Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Sprott Inc's., 2017 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. Instructions will be provided for you at that time for you to queue up for question.

[Operator Instructions] As a reminder, this conference is being recorded today, August 11, 2017. 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 any 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 the 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 Securities Regulators. I will now turn the conference over to Mr.

Peter Grosskopf. Please go ahead, Mr. Grosskopf..

Good morning, everyone and thanks for joining us today. On the call with me today is our Chief Financial Officer, Kevin Hibbart; and Glen Williams our Head of Public Relations. Our 2017 second quarter results were released this morning and are available on our website where you can also find the financial statements and MD&A.

I'll start on Slide 3 with the quick review of our Q2 results. Our assets under management declined by about $400 million during the quarter, due mainly to a pullback in precious metal prices.

Our adjusted base EBITDA was up by $3 million due to both higher commission revenues from our merchant banking and brokers businesses as well as lower compensation accruals and other expenses related to the sale of our Canadian diversified platform.

Our Exchange Listed Products have returned to growth with $100 million in net sales during the quarter. The bulk of the inflows were to our gold-mining equity ETFs, and we can discuss that continued opportunity later. With improving sentiment in precious metal markets, we are now seeing increased volume in our Physical Trusts.

Commission revenues increased by more than 50% during the quarter with contributions coming from both Sprott Capital Partners and our U.S. broker-dealer. Turning now to Slide 4 for a look at some of our year-to-date highlights. During the second quarter, we completed the second close of our Private Resource Lending LP.

Commitments to this strategy now exceed CAD 800 million, all of which will become performance fee earning AUM as it is deployed over the next 18 months. Raising this fund has enabled us to develop strong working relationships with several U.S. and global institutional investors and endowments.

Going forward, we intend to build on these relationships with a continued growth of our lending business as well as the potential introduction of related private equity partnerships.

Sprott Capital Partners continues to exceed expectations participating in more than $700 million in equity financings year-to-date and generating more than $5 million in contribution.

During the quarter, we concluded the final phases of Eric Sprott's succession plan as Eric stepped down from the Board of Directors, and Jack Lee was appointed Chairman of Sprott.

We also completed a successful marketed offering for a portion of Eric's share position, which broadened our investor base and added several marquee institutions to our shareholder base. Both the Sprott employee trust and our senior employees were significant buyers of the offering.

In addition, the offering allowed us to return capital to shareholders through the repurchase and cancellation of 5 million shares. Turning now to Slide 5. The sale of our Canadian retail business marks a key inflection point for our firm.

We have reduced our headcount by more than 50% and 30% of the remaining staff are on variable compensation packages. Our current assets under management stand at $7.1 billion, which includes approximately $800 million in sub-advisory agreements for our precious metal funds.

We are now a streamlined organization focused on delivering superior investment returns and building a global leader in our core natural resource areas. Each of our remaining businesses is engaged in the provision of specialized high-value added investment management or other services in an area where Sprott is a leading global player.

We'll now look to expand our capabilities into complementary real asset areas such as farmland or other resources. On Slide 6, you can see that we have simplified our organizational structure and reduced our headcount. We now have three core business lines and a new leadership team selected from within our organization.

The new team is highlighted on Slide 7. The group has deep experience in both asset management and the natural resource sector and also includes some of our largest individual shareholders.

The team is focused and committed on our strategy and will be completely aligned with shareholders, and that we will all be electing equity-oriented compensation going forward. With that, I'll pass it over to Kevin, for a closer look at our financial results..

Thanks Peter and good morning everyone. I'll start on Slide 8 with a look at our AUM roll forward. AUM as of June 30, 2017 was $9.3 billion down $386 million from March 31, 2017. The decrease was largely due to a decline in precious metals prices in the quarter. But since the quarter end, gold prices have improved materially.

As Peter noted, as part of the sale of our Canadian diversified funds business, we sold approximately $2.9 billion of our alternative asset management, AUM, of which we will continue to sub-advise approximately $783 million. This transaction closed on August 1, 2017 and will see our total AUM decline to approximately $7.1 billion.

However, the profitability of our remaining AUM as far as EBITDA contribution is materially higher than the AUM being exited and the remaining AUM is also more scalable and profitable levels going forward. Moving on to Slide 9, you'll see a breakdown of our second quarter revenues.

Net fees in the quarter were $16.7 million, down $700,000 or 4% from the prior period. The decline in the quarter was due to performance fees earned in the prior period on a seeded fund investment in our alternative asset management business. Net commissions in the quarter were $5.5 million, up $2 million or 55% from the prior period.

Robust placement activity in our new merchant banking business, Sprott Capital Partners, as well as higher deal flow in our U.S. broker-dealer, continues to drive this increasingly material revenue line. Interest income in the quarter was $3.5 million, down $400,000 or 11% from the prior period.

The decline in the quarter was due to the continued wind down of our on-balance sheet loans as we build scale in our Private Resource Lending LP. Turning now to Slide 10 for a look at our expenses, compensation expense, excluding commissions in the quarter was $12 million, down $200,000 or 1% from the prior period.

The decrease was due to lower incentive compensation in our alternative asset management platform as we prepared to exit that platform's Canadian diversified asset management business. SG&A was $6.2 million in the quarter, down $1.7 million or 22% from the prior period.

We continue to see the benefits of our cost-containment program with good cost savings across most of our platforms. In addition, we continued to experience materially lower SG&A in our alternative asset management platform, again, as we prepared to exit that platform's Canadian diversified asset management business.

Placement and referral fee expenses in the quarter were $4.6 million, up $2.9 million from the prior period. These fees were paid in order to acquire clients for the Sprott Private Resources Lending LP. Other expenses in the quarter were $1.5 million, up $1.8 million from the prior period.

The increase was largely due to non-recurring professional fee expenses related to the sale of our Canadian diversified asset management business. Turning now to Slide 11. Adjusted base EBITDA was $8.8 million for the quarter, reflecting an increase of $3 million from the prior period.

Higher adjusted base EBITDA was due to higher net commissions on increased transaction volumes in our brokerage businesses in Canada and the U.S., lower compensation accruals given fewer employees to accrue compensation expenses for as a result of the sale of our Canadian diversified asset management business and lower SG&A, as we continued to see the benefits of our cost-containment program across the organization and through the scale back in investment spend in our Canadian diversified business.

In conclusion, Slide 12 provides a snapshot of our current capital position. We continued to enjoy a strong balance sheet, no debt and $275 million of investable capital at the end of the quarter.

After giving effect to the disposition of our Canadian diversified business our investable capital increased after the quarter to approximately $325 million, our proceeds of disposition from the asset sale in August were partially offset by the cost of our participation in the secondary equity offering.

This explains most of the difference between our initial estimate of post-closing investable capital of $350 million back in April, and our current position of $325 million after the quarter end. I'll now pass it back to Peter..

Thanks, Kevin. We continue to believe that financial markets are long overdue for a correction. With tightening policies in place, a red hot index-fueled market, loaded debt levels and mixed economic growth, we are witnessing an increase in investor interest in what we do from the front lines.

The sale of our Canadian retail business has increased our leverage to this recovery and natural resource sector and interest in it, and in strengthening precious metal prices. With the deployment of capital from our Private Resource Lending LP, we're beginning to rebuild our performance fee book and our leverage to the recovery.

We've deployed approximately $230 million year-to-date and expect full deployment of the $800 million in commitments over the next 18 months. Sprott is recognized globally as a leader in precious metal investing, and our task is now to convert that brand and awareness into client and shareholder growth.

We have opportunities to continue to build scale in our existing strategies such as our exchange-traded funds, while also seeding and launching new strategies in complementary areas. Importantly, gold products themselves are rapidly evolving, and our investment in trade wins gives us exposure to the rapidly emerging digital gold market.

And lastly, on the Slide on balance sheet strategy, Slide 14. During the long resource spare market, we built up a strong balance sheet that allowed us to thrive and continue to pay dividends to our investors, while waiting for rebound in the sector. We're now at a stage where we need to increase deployment of our capital to create shareholder value.

We will do that by investing alongside our clients to seek new strategies and accounts and we'll build recurring revenue managed products and boutique real asset sectors. We will be exploring both tuck-ins and scale acquisition opportunities with a potential to move the needle.

And finally, we will continue to return capital through our shareholders by both share buybacks and dividends. That completes our remarks for today's call. And we'll now open the line for questions.

Operator?.

Thank you. [Operator Instructions] Our first question comes from the line of Graham Ryding of TD Securities. Your line is now open..

Hi, good morning.

First, can you just start on the Central Gold Fund? Any update on that takeover initiative?.

No. The schedule has been set as of this time. So our hearings in Alberta start in September, and we'll see if we can proceed with our proposed arrangement at that time..

Okay. Got it. The $5.4 million, I guess, Kevin, this question is for you. $5.4 million that you added back to sort of get to your adjusted-based EBITDA number.

Can you breakdown the different components of that?.

Sure. So we have a little footnote there, where we talk about all three of those – that the three main components of it. There's transition expenses with regard to certain employees. Mind you, that transition expense is not related to any employees that are going with the new company, as we would not have incurred those expenses.

Those employees essentially the way we've structured it, we see employment offers from the company. So essentially you have like 105 people quitting all at the same time so to speak. So that transition expense number was a portion of it. The large majority of that number is the placement fees.

If you recall, a few quarters back, we mentioned that, when we make the placement fees, and I think, it's about $4.4 million of that $5.4 million. When we make those placement fee payments upfront, it's to acquire clients in the lending LP, which are locked up over a period of time.

The new accounting rules that will be taking effect in January will require that we defer and amortize those. And so to ensure that we are having consistent comparative information at that time, we decided to essentially early adopt that accounting treatment to our EBITDA..

Sorry, go ahead..

Just going to quickly say, Graham, and then the third part is transaction costs related to the sale of the diversified business, and it's about $1 million. And you can see more of that info in Note 6 of the financial statements..

Okay. That’s helpful.

The placement fee and the portion that, I guess, you amortize overtime, does that get captured as an expense against base EBITDA anywhere?.

No, it does not. Only the amortized portion..

That’s right. That's what I mean, the amortized portion. It does get captured as placement....

Correct. So the $4.4 that we would have incurred, what you would see in the EBITDA is the – right now, is the portion that was amortized, correct..

Okay. Perfect. Investable capital, it dropped slightly quarter-over-quarter. I know, it was $18 million in share buybacks.

What else was caused the investable capital to drop quarter-over-quarter?.

So - that was the bulk of it. But we also had timing consideration around the dividend, for example. The dividends are a little over $7 million a quarter. This also – we also had the month of April fall. So we've got to pay the tax man. So there was a few bucks there that we had going up the door for that.

And then, obviously, the placement fee that we touched on earlier, it's an upfront fee. So that would have also been a contributor along with some other movements in and out..

Okay. Got it. Peter, I think you made a reference to Private Resource Lending that you’ve deployed $230 million year-to-date. But it looks to me like on one of your slides, it shows $73 million.

Are you factored in something post-quarter end? Or am I – what am I assuming?.

Yes, factoring in, we had a number of closings that happened during July..

Got it. Okay.

So those will show up as net flows in Q3, net sales?.

Correct..

Okay..

Yes..

And what sort of run rate in terms of deploying that committed capital? What's a reasonable run rate in sort of, I guess, your bandwidth and what you can manage on a quarterly basis?.

Well, I think that the run rate in the strategy that we have currently, is right about what we expected. And you could expect to see roughly $200 million for half year $400 million per year, $800 million over the two years that we will have had it by mid next year.

I think that there is the chance to enhance the strategy for both the clients and ourselves by broadening the base a little bit. In today, there's probably somewhere around $1 billion to $2 billion of total capacity there. And that we have the ability to draw co-investment capital along the way for larger deals.

So I would expect that by the time the $800 million is deployed, call it, mid next year, there's going to be a couple of hundred million of extra co-commitments that have been drawn down..

Okay. And you – that's not your capital.

That's people have already committed your third-party capital?.

Yes, it’s third-party capital that is not yet being managed that you can either drive down through the asset management agreement of the LP, which is an automatic process or on larger deals, you can ask for co-commitments in the same way as a traditional private equity format..

Got it..

But the full commitments are not identified at this stage, its deal independent..

Got it. My last question, you just talked about other products that you could potentially look at. Farmland is one thing you mentioned. At the Sprott Resource Corp. level, I think you've got some experience with One Earth Farms in the past around farmland, I guess.

Any color or context to sort of what you've learned from One Earth Farms that you would be deploying if deploying if you're going to move into farmland?.

Absolutely, The One Earth Farms strategy did not work. That was converted to a completely different format of company afterwards.

What we're looking at now is a completely different style of farmland's management, it's much more akin to the way institutions have participated in the area for a while, which is through ownership and professional management and so completely different. Same theme, same overall non-core related market – non-correlated to the market written profile.

We like the upside of the crop prices. We like the security of the asset area. We're working on something now. We can't talk about it yet, but totally different than One Earth..

Okay. That’s it from me. Thanks..

Thank you. Our next question comes from the line of Gary Ho of Desjardins Capital. Your line is now open..

Thanks. Good morning.

Maybe just to start-off with Peter, what's the outlook for the merchant banking business for the balance of the year? And as well you talked about the other products such as farmland and whatnot, so what's the timing on this potentially?.

Both answers are uncertain. So merchant banking business by nature is lumpy and you can't really forecast when the flows will occur because they're very transaction-driven. And I would say, in general, first of all, it's going better than we thought it would. There's a lot of synergy with the rest of the firm.

The main area for us and the merchant bankers themselves and their clients is when we collaborate on deals in order to win those deals and investing alongside them and other clients, it's all about getting the deals done and getting to the right ideas. And then lastly, it's lumpy.

So we're trying to potentially focus on some bigger deals there, where we can deploy our own capital alongside or that of other funds. And it's just really Earth forecast. The other question, I guess, was on acquisitions. Impossible to know, it's too early a stage..

No, no, it was on the ag and farmland.

Just wondering the timing of the launch of the product?.

Yes, again it's in a tuck-in acquisition format. It's with an existing team in that area. And so it depends on how their negotiations go..

Okay. And then, the other question is going back to Graham's question earlier.

The placement fee, is that more of a onetime or is there a recurring portion of it as well? And should we expect more transition costs related to the second close of the transaction later this year?.

Well, I’m going to answer that question first. So Kevin – sorry, Kevin. It's onetime in that. It hits us on a cash basis, just at one point in time, but it's amortized over the life of the funds..

Correct..

And in terms of the second closing on the transaction, Gary, again, the same answer as before the answer is, no. There will be no material transaction – termination or transition expenses associated with the closing on the SPW side.

Again, the way we structured the deal was effectively that all those people that would be going would be given offers of employment, full-time employment such that there would be no need for a termination expense on our P&L..

Okay. That's helpful. And then, maybe just lastly, I'm sorry, if I missed it in the MD&A.

But what will be the adjusted EBITDA look like? How would that look like this quarter if we removed the Canadian mutual fund assets that were sold?.

Sure. If you're going to be looking at out hard copy of it, just look at Page 15 of the MD&A. We carved out the [indiscernible] assets business from the exchange listed.

And then under the adjusted-based EBITDA line, Gary, we put a footnote that tells you what percentage the Canadian diversified business made up of our EBITDA, and that was 60% for the period and 50% for the comparative period..

Yes. That was 50% for the half year. I was just wondering if you have – is it pretty comparable for the quarter? Because that's what that was for the half year..

Yes. So we don’t give forward looking guidance, as you know. But I think, if you wanted to update your model, do you think what we've disclosed here as in being indicative of what would happen in the back half, I wouldn't think that would be unreasonable..

Okay.

And then, if I had to remove the sale of the second close, what would the impact of that deal? Or is that pretty minimal?.

Not material..

Okay, thanks. That’s it for me..

Thank you. Our next question comes from the line of Nik Priebe of BMO Capital Markets. Your line is now open..

Hi. Good morning, everyone. Just a quick question here with respect to the sale of the Canadian diversified assets. And I'm just wondering about the sub-advised strategy specifically.

Is there anything that would prevent the new entity from internalizing those sub-advised strategies in the future? Like are there any provisions in the sale agreement that would discourage that? Or is it just generally considered that those strategies are more aligned with Sprott's capabilities in precious metals?.

Both. We have contractual protection and as well an alignment with the new asset – our new asset management partners. So both..

Okay.

And will those sub-advised strategies remain subject to historical high watermark provisions for calculating performance fees? Or would there be a bit of a reset with the transaction?.

There is no reset with the transaction. We're exploring ways to make those funds better, but no reset with the transaction..

Okay. Got it.

So I guess, on the performance fee side, would you see more upside from the Private Resource Lending LP then in terms of rebuilding the performance fee outlook?.

Well, we have a couple of things. We have the Resource Lending LP. We've got some performance warrants for Sprott Resource Holdings Inc. We've got performance fees for some separately managed accounts. And I would say, it's a bit of a combination.

But just based on the sheer waiting, the Resource Lending will become the most important, and also the most predictable going forward..

Okay, great. Got it. All right. That’s it for me. Thanks..

Our next question comes from the line of Geoff Kwan of RBC Capital Markets. Your line is now open..

Hi, good morning. Just had one question. You mentioned in the presentation about M&A bolt-ons and maybe something bigger. I'm just kind of curious with the pending separation and kind of going back to your roots.

Does that make it a bit easier to do some transactions? Because sometimes you'll wind up issuing equity and maybe there's more of an appeal to be more aligned with a pure play type asset manager that you're coming back to?.

Yes. So couple of things. First of all, for the gold side, it is true that somebody that appreciates gold is kind of struck on those views, and somebody who doesn’t can usually never be converted to it or it comes very slowly. It's almost like a philosophy.

So from the perspective of doing precious metal small tuck-ins, it's easier because it's now a focus story. Also, it's clear that the better [indiscernible] gold or international not in Canada. So it's also clear that we're dealing with an international opportunity sets.

And then in terms of non-gold strategies, yes, I just thought it was fairly difficult task to talk to a non-asset manager about joining us because of our heavy weighting to gold. So it is going to make things more easy and targeted..

Okay. Great and thank you..

Thank you. Our next question comes from the line of Scott Chan with Canaccord Genuity. Your line is now open..

Good morning. Peter, just perhaps an update just on the U.S.

side with Whitney George and Rick Rule, I just have seen the commentary in the financial statements?.

As you can see, they both joined our Executive Committee. I mean, Rick, was already on our Board. So already had a principal role there. But their businesses are stable. Both of them contributing and stable. And I would say that both of them are somewhat capacity constrained by their structures.

Rick and Whitney are now helping us more outside their own businesses than they are probably inside. I mean, they're helping us with both. And I would say, we still do have a pretty good opportunity to grow these separately managed account business in the U.S. for both of them..

And Kevin, just with the sale of the retail division.

If I look at next quarter and the sub-advisory fees and whatnot, is there still going to be a segment of alternative asset management? Or is it going to be lumped into another segment?.

Good question. Unfortunately, we'll still be required to show it separate from the exchange-traded business. There's specific rules around operating around IFRS 8 and how the OSC interprets that around the Street financial information. So we're going to have to continue doing that going forward..

Okay. Great thanks a lot guys..

Thank you..

Our next question comes from the line of Aram Fuchs of Fertilemind Capital. Your line is now open..

Yes, so a couple of questions for Kevin. Kevin you mentioned you saw this line graph about the comp trend and the SG&A expense ratio.

How do we looking or not looking at specific quarters, but how do we extrapolate going forward to be flat line there? So – or what sort of volatility do we look – do you see going forward in these TWO lines?.

So touching on the compensation trend line, first. I think there's still a little bit more room for improvement there. I think we – year-to-date, right about 37%, if memory serves.

I think it will continue to drop-off for two reasons or one, mainly, which is we still haven't seen the full effects of the drop-off in compensation attributable to the employees that are going with the new company. So you should see a more significant drop in the back half of the year associated with that.

But then going into 2018, it should drop-off even more because now you're going to have 12 full months of that lower run rate level. On the SG&A expense side, I think it's probably safe to say that we'll probably move in and around the 20% to 25% range going forward.

A lot of that's going to have an impact – or sorry, a lot of that is going to be dependent on where our net revenues will be going forward. But a significant and increasing portion of that revenue line is coming from more transaction-based activity as Peter noted earlier. So that could have an impact on what that ratio stays going forward.

So I think maybe between 20% and 25% is about right on the SG&A ratio line and on the comp trend line, I think you could see that drop to closer to 30% going forward..

Okay.

But that's all regarding the structure of the business will be the big influence or that that the retail business is going away and then if Sprott Capital Partners has a good quarter, they get more comps pretty much, right?.

On the compensation line, yes, the SG&A side, there is probably a little bit more room for improvement, but not as much as what you'd see on the comp line, again, to your point driven primarily by the re-org as we exit the all Canadian retail business..

Okay. Okay, and then on the share buyback, you had the EPSP buy 7.5 million shares.

And what should we look like – what should we look at the EPSP buying shares or how much cash will go out the door going forward? It seems like you've bought quite a few shares for the EPSP? Can you talk about how much cash will go out the door on an annual basis going forward for that?.

Yes. So first of all, we basically were pre-buying for five years. So the cash going out the door going forward, which will very much depend on seeing excess profitability. So if we have the excess profitability, we'll buy more shares because we'll pay a little more bonus. But we've sort of covered ourselves mostly off.

And we do have a little bit of leverage in the trust. The trust will repay some of that leverage over time, but it's kind of immaterial. So it's basically been pre-funded..

Yes, and you’ll see what Peter is talking about.

If you look at the cash flow statement under the financing section, you will see the outflow they have about 17 million – I think, it was about 17 million, but we breakout the portion that related to the retirement of 5 million shares versus the portion that went to trust and that's the upfront that Peter is talking about, about 6.6 million, I think..

And just show you know-how the structure works? It's fairly important. If we were to see an events at some point in time, which we had no employees or no employee should be receiving bonuses or compensation, the trustee is able to sell those shares and return them to the company or have the company bid them and repurchase them for cancellation.

So there's no guarantee that employees will receive that. They have to perform to standard and above standard..

Okay, so that's never for salaries, it's always for bonus effective way?.

EPSP.

That’s right..

Okay. And Peter looking at the balance sheet going forward, as you know, we've broken record about share buybacks, and I want you to take all 18 million shares from Eric for the corporation.

But when you look at your different priorities where opportunities, is there a one that that you think you’ll deploy the balance sheet into more than the other with the notion we can see the different sizes are seeded investments outside assets and share buybacks? Is there a one that looks more appealing or is it something more arbitrary?.

No, it's not arbitrary. Definitely, we'll look at outside opportunities against a cost of capital. And if we can't make a cost of capital, we’re not going to pursue them.

And so same thing for share buybacks, we see our shares against operating earnings and we’ll wait those against any internal growth or external growth opportunity according to whether we can make shareholders an excess margin, so it's a very disciplined system. We can’t talk about the normal course issuer bid at this very point in time.

It seems like we've been constantly restricted this year for one reason or another. But I can tell you that there are no immediate large uses of capital that are foreseen and that would kind of string us up moving down one Avenue or another, we see that continued ability to be flexible there..

Okay, great. And then looking at year-to-date, it seems like the things that have moved precious metal equities are the WAM equity balancing and treats from the President of the United States.

And going forward, how are you going to – how is this business as the exchange-traded versus funds evolving? You have that – is the opportunity over on WAM EQ, and what seem to produce this nice inflow as this quarter?.

Well, I don't think the opportunity is over. I think it’s just getting started. What the situation – what GDX showed everybody, I think, is what happens when an index gets too large for its underlying constituency. And it will be interesting to see if that same tipping point is reached in other indexes, including perhaps the entire U.S. market.

But besides that kind of theoretical question, what we're seeing is just the constant ability to engage with clients and to show our solutions right across the spectrum, whether it's ETFs or physicals as being a preferred alternative from a trusted adviser. And we see a continued opportunity to build those assets.

So we know we have standing interest in that and making that fund bigger. It's a little bit of a question of liquidity begets liquidity. So it doesn't just happen all-in-one rush, it kind of happens almost on a larger rhythmic scale, but we're determined to get it on to the right side of that scale..

Okay.

And are the exchange-traded listed business is benefiting from the clients that you got through spot resource lending? Or are they effectively just two different houses right now?.

Well, that process is just starting. I mean, we're really just building a long-term solid institutional constituency now and we've had lots of institutional accounts in the past. But our funds were dating back five or 10 years too volatile in general, because they were too heavily equity loaded.

So for the first time, we're building longer-term clients and sustainable growing businesses there, I think. And the potential to cross-sell those clients between products is only now just starting. And I think it works the other way too, large retail investors or high net worth investors can come into our LP funds as well.

So I mean, we're just kind of getting ahead of steam here after five pretty tough years and it started last year, and I think it's building momentum..

And then, on the placement fees, are those tied – does the placement agent only the client? Or is it just related to the placements into the Resource Lending LP.

In other words, this coinvestment opportunities that you mentioned should we model these out as incurring placement fees? And if you cost out onto your exchange-traded listed funds, how does the economics work there?.

No. So first of all, they certainly don't own the clients. We have the direct client relationship. And secondly, we had some assistance with the Resource Lending LP and I have to say, have great respect for those placement agents. They really know their business, they know their clients, and they serve a very valuable service.

But it's kind of like paying the tax man. We just have to do it and drive on. We have internal sales. For the most part, there's always a costs to a sale. You have to compensate an employee. For the most part, lower levels for internal staff cross-selling opportunities are generally handled in the firm free of charge.

And that placement agent work unless we were to go out and do something like $1 billion new fund, we just don’t need the help anymore..

Okay, great. Thanks a lot. End of Q&A.

Thank you. And that is all the questions we have for today. I’ll now hand the call over to Peter Grosskopf for closing remarks..