In fact, since the acquisition through the end of 2023, the dental business has made $650 million in new sales, including $423 million last year. Virtually or most — the vast majority of that $423 million was not on the books as of the end of 2023. So that will be coming on board as we move through the first portions of 2024. In addition, there are significant other sales close to closing. So in balance, when you layer in the disenrollments but also the new sales, we expect the dental revenue to grow in 2024 as compared with 2023.
Paul Holden: Great. And there was a question on SLC, I want to follow up on that and it was regarding inflows versus outflows you gave a little bit of a historical perspective. Hoping maybe you can give us a little bit of a forward outlook there in terms of your expectation for fundraising in 2024?
Stephen Peacher: Yes. Thanks for the question. We’re optimistic as we look at the coming year. I think our total fundraising last year was just over $13 billion. We would — which was lower than we expected when we entered the year last year. We expect it to be meaningfully higher this year for a couple of different reasons. One is looks like the headwind from interest rates, Mike Roberge mentioned in the public markets, hopefully is moderating. But also part of our fundraising in a given year is which funds what do we have on our schedule in terms of fund raises. We’ve got a couple of big fundraisings coming up at Crescent with products where they’re on their fourth or ninth version of the products with a lot of installed investors that we would expect to reinvest.
So that will help us this year. We’ve got a number of funds at BGO that we’re raising money for, et cetera. So we think the environment should be helpful, and we’ve got some big fundraises coming up. So we’re optimistic about the coming year.
Operator: And that will come from the line of Darko Mihelic with RBC Capital Markets.
Darko Mihelic: Hi, thank you. I have two quick modeling questions. Just if you can give an outlook for 2024 for the corporate segment just in terms of sort of an expected sort of loss run rate, that would be very helpful. And my second question is really easy. I’m just looking at your supplemental in Canada and essentially what I’m looking at is the expected earnings on short-term group business, the growth there has been very high. I wonder if you can just give us some reasons for it, maybe an outlook for the growth there in that particular item this line number three in your supplemental on Page one is like the Excel spreadsheet opens. I think you know which lane talking about its exceeded premium growth. And so just wondering how we should be thinking about that specific line item for the Canada business. Thanks.
Manjit Singh: Good morning. Darko, it’s Manjit. So I’ll take the corporate items. So I think on the corporate item, we’ve talked about, on average, that corporate would have a loss of around $100 million. That’s kind of where we’ve been trending. And I think that’s around where we’ll trend for next year .
Jacques Goulet: Darko, it’s Jacques. Yes, sorry. Your question on short-term business. It’s actually predominantly related to premium growth. There can be some volatility in that line, depending on the actual level of sales and in particular, the profitability of those sales and the impact on reserving. So it’s predominantly premium growth. You should expect it to continue.
Darko Mihelic: Okay. But just to be clear, I mean, your premium growth is nowhere close to the growth in this line item. So you’re just suggesting it’s sort of business mix? Is that the better answers or maybe correct my thinking on that.
Jacques Goulet: Yes. It’s more linked to the profitability of those sales, and some of them maybe Kevin Morrissey, do you want to give more detail there?
Kevin Morrissey: Darko, it’s Kevin Morrissey. Maybe just to elaborate a bit. Part of what I’d say the fundamental pieces what’s driving that growth is the size of the business. As Jacques mentioned, there’s also a second piece related to that short-term business under the IFRS 17 accounting if the business is onerous. You do have to reflect a loss upfront, and we do reflect it in that line. So from time to time, some of the business related to the profitability of the business that comes on, you can have some short-term volatility in that line, and we saw a bit of that is explaining the quarter-over-quarter variance there.
Darko Mihelic: Okay. And is that expected to persist? In other words, less owners sales are expected to persist for 2024?
Kevin Morrissey: Yes. I would say that is our outlook. But I think from time to time, depending on the environment and the competition, you may see a bit of volatility there, but the outlook is, I think, in line with what you described, yes.
Operator: And that will come from the line of Lemar Persaud with Cormark.
Lemar Persaud: Yes, thanks for taking my question. I want to kind of come back to the answer on MFS to Mario’s flows question, so maybe for Mike. Is there something special that really drove the move into cash this quarter? I would have thought that rotation would have played out in a bigger way as interest rates are moving much higher, not necessarily in Q4. So could you just help me understand the timing of the outflows? I’m just having a hard time understanding why the pickup and the outflows in Q4 versus, say, earlier on in 2023?
Michael Roberge: Yes, Lemar, if you look at industry data, we saw redemption rates. What we had seen throughout the year, sales rates across the industry were relatively — we’re very low relative to what we see in typical cycles. So sales rates have come down, redemption rates had normalized from 2023, when you had the move down in the markets and then there was a bunch of tax loss selling in the fourth quarter of last year. What we saw happen in the fourth quarter is actually redemption rates spiked for the industry again. So sales rates were low and redemption rates spike. So whether it was clients taking tax loss selling, reallocating to other asset classes, and actually not putting net new money into investment products.
And so it’s not an MFS-specific issue, it’s what we’re seeing happen in the industry. And the firms that we work with the brokerage firms we want to; they’re clearly trying to get their cash off the sidelines as well for their clients. And we’re working with them to begin to get — to hopefully migrate that cash out, but we have yet to see that happen, particularly in the retail channel.
Lemar Persaud: Okay. That’s helpful. And then I just want to come back to an earlier question on real estate and the outlook going forward. So continued normalization in the first half of 2024 and then kind of stabilizing. What interest rate assumption are you baking in there? Are you assuming any cuts? What if we see some cuts into summer and fall, like how do you think real estate evolves?
Randolph Brown: Thank you for the question, Lemar. It’s Randy. What we’ve seen is the stabilization of rates and that’s healthy actually for the real estate market. If you if you look at forward pricing in the bond market, market is expecting Fed cuts. But what you’ve heard signaled from the Fed is higher, longer unless there’s a disaster not in March, then you have an election later in the year. So it creates a fairly narrow window for them to make a big move. So I’m assuming sort of stable rates allows people to readjust. And that’s part one. And part two is the change in valuations, as I talked about earlier, is actually quite healthy for the market because it reduces that bid offer gap and you start to see transactions. And once you start to see transactions, and we are starting to see them, that then puts the real estate into a stronger set of hands, and that’s also positive.
So I don’t think we need rates to drop a lot to start to see some stability. We just have to make sure they don’t rise significantly from here. Our expectation and the expectation of the market is that we’ve probably seen peak rates in that central banks will begin to cut rates at some point here, which will also be supported for real estate valuations.
Operator: And that will come from the line of Nigel D’Souza with Veritas Investment Research.
Nigel D’Souza: Thanks and good morning. A couple of follow-up questions from me. The first on SLC, I believe you had some seed investment invested this quarter. Just wondering if you could post what that was on a post-tax basis, trying to get a sense of the growth in underlying income year-over-year, excluding those gains and perhaps even what your operating margins would be excluded that.
