AGF Management Limited Reports First Quarter 2024 Financial Results
TORONTO, April 04, 2024 (GLOBE NEWSWIRE) -
- Reported quarterly adjusted diluted earnings per share of $0.51
- Total assets under management and fee-earning assets of $45.0 billion
- Increased quarterly dividend per share to 11.5 cents
AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the first quarter ended February 29, 2024.
AGF reported total assets under management and fee-earning assets1 of $45.0 billion compared to $42.2 billion as at November 30, 2023 and $41.9 billion as at February 28, 2023.
“Our solid results this quarter reflect our long-term efforts to diversify our business,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. “This quarter we made further progress with notable strategic investments laying the foundation for continued long-term growth, including the growth of AGF Capital Partners, our diversified alternatives business.”
AGF’s mutual fund gross sales were $914 million for the quarter compared to $687 million in the previous quarter and $982 million in the prior year quarter. Mutual fund net redemptions were $125 million compared to net redemption of $224 million in the previous quarter and net sales of $221 million in the prior year quarter.
“While the challenging market environment has weighed on industry and AGF flows, net flows improved during the quarter due to seasonality. We continue to take a long-term approach to increasing our penetration in high growth distribution channels by diversifying our capabilities and offerings.” said Judy Goldring, President and Head of Global Distribution, AGF.
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1 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 made a strategic investment in New Holland Capital, LLC (NHC), a New York based multi-strategy investment manager with more than US$5 billion in assets under management and more than 17 years of experience providing institutional investors with absolute return investment strategies across the liquidity spectrum. This transaction further grows AGF Capital Partners, AGF’s alternatives business with the addition of absolute return-focused strategies and specialized credit investment capabilities.
- On March 8th, AGF announced the closing of the previously announced strategic investment to acquire a majority interest in Kensington AGF Capital Partners Limited, one of Canada’s leading alternative investment firms with $2.6 billion of assets under management, as part of AGF’s strategic imperative to grow its alternatives business, AGF Capital Partners.
- AGF announced the appointment of Laura Dottori-Attanasio to the AGF Board of Directors effective April 3, 2024. Ms. Dottori-Attanasio is a renowned business leader with deep expertise in the financial sector and a track record of success across industries. This appointment further enhances and diversifies AGF’s independent directors’ collective experience and expertise.
- In February, AGF Investments Inc. broadened its Canadian ETF offerings with the launch of ETF Series on long-running funds in key areas of focus for investors, including alternative assets and active fixed income. This launch builds on AGF Investments Inc’s commitment to provide investors with options to access capabilities in their preferred vehicles.
- AGF Investments Inc. was recognized with FundGrade A+® Awards for AGF American Growth Fund/Class, AGF Global Select Fund, AGF Fixed Income Plus Fund and AGF Global Convertible Bond Fund.*
Financial Highlights:
- Adjusted EBITDA1 for the three months ended February 29, 2024, was $49.5 million, compared to $27.6 million for the three months ended November 30, 2023 and $27.3 million in the prior year comparative period. Results were adjusted for severance, corporate development and acquisition related expenses of $4.4 million for the three months ended February 29, 2024, compared to $2.2 million for the three months ended November 30, 2023 and $0.2 million in the comparative prior year period.
- Net management, advisory and administration fees1 were $74.9 million for the three months ended February 29, 2024, compared to $72.0 million for the three months ended November 30, 2023 and $73.0 million for the comparative prior year period.
- Revenue from AGF Capital Partners1 for the three months ended February 29, 2024, was $24.4 million, compared to $3.9 million for the three months ended November 30, 2023 and $4.0 million for the comparative prior year period. The increase quarter over quarter and year over year was driven by higher fair value adjustments and distribution income recorded on AGF’s Capital Partners long-term investments. AGF's Capital Partners long-term investments 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 $53.5 million for the three months ended February 29, 2024, compared to $50.7 million for the three months ended November 30, 2023 and $52.8 million for the comparative prior year period.
- Adjusted net income was $33.7 million ($0.51 adjusted diluted EPS) for the three months ended February 29, 2024, compared to $18.5 million ($0.28 adjusted diluted EPS) for the three months ended November 30, 2023 and $17.8 million ($0.27 adjusted diluted EPS) for the comparative prior year period.
| Three months ended | |||||||||
| February 29, | November 30, | February 28, | |||||||
| (in millions of Canadian dollars, except per share data) | 2024 | 2023 | 2023 | ||||||
| Revenues | |||||||||
| Management, advisory and administration fees | $ | 108.6 | $ | 104.2 | $ | 106.8 | |||
| Trailing commissions and investment advisory fees | (33.7) | (32.2) | (33.8) | ||||||
| Net management, advisory and administration fees1 | $ | 74.9 | $ | 72.0 | $ | 73.0 | |||
| Deferred sales charges | 2.0 | 1.9 | 1.8 | ||||||
| Revenue from AGF Capital Partners1 | 24.4 | 3.9 | 4.0 | ||||||
| Other revenue1 | 1.7 | 0.5 | 1.3 | ||||||
| Total net revenue1 | 103.0 | 78.3 | 80.1 | ||||||
| Selling, general and administrative | 57.9 | 52.9 | 53.0 | ||||||
| Adjusted selling, general and administrative1 | 53.5 | 50.7 | 52.8 | ||||||
| EBITDA1 | 45.1 | 25.4 | 27.1 | ||||||
| Adjusted EBITDA1 | 49.5 | 27.6 | 27.3 | ||||||
| Net income | 30.5 | 16.8 | 17.6 | ||||||
| Adjusted net income | 33.7 | 18.5 | 17.8 | ||||||
| Diluted earnings per share | 0.46 | 0.25 | 0.26 | ||||||
| Adjusted diluted earnings per share | 0.51 | 0.28 | 0.27 | ||||||
| Free cash flow1 | 17.2 | 18.3 | 19.3 | ||||||
| Dividends per share | 0.11 | 0.11 | 0.10 | ||||||
| (end of period) | Three months ended | ||||||||
| February 29, | November 30, | February 28, | |||||||
| (in millions of Canadian dollars) | 2024 | 2023 | 2023 | ||||||
| Mutual fund assets under management (AUM)2 | $ | 26,186 | $ | 24,459 | $ | 24,029 | |||
| ETFs and SMA AUM | 1,676 | 1,465 | 1,394 | ||||||
| Segregated accounts and sub-advisory AUM | 7,162 | 6,774 | 7,045 | ||||||
| Total AGF Investments AUM | 35,024 | 32,698 | 32,468 | ||||||
| AGF Private Wealth AUM | 7,836 | 7,341 | 7,324 | ||||||
| AGF Capital Partners AUM | 48 | 46 | 54 | ||||||
| Total AUM | $ | 42,908 | $ | 40,085 | $ | 39,846 | |||
| AGF Capital Partners fee-earning assets3 | 2,104 | 2,095 | 2,082 | ||||||
| Total AUM and fee-earning assets3 | $ | 45,012 | $ | 42,180 | $ | 41,928 | |||
| Net mutual fund sales (redemptions)2 | (125) | (224) | 221 | ||||||
| Average daily mutual fund AUM2 | 25,197 | 23,840 | 23,782 | ||||||
| 1 | Net management, advisory and administration fees, revenue from AGF Capital Partners, other revenue, 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. |
For further information and detailed financial statements for the first quarter ended February 29, 2024, including Management’s Discussion and Analysis, which contains discussions of non-IFRS measures, please refer to AGF’s website at www.agf.com under ‘About AGF’ and ‘Investor Relations’ and at www.sedarplus.com.
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/avwkx8wd/. 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 $49 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.
About AGF Investments
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). The term AGF Investments may refer to one or more of these subsidiaries or to all of them jointly. This term is used for convenience and does not precisely describe any of the separate companies, each of which manages its own affairs. AGF Investments entities only provide investment advisory services or offers investment funds in the jurisdiction where such firm and/or product is registered or authorized to provide such services.
Commissions, trailing commissions, management fees and expenses all may be associated with investment fund investments. Please read the prospectus before investing. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated.
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.
FundGrade A+® Awards:
FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.
AGF American Growth Class won in the U.S. Equity CIFSC Category, out of 794 funds. The FundGrade A+ start date was 1/31/2014 and the FundGrade A+ end date was 12/31/2023.
AGF American Growth Fund won in the U.S. Equity CIFSC Category, out of 794 funds. The FundGrade A+ start date was 1/31/2014 and the FundGrade A+ end date was 12/31/2023.
AGF Fixed Income Plus Fund won in the Canadian Fixed Income CIFSC Category, out of 311 funds. The FundGrade A+ start date was 1/31/2014 and the FundGrade A+ end date was 12/31/2023.
AGF Global Convertible Bond Fund won in the High Yield Fixed Income CIFSC Category, out of 161 funds. The FundGrade A+ start date was 1/31/2016 and the FundGrade A+ end date was 12/31/2023.
AGF Global Select Fund won in the Global Equity CIFSC Category, out of 1095 funds. The FundGrade A+ start date was 1/31/2014 and the FundGrade A+ end date was 12/31/2023.