Sprott Inc

TSX:SII

Earnings Call Transcript 2020-Q3

[Operator]

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Sprott Inc.'s 2020 Third Quarter Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, November 13, 2020.On behalf of the speakers that follow, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements within the meaning of the safe harbor provision of the Canadian Provincial Securities Law. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are implied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements.For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the MD&A for the quarter and Sprott's other filings with the Canadian and U.S. securities regulators.I will now turn the conference over to Mr. Peter Grosskopf. Please go ahead, Mr. Grosskopf.

[Peter F. Grosskopf, CEO & Director]

Good morning, everyone, and thanks for joining us today. I hope that you're all staying safe and managing through these challenging times. On the call with me today is Whitney George, President of Sprott; our CFO, Kevin Hibbert; and John Ciampaglia, the CEO of Sprott Asset Management.Our Q3 results were released this morning and are available on our website where you can also find our financial statements and MD&A. I'll start on Slide 4, and then I'll quickly pass it over to the team. On the third quarter -- during the third quarter of 2020, gold continued to perform well, breaking through $2,000 per ounce and setting a new high in early August before pulling back later in the quarter.For much of the year, markets have remained focused on 2 key issues: first, the economic impact of COVID-19; and secondly, the U.S. election. The COVID situation is ongoing. And although the results of the U.S. election are still being digested, market reactions appear favorable. While we understand that on a short-term basis, the expectations for additional stimulus and its effect on both interest rates and equities will remain in focus, we believe the long-term trends, which have driven precious metal prices to new highs remain unchanged. In the first 9 months of 2020, gold outperformed all major asset classes, and we expect this trend will continue to be positive into 2021.Turning over to Slide 5 for a look at some of our year-to-date highlights. We continue to experience significant asset growth with our assets under management increasing by 76% during the first 9 months of 2020. These gains have been driven by a combination of factors, including $2.3 billion in year-to-date sales, largely in our physical trusts; stronger gold and silver prices; the Q1 acquisition and closure of the Tocqueville gold strategies; and strong investment performance within our managed equity strategies. These factors combined to benefit our year-to-date financial performance, resulting in a 36% increase in adjusted base EBITDA and operating margins of approximately 46% through the first 9 months of the year. And remember, we have a bit of a lag when it comes to recognizing the effects of higher assets within our system.Yesterday, our Board of Directors approved an 8.7% increase to our quarterly dividend effective immediately. This increase is a reflection of the robust financial performance of the company and our strong financial position. We're confident that our business will support not only this dividend level, but it will continue to allow us to fund future growth initiatives.We continue to work to build shareholder value, and our efforts have been recognized lately through Sprott's addition to the S&P/TSX composite index and our inclusion in the TSX30, which recognizes the 30 top performing TSX stocks over a 3-year period based on dividend-adjusted share price appreciation.I'll now pass it over to Kevin for some detailed comments on our quarterly results.

[Kevin Lloyd Hibbert, Senior MD, CFO & Co]

Thanks, Peter, and good morning, everyone. I'll start on Slide 6, which provides a summary of our AUM as at September 30, 2020. Our AUM finished the quarter at $16.3 billion, up $2.4 billion or 17% from June 30, 2020, and was up $7 billion or 76% from December 31, 2019.Our AUM benefited largely from strong inflows into our physical trusts, strong precious metals prices in our physical trusts and strong market value appreciation across most of our equity fund products. We also benefited from new capital calls, net of distributions in our lending funds.Slides 7 and 8 contain our 3 and 9 months' operating performance. And what you'll see there is that our adjusted base EBITDA in the quarter was $12 million, up $4.4 million or 58% from the prior period and was $29.4 million on a year-to-date basis, up $7.9 million or 36%.The increases on a 3 and 9 months ended basis were primarily due to strong net inflows and precious metals price appreciation in our exchange-listed products, the Tocqueville gold strategies acquisition, AUM benefits earlier this year, coupled with stronger equity valuations in our precious metals fund strategies. However, we also benefited from increased commission revenues in our brokerage segment due to very strong equity origination and transaction activity. All these increases more than offset lower finance income in our lending segment and higher compensation as a result of the acquisition and increased revenues and earnings across the company that are driving our variable at-risk compensation.For more information on our revenues, expenses and EBITDA, you can refer to the supplemental information section of this presentation as well as our Q3 2020 MD&A that we filed earlier this morning.With that said, I'll pass things over to John. John?

[John Ciampaglia, Senior Managing Director]

Great. Thanks, Kevin, and good morning, everybody. We had a very good quarter in Q3, and I think it's very encouraging, given price of gold peaked first week of August and is down about 9% since and silver peaked around the same time and is down about 14%. So we've had a little bit of a correction in the price of gold and silver, but it hasn't really stopped the momentum in the product suite and the sales have been, I would describe as, quite robust in the last quarter and the subsequent 6 weeks since the quarter end.I think more importantly, the AUM levels are up substantially since Q1. And that lag effect that Peter referenced is very important because it's starting to dissipate and now you're starting to see the AUM growth from earlier in 2020 fall to the bottom line. So that's something to be mindful of.In the spring, a lot of our inflows were driven by retail investors. They were the first movers. But in the last 4, 5 months, we've seen this rotation to institutions. Looking at our last 13F filings across our physical bullion trusts, we're seeing a growing list of institutional ownership, which we think is very positive. Obviously, they control huge amounts of capital, and we're starting to see that rotation from institutions into the precious metals sector.More recently with the Biden presidency, we think it will be very supportive for precious metals. We think it will accelerate the return of U.S. retail buyers into the segment, which is a very slow and steady group of purchasers.More recently, we expanded our at-the-market offering to include the Canadian dollar versions of our bullion trusts on the TSX. And I'm happy to say that it's already starting to pay dividends, and we're starting to raise capital. This is new incremental capital. We have not had any ATM in place on the TSX-traded versions of our funds. And we're starting to see investor interest and liquidity improve there.Since the end of the quarter, flows have been pretty decent. October was approximately $100 million in the exchange-listed segment and November so far is approaching $100 million at $97 million. So despite the price of gold kind of peaking first week of August, we still have close to $700 million in net flows into the category over that period of time. So continued interest, and we're starting to see new buyers come into the market. And hopefully, people are picking up metals on this price dip that we've seen. AUM, over the quarter, is up about $300 million. So we continue to add to it since the quarter end.And with that, I will pass it over to Whitney to talk about the managed equity segment.

[W. Whitney George, President]

Thank you, John, and good morning, everybody. The great news in managed equities, I believe, is still in front of us. Our performance has been very strong as has the category this year. Most of our funds are up 25% to 50%, actually, more recently, maybe closer to 30% to 60%, which is a very strong showing for the sector. And it is underpinned by a very, very healthy fundamentals within the individual companies. This quarter's earnings reports featured a lot of earnings surprises to the upside, a lot of dividend increases, a lot of positive fundamentals, despite the slowdowns caused by COVID.So fundamentally, the category is very strong, arguably, one of the few growth -- real growth categories out there with valuations, still very attractive. Many, many companies still trading at 10% free cash flow yields, and so we're very excited as active managers.Our annualized redemption rate, which is a feature of the mutual fund business has been sequentially shrinking. We were at a 22.5% rate earlier in the year on the first quarter, and that's come down to about a 13.9% rate. Those redemptions, they're now being offset by new sales, but it's very early days. But the trend is for a flattening out, and we expect we're very well positioned to capture our gross and net sales in the very near future, if not already.A part of this is driven by the performance. Part of this is driven by the relative performance of active strategies versus -- but more widely held passive strategies in the category. Since July, active managements had to pay off. The market is spread out to include and appreciate mid and smaller mining companies, and that's been very helpful for everybody who does fundamental analysis. And our relative performance versus the -- all of our peers is gaining traction very, very quickly, where we are either at or ahead of most of our competition. I think our Canadian 9-point offering is the #2 in its category year-to-date.So the team has come together, and we have a very deep bench, as you know, in the analytical work and active management is starting to bear fruit. So we're well positioned to capture new flows. And we think, again, across the board, the market is yet to recognize the fundamentals on the equity side, and they are due to play catch-up and then some against the physical part of our business.So thank you, everybody, for your attention.

[Peter F. Grosskopf, CEO & Director]

All right. Thanks, Whitney. Turning now to Slide 11 for a quick look at our private strategies. We currently have more than $900 million of total AUM in our private strategies as well as substantial undrawn commitments.In our lending business, we've recently generated exceptionally strong performance for our LPs. LF2 has deployed more than $300 million and has an additional $400 million in advanced stage opportunities at some stage in the closing process. Given the current pace of deployment, which has exceeded our expectations in terms of timing, the team is planning for new fundraising efforts in 2021.And we continue to build-out our streaming and royalty strategies with the addition of Caroline Donally as managing partner. Caroline joins us from Denham Capital and will be based out of Houston, and she will work alongside Mike Harrison and the rest of the streaming team.Just turning to Slide 12. You can see a chart from our friends at Incrementum AG, which is really a fairly key ratio for us in our business. So we believe that government debt has passed its minsky moment and that we're now into a completely different phase in the markets. And that there are 3 things that governments have promised that they may not be able to deliver on. The first, which is illustrated on the page, is a long-term issue, which is the overall level of debt to the underlying productive capacity to cover that debt and where this key ratio has absolutely blasted off the top corner of the page.The second one would be the entitlements that have been promised to an aging demographic. And the third, which is new, is the implicit promise to keep everyone safe, the economy humming and the financial markets happy during the current pandemic, which will be extremely costly. And in this environment, while we realize that traditional financial portfolios still do need to include some measure of equity exposure and some measure of credit exposure as well as some ready cash, we believe that gold has assumed a newly important role in order to protect and ensure financial portfolios going forward. So this, in a nutshell, is our business plan, and we believe it has a long way to go.Turning now to Slide 13 for some closing thoughts. We believe the fundamentals are in place for a sustained bull market in precious metals. We've positioned the firm for this trend, and we're now focused on execution to capitalize. We're continuing to explore opportunities to launch complementary products in key segments and watch for us to be adding some new exchange-listed strategies this year and also looking at private equity in the sector.Our greatest asset is our brand and our people, and we're committed to leveraging them to the fullest extent, both domestically and internationally through distribution partnerships that will extend our global reach.And that concludes the remarks for today's call. I'll now turn it back to the operator for some Q&A.

[Operator]

[Operator Instructions] Our first question comes from Gary Ho with Desjardins Capital Markets.

[Gary Ho, Analyst]

Maybe first question, just for John. Just want to confirm some of the numbers that you provided. I think you said $300 million in AUM so far in Q4 and roughly $197 million in net flows. Do I have that correct? And are those net flows just on the exchange-listed products or is that on a consolidated basis?

[John Ciampaglia, Senior Managing Director]

Just on the exchange-listed, and all the numbers that you echoed back are correct.

[Gary Ho, Analyst]

Okay. And do you have any color on how it looks like on a consolidated?

[John Ciampaglia, Senior Managing Director]

Sure. So what we're seeing in the managed equities is a flattening of redemptions -- of net redemptions. So to give you some color, in July, we had minus $38 million; for the month August, minus $22 million; September, plus $16 million, October minus $8 million; and I'm going to guess November will be slightly positive. So we've gone from kind of an annualized, say, $500 million net redemption run rate to kind of flatten. And that's the first step. The first step is to flatten it for a number of months, and we're starting to see evidence of that.We're also encouraged by the number of institutional inquiries we're getting about separate accounts that are largely equity skewed. So as I said to you earlier in the call, a lot of the sales have been institutional, focused on physical metal. But I would say, in the last couple of months, those conversations are starting to switch to the equities, which we think is a really good sign. And we've always believed that the rotation would be gold bullion first, followed by silver bullion, followed by the equities. And that's exactly what's kind of playing out right now.So the conversations we're having with institutions, they can be anywhere from $10 million investments, they could be up to $200 million investments. And those are the one -- those are the conversations we're having right now, and that's what's going to tip us into -- back into positive sales in that segment. So the institutional sales process is always longer. There's a lot more steps involved. But we're having those conversations, and we're encouraged by the potential results.

[Gary Ho, Analyst]

Okay. Perfect. And then second question maybe for Kevin. Just wondering if you can provide some color, just on the corporate EBITDA number. I think you mentioned kind of compensation and some of the variable comp. Given the current AUM, is that a level that we should expect looking out in terms of expectations for that line item for Q4 and 2021?

[Kevin Lloyd Hibbert, Senior MD, CFO & Co]

So you're referring -- are you referring to compensation just in corporate or across the enterprise?

[Gary Ho, Analyst]

I'm actually looking just by segment, just on the corporate EBITDA. I think that was minus $4 million and change. That was a little bit off of my model. I just want some guidance, how I should look at that?

[Kevin Lloyd Hibbert, Senior MD, CFO & Co]

Okay. So a couple of things. It's -- I'll probably focus -- let me just focus on the expense items. The gains or losses are not EBITDA relevant. So on the comp side, I would say you -- it's not a run rate that I'd want you to rely on for Q4. At a high level, the AIP is higher because, for one thing, it's a greater proportion of the compensation of the employees, not just in corporate but across the whole organization since 2018 when we moved to -- as you recall, Gary, I know you paid pretty close attention to our circulars. The variable at-risk pay component is much larger now than it was in the past as we've reduced the amount of sort of fixed pay over the years as far as salaries and commissions and things of that sort.So the proportion of it relative to the rest of the comp, which you'd see elsewhere in the MD&A, will continue for the foreseeable future. But the year-over-year delta you saw, both in quarter and on a year-to-date basis, is primarily due to the performance triggers being significantly exceeded year-over-year versus in the prior year.The key ones are revenue growth and operating margin expansion. So if you look at our 8-quarter roll, you'll see that on both fronts, there's a sizable increase. So that's the main reason for the AIP being a bigger proportion of the total comp and being up significantly year-over-year.But also in that comp number is the additional corporate folks we have in shared services supporting the acquisition of Tocqueville as well as the private resources investments that we've done in people, specifically lending, Korea. And then we had, thirdly, a reclassification of some of our people from some of the operating segments into corporate as their responsibilities expanded to more corporate-wide ones. For example, Whitney George is now operating as President. So his comp will be reflected in here more so than the other segments, and then there were a few other folks that have more enterprise-wide responsibility.So I'd probably say it's too early to tell right now what would be a good run rate for you going forward, but I wouldn't say that Q4 will necessarily be as large period-over-period or year-over-year from -- compared to what you see here.

[Gary Ho, Analyst]

Kevin, maybe I can ask it the other way. The 9 months ended was roughly $9 million in comp for corporate. If I annualize that, that's $12 million. Is that a better number when I think about it on a year -- on an annual basis?

[Kevin Lloyd Hibbert, Senior MD, CFO & Co]

You could do that. But again, a big component of that number is the annual incentive. If our operating metrics change materially in the fourth quarter, then that number will change materially as well. So it's kind of hard to just do a cursory extrapolation of the 9-month number because, obviously, our results could change quite significantly depending on where, for example, gold prices are or gold equities move.And we also have to keep in mind transaction volumes in our broker dealer, which have been quite strong. But if those change, it could have a material impact on our numbers as well. So not sure I can really comment on what a good run rate would be at this time.

[Gary Ho, Analyst]

Okay. That's fine. Okay. And then my last question, just on the lending AUM. That has been flattish over the last few quarters. Peter, is that a function of the current environment? And can you provide a bit more context? I think you mentioned you're expecting $100 million plus for 2020, but how does it look like on a capital deployment basis in 2021?

[Peter F. Grosskopf, CEO & Director]

So it's a complex equation, as you know. We start with commitments. Some of those commitments, as I understand it, count as AUM because they pay fees right from the start, some of them don't. But definitely, when capital is deployed, it all counts as AUM.And I keep my eye on the overall trajectory of the capital that's deployed in that business. The overall trajectory is up. The overall pipeline is really strong, and we're in the process of closing a lot of deployments. So what it looks to me like is a business that should manage over $1 billion of capital going forward and then be able to have streaming on top of that. Hopefully, that would get to $1.5 billion in total, and that's kind of what we have on the table right now. That's what we're kind of focused on building the overall books to.And it's complicated because of all the different ways of counting assets. And obviously, repayments pay things like performance fees, but repayments reduce your AUM. So it's a bit of a slow treadmill that's grinding higher.

[Gary Ho, Analyst]

Okay. And then getting to that, including streaming, that $1.5 billion, can you give us a potential time frame? Is it kind of 12, 24 months? Is it 24, 36 months? How are you guys budgeting for that?

[Peter F. Grosskopf, CEO & Director]

Well, the streaming target is $500 million. We thought -- right now, there's about $70 million deployed. And I think there's more in the closing pipeline, but there also needs to be more capital raised. So we've kind of set a year's target to get to at least half of that amount and then another year's target to hopefully get to all of it. And that's the way we've looked at it.

[Operator]

Our next question comes from Rasib Bhanji with TD Securities.

[Rasib Ali Bhanji, Associate]

So I missed the first few minutes of the call, so I apologize if you've already addressed this, but I was wondering if you can provide some color around your growth rate segment, pretty healthy at and Q3. So I'm just wondering in Q4 so far, are you seeing this strong activity persist? And if you have any expectations for next year, would also be helpful.

[Peter F. Grosskopf, CEO & Director]

Well, the brokers are the hardest division to forecast because it does depend more on activity levels, but 2 things worth noting. Number one, the activity levels are continuing strong. And number two, in the U.S. broker, in particular, we're moving assets from assets under administration to assets under management, and that will smooth our revenue in that business. It will become a management business.And there will still be transactions across the brokers, but we're hoping to have a sort of predictable level of cash flow there and then still have the upside from having -- when you get into a really bullish market in one of the minerals, you can produce a lot of transactional revenue in that sector. So I know I'm not being too specific, but in general, the levels are continuing, yes.

[Rasib Ali Bhanji, Associate]

Yes. So near-term strength, at least, and then going forward, based on the sentiment of the market, that's where it should trend towards.

[Peter F. Grosskopf, CEO & Director]

Yes.

[Rasib Ali Bhanji, Associate]

Okay. Second question was just on your -- sort of your consolidated EBITDA margin. So revenue overall really strong, but then compensation expenses, specifically, were a bit higher as well, which slightly pressured the margin. So going forward, in terms of margin expansion and the level of compensation, what would be your view on the EBITDA margin of the business could accomplish?

[Kevin Lloyd Hibbert, Senior MD, CFO & Co]

So I'll take that one. I think I got most of what you were asking. From a margin perspective, we're actually quite comfortable with what we see here as a minimum go-forward rate. Enterprise-wide, we're at about 47%. That 40% margin is actually quite significant for this sort of business. There's not too many asset managers on the plant that can produce that type of number.I think that there is no pressure on the margin, certainly not from compensation. In fact, that it would be the opposite. Operating margins are a key factor in the comp calculations for our new variable at-risk pay model. So I think we're going to be in the high 40s for the foreseeable future.

[Rasib Ali Bhanji, Associate]

Okay. Okay. That makes sense. And just my last question was on...

[Kevin Lloyd Hibbert, Senior MD, CFO & Co]

And if anything, I wouldn't be surprised if the margin was at this level or even higher come Q4 on a full year basis.

[Rasib Ali Bhanji, Associate]

Okay. That makes sense. Got you. And just my last question on -- was on market sentiment. So like since the vaccine was announced earlier this week, I was wondering if you've seen a change in sentiment as the market sort of indicated more of a risk on sentiment. So I'm wondering if that's showing up in your flows yet or are the strength in precious metals still as strong as it was before?

[Peter F. Grosskopf, CEO & Director]

Well, I'm going to answer that from a really 30,000-foot level from our business, and then I'm going to pass it on to Whitney, but -- for a more specific comment. But from 30,000 feet, when you look at Sprott, we were 10 years ago dealing with a fringe asset that mostly was traded by gold bugs and hedge funds and was not very accepted in terms of being in the mainstream of portfolio assets. We're now dealing with an entirely different equation.So from our perspective, the pool of available investors, the pool of available assets and the potential is just a night and day difference. We don't see any change in the incoming tide, if you want to call it that, people that are interested in gold and using gold as an insurance asset to offset other market risks. In fact, we think we're still at the very early stages of adoption. So this is an asset class that's now accepted, and it's now mainstream. And we're kind of just getting started.So Whitney, do you want to talk about specific market sentiment?

[W. Whitney George, President]

Yes. Thank you, Peter. I think it's kind of, from a historic perspective, important to understand, particularly in North America, where people are. Gold, really in the United States, was kind of a fringe asset class, as Peter suggested. When you have the world's reserve currency, why do you need gold. And I think that's being challenged. I think that's being questioned by mainstream investors. Clearly, we're seeing it in our physical activity. It is considered more mainstream in Europe and certainly in Asia. But I think, particularly in the United States, which is a very, very large market, that we are way behind the curve in terms of its utility.On the equity side, again, after a long bear market, you have a very strong recovery, but people still remembering the volatility that can occur in this space. The sins of the prior peak bull market committed by companies -- sort of a recognition happens slowly. And of course, the best way to discover it is through the kind of results these companies are producing, but this is a much better managed industry than it was 6 years ago. Most managements have changed. They've become very disciplined, and they start to possess the kinds of characteristics that people appreciate in other sectors. And now most of all, they have earnings surprises, momentum and everything else.So I think it's a matter of time where that new understanding adoption, which is happening slowly in this country on the physical side, kind of then starts to seek out the more practical opportunity that you can get by investment in gold equities.And nothing has changed with the election or anything else. We had a fairly sharp pullback after hitting all-time highs. I think that pause and backup allows people now to reconsider without feeling like they're chasing something. So it's been very, very healthy. And with the election behind us and none of the fundamentals changed or likely to change, no matter who won, I think we're going to -- in for a pretty good exciting time right now.

[Operator]

Our next question comes from Geoff Kwan with RBC Capital Markets.

[Geoffrey Kwan, Analyst]

Just a 2-part question, and that's all I had. Just is there anything you can talk about where performance fees on a credit basis would be today? I recognize, obviously, it can swing either way between now and year-end?And then just similarly, any update on the timing of when you think you might realize some performance fees on the lending fund?

[Peter F. Grosskopf, CEO & Director]

Okay. It's best if Kevin answers that question. I can tell you, we were just talking about it this week because the numbers are getting a little better. I would say, on the -- just to answer the lending fund side of that question, they have one large loan remaining in LF1, and we're very happy with that loan. So it's kind of -- it's a 2-sided knife in that. If we lose the loan, we're going to have a performance fee payable right away. And if we keep the loan, we're going to keep making great income on it and continue to manage it and probably have greater gains later on, I would think. So that's going to resolve itself early in 2021 for the lending fund -- LF1.LF2, it's pretty -- it's a bigger number, but it's also a portfolio that's still being deployed. So it's not -- I don't think it's a 2021 date at all. It's 2022 at the earliest.Kevin, do you want to comment on any numbers or maybe you won't?

[Kevin Lloyd Hibbert, Senior MD, CFO & Co]

Yes. No, but -- No. Just to build on that, I would just say, just from a pure accounting and recognition perspective, the accounting rules in Canada under IFRS are converged with the U.S. And in that, we actually can't report or disclose performance fees or carried interest on funds where they haven't been crystallized.And in the case of the lending products, they would be crystallized at the maturity of the fund or if it were wound up early -- for example, if a material amount of loans end up repaying to the point where the PM feel it's best to close up the fund, lock in those gains and provide the outperformance to the unitholders, it's at that point that we'd be able to reflect it.And generally speaking, across the rest of the businesses where we have performance, the accounting would be the same, which is we book it at the time it's crystallized, which in most cases, is at the end of the fiscal year.I don't know if John or Whitney have any specific color they want to share on the managed equity side as far as performance.

[W. Whitney George, President]

Sure. On managed equities, with the departure of Eric Sprott and his fund, we sort of got out of the performance fee business. We now have 2 funds: our special situations with John Hathaway and Neil Adshead's drill-driven alpha fund. They're private partnerships, so we can't really talk about the metrics. But they are performing very well, and they carry with them annual performance fees. I believe it's 20% of performance above and beyond 8% on top of their management fees. And those would show up after the end of our fourth quarter.

[Geoffrey Kwan, Analyst]

And sorry, I just wanted to clarify, Kevin or Whitney, so you're not actually allowed to even talk -- I get you, you can't book it until that actually happens, but you're not even allowed to kind of verbally or whatever, kind of talk about where you would sit on an accrued basis?

[W. Whitney George, President]

Well, on the equity side, you've got to tell me where the market is going to be and where the equities are going to be. I couldn't -- I wouldn't venture a guess. I'm not sure what is disclosed on our balance sheet in terms of our co-investments and fund sizes. But again, because they're private partnerships, I think we're prohibited from really sharing a lot of information to the public.Do we -- Kevin, do we disclose the size of those products?

[Kevin Lloyd Hibbert, Senior MD, CFO & Co]

We provide the co-investment balances on our financials, but we wouldn't provide the entire broken-out value by particular fund because it's not our assets, right? It's client managed money. So we wouldn't...

[W. Whitney George, President]

Where we describe our products -- we have a description of our products that we break out managed equities, physicals with the individual products and the fee rates in our MD&A, don't we?

[Kevin Lloyd Hibbert, Senior MD, CFO & Co]

Yes. Correct. At a little bit of a higher level, it's grouped by strategy.

[Operator]

Thank you. This concludes the question-and-answer session. I would now like to turn the call back over to Peter Grosskopf for closing remarks.

[Peter F. Grosskopf, CEO & Director]

Okay. Well, thank you, everybody, for joining us on today's call. We appreciate your interest. We look forward to reporting to you at our next quarter. And we hope you have a good weekend.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.