Transcript: Onex Q1 2026 Earnings Conference Call - ONEX CORP SHS by Onex Corporation (OTC:ONEXF)

Onex (OTC:ONEXF) reported first-quarter financial results on Friday. The transcript from the company's first-quarter earnings call has been provided below. Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit www.benzinga.com/apis to learn more. Access the full call at edge.media-server.com/mmc/p/sh... Summary Onex reported a solid first quarter performance despite challenging market conditions, with Convex being the largest contributor to shareholder value. The strategic partnership with AIG was highlighted, with a $2 billion capital commitment expected to enhance shareholder value and fee-related earnings. Convex showed strong performance with an 8% adjusted growth in gross premiums and a 24% return on equity over the last 12 months. Asset management within private equity returned significant capital to limited partners, with expectations for continued realizations and increased DPI. Convex's valuation increased to $4 billion, driven by high return on equity and market share gains, with a plan to transition its fixed income portfolio classification to reduce income statement volatility. Onex's credit platform continues to expand, with notable CLO issuances and minimal exposure to direct lending, positioning it as a market leader. The company aims to reorient its balance sheet investments to align with Convex's strategic goals and asset management growth, with potential for future share buybacks. Full Transcript OPERATOR Jill Humenick (Managing Director, Shareholder Relations and Communications) Bobbi LeBlanc (Chief Executive Officer) Meg McClellan (Chief Financial Officer) OPERATOR Certainly. And as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone. Our first question comes to the line of Scott Fletcher from cibc. Your question please. Scott Fletcher (Equity Analyst) Hi, good morning everyone. Wanted to ask a couple questions on Convex. Maybe for Paul in particular. Just first I want to just looking at the current accident year loss ratio. It did tick up quarter over quarter and year on year. Sounds like the Middle east conflict might have had some element at play there. So wonder if you could just dig into that and how we should be thinking of that for the rest of the year. Paul Brand (Chief Executive Officer) Yeah, no, absolutely, yeah. So you're quite right. As we sort of noted in the, in the materials, there's about a 23 million add on for the, the Iran Mall and that just. Yeah, that moved the ex major event loss ratio up a little bit. Scott Fletcher (Equity Analyst) Okay, thanks. Nothing sounds like there's not much else to call out there. And then on the net premiums retention, that number sort of came down again quarter over quarter, year on year drove net premiums into sort of a. I think it was 9% down year on year. Just wondering what you're seeing in the market that's sort of shifting the posture on premium retention and how again we should think about the approach there for the rest of 2026. Paul Brand (Chief Executive Officer) Yeah, so I mean convex buys a reasonable amount of reinsurance and as we, and we buy that sort of through the market as we see prices soften, we might expect to see sort of reinsurance purchasing going up a little bit. And we also have hold account credit share which was slightly underplaced in Q1 of 2025. And so that will be affecting that comparative state. Scott Fletcher (Equity Analyst) Paul Brand (Chief Executive Officer) Yeah, I will come back down much closer to the what you're seeing in the LTM sort of 22ish would be my prediction on that. There's just some noise in Q1 in terms of how different parts of the both the sort of the outwards premium and the inwards premium are driving that effect. OPERATOR Thank you. And our next question comes from the line of Graham Riding from TD Securities. Your question please. Graham Riding (Equity Analyst) Hi, good morning, Paul. Maybe I'll stick with you. Welcome to the call. Just maybe the outlook for gross written premium in 2026, just given your focus on specialty and you know there is some pricing pressure in the markets overall, maybe your outlook on what your expectations are for the year. Paul Brand (Chief Executive Officer) Paul Brand (Chief Executive Officer) starts to balance in. With reinsurance being having a very big Q1 and growing and predicted to grow at a slightly lower rate than we're seeing the insurance business in 26. Paul Brand (Chief Executive Officer) But still a few quarters to go before we'll be able to print that. Graham Riding (Equity Analyst) Okay, understood. And the business delivered at 20% ROE last year. I think slightly higher than that on an LTM basis. Do you feel like this is a business that should be able to sustain that 20% plus ROE? Is that a reasonable target? Paul Brand (Chief Executive Officer) Yeah, I mean, I think you kind of have to see what happens to losses. You have to see what's obviously going to go on in the investment environment in an uncertain world. But yes, I still, as I said, I still think there's plenty of margin in the business Paul Brand (Chief Executive Officer) Graham Riding (Equity Analyst) Okay, helpful. Megan, maybe I could jump to you, just on the asset management fre, you put a $35 million target for the end of 2026. So maybe I should interpret that as sort of a run rate in Q1 27. And I think previously you guys have talked about hitting a $17 million run rate by Q2 of this year. Does that still hold? And then just bigger picture, what are the key pieces here to sort of get fre moving into that positive territory that you're targeting? Megan McClellan Graham Riding (Equity Analyst) Okay. And on the PE side, you know, expenses seem to continue to sort of be elevated relative to management fees. Are you looking at the expense and the efficiency side, or is this more about fundraising and driving the top line higher? Megan McClellan No, it's definitely the latter. As we continue to sell assets out of OP5, which of course generates DPI, which is very important to our LPs. The revenue goes away on those assets when you sell them. So the expense line ought to be right sized, if you will. And that team's done a very good job of right sizing its expense structure relative to our fundraising expectations. But when we begin to have closes at OP6, that'll rectify itself. Graham Riding (Equity Analyst) Okay, understood. And then. Sorry, I missed that part. Where are you with the fundraising and what's the expected sort of or what's the initial feedback and uptake then for OP6? Megan McClellan Graham Riding (Equity Analyst) Okay, understood. That's it for me. Thank you. OPERATOR Thank you, thank you. Bart Jarski And our next question comes from the line of Bart Jarski from RVC Capital Markets. Your question please. Great. Thanks and good morning everyone. Maybe sticking with the asset management business. I saw the net IRR disclosure was dropped. Maybe give us a rationale why and an update on net IRR performance on the flagship PE funds would be great. Thanks. Bobbi LeBlanc (Chief Executive Officer) Bart Jarski Okay, got it. Thanks, Bobby. And maybe Megan. Welcome to the call. Just wanted to ask around how we should think about when the buyback could resume. I think you had mentioned you want to pay down the NAV loan. So what should we be expecting on that front? Bobbi LeBlanc (Chief Executive Officer) Bart Jarski Paul Brand (Chief Executive Officer) Bart Jarski Great. Very helpful. Thanks for the caller. Paul, thanks for taking my questions. OPERATOR Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program Back to Bobby LeBlanc for any further remarks. Bobbi LeBlanc (Chief Executive Officer) Thanks everyone for being here with us today and again thanks Paul and Meg for joining your first earnings call. Great to have you both here. I hope everybody has a great weekend and again if you have any questions at all feel free to call Jill Zeb or Meg Ray and we'll try to get back to you quickly. Have a great weekend. Bye bye. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.