AGF's New Holland Majority Move Reshapes Earnings Mix

With a 50% stake, AGF pushes AUM to $75B and leans into alternatives for future growth.

AGF-B.TO · Earnings Call · 2026-06-24

A Strategic Pivot in Alternatives

AGF's Q2 earnings call (period 20261) was dominated by one theme: the consolidation of New Holland Capital. As CEO Judy Goldring put it, “Q2 was a strong quarter for AGF. At the end of May, we made a subsequent investment in New Holland Capital where AGF now owns a 50% economic interest in the company.” — Judith Gail Goldring, Chief Executive Officer · 2026-06-24 This move transforms AGF's earnings profile, shifting from a passive lender to an active controller in a multi-strategy hedge fund and credit manager. The AGF Capital Partners platform now manages over $15B, with New Holland alone contributing $11B in AUM—up 44% since the initial 2024 investment. The transaction also brings two additional warrants that could lift AGF's ownership to 65%, cementing its commitment to alternatives. As Ashley Lawrence, head of AGF Capital Partners, explained, “they have seen significant growth an AUM perspective since we closed our transaction... 40 plus percent growth” — Ashley Lawrence, Head of AGF Capital Partners or similar senior role in alternatives/private markets · 2026-06-24. The growth is driven by both new fundraising and reinvested profits, particularly in the flagship multi-strategy fund, which now holds ~$3B (CAD).

Flows and Product Mix: The SMA/ETF Shift

On the retail side, AGF delivered its eighth consecutive quarter of positive net sales in Canadian mutual funds, though at a modest $6M. The real momentum is in SMAs and ETFs, where AUM jumped 74% year-over-year to $4.8B. CFO Ken Tsang noted that the $155M in Canadian flows are only part of the story, with strong U.S. flows as well. He said, “the 155 million of SMA flows and ETF flows are strictly on the Canadian side, but we have also seen some very strong flows on The US side as well.” — Ken Tsang, Chief Financial Officer · 2026-06-24 This broadening product mix is a Private Credit and alternatives push that aligns with the industry's secular shift toward fee-based advisory channels. Management introduced a combined view of Canadian retail mutual funds plus ETF/SMA flows to reflect this trend, a move that underscores the strategic importance of these channels. The 8-quarter streak of positive flows in these newer vehicles indicates durable demand.

Valuation, Capital, and the Path Forward

Despite strong performance, AGF's stock trades at a significant discount to its sum-of-parts. Ken Tsang highlighted,

At 6.9 times, our long term investments are valued at $124 million, a 70% discount against the balance sheet value of $418 million as of Q2 and the rest of the business continues to trade at a 2-turn discount against other traditional asset managers.
Ken Tsang, Chief Financial Officer · 2026-06-24

This persistent mispricing supports management's active buyback program and disciplined capital allocation. The balance sheet is strong, with net debt of just $51M and $435M in investments. The New Holland deal is expected to be modestly accretive near term, with fee-related earnings currently at breakeven as the firm completes its retooling. “So as a result, their fee related earnings right now are roughly breakeven. Our expectation and the reason for the exercise of our option is with the bulk of that retooling now complete, we do expect those fee related earnings to pick up over the next 12 to 24 months.” — Ashley Lawrence, Head of AGF Capital Partners or similar senior role in alternatives/private markets · 2026-06-24 This forward-looking accretion, combined with existing performance fee potential, could meaningfully boost earnings power.

What Changed?

Prior to this call, AGF had discussed its plans to potentially increase the New Holland stake, but the actual exercise of the option marks a definitive pivot. In the September 2025 call, Ashley Lawrence noted, “in February of next year 2026, we have the first of 2 options to both convert our position from debt to equity and increase our ownership to 51%.” — Ashley Lawrence · 2025-09-24 That option has now been exercised, and the company has taken steps to reach 50% (50.01% with a future warrant). More broadly, AGF is positioning itself as a diversified alternatives manager, a strategy that has been evolving but is now crystallizing with majority control. The company also added a new recognition—the NASDAQ Broad Canadian Dividend Achievers—which reflects a track record of dividend growth and capital returns, a theme echoed in prior calls about a balanced capital allocation approach. As Judy Goldring said in the June 2025 call, “we've seen strong growth in the U.S., largely on the backs of us getting on to several different platforms.” — Judith Goldring · 2025-09-24 This persistence in cultivating distribution channels highlights the deliberate nature of AGF's expansion into higher-growth vehicle types. In summary, AGF's Q2 numbers were solid, but the strategic step-up in New Holland is the headline. It alters the earnings mix, adds growth optionality, and underscores a deliberate shift toward higher-margin alternative assets. As the global tape shows, there is no broader wave of asset managers making similar moves; this is a company-specific strategic decision.