AGF Management Q3 Earnings Call Highlights

Key Points

• AGF delivered solid Q3 results, with adjusted diluted EPS of CAD 0.49, adjusted EBITDA of CAD 49 million and free cash flow of CAD 39 million. Total AUM and fee-earning assets rose 31% year over year to CAD 74 billion, led by growth in mutual funds, ETFs and SMAs.
• Canadian retail mutual-fund net sales remained positive at CAD 92 million for the ninth consecutive quarter, while ETF and SMA net flows more than tripled year over year to CAD 179 million. However, AGF’s equity focus limited mutual-fund growth as industry investors favored fixed-income and balanced products.
• Management expects fee rates to decline another 2–3 basis points as clients shift toward lower-fee products, while long-term investment returns are projected at just 1%–2% in 2026. AGF continues to pursue alternatives acquisitions, monetize legacy investments and return capital through dividends and share repurchases.

AGF Management TSE: AGF.B reported third-quarter 2026 adjusted diluted earnings per share of CAD 0.49, adjusted EBITDA of CAD 49 million and free cash flow of CAD 39 million, as growth in assets under management and retail sales momentum supported results.

Chief Executive Officer Judy Goldring said the company’s assets under management and fee-earning assets totaled CAD 74 billion at quarter-end, up 31% from a year earlier. AGF Investments mutual fund AUM rose 14% year over year to CAD 37.5 billion, while global ETF and separately managed account, or SMA, assets climbed 57% to CAD 5.5 billion.

“Q3 was a solid quarter for AGF,” Goldring said, citing the company’s ninth straight quarter of positive Canadian retail mutual-fund net sales and continued ETF and SMA growth.

Retail flows remain positive as investors favor fixed income

AGF’s Canadian retail mutual funds recorded CAD 92 million of net sales during the quarter. The broader Canadian mutual-fund industry had CAD 18 billion of positive net sales, though Goldring said 70% of industry flows went into fixed-income and balanced funds, while equity funds received 12% of flows.

Goldring said AGF’s equity orientation contributed to more muted mutual-fund flows relative to the industry’s broader fixed-income and balanced-fund demand. However, Canadian ETF and SMA net flows were CAD 179 million, more than triple the prior-year level. During the question-and-answer session, she said mutual-fund flows quarter to date were approximately CAD 48 million and that U.S. SMA flows were also constructive.

AGF Private Wealth AUM increased 7% from a year earlier to CAD 9.7 billion. The company reported that its mutual-fund performance ranked in the 46th percentile over one year, 47th percentile over three years and 44th percentile over five years relative to peers, based on gross returns before fees. About 57% of its funds outperformed peers over the three- and five-year periods.

Segregated accounts and sub-advisory AUM declined 12% year over year. Goldring said the company experienced CAD 650 million of redemptions from an institutional client, including CAD 150 million previously disclosed during the second-quarter call. She said the redemption was tied to an asset-allocation decision rather than investment performance. The company also cited CAD 120 million of institutional-series mutual-fund outflows and said it was not aware of further redemptions currently expected.

Capital Partners expands, while investment values remain uneven

AGF Capital Partners, the company’s multi-boutique alternatives business, ended the quarter with CAD 15.7 billion of AUM and fee-earning assets, including New Holland Capital’s AUM. Head of AGF Capital Partners Ash Lawrence said the company was actively evaluating a select number of potential acquisition opportunities, though timing for transactions remained uncertain.

Lawrence said AGF expects to consider exercising its option to gain a controlling stake in New Holland Capital within one to three years. The company is not currently seeking required limited-partner consents, he said. AGF expects New Holland to move into a fee-related earnings profit position in the next 12 to 24 months, excluding performance fees and carried interest. New Holland has been profitable for several years when including performance fees and carried interest, Lawrence said, while fee-related earnings are currently roughly breakeven.

Kensington Capital Partners added Saar Pekar as president and Bogdan Cenanovic as senior managing director and head of private equity. Both joined Kensington’s executive management committee and investment committees. Goldring said the hires were intended to strengthen the affiliate’s senior leadership team.

Revenue from AGF’s long-term investments was CAD 4 million in the quarter. Lawrence said this included CAD 7.2 million of distribution income and a CAD 3.3 million negative fair-value adjustment, including a CAD 5 million markdown by a legacy venture-capital partner. The venture markdown stemmed from a portfolio company losing its key client, he said.

Lawrence said AGF expects total 2026 returns on its long-term investment portfolio to be in the 1% to 2% range. The company has generated approximately 11% annual returns on those investments since inception, but now expects returns of 6% to 8% over the next one to five years as legacy assets mature. AGF continues to target long-term returns of 8% to 10% as it broadens the portfolio across current and future affiliates.

The company expects to monetize a material share of long-term investments over the next one to five years, using proceeds to support new affiliate investments and to diversify the portfolio. Lawrence noted that AGF does not control the timing of realizations in certain legacy investments because it is not the general partner.

Management fees rise; fee rate expected to decline

Chief Financial Officer Ken Tsang said adjusted EBITDA declined CAD 15 million sequentially, primarily because the second quarter included a CAD 15 million gain from the New Holland Capital transaction. Adjusted EBITDA increased CAD 3 million from a year earlier, supported by higher net revenue.

Net management fees from AGF Investments and AGF Private Wealth were CAD 101 million, increasing CAD 4 million sequentially and CAD 12 million year over year, driven by higher average AUM. SG&A expense was CAD 64 million, up CAD 1 million from the previous quarter and CAD 2 million from the prior year.

AGF’s net management fee rate was 67 basis points, down one basis point from the second quarter and the trailing 12-month period. Tsang said management expects a further 2- to 3-basis-point decline as clients increasingly use ETFs, SMAs and lower-fee F-series mutual funds.

Tsang said the lower fee rate should be partly offset by the relatively low marginal cost of SMA growth. EBITDA yield was 26 basis points for the quarter, compared with 25 basis points over the trailing 12 months.

Capital returns and balance sheet

AGF ended the quarter with CAD 432 million in short- and long-term investments, net debt of CAD 28 million and CAD 170 million available under its CAD 250 million credit facility. Trailing 12-month free cash flow was CAD 143 million.

Over the trailing 12 months, AGF returned CAD 56 million to shareholders through CAD 31 million in dividends and CAD 25 million in share repurchases. The company repurchased more than 600,000 shares during the quarter and 2.2 million shares year to date under its normal course issuer bid, compared with 1.5 million shares in the prior-year period.

Goldring said AGF intends to balance dividends, buybacks and investment in growth while maintaining flexibility to navigate changing market conditions.

About AGF Management (TSE:AGF.B)

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.

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