Our balance sheet and capital position remain strong. This provides us financial flexibility to support attractive organic and inorganic business opportunities, return capital to shareholders and maintain resilience to absorb potential impacts from volatile market conditions. SLF LICAT of 149% increased two points from the prior quarter, primarily driven by strong organic capital generation. Total capital generation in the quarter before payment of dividends was just over $1 billion, reflecting good business results and favorable capital impacts from lower interest rates. Book value per share increased 2% quarter-over-quarter, holdco cash remained strong at $1.6 billion, and our leverage ratio remains low at 21.5%. Now let’s turn to our business group performance, starting on Slide 11 with MFS.
MFS net underlying income of US$ 191 million was down $11 million or 5% from the prior year, reflecting higher expenses, partially offset by higher A&A and increased investment income. Reported net income of US$ 183 million was down 18% year-over-year, driven by the fair value changes in shares owned by MFS management. Pre-tax net operating margin of 39% remained resilient. AUM US$ 599 billion was up $43 billion from the prior quarter, driven by market appreciation, partially offset by net outflows of $11.2 billion. MFS investment performance was strong. Over 95% of fund assets ranked in the top half of their respective Morningstar categories for both five and 10-year performance. Short-term performance was impacted by the significant outperformance of a small group of equities relative to MFS’s broader core and growth-oriented strategies.
Turning to Slide 12. SLC Management generated underlying net income of $70 million, up from $48 million last year, driven by higher fee-related earnings and higher seed investment income. Fee-related earnings of $92 million were up 26% year-over-year. The increase reflects strong capital raising and deployment of capital into fee-earning AUM over the past year as well as the AAM acquisition. Reported net income was $47 million, up $29 million year-over-year, largely due to growth in underlying earnings. Capital raising of $5.5 billion increased over the prior quarter, driven by demand for public debt at SLC fixed income and strong fundraising at BGO. For the full year, SLC Management raised $13.1 billion of capital. Total AUM of $223 billion was up $13 million from the prior year.
Turning to Slide 13. Canada, underlying net income of $350 million was driven by strong growth across all businesses. Reported net income of $348 million was in line with underlying earnings as unfavorable market-related impacts and acquisition-related expenses were largely offset by favorable ACMA. Wealth and Asset Management underlying earnings were up 28% year-over-year on increased investment income from higher volumes and yields. Group Health and Protection underlying earnings increased 56% year-over-year, reflecting business growth and improved disability experience driven by higher margins, lower claims volumes and shorter claim durations. Individual Protection earnings were up 9% year-over-year and higher investment earnings, partially offset by unfavorable mortality experience.
Both group and individual protection businesses posted strong sales growth. Group sales were up 63% in higher large case sales while individual sales were up 23% due to higher par life sales. Turning to Slide 14. U.S. underlying net income of US$ 187 million was up 8% from last year. Reported net income of US$ 77 million includes unfavorable ACMA negative market-related impacts and acquisition-related expenses. Group Health and production underlying earnings were down from the prior year, driven by lower dental results, partially offset by growth in Group Benefit earnings. Our Group Benefit businesses benefited from strong revenue growth, driven by good sales and disciplined pricing, higher investment returns and improved mortality experience, partially offset by less favorable morbidity experience compared to the prior year.
U.S. morbidity experience in the quarter remained favorable in stop-loss and group disability, partially offset by unfavorable dental experience. U.S. Group sales of $932 million were up 4% year-over-year, driven by strong stop-loss sales. We are pleased with this performance during this important part of our annual sales cycle. Lower dental results were driven by the impact of Medicaid redeterminations on member count, which drove lower dental premiums and higher loss ratios. Looking forward, we expect the added revenue from 2023 sales as well as our current sales pipelines to more than offset the impacts from the Medicaid redetermination process, driving good dental revenue and earnings growth in 2024. Individual protection results increased year-over-year, reflecting the inclusion of our legacy U.K. business and better mortality experience.
Slide 15 outlines Asia’s results for the quarter. Underlying net income of $143 million was up 5% year-over-year on a constant currency basis. Normalizing for the impact of insurance experience, Asia’s results were in line with the prior quarter, reflecting good core business fundamentals. Reported net income of $44 million includes unfavorable market impacts, partially offset by favorable tax benefits. We continue to see good sales momentum in Hong Kong with sales up 4x year-over-year and high net worth, where sales grew 88%. The strong sales results also drove new business CSM of $223 million, up 82% from the prior year. Overall, we closed the year on a high note. We delivered year-over-year underlying earnings growth of 10%, generated peer-leading underlying ROE of 18.4%.
We maintained an excellent capital position, had strong sales momentum in both our individual protection and group health and protection businesses and our asset management businesses were resilient, delivering steady contribution in a challenging environment. Looking ahead, we are optimistic that our strong fundamentals and focus on execution will help carry our strong performance into the new year. In closing, as Kevin noted, this will be my last call as CFO. I’d like to thank my finance team for all their tremendous support over the past 3 years in my tenure as CFO. I would also like to thank our investors and analysts for your thoughtful engagement. Now I’ll turn the call over to David for Q&A.
David Garg: Thank you, Manjit. To help ensure that all our participants have an opportunity to ask questions this morning, please limit yourself to one or two questions and then requeue without any additional questions. I will now ask the operator to poll the participants.
Operator: [Operator Instructions] That will come from the line of Meny Grauman with Scotiabank.
Meny Grauman : Hi, good morning. I wanted to ask about the impact of real estate this quarter and just see whether the impact was concentrated in any particular geography or property?
Randolph Brown: Meny, thank you for the question. It’s Randy Brown. The decrease in the valuation in real estate, I would say it’s primarily office and worse in the U.S. than other areas. And what we’re seeing is actually pretty healthy for the market because we’re getting the difference between buyers and sellers with these valuation write-downs, closing that gap, which is leading to the beginning of actually a functioning market again because we had seen a dearth of activity and you need that activity to get the market back to balance. So I would say primarily office and primarily U.S., but it was also in Canada as well. Additionally, as we talked about in priors, we are seeing revaluation in things like industrial and multifamily as well, simply a delayed response to the increase in interest rates. So we’ve seen the underlying metrics change and adjust in this was something that had been signaled broadly in the real estate markets.
Meny Grauman : And then just as a follow-up, I mean, it looks like the drag is getting bigger. So I’m wondering — I think you touched on it, but just if you could provide maybe some outlook or guidance in terms of how reasonable is it to assume that those impacts have peaked for you? Maybe start there if you get some thoughts on that because it definitely looks like it’s — the impact is getting bigger quarter-to-quarter here in terms of the drag.
Randolph Brown: Sure. Thank you. The expectation is you saw the very rapid increase in interest rates that really peaked in the summer. And so the decrease in valuations in Q3 and Q4 as a result of the increase in rates is quite logical. The expectation is that real estate prices will continue to normalize for the first half of 2024 and then stabilize. But I do want to remind people we are long-term holder; our typical hold period is 10 to 20 years in their portfolio. We’re a cash buyer. So we have absolutely no pressure to sell so we can weather situations like this and actually benefit from them because it gives us opportunities to go into the market and buy things that what we think could be really attractive long-term values.
As Manjit said, we have outperformed our long-term expectations over the last decade. So it’s an asset class that is important to our big global diversified asset holding, high quality. It has a place in it. It’s performing well over the long run, and we think it’s — it will continue to do so.
Meny Grauman : So just to follow up on that. In terms of your outlook for office — U.S. office specifically, like have you made a determination in your view, the valuation pressure is temporary and it’s not let’s say, structural. Is that something that you’re kind of willing to say like that’s what we believe here? So just thoughts on how structural the revaluation is specifically for maybe the hardest hit property types that you hold?
Randolph Brown: Yes. The office sector in particular, I think it’s a bit structural for a while as a result of the change in working dynamics work from the office or work from home, changed during COVID. We are seeing a gradual return to office across the industry, but I don’t think we ever get back to first five days a week in the office across all sectors that would populate office space. So I think that piece of it is what I would call temporary structural. But over time, the economy is growing and demand for office space will rise. And so you need to have that transfer from trained holders who may need less space to new holders that are growing. So if you take an intermediate to long-term view on office, we think there will be opportunities actually to do quite well in office, but not yet.
