of our balance sheet and capital position provides us with the flexibility in our capital allocation strategy and the resilience to weather different market environments. I would also like to take a moment to thank our AGF team for all their hard work. We will now take your questions. OPERATOR Thank you. If you have a question at this time, please press the star one one on your touchtone telephone. One moment for our questions. Our first question comes from Gary Ho, Deshardin Capital Markets. Your line is open. Gary Ho Thanks. Good morning. Just wanted to start off with a question on your private alt side, so just wondering if you can walk us through that 16.8 million of non cash fair value adjustment loss in the quarter. I know you carry infrastructure assets, private equity through Kensington and some private credit exposure. Can you maybe just break down what that relates to? I know there's sometimes DCF kind of involved in valuing these assets. Is it lower expected cash flows looking out or higher discount rates? And are the marks appropriate now in your view? And what gives you that confidence? Ash Lawrence (Head of AGF Capital Partners) Hi Gary, it's Ash here. I'll take that question. As mentioned in Judy and Ken's earlier comments, the net 10.6 million in fair value adjustments after the distributions that was largely driven by markdowns in our legacy infrastructure fund holdings. Based on recent discussions we've had with the general partner for those funds, those adjustments were largely driven by the impact around the current economic environment in certain sectors as well as the continued uncertainty through the end of last year with the cross border tariff environment and that is impacting certain businesses within their portfolio. I would also note that the net adjustment amount, the 10.6 million, equates to a pretty modest 2.5% adjustment in the value of our long term investments. And Ken mentioned this in his comments as well. But over the long term, our long term investment portfolio has produced an 11% return to AGF. And as with most private investments, we have a long term perspective on these investments and we continue to be pretty pleased with the performance that they're giving us. That said, we are reducing our expectations for returns on the portfolio for this fiscal year for fiscal 2026 from our typical long term guidance around 8 to 10% to a more modest 5 to 6% for this year. And just to remind you again, our infrastructure investments, these are legacy fund investments where while we do retain an interest in certain fund economics, we do not have an ownership in the manager of these funds. Gary Ho Okay, thanks for that, Ash. Maybe just clarify that that 5 to 6%, does that include the negative 2.5% in Q1 and then also the infrastructure assets that you mentioned? Any Middle east exposure there or are they all North American? Ash Lawrence (Head of AGF Capital Partners) Yeah. So on your first question, that does include the 2.5%, there is no direct Middle east exposure. Certain assets in that business will have energy market exposure which obviously at some point will tie back to what's going on in the Middle East. Gary Ho Okay, got it. Okay, great. My second question. I did see decent retail flows in the quarter which included the RSP season. Can you elaborate on the retail environment today and also last quarter? What are you seeing through your distribution channels? I know the markets have been choppy of late. Geopolitical risk, has that kind of put a dent in the retail flows at all or how's the retail side holding up? Judy Goldring (Chief Executive Officer) Yeah, thanks, Gary. Judy here. Well, we did comment we saw 237 million of net sales for the quarter. That was adjusted for one institutional outflow that occurred during the quarter as well. That being said, we found we were quite pleased because we were right at market at 0.7% of AUM, which is the same as what industry saw as, well, you know, mutual funds, obviously a primary source for us. We do see continued growth in our SMAs. And I think as we look to the industry and as it continues to evolve, looking to how we count for the SMA flows is something that I think a number of our market participants are trying to deal with. But really we would have seen double of our net sales had we included our SMAs and quarter to date. I can just let you know we're about 40 million net positive quarter to date. What we are seeing is a bit of skittishness with investors as they sort of assess where this market turmoil and the economy generally is going given the volatility. But we're still seeing strength in our SMA business. A little bit of softness on the mutual fund side. Ash Lawrence (Head of AGF Capital Partners) Okay, Gary, the 40 million of quarter to date net sales excludes the SMA flows. Gary Ho Yeah, got it. Okay. And then maybe if I can sneak one in for Ash. I believe you passed the lockup terms for the ability to increase your stake in New Holland Capital. I would have expected announcement by now, but given the outperformance there. Is there something that we're missing or. Talks are just ongoing? Just appreciate an update there. Ash Lawrence (Head of AGF Capital Partners) Yeah. Hi Gary. You are correct. We are in a position starting in the first half of this year to exercise exercise an option to increase our ownership in New Holland Capital. One thing to note, that window remains open through 1H27 as well. So it is not a one time singular event. We have a window to exercise. We are actively evaluating that option and I think we've mentioned this on prior calls, but we are pretty pleased with our partnership and with the progress that New Holland has made over the last couple years in Canadian dollar terms. We've seen their AUM increase from approximately 7 billion when we made our initial investment to around 10 billion today. So we are in active analysis and discussions around that option now. Gary Ho Okay, great. Thanks for the update. I'll jump back in the line. Thank you. OPERATOR Thank you. Our next question comes from Bart Ziarni with RBC Capital Markets. Your line is open. Bart Ziarni Great, thanks. Good morning everyone. Just wanted to ask around AGF Capital Partners, the recurring manager earnings of $6.3 million, they're down sequentially and year over year. Can you just help us understand what's driving that trend? Ash Lawrence (Head of AGF Capital Partners) Yeah. Hi Bart, it's Ash again. So that trend is largely due to some fair market value adjustments in Kensington's Evergreen Private Equ and Venture portfolio that obviously results in lower net asset values on which the fee rate is applied for those vehicles. So depending on exactly which historic period you're comparing to, there may also be a little bit of impact from capital that was redeemed from that same fund in Q1 of 2025, but that that impact is largely driving that reduction you're seeing. Okay, great, thanks. And Just a clarification. How big is the Evergreen PE Venture portfolio? That vehicle is approximately 1.2 million of nav. Bart Ziarni Okay, thank you. And then if we could just get an update on Kensington, the redemption suspending. Is there any line of sight or clarity that you can give us as to when we could sort of get through that? Ash Lawrence (Head of AGF Capital Partners) Yeah, absolutely. So there is an update. On March 25, actually, Kensington held a unicolder vote to pass certain amendments to the terms of the private equity fund. As a result of that vote passing, the suspension is actually lifted. Now, it also eliminated the redemption queue and it implements a new redemption framework that will allow the fund to operate without the need to further suspend redemptions. The amendments basically allow the fund to manage liquidity in a manner that's more consistent with the underlying investments, while also avoiding the pressure to liquidate assets either at inopportune times or at discounts. And this sort of preserves the long term value for all the unitholders in the fund. So we are now in a position where the Kensington team is focused on the underlying assets again and managing that fund for its objectives, for its unitholders. Bart Ziarni Got it. Thanks, Ash. Very helpful. That's it for me. OPERATOR Thank you. Our next question comes from Romel Sabat with Jefferies. Your line is open. Romel Sabat Hi. Thank you for taking the questions. So I just have a question on the 4.3 million of special interest income that you received in New Holland. Assuming that you don't convert the note, should we expect another 4 to 5 million of interest income in Q1 27? Ken Tsang (Chief Financial Officer) Yeah. Hi, it's Ken. The short answer is no. The 4.5 million represents our proportionate share of the earnings of New Holland above and beyond, kind of the coupon that's collected. You will note that this is an increase, I think in the prior year we would have recorded a similar revenue amount to about $1 million. And so there is some volatility depending on sort of the overall profitability of New Holland. And 2025 was a good year for them. Part of those earnings were driven in part by the fees that they would have earned in a year as well. Romel Sabat Okay, got it. Ken Tsang (Chief Financial Officer) Thanks. And the other question I had was when we were looking at. So when we were looking at the net management fee rate that you're collecting. So I think in the past you've mentioned that you're expecting two basis points of annual compression. Is that still relevant today? Like we still seeing two basis points of annual compression on that management fee? And what would that compression look like on the revenue basis only? Yeah. So we do still expect a roughly 2 basis point annualized rate of decline in a year. That's driven in part by the success in the growth of our fee based IIROC channels as assets shift from MF series to F series, as well as what Jude alluded to earlier of just tremendous success in the SMA business, which has grown by more than 50% since last year. So as a consequence, you will see that while our revenue basis points will trend lower, our overall revenues will increase over time. This quarter was compounded by some volatility in terms of the level of AUM that we saw, just in the way it's calculated. The fees are determined based on daily aum, but the denominator of that calculation is calculated based on simple averages for each of the months. And so that volatility does create a bit of noise in that number for this particular quarter. Romel Sabat Okay, got it. All right, thank you for answering the questions. OPERATOR Thank you. Our next question comes from Graham Riding with TD Securities. Your line is open. Graham Riding Hi, good morning. Ash, maybe you could just go back to the Kensington, just maybe a little bit more color on how you're managing those redemption requests going forward while still preserving the performance of the fund. Can you give us a little more detail on what the specific changes are? Ash Lawrence (Head of AGF Capital Partners) Yeah, sure. So the structure they've implemented going forward really provides the manager a little more flexibility in terms of making capital available for investor redemptions that is more consistent or in line with the cash management needs of the fund. It also basically eliminates an ongoing queue from ramping up, which can have sort of spiral effects on vehicles of this type of. So from a long term perspective, that allows them to manage the fund consistent with what are generally illiquid assets below. But it will require, from a cash management perspective, ensuring that there is liquidity available to investors on a relatively consistent basis. But it just doesn't put you in a vice grip at certain points in time in the market. Graham Riding Okay, so is there any sort of quarterly limit to redemptions in place or is it. Is the entire structure fluid going forward? Ash Lawrence (Head of AGF Capital Partners) It's a little more fluid going forward. So the fund will endeavor to make 5% a quarter available, but that is neither a cap nor an obligation. Graham Riding Understood. Okay. And then the, the earnings that you earned from, I guess, New Holland Capital this quarter, is that. That's based on 20, 25 earnings for that business. So does that reflect your 25% sort of interest in that entity? Is that the right way to think about it? And then what would be. Is it safe to assume that the run rate, the earnings run rate is higher than. Than what's implied with that 4.6 million that you received. Ken Tsang (Chief Financial Officer) Yeah. Hi, Graham. So, yes, the earnings from New Holland does represent our 25% stake. I will sort of highlight that a proportion of that is related to performance fees. And so these earnings, again, could be lumpy as a consequence. Graham Riding Okay, understood. And then last question, just for Judy. With the new hire of John Porter, can you just maybe elaborate a little bit on what it was about his track record or his skill set that sort of makes you think he's going to be a good fit for AGF and the right person for the role of CIO going forward? Judy Goldring (Chief Executive Officer) Yeah. Thank you, Graham. We're really excited that John has joined us. He'll start May 1st. He comes from Boston, the US has long decades, years of experience in investment management. He's been in leadership positions as well and certainly has overseen investment management teams across different markets and asset classes. And so the combination of sort of his passion, his capabilities, his leadership strength, being a talent portfolio manager, understanding the role of a cio, I think he'll make a very strong addition to our investment team. So we're really excited by that. Certainly want to make sure I give credit to David Stonehouse as well for his significant contributions. It really was truly valued during a very pivotal period of our firm. And again, thank you to David for his work as interim cio. Graham Riding Okay, that's it for me. Thank you. OPERATOR Thank you again. If you have a question, please press Star 11 on your Touchstone telephone. Again, that is Star 11 to ask a question. Our next question comes from Tom McKinnon with BMO Capital. Your line is open. Tom McKinnon Yeah, thanks. Good morning. Just to follow up, with respect to the March 25 agreement, with respect to Kensington, I think you mentioned about clearing the redemption queue. Were there any redemptions then? What does that mean in terms of where the AGF capital AUM, which was sitting at 4.465 billion at the end of fiscal. At the end of Q1. How should we be thinking about where that would be sitting right now as a result of clearing that redemption queue? Ash Lawrence (Head of AGF Capital Partners) Hi, Thomas, it's Ash. Good question. So let me clarify. When I say cleared the redemption queue, I should have said eliminated the redemption queue. So no redemptions were paid out as a result of the amendment passing on March 25th. So that AUM, going forward, or at least for now, until liquidity is made available for redemptions, will generally go forward reflecting fair market value adjustments in the portfolio until such time as liquidity is available for redemptions. Tom McKinnon And was there any. In order to get that agreement, was there any reduction in fees that Kensington can get? Ash Lawrence (Head of AGF Capital Partners) There was no reduction in fees. There was a consolidation of two classes that had a very nominal impact on fee levels for one of those classes that got a little bit lower from the result of that consolidation. But nothing material. No. Tom McKinnon Okay. And then just a question with respect to severance and other expenses. I mean, these aren't supposed to be part of normal course, but they were like in 20, the last couple of years, they seem to be running about 2% of expenses. Of your overall expenses, they were closer to five in this quarter. Is there anything to call out and should we continue to kind of see these below the line severance expenses going forward? Ken Tsang (Chief Financial Officer) Yeah. Hi, Tom. Yeah, the elevated expenses this quarter reflected some targeted workforce adjustments that we've made to align our portfolio and reposition for our initiatives. We make these tactical adjustments periodically in an effort to focus on improving efficiency while investing for growth. The number is quite lumpy. I mean, just to give you a sense. I mean, last quarter it was virtually zero. Right. And so this quarter it was 3.5, which is why we've adjusted it out. It just doesn't represent a normalized EBITDA run rate for the business. Tom McKinnon I mean, everybody's always investing in the business. But what's the decision then to move some of these below the line? Ken Tsang (Chief Financial Officer) I think it's, you know, a number of firms actually do adjust severance just because the point of making the adjustments is to provide more of a run rate EBITDA number for valuation purposes. And, you know, my earlier point, you know, similar to how we view fair value adjustments on the liabilities, which again, can be lumpy, we try to just eliminate that noise. It's one of the few adjustments we make to the ebitda. It's a fairly short list. But, you know, we felt that it's appropriate to do that for the, for the investors to better evaluate our core underlying business from an EBITDA perspective. Tom McKinnon All right, thanks. OPERATOR Thank you again. If you have a question, please press star 11 on your Touchstone telephone. Again, that is star 11 on your Touchstone telephone. If you have a question. I'm not showing any further questions at this time. Judy Goldring (Chief Executive Officer) Thank you very much for your questions. And in closing, our investment performance and sales momentum remain strong. Our strong balance sheet and strong cash flow position provides flexibility to return capital. Shareholders continue investing in the long term growth and remain resilient through challenging market conditions. We continue here at AGF to make progress against our strategic objectives, and we look Forward to our Q2 earnings call on June 24, 2026. OPERATOR Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.