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AGF Management Limited Reports Second Quarter 2024 Financial Results

June 26, 2024 • Quarterly Reports/Dividends
  • Reported quarterly adjusted diluted earnings per share of $0.35
  • Total assets under management and fee-earning assets of $47.8 billion
  • Declared quarterly dividend per share to 11.5 cents

AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the second quarter ended May 31, 2024.

AGF reported total assets under management and fee-earning assets1 of $47.8 billion compared to $45.0 billion as at February 29, 2024 and $41.2 billion as at May 31, 2023.

"Our solid results reflect the continued strength of our investment performance driven by our disciplined investment approach and bolstered by stronger than anticipated equity market conditions over the past quarter," said Kevin McCreadie, CEO and Chief Investment Officer at AGF. “Our robust performance was complemented by consistent growth across our business lines as conditions turned more supportive and flows showed signs of improvement.”

AGF’s mutual fund gross sales were $934 million for the quarter compared to $914 million in the previous quarter and $819 million in the prior year quarter. Mutual fund net redemptions were $112 million compared to net redemptions of $125 million in the previous quarter and net sales of $77 million in the prior year quarter.

"We continue to make our capabilities available to clients in a range of vehicles, and we're seeing the benefits of this approach in particular as our separately managed accounts business continues to grow rapidly in both the U.S. and Canada," said Judy Goldring, President and Head of Global Distribution, AGF. "Our approach, coupled with our solid investment performance, earned us recognition amongst our peers as we either won or were named a finalist for key industry awards both sides of the border," Goldring added.

Fee-earning assets represents assets in which AGF has carried interest ownership and earns recurring fees but does not have ownership interest in the managers.

 

Key Business Highlights:

  • AGF Global Select ADR Constrained Strategy was recently named the winner in the Global category at the SMArtX 2024 X Awards and AGF U.S. Large Cap Growth Equity Strategy was named a finalist in the Large Cap category.
  • AGF was named a finalist in three key categories at the Wealth Professional Awards: Employer of Choice, Mutual Fund Provider of the Year and Alternative Investment Solutions Provider of the Year.
  • AGF U.S. Market Neutral Anti-Beta Fund (BTAL) was shortlisted for Alternative ETF of the Year at the Mutual Fund & ETF Awards presented by With Intelligence.
  • On June 13, Kensington Capital Partners Limited (KCPL) – one of Canada’s leading alternative asset management firms and a partner of AGF Capital Partners – announced the final close of its $290 million Kensington Venture Fund III, which follows a hybrid approach of direct investments into emerging tech companies and venture capital funds. Earlier this year, AGF completed a strategic investment to acquire a majority interest in KCPL as part of the AGF Capital Partners growth strategy.

 

Financial Highlights:

  • AGF completed the acquisition of KCPL on March 8, 2024 and has consolidated KCPL financial results for the quarter ended May 31, 2024 under AGF Capital Partners.
  • Adjusted EBITDA1 for the three months ended May 31, 2024, was $37.0 million, compared to $49.5 million for the three months ended February 29, 2024 and $43.9 million in the prior year comparative period.
  • Net management, advisory and administration fees1 were $81.2 million for the three months ended May 31, 2024, compared to $74.9 million for the three months ended February 29, 2024 and $75.7 million for the comparative prior year period.
  • Revenue from AGF Capital Partners for the three months ended May 31, 2024, was $12.0 million, compared to $24.4 million for the three months ended February 29, 2024 and $18.0 million for the comparative prior year period. The decrease quarter over quarter and year over year were driven by lower fair value adjustments and distribution income recorded on AGF Capital Partners, partially offset by the consolidation of KCPL financial results. Revenue from AGF Capital Partners can be variable quarter to quarter and can be impacted by fair value adjustments, timing of monetizations and cash distributions as well as changes in foreign currency translation as a portion of the investments are held in USD.
  • Adjusted selling, general and administrative costs1 were $60.0 million for the three months ended May 31, 2024, compared to $53.5 million for the three months ended February 29, 2024 and $51.9 million for the comparative prior year period.
  • Adjusted net income attributable to equity owners was $23.6 million ($0.35 adjusted diluted EPS) for the three months ended May 31, 2024, compared to $33.7 million ($0.51 adjusted diluted EPS) for the three months ended February 29, 2024 and $31.2 million ($0.46 adjusted diluted EPS) for the comparative prior year period.

Three months ended Six months ended
(in millions of Canadian dollars, except per share data) May 31, 2024 February 29, 2024 May 31, 2023 May 31, 2024 May 31, 2023
Revenues
Management, advisory and administration fees $ 116.4 $ 108.6 $ 109.8 $ 225.0 $ 216.6
Trailing commissions and investment advisory fees  (35.2)  (33.7)  (34.1)  (68.9)  (67.9)
Net management, advisory and administration fees1 $ 81.2 $ 74.9 $ 75.7 $ 156.1 $ 148.7
Deferred sales charges  1.9  2.0  2.1  3.9  3.9
Revenue from AGF Capital Partners1  12.0  24.4  18.0  36.4  22.0
Other revenue1  1.9  1.7  —  3.6  1.3
Total net revenue1  97.0  103.0  95.8  200.0  175.9
 
Selling, general and administrative  68.2  57.9  53.0  126.1  106.0
Adjusted selling, general and administrative1  60.0  53.5  51.9  113.5  104.6
EBITDA1  26.6  45.1  42.8  71.7  69.9
Adjusted EBITDA1  37.0  49.5  43.9  86.5  71.3
Net income - equity owners of the Company   18.1  30.5  30.3  48.6  47.9
Adjusted net income - equity owners of the Company   23.6  33.7  31.2  57.3  49.0
Diluted earnings per share   0.27  0.46  0.45  0.73  0.71
Adjusted diluted earnings per share   0.35  0.51  0.46  0.86  0.73
Free Cash Flow1  17.2  17.2  19.8  34.4  39.1
Dividends per share  0.115  0.110  0.110  0.225  0.210

 

(end of period) Three months ended
(in millions of Canadian dollars) May 31, 2024 February 29, 2024 November 30, 2023 August 31, 2023 May 31, 2023
Mutual fund assets under management (AUM)2 $ 26,961 $ 26,186 $ 24,459 $ 24,377 $ 23,631
ETFs and SMA AUM  1,800  1,676  1,465  1,332  1,400
Segregated accounts and sub-advisory AUM  6,313  7,162  6,774  7,058  6,876
Total AGF Investments AUM  35,074  35,024  32,698  32,767  31,907
AGF Private Wealth AUM  8,026  7,836  7,341  7,360  7,162
AGF Capital Partners AUM  2,663  48  46  42  48
Total AUM $ 45,763  $ 42,908 $ 40,085 $ 40,169 $ 39,117
AGF Capital Partners fee-earning assets3  2,081  2,104  2,095  2,090  2,087
Total AUM and fee-earning assets3 $ 47,844 $ 45,012 $ 42,180 $ 42,259 $ 41,204
 
Net mutual fund sales (redemptions)2  (112)  (125)  (224)  (151)  77
Average daily mutual fund AUM2  26,604  25,197  23,840  24,168  24,017

1 Net management, advisory and administration fees, total net revenue, adjusted selling, general and administrative, EBITDA, adjusted EBITDA, and free cash flow are not standardized measures prescribed by IFRS. The Company utilizes non-IFRS measures to assess our overall performance and facilitate a comparison of quarterly and full-year results from period to period. They allow us to assess our investment management business without the impact of non-operational items. These non-IFRS measures may not be comparable with similar measures presented by other companies. These non-IFRS measures and reconciliations to IFRS, where necessary, are included in the Management’s Discussion and Analysis available at www.agf.com.

2 Mutual fund AUM includes retail AUM and institutional client AUM invested in customized series offered within mutual funds.

3 Fee-earning assets represents assets in which AGF has carried interest ownership and earns recurring fees but does not have ownership interest in the managers.

Conference Call

AGF will host a conference call to review its earnings results today at 11 a.m. ET.

The live audio webcast with supporting materials will be available in the Investor Relations section of AGF’s website at www.agf.com or at https://edge.media-server.com/mmc/p/d8ghnmot. Alternatively, the call can be accessed over the phone by registering here or in the Investor Relations section of AGF’s website at www.agf.com, to receive the dial-in numbers and unique PIN.

A complete archive of this discussion along with supporting materials will be available at the same webcast address within 24 hours of the end of the conference call.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. Our companies deliver excellence in investing in the public and private markets through three business lines: AGF Investments, AGF Capital Partners and AGF Private Wealth.

AGF brings a disciplined approach, focused on incorporating sound, responsible and sustainable corporate practices. The firm’s collective investment expertise, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.

Headquartered in Toronto, Canada, AGF has investment operations and client servicing teams on the ground in North America and Europe. With nearly $48 billion in total assets under management and fee-earning assets, AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.

 

AGF Management Limited shareholders, analysts and media, please contact:

Ken Tsang
Chief Financial Officer
416-865-4338, InvestorRelations@agf.com   


Caution Regarding Forward-Looking Statements

This press release includes forward-looking statements about the Company, including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as ‘expects,’ ‘estimates,’ ‘anticipates,’ ‘intends,’ ‘plans,’ ‘believes’ or negative versions thereof and similar expressions, or future or conditional verbs such as ‘may,’ ‘will,’ ‘should,’ ‘would’ and ‘could.’ In addition, any statement that may be made concerning future financial performance (including income, revenues, earnings or growth rates), ongoing business strategies or prospects, fund performance, and possible future action on our part, is also a forward-looking statement. Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations, business prospects, business performance and opportunities. While we consider these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about our operations, economic factors and the financial services industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by us due to, but not limited to, important risk factors such as level of assets under our management, volume of sales and redemptions of our investment products, performance of our investment funds and of our investment managers and advisors, client-driven asset allocation decisions, pipeline, competitive fee levels for investment management products and administration, and competitive dealer compensation levels and cost efficiency in our investment management operations, as well as general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, taxation, changes in government regulations, unexpected judicial or regulatory proceedings, technological changes, cybersecurity, the possible effects of war or terrorist activities, outbreaks of disease or illness that affect local, national or international economies, natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply or other catastrophic events, and our ability to complete strategic transactions and integrate acquisitions, and attract and retain key personnel. We caution that the foregoing list is not exhaustive. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. Other than specifically required by applicable laws, we are under no obligation (and expressly disclaim any such obligation) to update or alter the forward-looking statements, whether as a result of new information, future events or otherwise. For a more complete discussion of the risk factors that may impact actual results, please refer to the ‘Risk Factors and Management of Risk’ section of the 2023 Annual MD&A.

MEDIA
Media Contact

Amanda Marchment
Director, Corporate Communications
Phone: 416-865-4160
Email: amanda.marchment@agf.com

Meaghan Kelly
Chief Marketing & Product Officer
Phone: 416-865-4161