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Onex Corp. ONEX-T lost US$184-million in the most recent quarter, as the slump in equity markets eroded the value of the asset manager’s stakes in public companies.

The Toronto-based pioneer in private equity saw the value of its portfolio of businesses decrease by 3 per cent in the three months ended June 30, which the company said “largely reflecting global macroeconomic factors.”

Stock markets sold off sharply in recent months, with the benchmark S&P 500 index down 7.8 per cent year-to-date. Onex’s quarterly loss in 2022 follows the US$174-million the company made in the same period a year ago.

“The global economy is going through a period of adjustment,” said Gerry Schwartz, Onex’s founder and chief executive, in a conference call. He said the company remains optimistic on the overall environment for investments, as more than four decades of experience through numerous market downturns “show it is possible to weather these challenges and emerge even stronger.”

Economic uncertainty is creating opportunities for Onex to buy businesses, Mr. Schwartz said. The company has US$1.2-billion of cash available. Onex invested US$140-million in the second quarter on businesses such as Miami-based software company Analytic Partners and Sacramento-based Ideal Dental Management Partners.

Onex turned in “very good” performance in the second quarter, analyst Geoffrey Kwan at RBC Capital Markets said in a report. He said while the rate of growth slowed in the company’s return on investment and its net asset value, “the returns were strong relative to public equity markets.”

The value of Onex’s stakes in five publicly traded companies – including event business Emerald Holding Inc. and technology company Celestica Inc. – fell by US$126-million to US$660-million, while the value of Onex’s investments in its portfolio of 42 private companies decreased by US$66-million to US$3.8-billion, according to the company’s financial disclosure on Thursday.

Onex’s portfolio includes WestJet Airlines Ltd., acquired in 2019, just ahead of the COVID-19 pandemic. Onex reports WestJet’s financial results as one of 10 businesses in its industrial portfolio. The value of the portfolio fell by 4 per cent in the most recent quarter; year-to-date, the value of these 10 companies is up by 7 per cent.

To date, Onex has received proceeds of US$25-million from Calgary-based WestJet after investing US$196-million in the airline three years ago. The total value of the WestJet takeover was $5-billion, including debt.

In recent years, Onex diversified from its private equity roots by acquiring asset manager Gluskin Sheff + Associates Inc. in 2019 and building a credit investment business from scratch. Both divisions have grown this year.

Onex ended the most recent quarter with US$33.5-billion of third-party fee-generating assets under management, up 6 per cent over the past year. The credit business has US$23.3 billion of assets, up US$1.1-billion through the first seven months of this year.

Through the first seven months of the year, Onex spent US$86-million buying back its own shares at an average cost of US$61.51 per share.

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