ONEX Corporation ((TSE:ONEX)) has held its Q2 earnings call. Read on for the main highlights of the call.
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ONEX Corporation’s recent earnings call conveyed a positive sentiment, highlighting significant growth in fee-generating assets under management (AUM) and strong performance in its Credit segment. The company showcased a robust financial position, despite facing minor challenges related to fee-related earnings. Strategic sales and share repurchases further underscored the company’s strength.
Strong Growth in Fee-Generating AUM
ONEX Corporation reported a 16% increase in fee-generating AUM for 2025, driven by substantial contributions from its Structured Credit and Private Equity platforms. This growth underscores the company’s ability to expand its asset base and generate increased revenue streams.
Successful Partial Sale of WestJet
In a strategic move, Onex Partners announced the partial sale of a 25% interest in WestJet. This transaction is expected to return the entirety of its original investment while retaining a 75% ownership stake. The sale was executed at a price more than a 40% premium to the Q1 mark, reflecting the company’s adeptness in capitalizing on market opportunities.
Precision Concepts Sale Success
ONCAP, a subsidiary of ONEX, successfully completed the sale of 80% of its stake in Precision Concepts. This sale returned more than three times ONCAP’s initial investment over a 7.5-year period, demonstrating the company’s strategic investment acumen.
Significant Increase in Unrealized Carried Interest
ONEX Corporation saw a 22% increase in unrealized carried interest across its Private Equity segment, amounting to nearly $60 million since the year’s end. This growth highlights the potential for future earnings as these investments mature.
Credit Segment Expansion
The Credit segment of ONEX experienced significant expansion, with the team raising $4.5 billion in new fee-generating assets and extending another $3.8 billion. Onex Credit is nearing $30 billion in assets under management, showcasing the segment’s robust growth trajectory.
Share Repurchases and Strong Liquidity
ONEX repurchased 1.8 million shares in Q2 and 3.2 million shares since the start of the year, capturing approximately CAD 215 million of hard NAV. The company maintains a strong liquidity position with $1.5 billion, reflecting its commitment to enhancing shareholder value.
Breakeven Fee-Related Earnings
Despite the growth in AUM, ONEX reported a loss of $2 million in total fee-related earnings for Q2, breaking even for the first half of the year. This indicates challenges in converting AUM growth into earnings, an area the company is likely to focus on improving.
Forward-Looking Guidance
ONEX Corporation’s forward-looking guidance remains optimistic, with a reported 4% return in investing capital per share for Q2 and 7% for the first half of the year. The company continues to focus on strategic capital allocation and operational growth, aiming to maintain its position as a top global CLO issuer and expand its fee-related earnings. Notable transactions, such as the partial sale of WestJet and the sale of Precision Concepts, are expected to contribute positively to future performance.
In summary, ONEX Corporation’s earnings call reflects a positive outlook with strong growth in fee-generating AUM and strategic sales. While challenges in fee-related earnings were noted, the company’s robust financial position and strategic initiatives suggest continued strength and potential for future growth.