Onex (TSE:ONEX) executives highlighted what they described as a strong 2025 and an improving outlook following the completion of the Convex acquisition and a new strategic relationship with AIG, as management emphasized a shift toward more consistent net income and free cash flow growth.
Convex acquisition: scale, profitability and growth levers
Chief Executive Officer Bobby Le Blanc said the recently completed acquisition of Convex is expected to be Onex’s largest contributor to value creation going forward. Le Blanc noted Onex had “almost 7 years of due diligence” on Convex because it was previously an Onex Partners V portfolio company, describing that informational advantage as central to the firm’s approach.
Onex provided year-end financial information for Convex and said the business delivered $711 million in net income in 2025 and a 20% return on equity. Management said net income increased 25% versus the $566 million latest-twelve-months figure referenced at the time of the acquisition announcement and rose 40% from $506 million in 2024. Based on Onex’s 63% ownership, Le Blanc said the 2025 net income equates to $423 million for Onex and is updated for Convex’s pro forma interest cost on $600 million of debt raised as part of the transaction.
Convex reported $5.9 billion of gross premium written in 2025, up 14% year over year, and an 89% combined ratio, marking a third consecutive year under 90%, according to management. Le Blanc said Convex has captured about 2% of its addressable market, which Onex views as significant runway.
Management outlined several “structural levers” it expects can drive earnings growth through the cycle:
- Operating leverage as Convex scales into its expense base
- Growth and asset leverage
- Growth in net underwriting profitability
- Yield improvement on an expanding investment portfolio
Le Blanc said Convex’s tangible book value rose to $3.8 billion at year-end, which Onex said reduces its effective acquisition multiple to 1.8x tangible book value and 10x 2025 net income. Onex also said it plans to publish complete financial information for Convex next month “similar to the tables” provided with its Q3 announcement, citing a commitment to transparency.
Capital allocation and “sum of the parts” view of intrinsic value
Le Blanc said Convex will sit alongside Onex’s private equity and credit businesses as a core platform and will support Onex’s transition toward consistently growing net income and free cash flow. He said future capital allocation will focus on direct investments with strong risk-adjusted returns, low leverage, and longer hold periods in sectors where Onex believes it has “a right to win.”
While Onex will continue to participate in its private equity and credit funds “up to a maximum of 10%,” Le Blanc described the approach as a capital-lighter model that can support a higher proportion of third-party capital and contribute to growth in fee-generating AUM, fee-related earnings (FRE), and carried interest.
In discussing valuation, Le Blanc said Onex is intensifying efforts to have intrinsic value reflected in its share price and that management is using a sum-of-the-parts framework with three primary value drivers: Convex, the asset management business, and remaining balance sheet investments. Based on using the Convex acquisition valuation (which management described as conservative), applying a 15x multiple to pro forma 2026 year-end run-rate FRE, and valuing remaining investing capital at Q4 marks, Le Blanc said management believes intrinsic value is $174. He added that this estimate does not include potential value from redeploying private equity realizations into one or two additional direct balance sheet investments and that Onex intends to provide transparency and key performance indicators for any such investments similar to Convex.
Private equity and credit activity: realizations, CLO issuance, and tech exposure
Onex said both Onex Partners and ONCAP completed successful fundraises early in 2025. Le Blanc stated that across the platforms, Onex delivered $8 billion in realizations during 2025 and continued sourcing new opportunities.
Onex Partners reported $7.7 billion of total distributions in 2025, including $4.3 billion to co-investors. Since 2024, Le Blanc said Onex Partners has returned $10 billion across eight realizations and completed six new investments totaling $2 billion. He also highlighted a recently announced agreement to create a $1.5 billion multi-asset continuation vehicle with secondary funds and sovereign investors, expected to close in the current quarter and deliver approximately $310 million of proceeds to Onex. Le Blanc said the transaction would bring DPI for Onex Partners V to 0.8.
ONCAP returned $270 million to investors in 2025, driven primarily by a partial sale of Precision Concepts, management said. Le Blanc also noted a leadership transition, with Adam Shantz and Stephen Marshall becoming co-heads and Michael Lay moving to Executive Chair.
In credit, Le Blanc said the structured credit team priced 28 CLOs across the U.S. and Europe in 2025, raising more than $6 billion of new fee-generating AUM and extending another $6 billion. He said the team navigated a “spread-challenged” landscape and avoided certain “high-profile casualties” that affected the broader market. Onex also discussed its exposure to software and AI-related disruption, with Le Blanc stating that 4% of Onex’s total investing capital is tied directly to “pure vertical software” and 14% is in tech-enabled firms; on the call, he added the software exposure is mostly private equity holdings, particularly PowerSchool and Unanet, while credit is “meaningfully underweight” software and AI risk credits.
Financial results, FRE outlook, and liquidity following the Convex closing
Chief Financial Officer Chris Govan said Onex ended the year with investing capital per share of $124.70, delivering a 3% return in Q4 and 10% for the year. He said the five-year CAGR on investing capital per share is now 11%. Q4 investing gains were driven by returns of 4% from Onex Partners V, 7% from Onex Partners Opportunities, and 6% across the ONCAP portfolio. Credit investments were “essentially flat” in Q4, which Govan attributed to spread compression affecting the mark-to-market value of CLO equity; he emphasized that Onex expects the mismatch to be mitigated through refinancing of CLO liabilities when they exit no-call periods.
Govan said the $8 billion of 2025 private equity realizations delivered more than $800 million to Onex Corporation. Q4 realizations included Onex Partners V sales of 54% of OneDigital and 25% of WestJet, and Onex’s final realization of Ryan Specialty, which netted just over $200 million. Govan said the Ryan Specialty investment generated $1.2 billion of aggregate proceeds for Onex over almost eight years, representing a 3.8x multiple of capital and a 49% IRR.
On asset management, Govan said fee-generating AUM ended the quarter at nearly $44 billion, up 24% during the year, driven primarily by new CLO issuance, commitments to ONCAP V and Onex Partners Opportunities, and net write-ups in the private equity portfolio. The asset management segment generated earnings of $49 million in Q4, including $2 million of FRE from the private equity and credit platforms. After corporate costs, firm-wide FRE was a loss of $4 million for Q4 and a loss of $3 million for the year.
Looking forward, Govan said credit ended 2025 with run-rate FRE of $60 million, ahead of Onex’s 2023 Investor Day target. He said firm-wide run-rate FRE ended the year at $17 million, inclusive of the expected impact of the multi-asset continuation vehicle, though management fees on the vehicle are not expected to begin until the transaction closes later in the current quarter, with the run-rate impact expected to be reflected in quarterly FRE starting in Q2. For 2026, Onex is projecting firm-wide FRE in the low- to mid-$20 million range and expects to exit 2026 with firm-wide run-rate FRE “more than twice” the $17 million level at the start of the year. In response to analyst questions, Govan said Onex’s assumptions include only about one-third of AIG’s expected $2 billion of commitments in 2026 and no additional allocations from Convex.
Govan also provided an update on transaction funding and liquidity. At closing, Onex drew $700 million under a NAV loan facility, $300 million less than the initially contemplated $1 billion draw, which he said was enabled by incremental realizations and distributions. After closing, Onex retained approximately $400 million of cash and near-cash and had access to $500 million of undrawn funds on the revolving portion of the NAV loan, for total liquidity of about $900 million. He said Onex has almost $5 billion of private equity investments relative to $735 million of unfunded commitments, with $330 million remaining within the commitment period, and said management is comfortable with its ability to fund capital needs while expecting “significant net PE realizations” over the next few years.
Govan noted the call was his final earnings call as CFO and said Megan McClellan will become Onex’s next CFO.
About Onex (TSE:ONEX)
Onex Corporation is a private equity investor and asset management firm. The company operates in two main segments: investing, which includes private equity, private credit, and direct investments; and asset and wealth management, which manages pension plans, sovereign wealth funds, insurance companies, and family offices. Investing revenue primarily comes from net gains on corporate investments and CLOs (collateralized loan investments). Asset and wealth management revenue comes primarily from management and performance fees.
