AGF Management Ltd. (TSX: AGF.B) reported adjusted diluted earnings per share of $0.49 for its fiscal third quarter, falling short of consensus estimates of $0.5768 and marking roughly a 15% miss.
Total adjusted net revenue came in at $112.5 million, nearly 30.5% below the $161.86 million forecast, as fee-rate compression from rising sales of lower-cost F-series mutual funds and separate-managed accounts pressed on margins. Adjusted EBITDA was $48.8 million, down 24% sequentially but up 6% year-over-year, with the adjusted margin at 43.4%, down from 50.6% in the prior quarter.
Despite the profit miss, assets under management grew sharply. Fee-earning AUM reached $74.2 billion, a 31% increase from a year earlier, fueled in part by a 238% surge in AGF Capital Partners' alternative strategies platform to $15.7 billion across absolute return, venture capital, private credit, private equity and other fee-related holdings. AGF Investments mutual fund assets climbed 14% to $37.5 billion, while ETF and SMA assets jumped 57% to $5.5 billion.
Canadian retail mutual fund net sales totaled $92 million, extending a streak of nine consecutive quarters of positive flows. However, institutional outflows were noted, including $650 million from one strategic partner and $120 million from institutional mutual funds.
Free cash flow strengthened to $38.9 million, up 27% year-over-year and 7% sequentially, pushing the trailing-twelve-month total to $143 million. AGF returned $56 million to shareholders over the past year through dividends and buybacks, with a dividend yield of 2.92%.
The company cautioned that net management fee rates are expected to decline by two to three basis points as the mix shifts toward lower-fee products. Long-term investment returns were projected at a modest 1% to 2% for fiscal 2026. Kensington Capital Partners, an affiliate, posted a 7.5% year-to-date decline.
Shares fell 7.51% to $17.13, trading within a 52-week range of $13.33 to $24.20. Enterprise value stands at $1.24 billion, or about 6.3 times trailing-twelve-month adjusted EBITDA of $195 million. The firm holds $432 million in short- and long-term investments against net debt of $28 million and has $170 million available on its credit facility.
