- Convex Performance: Delivered $711M net income in 2025, a 25% increase from Q3 2025's $566M and 40% growth from 2024's $506M, with a 20% return on equity.
- Intrinsic Value Estimate: Onex values intrinsic value at $174/share, excluding future value from reallocating private equity proceeds into Convex-like direct investments.
- Investing Capital Growth: Ended 2025 with $124.70 investing capital per share, reflecting a 10% annual return and a 5-year CAGR of 11%.
- Fee-Related Earnings (FRE) Outlook: Projects firm-wide FRE of $35M by 2026 year-end, doubling from $17M at year-start, with $8.75M expected in Q1 2027.
Convex's Contribution to Value Creation
Convex's acquisition has significantly enhanced Onex's growth prospects and earnings outlook, with the company expected to be Onex's largest contributor to value creation going forward. Convex delivered $5.9 billion of gross premium written in 2025, growing 14% year-over-year. The company's net income increased 25% versus the $566 million Q3 latest 12 months figure announced at the time of the acquisition and grew 40% from the $506 million delivered in 2024.
Capital Allocation and Investment Strategy
Onex's future capital allocation initiatives will focus on direct investments with strong risk-adjusted returns, low leverage, and longer hold periods in sectors where they have a right to win. The company will continue to support its private equity and credit strategies, participating in each fund up to a maximum of 10%. Onex believes its intrinsic value is $174, which does not include the value expected to be generated from reorienting realized proceeds from private equity investments into direct balance sheet investments similar to Convex.
Valuation and Outlook
With a P/B Ratio of 0.59, Onex's valuation appears attractive. Analysts estimate next year's revenue growth at -18.9%. However, the company's projected FRE growth and expected earnings from Convex are likely to drive value creation. Onex's ROE stands at 7.2%, indicating a decent return on equity. The company's Net Debt / EBITDA ratio is -1.97, indicating a healthy debt position. Overall, Onex's strong 2025 results and growth prospects position the company for accelerated value creation.