AGF Management Limited Reports Third Quarter 2021 Financial Results

• Reported diluted earnings per share of $0.21
• Mutual fund gross sales of $790 million for the third quarter of 2021, an improvement of 61% year-over-year
• Mutual fund net sales of $288 million for the quarter
• Total assets under management and fee-earning assets¹ of $43.4 billion

AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the third quarter ended August 31, 2021.

AGF reported total assets under management and fee-earning assets¹ of $43.4 billion compared to $36.5 billion as at August 31, 2020.

As we head into the final months of 2021, we are well-positioned to execute against our strategic priorities and will aim to continue to gain momentum with a focus on increasing sales, evolving our client-base and looking for opportunities to diversify our business, said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF.

Despite the challenges of the pandemic, this year we have made strides expanding into the private alternatives space and are seeing the results of growing interest into our fee-based series and separately managed accounts, added McCreadie.

AGFs mutual funds net sales improved $310 million year-over-year, with total net sales of $288 million in Q3 2021, compared to net redemptions of $22 million in Q3 2020. Excluding net flows from institutional clients invested in mutual funds, retail mutual fund net sales were $288 million for the quarter compared to net redemptions of $4 million in the comparative period of 2020. AGF mutual fund gross sales for the quarter totaled $790 million, a 61% improvement over prior year.

Mutual fund sales momentum continued into September with AGF reporting mutual fund net sales of $80 million as at September 24, 2021 compared to net redemptions of $11 million for the same time last year. Mutual fund gross sales were up 51% year-over-year.

Delivering on our strategic growth strategy, this quarter we deployed capital and diversified partnerships within our private alternatives business, said Adrian Basaraba, Senior Vice-President and Chief Financial Officer. The opportunities within this space have allowed us to realize value for our shareholders and grow our assets and revenue streams.

We are targeting continued growth while keeping expense management top of mind with the goal of improving margins, added Basaraba.

• AGF in partnership with the SAF Group (SAF) announced the launch of AGF SAF Private Credit Limited Partnership and AGF SAF Private Credit Trust. The new offerings provide both institutional and retail investors access to the benefit of private credit investing.
  
  
• AGF announced an evolution of its strategic partnership with SAF. The partnership is focused on providing investors access to unique private alternative opportunities leveraging AGFs operations and distribution reach coupled with SAFs private credit investment management expertise. AGF and SAF have agreed to a definitive agreement along with a distribution arrangement as an alternative to AGF exercising its option to acquire management contracts of select SAF funds.
  
  
• In June 2021, one of AGFs long-term private alternative investments, SAF Jackson Management LP (SAFJM LP), was fully monetized, with a final cash distribution of $5.9 million received. As part of this transaction, AGF through its joint venture ownership interest in the manager received $2.4 million of carried interest.
  
  
• AGF announced a strategic private equity partnership with First Ascent Ventures (First Ascent) focused on investing in emerging technology companies that are building the next generation of disruptive, fast growing enterprise B2B software companies. AGF has made a $30 million cornerstone investor commitment to First Ascents second fund and is a member of the Limited Partner Advisory Committee of the fund.
  
  
• AGF International Advisors Company Limited has been accepted as a signatory to the UK Stewardship Code, recognized globally as a best-practice benchmark in investment stewardship.
  
  
• Building on its commitment to diversity and inclusion, AGF announced a multi-year partnership for the creation of the AGF Scholarship Fund for Indigenous students with Indspire, a national Indigenous organization that invests in the education of Indigenous people, enabling their success through financial awards, resources and role models.

• Judy Goldring, AGF's President and Head of Global Distribution, was elected Vice-Chair of The Investment Funds Institute of Canada (IFIC)'s Board of Directors. She will serve a two-year term supporting IFIC's commitment to further strengthen the integrity of Canada's investment funds industry and foster a strong, stable investment sector for the benefit of investors and the associations Members.

When it comes to expense management, we continue to take a thoughtful approach that has allowed our core expenses and operations to remain relatively consistent as we continue to see an increase in success-based expenses, added Basaraba.

• Management, advisory, administration fees and deferred sales charges were $112.4 million for the three months ended August 31, 2021, compared to $94.9 million in 2020. The increase in revenue is attributable to higher net sales, increase in AUM and higher average revenue rate as a result of product mix.
  
  
• The continued increase in mutual fund sales in the third quarter along with increased corporate development activity drove higher selling, general and administrative costs in the period. Selling, general and administrative costs were $50.1 million for the three months ended August 31, 2021, compared to $46.1 million in 2020. This increase in variable costs was partially offset by managements continued focus on cost control.
  
  
• EBITDA before commissions for the three months ended August 31, 2021 was $37.5 million, compared to $62.6 million in the prior year comparative period. Excluding reported earnings from S&WHL, adjusted EBITDA before commissions for the three months ended August 31, 2021 was $37.5 million, compared to $21.3 million in the prior year comparative period.
  
  
• DSC commissions for the three months ended August 31, 2021 were $14.1 million, compared to $8.9 million in the prior year comparative period.
  
  
• Net income for the three months ended August 31, 2021 was $14.9 million ($0.21 diluted EPS), compared to $47.3 million ($0.60 diluted EPS) in the prior year comparative period. Adjusted net income for the three months ended August 31, 2021 was $14.9 million ($0.21 adjusted diluted EPS), compared to $14.8 million ($0.19 adjusted diluted EPS) in the prior year comparative period. Excluding reported earnings from S&WHL, adjusted diluted earnings per share was $0.08 in the comparative prior year period. The increase is primarily due to the growth in mutual fund sales as well as the income generated from AGFs interest in private alternative managers and long-term investments.