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Gerry Schwartz, Onex’s founder and chief executive, addresses shareholders during their annual general meeting in Toronto, May 8, 2008.J.P. Moczulski/The Canadian Press

Asset manager Onex Corp. continued to come back strong from pandemic-related setbacks, posting a US$515-million profit in the most recent quarter after losing US$1.1-billion in the first three months of the year.

Toronto-based Onex announced on Friday that the value of its private equity investments increased by 14 per cent in the past three months and are up 9 per cent year to date. The company’s US$38-billion portfolio includes stakes in WestJet Airlines Ltd. and trade show operator Emerald Holding Inc., businesses whose revenue have fallen sharply since March because of the novel coronavirus contagion.

In an investor call, Onex president Bobby Le Blanc said the company’s travel and conference businesses “have made tough but necessary decisions to cut costs and boost liquidity.” But he added, “We remain confident in their ability to prosper as we go forward.”

Mr. Le Blanc said Onex remains on the hunt for acquisitions. In a recent report, analyst Phil Hardie at Scotia Capital Inc. said Onex may bid for bankrupt Hertz Global Holdings Inc.'s car leasing business, Donlen, a potential US$1-billion buyout.

Rival private equity firms, including Brookfield Business Partners LP and Apollo Global Management Inc., have also been putting capital to work during the pandemic. New York-based Apollo offered to buy casino operator Great Canadian Gaming Corp. this week for $2.1-billion, a bid that came when most of the Toronto-based company’s properties are closed.

Onex detailed the pandemic’s impact on its holdings by dividing the businesses it owns in three groups, and disclosing the amount of capital committed to each sector.

Onex has US$2.47-billion committed to 12 companies that have low to positive exposure to COVID-19, and in the three months ended Sept. 30, their value increased by 18 per cent. The company has US$1.1-billion committed to 19 businesses that face what it described as pandemic-related “headwinds,” and the value of these investments rose 9 per cent in the most recent quarter.

Onex said it also has US$647-million tied up in seven companies with “direct exposure” to the pandemic, including WestJet and Emerald. The value of these businesses increased by 11 per cent in the quarter, but is down 32 per cent year-to-date. When asked how these businesses may perform in the face of a significant increase in the severity of the pandemic, Mr. Le Blanc said: “We are more prepared for a second wave than we were in March.”

After the pandemic hit North America in March, Onex spent several months working with the companies it owns and building the team that runs its credit market portfolios to ensure they could weather an economic downturn, then began investing. Gerry Schwartz, Onex’s founder and chief executive, said: “Building on our portfolio improvements last quarter, we continue to demonstrate increased momentum in our private-equity and credit portfolios, resulting in a very good quarter for Onex.”

Onex made three significant investments in the most recent quarter, including a US$725-million commitment by the company and its funds to Atlanta-based OneDigital, a leading U.S. provider of employee benefits, insurance and retirement services. Onex also spent US$444-million over the first 10 months of this year buying back 9.8 million of its own shares.

In the three months ended Sept. 30, Onex earned a US$492-million profit on investments and US$23-million from its asset and wealth management holdings, which include fund manager Gluskin Sheff.

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