Onex (ONEX) Q2 2024 earnings summary

Executive summary

• Investing capital per share increased 3% in Q2 to $110.35, with an 11% return over the last twelve months and a 13% five-year CAGR.

• Net earnings for Q2 2024 were $168 million, up from $132 million in Q2 2023, and $807 million over the last twelve months.

• Strong fundraising in private equity and credit, with $2.2 billion in new fee-generating capital raised in Q2 and $7 billion raised or extended across the CLO platform year-to-date.

• Major realizations included the sale of Englobe and Wyse Meter Solutions, and agreements to sell PowerSchool and ASM, expected to return significant proceeds.

• Falcon was separated to operate independently, reducing AUM by $3 billion and freeing up $55 million in capital, with Onex retaining a minority interest.

Financial highlights

• Investing capital per share ended Q2 at $110.35, up from $67 five years ago.

• Q2 net earnings per diluted share were $2.19, with distributable earnings of $74 million and $1.4 billion in cash and near-cash at quarter end.

• Private equity portfolio generated a $121 million net gain (2% return) and credit strategies delivered a $17 million net gain (1% return) in Q2.

• Repurchased 880,000 shares in Q2 and 3.9 million shares over the last twelve months.

• Run-rate management fees at quarter end were $179 million.

Outlook and guidance

• Focus remains on disciplined capital allocation, share buybacks, and portfolio optimization.

• No near-term plans for M&A in asset management; organic growth and balance sheet deployment prioritized.

• Significant proceeds expected from pending asset sales in H2 2024.

• Fundraising for larger cap buyout strategy contingent on further DPI and performance milestones.

• Expectation for fundraising environment to improve as LP imbalances normalize.