AGF Management Ltd. reported fiscal third-quarter results that missed both earnings and revenue estimates, weighed down by significant institutional redemptions and a shift toward lower-fee products.
Adjusted diluted earnings per share came in at CAD 0.49, missing the consensus estimate of CAD 0.5768 by approximately 15%. Revenue of CAD 112.5 million fell short of the CAD 161.86 million forecast by roughly 30%, a shortfall of CAD 49.36 million.
Shares fell 6.86% in premarket trading to CAD 17.25, down from CAD 18.52 the prior session. The stock has traded between CAD 13.33 and CAD 24.20 over the past 52 weeks.
Assets under management and fee-earning assets reached CAD 74 billion at quarter-end, up 31% year-over-year, CEO Judy Goldring said on the earnings call. The company’s Canadian retail mutual fund business posted its ninth consecutive quarter of positive net sales, with CAD 92 million in inflows for the quarter. Global ETF and separately managed account assets rose 57% year-over-year to CAD 5.5 billion.
However, institutional flows were a drag. The company disclosed CAD 650 million in redemptions from a single strategic partner, including CAD 150 million previously announced in the second quarter, plus an additional CAD 120 million from institutional mutual funds.
Adjusted EBITDA was CAD 49 million, down CAD 15 million from the prior quarter, which had benefited from a gain on the New Holland Capital transaction. Free cash flow came in at CAD 39 million, up CAD 3 million sequentially and CAD 8 million year-over-year. Net management fees totaled CAD 101 million.
Net debt stood at CAD 28 million, with CAD 170 million available under a CAD 250 million credit facility. The company returned CAD 56 million to shareholders over the past twelve months through CAD 31 million in dividends and CAD 25 million in buybacks. More than 600,000 shares were repurchased during the quarter under the normal-course issuer bid, bringing year-to-date repurchases to 2.2 million shares.
AGF Capital Partners, led by Ash Lawrence, reported CAD 15.7 billion in assets. Private wealth AUM grew 7% year-over-year to CAD 9.7 billion. AGF Investments mutual fund AUM rose 14% to CAD 37.5 billion. Kensington Private Equity’s year-to-date performance was down 7.5%, according to senior managing director Bogdan Cenanovic.
Looking ahead, New Holland Capital is expected to reach fee-related earnings profitability within 12 to 24 months, with AGF retaining an option to increase its stake to a controlling position within one to three years.
Net management fee rates, currently at 67 basis points, are expected to decline by two to three basis points going forward as the mix shifts toward lower-fee F-series mutual funds and SMAs. Long-term investment returns are projected at 1% to 2% for 2026, well below the 8% to 10% target, with monetizations expected to accelerate over the next one to five years. LP returns on legacy infrastructure assets are guided at around 6% to 8% over the same horizon.
The company will report fourth-quarter results on January 21, 2027.
