Onex Q2 2025 slides: 4% investment return amid 16% growth in fee-generating assets

Introduction & Market Context

Onex Corporation (TSX:ONEX) released its Q2 2025 supplemental information package, highlighting a 4% quarterly return on investments and significant growth in its asset management business. The Canadian investment firm, currently trading at C$111.62, continues to execute on its strategy of growing fee-generating assets while maintaining an active share repurchase program.

The company’s Q2 results build on the momentum seen in Q1, when Onex reported a 2% return on its private equity portfolio. The latest quarter shows acceleration in both investment returns and asset gathering, particularly in the structured credit segment.

Quarterly Performance Highlights

Onex reported investing capital per share of $121.23 (C$164.96) as of June 30, 2025, representing a 4% return for the quarter and 7% year-to-date. The company has maintained a five-year compound annual growth rate of 15% for investing capital per share, in line with its long-term expectations.

As shown in the following chart of investing capital per share growth over the past five years, Onex has demonstrated consistent capital appreciation from $62.10 in June 2020 to $121.23 in June 2025:

The company’s investing segment generated earnings of $231 million in Q2 2025, compared to $140 million in the same period last year. On a per-share basis, this translates to $3.32 for Q2 2025, up significantly from $1.79 in Q2 2024.

The detailed breakdown of investing segment earnings reveals strong performance across both private equity and credit investments:

Asset Management Growth

A standout achievement for Onex in Q2 was the continued expansion of its asset management business. Fee-generating assets under management reached approximately $41 billion, up 16% since year-end, driven by successful private equity fundraising and strong growth in the structured credit business.

The following chart illustrates Onex’s consistent growth in fee-generating assets under management, which has achieved a 10% five-year CAGR:

The company’s credit platform is approaching $30 billion in assets, with structured credit AUM increasing 20% since year-end. Structured credit fee-related earnings reached $15 million in Q2, contributing to total asset management fee-related earnings of $6 million for the quarter.

Unrealized carried interest, a key indicator of future earnings potential, increased by $60 million to $346 million since year-end, as shown in this chart:

Investment Portfolio Performance

Onex maintains a diversified private equity portfolio across multiple sectors, with varying performance by industry. The financial services vertical, representing 37% of gross private equity capital, was the strongest performer with a 19% return over the last twelve months. Conversely, healthcare investments, comprising 6% of the portfolio, struggled with a -20% LTM return.

The following table provides a comprehensive breakdown of Onex’s private equity portfolio by industry vertical:

In a notable transaction during the quarter, Onex Partners V announced the sale of 25% of its WestJet stake, which is expected to generate net proceeds of approximately $95 million for Onex upon closing. This builds on the discussion from Q1’s earnings call, where management indicated that a future IPO could be a long-term exit strategy for the remaining 75% stake.

Capital Management and Outlook

Onex continues to maintain a strong liquidity position of $1.5 billion, supporting ongoing share repurchases and investments in priority areas. During Q2, the company repurchased 1.8 million subordinate voting shares for $129 million (C$180 million) at an average cost of $70.66 (C$98.06) per share.

Year-to-date, Onex has repurchased 3.2 million shares for $228 million (C$320 million), demonstrating its commitment to returning capital to shareholders. The following chart illustrates Onex’s historical approach to shareholder returns through dividends and share repurchases:

The company’s cash position remains robust despite active capital deployment. The following waterfall chart details the changes in Onex’s cash and near-cash position during the first half of 2025:

Looking ahead, Onex appears well-positioned to continue its growth trajectory in asset management while maintaining its investment return targets. With its diversified portfolio and strong liquidity, the company has the flexibility to navigate market challenges while pursuing strategic opportunities in its core business segments.

Full presentation:

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