Power Co. of Canada (TSE:POW) reported a 12% increase in third-quarter adjusted net earnings as its Great West and IGM businesses contributed higher earnings, while a financing round lifted the value of the group’s Wealthsimple investment.
Adjusted net earnings rose to CAD 964 million, or CAD 1.53 per share, up 13% per share from a year earlier, CFO Jake Lawrence said on the company’s November 12 earnings call. Net asset value per share climbed 57% year over year to CAD 113.28 at quarter end.
CEO James O’Sullivan said the company’s discount to net asset value had narrowed to roughly 20%, but management sees room for further improvement. Power is seeking to increase earnings and asset value through active ownership, simplification and capital returns, he said.
Great West and IGM Drive Earnings Growth
Great West contributed CAD 905 million to Power’s adjusted net earnings, up 7% from a year earlier, Lawrence said. He attributed the growth to earnings at Empower and the Capital and Risk Solutions business. Great West reported base earnings per share of CAD 1.48, up 11%, and a record base return on equity of 19.4%.
At Empower, base earnings rose 15% on a constant-currency basis. Its retirement services business ended the quarter with $2.15 trillion in client assets, while Empower Wealth’s base earnings increased 28% year over year, Lawrence said.
IGM’s contribution to Power’s adjusted net earnings rose 21% to CAD 227 million. IGM reported adjusted earnings per share of CAD 1.51, up 19%, and assets under management and advisement, including strategic investments, of CAD 645.6 billion, up 15%.
IGM increased its interest in Northleaf to approximately 61% during the quarter, Lawrence said, and now consolidates its results in IGM’s asset management segment.
Wealthsimple Valuation Rises
Wealthsimple announced a financing round of up to CAD 425 million on October 27, including a CAD 300 million primary offering. The Power group’s collective interest in Wealthsimple was valued at CAD 5 billion net of carried interest, up 13% from the prior quarter, Lawrence said.
That valuation included CAD 2.9 billion at IGM and CAD 1.9 billion at Power. Wealthsimple’s assets under administration rose to CAD 170 billion from CAD 155 billion in the prior quarter, supported by approximately CAD 11 billion in net flows. The company added 200,000 clients and served approximately 4 million Canadians, Lawrence said.
The higher valuation also affected earnings. Lawrence said Sagard’s results were impacted by carried interest expense related to Wealthsimple’s increased value, as well as an investment loss. He told analysts that the expense could not be adjusted differently under the accounting treatment and that disclosure of the expense and valuation increase was the best way to help investors assess the impact.
Simplification and Buybacks Remain Priorities
Power returned CAD 2.4 billion to shareholders through dividends and buybacks in the first nine months of 2026, compared with CAD 1.5 billion in the same period a year earlier. Lawrence said Power had CAD 1.9 billion in cash and cash equivalents at quarter end, with CAD 1.6 billion available after accounting for certain dividends to be received and paid.
O’Sullivan said the level of Power’s buybacks would be influenced by its net asset value discount. Asked where he thought fair value might lie, he said he would probably speak less about the discount if it were 10%, but felt obliged to focus on closing it while it remained above that level.
Lawrence said Power’s participation in Great West’s buyback had returned more than CAD 1 billion to Power this year, helping accelerate its own repurchases. He said investors modeling 2027 could start with the company’s base buyback activity in recent years and take guidance from its discussions about the Great West program.
O’Sullivan said Power was not currently participating in IGM’s buyback because he would like to own more of the company, although that position was not necessarily permanent. Lawrence said Power’s intention to participate in Great West’s buyback had not changed, subject to filing again when its current program expires.
Asked about consolidating Wealthsimple ownership in one place, O’Sullivan called it a potential simplification opportunity but said it would require a willing buyer and seller, sensible financing and shareholder-friendly effects. He also identified cross-holdings in Great West and IGM, as well as multiple alternative and traditional asset management businesses, as areas the company could consider.
Alternative Platforms Focus on Scale
Power’s alternative asset management platforms had CAD 71.4 billion in assets under management at quarter end. Sagard raised approximately CAD 1.4 billion during the quarter, bringing its year-to-date total close to CAD 4 billion, Lawrence said.
O’Sullivan said Sagard is focused on sustaining fee-related earnings profitability and growing margins after increasing its asset base. He expects progress in 2027 and said the business has a goal of $100 billion in assets over the next several years.
Lawrence cautioned that fee-related earnings could remain volatile despite two positive quarters, citing challenging fundraising conditions and difficulties deploying and monetizing capital amid interest-rate volatility.
About Power Co. of Canada (TSE:POW)
Power Corporation is an international management and holding company that focuses on financial services in North America, Europe and Asia. Its core holdings are leading insurance, retirement, wealth management and investment businesses, including a portfolio of alternative asset investment platforms.
