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Good morning, ladies and gentlemen. Thank you for standing by. I'd like to welcome everyone to the Canaccord Genuity Group Inc. Fiscal 2021 Third Quarter Results Conference Call. As a reminder, this conference call is being broadcast live online and recorded. I would now like to turn the call over to Mr. Dan Daviau, President and CEO. Please go ahead, Mr. Daviau.
Thank you, operator, and thanks to everyone joining us for today's call. As always, I'm joined by Don MacFayden, our Chief Financial Officer, and I'm also joined by David Esfandi, the CEO of our wealth management business in the U.K. Following the overview of our third quarter fiscal 2021 results, Don, David and I will be pleased to answer questions from analysts and institutional investors.During today's call, we'll refer to our earnings release and MD&A, copies of which have been made available for download on SEDAR and on the Investor Relations section of our website at cgf.com. Our quarterly investor presentation and supplemental financials are also available on our website. I won't cover the entire presentation during this call, but I will refer to certain slides to guide our discussion.Within our update, certain reported information has been adjusted to exclude significant items in order to provide a transparent and comparative view of our operating performance. These adjusted items are non-IFRS financial measures. Please refer to our notice regarding forward-looking statements, the description of non-IFRS financial measures that appear on Page 1 of our investor presentation and also in our MD&A.I expect that you've all had the opportunity to review our quarterly disclosures that were made available last night in addition to the separate press release to disclose a significant investment in our wealth management business in the U.K. and Crown Dependencies.We are very excited about our partnership with HPS and both the near and longer-term value that this creates for the business and our shareholders. I'll discuss this exciting development in more detail, alongside the results for our wealth management divisions. But first, I'll provide a brief overview of our firm-wide financial performance.As you may have assessed by now, our third quarter results were very strong. Most of our businesses and segments delivered record quarterly results and several of our 9-month fiscal year-to-date results have surpassed our prior fiscal full year records. Our quarterly financial highlights can be viewed in context of our historical performance on Page 9 of our investor presentation.Firm-wide revenue amounted to $533 million, our highest quarterly production on record. This brings our total revenue for the first 9 months of this fiscal year to $1.3 billion, surpassing the record we set in our last fiscal year. Excluding significant items, firm-wide pretax net income amounted to $111 million, which translated to diluted earnings per share of $0.62 for our third fiscal quarter. This brings our fiscal year-to-date diluted EPS to $1.16, up 81% year-over-year.Given our record revenue and our constant focus on operating our business more efficiently, we continue to generate meaningful margin improvement. Excluding significant items, our total expense ratio for the 9-month period was 4.7 percentage points lower year-over-year, while our non-compensation expenses as a percentage of revenue were 9.1 percentages lower than the same period last year. While a portion of this decrease reflects the reduction in travel and entertainment expenses, we've also proven the agility of our platform, which is capable of supporting a significant increase in revenue levels over a relatively fixed cost base.Compensation ratio for the third quarter was 61.7%, but as we previously indicated, it has been trending lower from prior quarters. I'll note that our effective tax rate for the quarter was 31%, a sequential increase of 2.9 percentage points, which primarily reflects the increased profitability earned in our higher tax jurisdictions of the United States and Australia.Our business continues to be capitalized to support our strategic priorities and deliver enhanced value for our shareholders. Subsequent to the end of the quarter, we disclosed that we are seeking consent to amend the terms of our unsecured senior subordinated debentures, which are set to expire in 2023. This proposed change is intended to provide added flexibility with respect to the allocation of our capital resources. We have received preliminary support from holders representing over 55% of the outstanding debentures.I am also pleased to announce that our Board of Directors has approved a quarterly common share dividend of $0.065, our second increase since the beginning of this fiscal year. This is a testament to the stable and growing earnings contributions from our wealth management operations to date, and we expect further increases in connection with the sustainable improvement that this segment is on track to deliver.Our business is performing just as it should, providing our investors with a stable and growing earnings foundation from our wealth management businesses and with significant upside from our capital markets business during periods of market strength. Without a doubt, the extraordinary market opportunity that benefited small and mid-cap industries and investors was an important driver of our revenue and profitability growth in this quarter.But perhaps most importantly, we continue to capture market share across regions and verticals, further enhancing our position as a leading mid-market independent investment bank and wealth management firm in each of our key geographies. Anyone listening to this call will likely be well-versed in the current market dynamics. But at the end of the day, we are a people business, and I continue to be impressed by the relentless dedication from our 2,300 people, who through hard work and dedication have harnessed every opportunity to create value for our clients through this extraordinary period, all while working in a remote environment that we never expected would last this long.Our global capital markets business is up substantially this year and most notably during our third fiscal quarter. Firm-wide capital markets revenues amounted to $349 million for the 3-month period, essentially double the revenue from the same period a year ago. We earned record quarterly contributions from our U.S., Canada and Australian businesses. Excluding significant items, the pretax net income contribution from this segment amounted to $92.5 million for the third quarter, an almost fivefold increase over the same period a year ago.We participated in 187 transactions globally, raising proceeds of $20 billion for growth companies during the 3-month period and further solidifying our position as the most active mid-market investment bank dealer globally.The third quarter also presented an opportunity for us to deliver on a strong pipeline of higher-margin advisory activity, bringing advisory revenue for the 3-month period to $71 million, another all-time record. Our revenue mix was broad-based without concentration in any sector or region. Greater detail can be viewed on Page 24 of the investor presentation.Our U.S. capital markets business was our largest revenue contributor, delivering 46% of firm-wide capital markets revenue and a significant year-over-year gains across all verticals. I'll point out that advisory revenues for the third quarter were the highest on record for this team at $51 million, an increase of 76% year-over-year. This drove a significant increase in our adjusted pretax profit margin for this business, which reached 24% for the third quarter and 17% for fiscal year-to-date. We've also been steadily improving pretax margins in our U.S. business since we expanded our advisory practice with the Petsky Prunier acquisition in 2019.Excluding significant items, our Canadian capital markets business contributed pretax net income of $42 million, amounting to 46% of adjusted pretax net income for our combined capital markets businesses. Total revenue for the 3-month period increased by 152% year-over-year to $121 million, and this team reported its strongest quarterly investment banking revenue on record at $86 million. Our Canadian business continues to be a top-ranked domestic underwriter in the region and was a leading equities and IPO underwriter for the 2020 calendar year.We have also continued to lead in the Canadian SPAC issuance, both as a sponsor and underwriter, providing innovative opportunities for growth companies to access public capital. This was the third consecutive quarter where revenue earned by our Australian team exceeded that of the prior full fiscal year. Third quarter revenue amounted to $46 million, bringing the total for the first 9 months of the fiscal year to $135 million, an improvement of 358% when compared to the same period of the prior fiscal year.As with prior reporting periods, we note that revenue in this region includes unrealized gains in certain inventory and warrant positions earned in respect of our investment banking activity. We always apply a conservative valuation to those investments, and we work to monetize them efficiently. Our U.K. and Europe operations achieved modest profitability in the third fiscal quarter, primarily driven by year-over-year increases in investment banking and trading revenue, which increased by 179% and 44% respectively.The environment in the U.K. has been challenging across the industry, but I'm also proud to say that this team was the most active AIM underwriter for its second consecutive year and continues to show impressive growth in its roster of corporate broking clients. While our U.K. and Europe advisory activities remained below historic levels, revenue from this segment increased by 24% sequentially during the 3-month period.Each of our wealth management businesses delivered excellent results in our third fiscal quarter. At December 31, total client assets reached a new record of $85 billion, an improvement of 17% compared to a year ago, and we are seeing continued growth into the current quarter. Excluding significant items, the 3 and 9 month pretax net income contributions from this segment amounted to $39 million and $90 million, improvements of 110% and 42% respectively.Although the lower interest rate environment continues to negatively impact revenue and profitability associated with our deposit and lending activities, I'll note that the adjusted pretax profit margins in each of our geographies increased over both the 3 and 9-month periods. For our combined wealth management businesses, third quarter adjusted pretax profit margin increased by 7.2 percentage points year-over-year to 21.7%. Our North American wealth management business was the largest contributor over the 3-month period, with quarterly revenue of $93 million and an adjusted pretax net income of $20 million, increases of 102% and 385% respectively, both new records for this business.The robust environment for new issue activities boosted third quarter Investment banking revenue in this business to $37 million, bringing the fiscal year-to-date revenue for the segment to $70 million. At the end of the third fiscal quarter, client assets in this business reached $29 billion, an increase of 40% compared to a year ago. The advantages and opportunities provided by our platform have been consistently evidenced in the growth of this business, which has outpaced the broader industry.This performance has driven increased interest from established IA teams looking to join CG. Accounting for a seasonal break in activity over the holidays, we are pleased to report commitments from advisers representing client assets of over $530 million, who will be joining us from both bank-owned and independent competitors. Client assets in our Australia business increased by 13% year-over-year as CG gains momentum as the premier brand for small and mid-cap investors in the region. Third quarter revenue contributed by this team increased by 59% year-over-year to $18 million.This business has been an increasingly positive contributor of pretax net income since we welcomed the Patersons team in 2019. Excluding significant items, the adjusted pretax net income for the third fiscal quarter amounted to $3.1 million, exceeding the aggregate contribution from all 4 quarterly reporting periods since Patersons joined the CG platform.And finally, turning to our business in the U.K. and Europe, where client assets at the end of the third quarter reached a new record of $51.8 billion. Under David Esfandi's leadership, this business has consistently delivered steady growth and profitability through a range of market environments. Over that period, his team has identified a number of additional opportunities for growth that our own capital allocation objectives have made challenging for us to finance. For this reason, we are very pleased to welcome a significant investment from HPS, which as a partner to help fund the future growth of this business while creating options and flexibilities for us to deploy the proceeds in ways that will continue to benefit our shareholders.On a converted basis, the net cash proceeds from the sale of the convertible preferred shares amounts to CAD 219 million and represents a 22% interest in the U.K. wealth management business. We have provided additional disclosures in the press release, MD&A and on Slide 15 of our investor presentation. The proceeds will be distributed to the group to redeploy our capital in ways that optimize value for our shareholders. The transaction has been structured in a manner that attributes a premium valuation for this asset while minimizing dilution for our existing shareholders.While 78% of the net income contribution from this business will be allocated to group results going forward, we believe this development gives David and his team greater support to advance their growth and deliver steadily increasing net income contributions to our group results. Subject to customary regulatory approvals, we expect to complete this transaction within the first quarter of fiscal 2022.Looking ahead, we are optimistic that each of our wealth management businesses will continue to generate margin improvement over the coming quarters and years, and we will continue to invest with discipline in the growth of this segment to further enhance our earnings potential. We will be opportunistic, yet measured in our approach to capital deployment with a disciplined focus on initiatives that increase the long-term value of our business while upholding our commitment of returning excess capital to our shareholders.In conclusion, our strong quarter and fiscal year-to-date results reflects the resilience of our business and the breadth and quality of earnings that we've been able to achieve. Despite the optimism surrounding the rollout of vaccines, the circumstances surrounding COVID-19 continue to be fluid, and we're continuing to operate our business in a safe and responsible manner for the protection of our employees and communities. Heading into our fourth fiscal quarter, we are operating at near-record activity levels with strong client asset levels, engaged institutional and retail investors and a solid pipeline of ECM and advisory mandates.While we do not expect this level of momentum to persist throughout calendar 2021, several factors point towards the continuance of a supportive marketplace for growth and value stocks in our focus sectors. With our defensive revenue mix and our relentless drive to be the very best in our core focus areas, we are structured to deliver stability in times of stress and increased value when markets are active.And with that, Don, David and I will be pleased to take your questions. Operator, if you can please open the lines.
[Operator Instructions] Your first question comes from Jeff Fenwick of Cormark Securities.
So Dan, obviously, a lot to cover there and a very busy quarter, but why don't we start with your announcement that you were just running through with HPS. Maybe a starting point, can you just characterize who they are a little bit for us? How they're involved here? I assume this is largely passive money, although it looks like they've done a little private equity in the past, but maybe a little more focused on debt investing. So what kind of background can you give us on that HPS relationship and how they'll play with you going forward here?
Yes. I mean thanks for the question. I mean, HPS is the old Highbridge that changed their name. They've been incredibly active as equity investors. It's structured as a pref. But the line between pref debt equity is a pretty blurry line. So they've been very active. They were just -- they were just partnered with [ Apollo ] and buying [ Great Canadian ]. They were one of the early financial sponsors just from a Canadian perspective in GFL. They were the equity behind GFL as it grew. So very active in this market.They've got close to $70 billion in assets. And they like businesses that are stable and growing and that are consolidating, which is exactly the business that David runs. So from our perspective, they were a perfect partner. Structure as a pref gives us added governance flexibility from our perspective in terms of continuing to drive the strategy. So I wouldn't classify them as passive money, but obviously in a structured investment, we've probably got a little bit more flexibility than we would have if somebody was just writing a pure equity check alongside us. So we're very, very happy with the investment, and then also structured this way with a yield, it certainly presents a premium valuation for the asset than perhaps you'd see if it was just stray common.
Okay. And I know you've aspired to grow this unit for -- basically since you picked up Hargreave Hale, you wanted to expand on that, the big foundation you have there. So how should we expect things playing out from here? I assume you have a list of doors to knock on and conversations that maybe you let simmer for a while. I mean, how do we think about this playing out here? And I guess in the context of the market as well, whether has continued to be consolidation while you guys haven't been able to transact.
Sure. I'm going to let David answer the back end of the question, but just on the front end because David -- it will be hard for David to answer this. I mean, in the last 4 years, we've grown our assets in that business. We've doubled our assets in the business. We've doubled our revenue in our U.K. wealth business, and we've tripled our net income in Canadian dollars. So certainly tripled our net income in the last 5 years. David has flawlessly, and he wouldn't say this, I would, about himself, but flawlessly executed. To continue on that pace of activity and that pace of growth, there's other things we need to do. So David, maybe you want to speak a little bit to how you see the business continuing to progress for the next 5 years.
Sure. Thanks, Dan. Just checking that you can hear me. Can you hear me great? Yes. Thanks. So really I think we've had a strong 5 years. I think the challenge for ourselves is to have another stronger 5 years, as Dan said. And I wouldn't solely put that on acquisitive growth. I think we are really focused on our organic strategy and really building out that organic strategy to make this business come even more so than it has been doing and focusing on our culture and people.I say that we do have a competitive advantage in our systems the way that we're set up currently. So clearly there is an opportunity for inorganic growth. But I would say that the emphasis is slightly different. We now have the supportive partner that help us on acquisitions if they are like-minded in terms of our culture, our investment process, et cetera. And we are a more mature business than we were 5 years ago. So I think we know what we want a little bit more.And absolutely, when those opportunities come up, we'll be pretty aggressive about it. I hope that answers your question.
And I think about this business as one where it's different from the Canadian market where you can pick up adviser teams and pull their assets over. So does organic growth here really come from enhanced marketing? Or is there a solution set that you're missing somewhere that would be complementary that you would like to add in, if that's what you're talking about?
Yes, it's -- look, we really -- I was late for this call. I just got a very nice call from a senior investment manager who came from Hargreave Hale. And I'll just share with you a really nice story that makes me very proud actually. He said, David, when you met me, you said I should get into the premier league. He was managing circa GBP 65 million of assets. Now he's managing GBP 120 million of assets, and that's 2 to 3 years in. That makes me very proud. He's got all the tools at his fingertips. He's got a great team, and he's got a really good culture, and he's taken that opportunity.So really this is about the business providing the right foundation, and the science to allow the individuals to continue to grow their books, getting them more efficient and obviously giving them the right marketing and digital marketing capabilities to really get our name out there so they can really maximize their potential going forward. And easy to talk about, much harder to execute.
Okay. That's helpful. And so why don't we talk about Canada then, Dan, as well. I mean, it's been a great success in gathering assets and seeing the profitability grow there as well. Just -- you mentioned you have some commitments for advisers to come over.
Yes.
I mean, your -- the extent of your success that you've had, the financial position of the firm today, the fact you've got a currency now maybe go out and be utilized, would you look to do something more like a platform acquisition potentially down the road here in Canada? Or is the plan to basically stick with that, gather the teams and plug them into the platform?
Yes. I mean, we definitely want to be larger in the wealth business in Canada. There's a number of strategic directions we're looking at as well as our historical path of bringing on advisers. I mean, we're really seeing the benefits in Canada of the marriage between our capital markets business and our wealth business. And you're seeing both businesses grow significantly. You're seeing the same in Australia, to be honest. Unlike the U.K., it's a different business. Those 2 businesses are separate, as you know.So from a Canadian perspective, I mean, we've seen remarkable 50% uptick in our assets. We're at roughly $30 billion now or -- sorry, 50% uptick in our revenue and a 13% uptick in our assets. So -- and yes, there's more advisers coming onboard. We also have a very big back office, as you're aware, a pinnacle offering. So there's a number of different paths we're exploring for growth. Clearly, we're very well capitalized right now. And I think, as you know, Jeff, there's really not a lot of big platform acquisitions out there. There's very few. And obviously we know them all very well.
Okay. Why don't we talk briefly about the other side of that is here in capital markets, I mean, just really strong across the board. One of the standards was advisory in the U.S., obviously really accelerating very nicely. And I know advisory has been just one of those areas that was disrupted early in COVID. So that's coming back. And I guess are you seeing that in other markets is one of the questions here. I mean, Canada has done well on that front. But are you -- how are you feeling about that as maybe an area that maybe the next leg year that will pick up steam?
Yes. I mean, there's record advisory revenue if you just kind of add it up above the firm. It was driven off the U.S., but Canada had a pretty active advisory market too, less so in the U.K. and Australia. It's not one of our strengths. So it would primarily be a North American-driven phenomenon. Yes. And we've gone, again, materially increased our M&A revenue almost doubled from Q2 to Q3. We indicated that that was picking up. We've got pretty good visibility on M&A, just given the pipeline that takes to close a deal. And we continue to feel pretty confident about the broader M&A market.We're in a period where there's good stock prices, good liquidity. That all points to a positive M&A environment. So we continue to be -- think it will be strong for the next quarter or 2 as long as we've got visibility for.
Okay. And then maybe more broadly in terms of capital allocation from here. I've certainly seen your news on your converts and what you're trying to do there. Are you thinking about obviously now further expansion in the U.K.? I mean, what are sort of the priorities for using some of that capital that you're building? I mean, we don't often get these points in the cycle where things are so strong. So is there -- are there some other things on your list here that you're thinking of maybe using that capital for? How do we think about that?
Yes, Jeff, I think I'll be a little elusive at this stage just given what's going on. But -- and bear in mind that our U.K. transaction doesn't close for a couple of months. So it's not like the money is burning a hole in our pocket right now. So we've got some time to think through it and understand what our alternatives are in the context of the market at the time. And then we'll probably have further guidance on the next quarter call in terms of what we're doing.
And clearly the change in the converts you're making, that's sort of one of the front and center things here you're looking to go forward with?
It was simply to create that alternative. It's our option if the converts approve the change, which I suspect will happen. It just creates an option for us. Otherwise, we couldn't have taken out those converts. They were impossible to take out without this change. So it provides -- it's not like we're taking out a super-duper price. We're taking them out of that market. That's the way the amendment is kind of defined and changed. So -- but it does create an alternative for us should we choose to do that.
Okay.
And thanks for the great questions.
Your next question comes from Graham Ryding of TD Securities.
Maybe just keeping on that theme on the converts. I guess what do you need in terms of the investor support? I think you said you have 55% -- is there a hurdle to get over to -- for that amendment to pass-through?
No, we have 55% of the outstanding convert holders that have already agreed to that amendment. They already agreed to vote in favor of that amendment. We have to get to 2/3 of those voting.
2/3. Okay. Perfect. And then if that goes through, is this a situation where you book a charge again? I know the last time you amended your converts, there was a bit of a onetime charge that came through. Will that happen again?
Good question. Don, do you want to answer that? Don, can't hear you. You're on mute.
Sorry. Yes, there will be an accounting charge at the time we -- that would become effective at the time of the debenture holders meeting, and then that would vary over time and be trued up at the time we purchased the debentures if we do -- if we do actually complete a purchase. Part of the charge would go through directly to equity and part of it will go through P&L. But we would treat it as an adjustable item similar to the charge in 2018 or fiscal 2019.
Okay. Understood. Maybe on the advisory side of your business, obviously very strong in the U.S. Is that -- is it right to assume that that's a direct reflection of the Petsky Prunier acquisition and then those type of deals that were driving the higher...
Yes.
Advisory fees this quarter?
Yes. I mean, the line is becoming increasingly blurred between what was Petsky Prunier and what was Canaccord Genuity, as you would expect, 2 years post an acquisition. So probably hard to define that, Graham, exactly. But we do have increased M&A specialization in our core focused areas of technology and in health care. So -- and we spend a lot of time with the private equity folks in the U.S. So there's a -- obviously a very active stable M&A transactions that are kind of progressing through the pipeline. I'd add to that that we probably -- our average fee per M&A deal has probably gone up.In other words, the size of transaction we're doing has probably gone up. So that's an added benefit you'll see in our M&A revenue. So yes, we are clearly in the advisory business in a material way in the U.S. as we are in Canada. And hopefully that will continue to expand.
Got it. How about a little bit just color in calendar Q1 here in terms of activity in terms of Canaccord in Q4? Is that persistent?
You just look -- look at the league tables. You can figure it out there. Yes, it's been an incredibly buoyant January. I mean, I think anyone who's kind of looking at the capital markets can see from a trading perspective immense amount of volatility in the market. That helps us obviously. We've seen an incredible amount of underwriting activity in the first month of the quarter. So yes, I mean, I'm reluctant to be too bullish simply because things can change and things can change very quickly. I think long term, with the liquidity we see in the market, even with short-term pullbacks, we expect the market to recover materially, not forever, but for the time being for the foreseeable future.So really hard to predict beyond a couple of weeks on the new issue business, Graham, but right now, as you can see yourself, I mean, there's an immense amount of activity. There's companies destacking. There's tons of equity underwriting going on in all of our markets right now. But I don't know if that's going to continue from now to the end of March. Our M&A pipeline continues to be robust though.
And are your comments like relative to all your regions, U.S., Australia, Canada?
Yes. I mean, Australia, typically, this would be a quieter quarter in Australia. It's the summer. It's the middle of summer in Australia, and it's their holiday break. So just like Canada, sometimes slows down in the summer, Australia would slow down some time in the winter. But yes, broadly speaking, that comment applies to all our markets.
Okay. Perfect. And just my last question, just on the compensation side. So the ratio was down quarter-over-quarter, which was good to see, but it does sound like there was still some share-based compensation was elevated due to the share price. Is there anything you could quantify as to how much of an impact that had on maybe the compensation ratio in the quarter?
Yes. I think it certainly did have an impact on the compensation ratio over the quarter as we had sort of indicated at the start of this fiscal year. We said that it would -- if share prices sort of continued as they were the start of the year, then it would have an elevated impact during the course of the year, but we would have expected it to sort of decline as we progress through the year. And that was -- that's continued to hold true, and that's what we've seen.It's difficult to quantify precisely exactly what the impact would be. But I think we'd always said that the 60% plus or minus a bit was our sort of normal course comp ratio, and I think that still holds true. So to the extent we're above that, I think you can sort of assume that that's sort of driven by stock-based type charges that are going to be impacted by the level of stock price.
Okay. Understood. That's it from me.
Your next question comes from Rob Goff of Echelon.
And please let me say congratulations both on your results and your new partnership. Very impressive, to say the least.
Thanks, Rob.
We've pretty much gone around the globe, but maybe could we focus a bit on Australia? Can you talk to you how you see that market unfolding? What growth prospects you see within Patersons? And the advisory business has been exceptional in the U.S., you did make mention to that with respect to Australia. Is that an area of growth or investments you might see in Australia?
Yes. I mean our Australia business has obviously performed dramatically higher than what our expectations were. As I mentioned, I mean, in our capital markets side of the business, our revenue in each of the past 3 quarters was higher than what it was in all of last year. So an immensely profitable, great business for us. And remember, we increased our ownership in that business from 50% to 80%, I don't know, 1.5 years ago, 2 years ago. So timing worked obviously very, very well from our perspective. And the partners there are very, very excited.So it continues to be a very good market. Some of it is just obviously a strong mining tape and the strong technology tape, no different than what's happened in other markets, but a big part of it is our improved competitive position in the marketplace, in part because we've been there for a while, and we're getting better and better and in part because we've married it with a very successful wealth business. And the wealth business there, again, I mean, we did $3 million in pretax net income this quarter in our wealth business in Australia. That's a business that we bought for $27 million 1.5 years ago.So obviously that's performing higher than what we expected it to perform. So when you marry the 2 businesses, we've collectively done remarkably well in that marketplace and continue to be very, very excited by the prospects there. That being said, it is a small mid-cap market. And when that tape stops for small and mid-cap stocks, you can't expect that level of activity. We do, as you know, take a lot of our fees there in options and broker warrants. It wasn't a significant element of the revenue this quarter. There were some of it, but 10% of it. But it's always there, and it can always create some volatility in our overall results.So Australia business continues to perform well. We're looking at committing more capital to Australia. We've hired some advisers in Australia. We're trying -- as we've indicated before, we're trying to replicate our strategy that we deployed in Canada on our wealth side in Australia. That's starting to work. And you can see that kind of working in our numbers. I mean, assets are up from -- almost doubled from when we bought that business and revenue is significantly up in our wealth business. It's significantly up in our capital markets business. So we're very excited by the prospect, and it's well integrated into the broader firm at this stage as well.
You mentioned the pipeline of wealth advisers, both in Australia and in Canada. Can you talk to what you're seeing in terms of the terms of getting those advisers onboard? Are there any upwards or downwards pressures on those valuations or upfront loading fees?
Stuart Raftus isn't on the call with us, our Canadian Head of Wealth and our CEO. But if you ask him the question, he would tell you prices are coming down. That being said, we've hired I think 46 teams of advisers in Canada. Believe it or not, I'm not sure it's enough data points to actually look at that graph and say, oh, prices are definitely coming down because each adviser has a different level of profitability and is relatively more or less important. But it's not -- let's put it this way. It's not going up. That I'm pretty sure.
Okay. And I take it with COVID becoming a bit more of the norm people are more comfortable with that and more comfortable in making these moves. That's helping your efforts?
Yes. I'd say it's still delaying them a little bit to be honest. I think in a non-COVID world, we probably see a more active recruiting pipeline. But yes, we're able to get through those COVID issues. We've brought over many advisers who we haven't really met with them until they show up, although lots of Zoom calls and all that kind of stuff. But yes, advisers are still moving even though it's COVID.
And just in general terms, any trends are shifting in your M&A pipeline or underwriting pipeline between the 3 leaders being tech, life sciences and mining?
No. I don't -- no, I don't think so. It's wherever the -- and you guys know this. So -- but it's wherever the risk capital is going. So at one point, we're the dominant underwriter in cannabis. And then we're the dominant underwriter in mining. And then we're the dominant company taking tech companies public. And then it's kind of wherever that risk trade goes. I think it's more about us being very, very active in the risk element of the marketplace. And wherever that goes, we tend to try and be there in a pretty dominant way. So we haven't seen much changing sectorially. I think it'd be hard for me to have a broad-brush approach on that.
Your next question comes from [ Gord Flat ] of Sky Capital.
As one of your previous callers said, congratulations on spectacular results. Those are well played and well done. So I just wanted to acknowledge that. Looking forward and recognizing that none of us can predict the future or we'd all be rich, do you think that the -- we should use this quarter as a scalable and predictable model going forward as we try and value your business? Or would you view this was more of a one-offish? And obviously they'll be bumpy quarters going forward. But how do you actually -- how do you guys actually see platform that you've successfully built being able to adjust through?And you touched on many of the points in your presentation. I was going to touch on the U.K. operations, but I think you did a great -- I think you did a great partnership with that. So I congratulate you for that. But how do you think shareholders should look at -- is this kind of the new basis point as we try and leading shareholders try and figure out what your business is going to produce going forward?
Great question, Gordon. Thanks for your comments and thanks for the question. I would love to say take $0.62 and times it by 4 and tell you we're earning $2.50 a year, but that's not true. So clearly, there's an exceptional element in our capital markets business about the pace of activity, that's probably not replicable quarter after quarter after quarter. That being said, as -- I forget who it was, Rob or somebody asked me, I mean, the environment continues to be robust into this quarter. So I can't say, oh, it's over, and it just happened.I think what I can confidently say is that we've built a business at this stage in the capital markets side that's going to have higher highs and higher lows. So there's going to be volatility in the capital markets business. As I've always said, we can't avoid that. But I do think our competitive position in virtually all of our markets has improved so that the low points of the cycle will be better than they were before. And that's where I'm increasingly confident in how that actually reflects an EPS is a difficult question to predict. But I do feel confident that the business is a better business.Our wealth side of the business is much more predictable. Both David's business, who's on the phone and Stuart's business and our growing Australia business. And again, we've got a pretty aggressive plan on our wealth side to improve our earnings. We put out a plan originally. It's part of our investor presentation that said we're going to get to $80 billion in assets and going to get our margins to 20%. Well, that's what's supposed to happen 1.5 years from now. We're already at $85 billion in assets, and our margins are through 20%.So obviously we've built and ready to share with our investors soon the new wealth plan, which will be -- obviously have much more aggressive targets for the next 3 years. And that's a more predictable earnings. And that's why we've invested what we've invested in our wealth business because we can predict it, we can plan for it, and we can sleep at night, understanding what we're making in that business given the opportunities. But like I said in the prerecorded part of the call, the business is working like it should, good growing wealth earnings and taking advantage of capital markets opportunities as they arise.So I know it's not a perfect answer to your question, Gord, but hopefully, it certainly is the truth.
No, I appreciate that. And yes, capital markets go up and down in terms of what you can access and be. The wealth management business is stable and customers are typically sticky. And...
Yes.
That's a really decent model. So again, I congratulate you guys.
There are no further questions at this time. I will now return the call to Mr. Daviau for closing remarks.
Okay. Well, thanks, everyone, for the questions, and thanks, everyone, for joining us today. Obviously it's an exciting time for our business and our industry. And certainly we look forward to updating you all again in June when we'll release our year-end results and our fourth quarter results. So if there's other questions, please feel free to reach out to us. And operator, we can probably close the lines.
Ladies and gentlemen, this concludes the conference call for today. Thank you for participating.
Thank you.
Please disconnect your lines.
Yes, bye-bye.