Onex Corp Reports Strong Q2 with Strategic Divestments

Onex Corp delivered an impressive performance in the second quarter of 2024, highlighted by significant fundraising and successful investment realizations. The company’s private equity platforms, including ONCAP, reported gains and ongoing advancements in fundraising efforts. Notably, Onex’s CLO platform raised $7 billion, contributing to fee-generating assets under management.

Additionally, Onex announced the strategic separation of Falcon, which will now operate as an independent entity. The company reaffirmed its commitment to maintaining balance sheet liquidity for share buybacks and is considering restarting fundraising for its larger-cap buyout strategy. Onex is also closely monitoring the property and casualty insurance market cycle for potential investment opportunities.

### Key Takeaways
– Onex Corp achieved strong results in Q2 2024 with successful fundraising and investment exits.
– The CLO platform’s $7 billion capital raise has bolstered fee-generating assets.
– Key sales included Englobe and Wyse Meter Solutions, as well as an agreement to sell half of PowerSchool shares.
– The company is focusing on share buybacks and plans to communicate capital allocation strategies in future quarters.
– Falcon’s separation has provided Onex with additional capital flexibility.
– Onex is carefully observing the trends in the property and casualty insurance sector to inform investment decisions.

### Company Outlook
– Onex is set to restart fundraising for its larger-cap buyout strategy following strong performance indicators.
– Continued prioritization of share buybacks is anticipated.
– There are currently no immediate plans to acquire additional asset managers.

### Bearish Highlights
– The divestment of Falcon resulted in approximately $3 billion in assets under management leaving the platform.
– The growth rate in the property and casualty insurance sector is slowing.

### Bullish Highlights
– Onex’s private equity platforms demonstrated solid fundraising progress.
– The company’s balance sheet is being managed effectively, benefitting shareholder value.
– There remains positive momentum within the property and casualty insurance sector.

### Misses
– A detailed breakdown of the $2.2 billion raised between credit and equity was not available during the earnings call.

### Q&A Highlights
– Chris Govan remarked that the Falcon divestiture would liberate around $55 million in capital.
– The effect of the Falcon sale on fee-related earnings is minimal, estimated at $20 million in run-rate fees.
– Bobby Le Blanc clarified that cash sweep income from the Wealth Enhancement group does not affect the platform’s economics.

Onex Corp’s earnings call highlighted its strategic initiatives and financial health, underscoring a focus on maximizing shareholder value through prudent capital management. The separation of Falcon and commitment to share buybacks demonstrate the company’s proactive approach to portfolio management. As Onex continues to monitor the property and casualty insurance sector and prepares for future fundraising, it remains committed to transparency and shareholder engagement.

### Overview of Onex Corp’s Recent Performance
In the past year (as of Q2 2024), Onex Corp has shown significant financial growth aligning with its strategic goals. The company boasts a market capitalization of $5.03 billion and a low P/E ratio of 6.27, indicating potential undervaluation against its earnings. Onex has experienced a 41.41% revenue growth, demonstrating the effectiveness of its business strategies.

Key financial strengths include:
– Attractive earnings multiples for value-focused investors.
– Healthy cash flow supporting interest payments.
– A robust history of dividend payments, with 38 consecutive years of returns to shareholders.

Overall, Onex Corp appears well-positioned in the market, with productive financial operations and investment strategies fostering confidence among stakeholders.