Onex Corporation

Onex said Convex’s value increased 4% in the quarter and 9% since the acquisition closed, reaching USD 4.2 billion, or CAD 76.83 per share. Onex ended Q2 with total investing capital per share of $123.99, and other investing capital ended at $5.3 billion. Convex generated net income of $169 million in the quarter, with an 85% combined ratio; over the last 12 months, adjusted net income was $719 million versus $520 million a year ago, combined ratio improved to 84% from 94%, and return on average tangible equity rose to 20.3%. Fee-generating AUM was $43.2 billion, up 6% year over year, with run-rate management fees of $211 million. Fee-related earnings were $4 million in the quarter, while structured credit FRE was $19 million. For liquidity, Onex ended the quarter with $287 million of cash and near cash, then reduced the NAV loan to $220 million after quarter end, with $600 million of undrawn revolver capacity and $275 million of unfunded commitments. Management reiterated it remains on track for $35 million of exit run-rate FRE by the end of 2026, assuming a successful first close for Onex Partners VI in Q4.

Bobby LeBlanc framed the quarter as evidence that Onex is executing on a broader strategic reset: shifting capital toward Convex and a small number of other direct investments, using the balance sheet more efficiently, and making the asset management business less capital intensive. He emphasized that the company has already reduced private equity’s share of investing capital from 65% to 46% in six months and expects to resume share repurchases immediately as the NAV loan has come down. His tone was constructive and confident, repeatedly pointing to improved disclosure, stronger intrinsic value, and continued progress on the strategy announced at the time of the Convex deal.

Meg McClellan highlighted that total investing capital per share ended at $123.99 and said, excluding the one-time dilution from AIG shares, investing capital per share was up 6% over the last 12 months. She noted Convex’s value of USD 4.2 billion at quarter-end, based on a 2x price-to-tangible-book multiple, and said the implied price-to-earnings multiple is 9.8x last-12-month adjusted net income. On the asset management side, she pointed to fee-generating AUM of $43.2 billion, run-rate management fees of $211 million, and the view that fundraising momentum should drive more meaningful second-half contribution toward the $35 million exit run-rate FRE target. She also emphasized liquidity, including $287 million of cash and near cash, $600 million of undrawn revolver capacity, and only $275 million of unfunded commitments still in active commitment periods.

Analysts pressed on Convex premium growth in a soft pricing market, and Paul Brand said growth came from a diversified book, with pressure in property offset by better pricing in casualty and political violence/terrorism, while the company stayed focused on profitability rather than launching many new lines. Questions on prior-year development drew a response that Convex reserves conservatively and that the quarter reflected fewer short-tail losses than expected, not necessarily a durable trend. On buybacks, Bobby LeBlanc said repurchases should restart immediately, via the normal course issuer bid and opportunistic blocks. Analysts also asked about PE performance and OP VI fundraising; management said the quarter reflected a few marks lowered to reflect reality, not a broader trend, and that demand for OP VI appears to extend beyond the first close, which they expect later this year.