ONEX Corporation

Welcome to ONIX fourth quarter and full year 2025 conference call and webcast. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session with pre-qualified analysts. At that time, if you have a question, please press star 1-1 on your telephone keypad. As a reminder, this conference is being recorded. And now I'd like to turn the call over to Jill Hominick, Managing Director, Shareholder Relations and Communications at ONIX. Please go ahead.

Thank you. Good morning, everyone, and thanks for joining us. We're broadcasting this call on our website. Hosting the call today are Bobby LeBlanc, Onyx's chief executive officer, and Chris Gevin, our chief financial officer. Earlier this morning, we issued our fourth quarter and full year 2025 press release, MD&A, and consolidated financial statements, which are available on the shareholder section of our website and have also been filed on CDAR. A supplemental information package is also available on our website. As a reminder, all references to dollar amounts on this call are in U.S. unless otherwise stated. I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward-looking statements contained in today's presentation and remarks. With that, I'll now turn the call over to Bobby.

Good morning, everyone. In 2025, Honest delivered strong results and made meaningful progress on our business and capital allocation objectives to set the stage for accelerated value creation and earnings growth going forward. Most notably, our recently completed acquisition of Convex and our new strategic relationship with AIG has significantly enhanced our growth prospects and earnings outlook. Across ONIX, we are entering 2026 with momentum and confidence. We're able to do almost seven years of due diligence on Convex, given it was an ONIX Partners 5 portfolio company. This is exactly the type of informational advantage that we look for as investors. Convex is expected to be ONIX's largest contributor to value creation going forward. and the accelerated closing reflected a strong commitment and alignment across Convex, AIG, and ONIX to complete the transaction on an expedited basis. As a reminder, the transaction valued Convex at $7 billion, with ONIX and AIG owning approximately 63% and 35% respectively. In addition, the Convex management team demonstrated their alignment and conviction by rolling approximately $500 million of equity and accrued incentives, which is a major vote of confidence in our partnership and go-forward strategy. This morning, we released our year-end financial information for Condex. In 2025, the team delivered another outstanding year, continuing to demonstrate their ability to deliver industry-leading growth and profitability. You will find more information in our Q4 supplemental information package, but here are some of the highlights. For the year, Convex delivered $711 million in net income and an overall return on equity of 20%. Net income increased 25% versus the $566 million Q3 latest 12-month figure we announced at the time of the acquisition and grew 40% from the $506 million delivered in 2024. This 2025 debt income figure equates to $423 million for Onyx based upon our 63% ownership position and is updated for Convex's pro forma interest cost on the $600 million of debt raised as part of the transaction. The team achieved 5.9 billion of gross premium written in 2025, growing 14% year over year. Convex's ability to scale to this level of gross premium written in less than seven years demonstrates the impressive business the Convex team has built and the value they provide to their customers. Despite the significant growth, Convex has still only captured about 2% of its addressable market, which highlights a significant opportunity we in management continue to see for the business. Convex also delivered consistent and strong under-earning performance in 2025 with an 89% combined ratio, the third consecutive year of combined ratios under 90%. Management expects to continue growing earnings through cycle by utilizing several structural levers, including, One, capturing further operating leverage as Convex continues to scale into its expense base. Two, growth in asset leverage. Three, growth in net underwriting profitability. And lastly, yield improvement on Convex's growing investment portfolio. This strong financial performance increased Convex's tangible book value to $3.8 billion a year end. resulting in a reduction of ONIX's effective acquisition multiple to 1.8 times tangible book value and 10 times 2025 net income. In our supplemental information package, we outline more information, including Convex's structural competitive advantages, how management plans to continue to grow through cycle, and how Convex should deliver significant value to ONIX shareholders. When we announced the transaction, one of our commitments to shareholders was to ensure you receive transparency on our investment in Convex so you can value it appropriately. Next month, in follow-up to today's earnings update, we plan to publish complete financial information for Convex, similar to the tables we provided at the time of our Q3 announcement. The addition of Convex as a core ONIX platform alongside private equity and credit, will play a pivotal role in our ongoing transition, where we continue to prioritize consistently growing net income and free cash flow to help drive overall enterprise value. Our future capital allocation initiatives will align with this strategy, focusing on direct investments with strong risk-adjusted returns, low leverage, and longer hold periods in sectors where we have a right to win. While we continue to support our private equity and credit strategies to ensure continued alignment with our LPs and co-investors by participating in each fund up to a maximum of 10%, this capital lighter model will enable a higher proportion of third-party capital in our funds. This, in turn, will contribute to ongoing growth in fee-generating AUM, fee-related earnings, and carried interest. Early in 2025, both of our private equity platforms, Onyx Partners and OnCap, completed successful fundraisers. And throughout the year, both made progress in continuing to return capital to their limited partners and co-investors, a total of $8 billion in realizations and securing new investment opportunities with high conviction value creation plans. Onyx Partners had an active and successful year and has extended the momentum into 2026. OP announced $7.7 billion in total distributions in 2025, including $4.3 billion to its co-investors. Since 2024, OP has returned $10 billion in capital across eight realizations and completed six new investments totaling $2 billion. Recently, OP entered into an agreement to create a 1.5 billion multi-asset continuation vehicle with leading global secondary funds and sovereign investors. The transaction is expected to close this quarter and deliver proceeds of approximately $310 million to ONIX. Importantly, we'll also bring DPI for ONIX partner five to 0.8, positioning it very favorably relative to other funds of its vintage. As you all know, there has recently been a lot of news around software and AI disruption. Looking at the percentage of our investing capital in technology-enabled businesses, we feel comfortable with our relative exposure and the embedded protections of our company's business models and competitive environments. Only 4% of Onyx's total investing capital is tied directly to pure vertical software businesses. Looking at it from the broadest perspective, only 14% of Onyx's total investing capital is invested in tech-enabled firms. All these businesses have proprietary data and significant competitive modes sustained by regulatory barriers and B2B workflows occurring inside their systems. Across our operating companies, we're not seeing any meaningful evidence of disruption, but rather they're continuously improving their product value proposition through the adoption of AI and other data analytic tools. Turning to ONCAP, the team returned 270 million to investors, including ONIX, in 2025, which was primarily driven by the partial sale of precision concepts. ONCAP also recently completed its leadership succession process, which resulted in two of its most proven leaders, Adam Schantz and Steve Marshall, becoming co-heads of the platform. Michael Lay has transitioned into the role of ONCAP executive chair. Congratulations to each of them on this milestone, which ensures long-term leadership continuity for ONCAP. Our credit team had another outstanding year. With unstructured credit, where we are recognized as a global leader, we priced 28 CLOs across the U.S. and Europe, raising more than $6 billion of new fee-generating AUM and extending another $6 billion. Chris will get into more detail on fee-related earnings, but it's worth noting that the team's ability to increase fee-generating AUM has enabled them to exceed our investor day run rate FRE expectations. We have a reputation for delivering strong performance within our CLOs relative to peer firms through a proactive and diligent approach to portfolio management. By heavily investing in our underwriting processes and implementing state-of-the-art risk management tool and processes, we were able to navigate the spread challenge credit landscape and avoid involvement in some of the high-profile casualties like First Brands and Sachs Global. that impacted the broader credit market last year. The credit team to its credit is also underweight software and AI risk credits across its portfolio. Across ONIX, our success wouldn't be possible without the commitment and dedication of the people who make up the organization. I want to thank them for all they do and also for making ONIX a great place to come to work every day. We have strong conviction in ONIX's intrinsic value and are intensifying our efforts to have that value reflected on our stock price. In the supplemental information package, we've included how management views ONIX's intrinsic value. At this stage of our capital allocation transition, we believe it is appropriate to utilize a sum-of-the-parts framework. There are currently three distinct value drivers for shareholders, convex, our asset management business, and our remaining balance sheet investments. The slide on the screen is a really important one to focus on. As you can see, when utilizing first the acquisition for convex, which we believe is conservative given the strong recent performance, And then applying a 15 times multiple to pro forma 2026 year end run rate fee related earnings. And then finally, looking at the value of our remaining investing capital at the Q4 valuation, we believe intrinsic value is $174. Importantly, our current estimate does not include the value we expect to generate for shareholders over time. from reorienting realized proceeds from our private equity investments into one or two direct balance sheet investments similar to Convex that ideally have a good strategic fit with Convex and our asset management business. These investments will use lower leverage and have attracted risk-adjusted return profiles to drive growth and enterprise value for our shareholders. We will also provide significant transparency and financial KPIs, similar to the convex, on each investment to support our shareholders in measuring our performance. Having our intrinsic value properly reflected in our share price is a top priority, and we are committed to delivering the earnings growth, disciplined execution, and transparency to make this happen. I want to thank our shareholders for their ongoing support over the past year and for their confidence as we move forward. The pieces are in place for a solid year, and our team is laser focused on driving enterprise and shareholder value. I'll now turn the call over to Chris.