Power Corporation of Canada T.POW.PR.A

Primary Symbol: T.POW Alternate Symbol(s): PWCDF | PWCCF | T.POW.PR.B | T.POW.PR.C | T.POW.PR.D | T.POW.PR.E | T.POW.PR.G

Financial Services Insurance - Diversified

Power Corporation of Canada is a Canada-based international management and holding company. The Company is focused on providing financial services in North America, Europe, and Asia. Its core holdings include insurance, retirement, wealth management and investment businesses, including a portfolio of alternative asset investment platforms. It operates through three segments: Lifeco, IGM Financial and GBL. Lifeco is a financial service holding company with interests in life insurance, health insurance, retirement and investment management services, asset management and reinsurance businesses primarily in Canada, the United States and Europe. IGM Financial is a wealth and asset management company supporting financial advisors and the clients they serve in Canada, and institutional investors through North America, Europe, and Asia. GBL is a Belgian holding company, which is focused on long-term value creation with a diversified quality portfolio of listed and private investments.

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Power Corporation of Canada > TD: Virtual Q&A with Power Corporation CEO

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Post by lb1temporaryon May 27, 2021 5:19pm

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Post# 33282946

TD: Virtual Q&A with Power Corporation CEO

Asset / Wealth Management Within Power Corp

Virtual Q&A with CEO Jeffrey Orr

Impact: Neutral

We hosted CEO Jeffrey Orr for a discussion focused on Power Corp.'s broadbased asset/wealth management assets across Power Corp. and its operating entities (Great-West Lifeco and IGM Financial).

Power Corp.

The alternatives platform at $11.3bln in AUM ($7.4bln in funded AUM) is up 102% y/y. Management believes that there is plenty of capacity for further AUM within the existing strategies and expects to add new verticals. While there is room for value creation, consistent profitability may still be 3-4 years out according to management. The Grayhawk wealth acquisition (HNW) adds a distribution channel to this platform

The fintech strategy has evolved and provides multiple benefits. Initially, the launch of a venture capital fintech fund was to provide valuable insight for Power Corp's operating companies. This has evolved into a very successful vertical within the alternatives platform. Two big bets on digital wealth companies - Wealthsimple and Personal Capital - have generated strong investment returns, with the latter currently being integrated into Great-West (Empower).

The recent Wealthsimple financing transaction provides $500mm in proceeds for the Power Group (more than recouping the $315mm investment). The ongoing controlling stake (60% voting rights) is valued at $2.1bln. Management sees this transaction as de-risking the investment while still providing optionality

The China AMC investment (28% ownership across Power Corp. and Mackenzie) should benefit from a growing Chinese middle class and asset management industry. Power Corp. would be open to a larger position. Ultimately, ownership might be simplified under one Power Corp. entity (Mackenzie makes most sense, in our view).

TD Investment Conclusion

Management's closing message was investments in recent years have paved a road for good earnings growth at both Great-West and IGM, and expects more progress around value creating investments, and simplification, at Power Corp. In our view, the company has executed well over the past 12-18 months towards simplifying the organization, improving disclosure and outreach, and delivering value-surfacing transactions (Lion Electric, WealthSimple).