AGF Management Ltd (AGFMF) Q3 2024 Earnings Call Transcript Highlights: Strong AUM Growth and ...

GuruFocus Research
5 min read

In This Article:

  • AUM and Fee Earning Assets: $49.7 billion, up 18% year-over-year.

  • Adjusted Diluted EPS: $0.37 for Q3 2024.

  • Short and Long Term Investments: $332 million.

  • Retail Mutual Fund Net Sales: $19 million in Q3 2024.

  • Mutual Fund AUM: $28 billion, up 15% year-over-year.

  • ETF and SMA AUM: Increased 60% year-over-year.

  • Segregated Accounts and Sub-Advisory AUM: Decreased by 9% year-over-year.

  • Private Wealth AUM: $8.2 billion, up 11% year-over-year.

  • AGF Capital Partners AUM and Fee Earning Assets: $4.9 billion, up $2.7 billion from the prior year.

  • Net Income Attributable to Equity Owners: $24.5 million, up $0.9 million from Q2 and $1.6 million from the prior year.

  • Net Revenues (Traditional Asset and Wealth Management): $81.3 million, $3.7 million lower than Q2 but $4.6 million higher than the prior year.

  • Adjusted SG&A: Decreased by $0.4 million from Q2 to Q3 2024.

  • Recurring Manager Earnings: $9.3 million, up due to the acquisition of Kensington.

  • Revenues from Long Term Investments: $7.5 million in Q3 2024.

  • Net Management Fee Yield: 71 basis points in Q3 2024.

  • Free Cash Flows: $94 million on a trailing 12-month basis.

  • Dividends and Share Repurchases: $41 million returned to shareholders in the form of dividends and share repurchases under NCIB.

  • Net Cash: $3 million (cash of $48 million and long-term debt of $45 million).

  • Credit Facility: $105 million remaining, with a maximum of $150 million.

  • Enterprise Value: Approximately $550 million.

Release Date: September 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • AGF Management Ltd (AGFMF) reported an 18% increase in AUM and fee-earning assets, reaching $49.7 billion.

  • Adjusted diluted EPS for the quarter was $0.37.

  • The company declared an 11.5% share dividend for Q3 2024.

  • Mutual fund AUM increased by 15% year-over-year, outpacing the industry growth of 13%.

  • AGF Capital Partners AUM and fee-earning assets rose to $4.9 billion, driven by the Kensington transaction.

Negative Points

  • Segregated accounts and sub-advisory AUM decreased by 9% compared to the prior year due to a redemption from an institutional client.

  • Net management fees were flat compared to Q2, excluding performance fees and timing of certain fund costs.

  • Adjusted SG&A decreased by only $0.4 million from Q2 to Q3 2024.

  • The net management fee yield decreased by 4 basis points from the previous quarter.

  • Performance fees and carried interest can vary significantly due to the subdued private equity market.

Q & A Highlights

Q: Can you clarify how performance fees are recognized and earned at Kensington? A: Performance fees at Kensington are tied to the monetization of underlying investments and distribution of gains to investors. For Q3, a $3.6 million performance fee was recognized, of which AGF shareholders capture about 20% after deducting non-controlling interests and other allocations. (Ken Tsang, CFO)

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