Onex Corp. ONEX-T raised US$1.8-billion for private equity and credit funds in the first three months of the year, a show of support from investors after the asset manager paused fundraising on its latest flagship private equity offering last year.
On Friday, Onex announced the company and its institutional clients have committed US$795-million to the company’s fifth fund, known as ONCAP, dedicated to acquiring small to medium-sized businesses, and US$735-million to a new platform, the Onex Partners Opportunities Fund. Onex expects to announce final closes on both funds in the next five months.
Toronto-based Onex has raised or extended a total of US$3.5-billion of fee-generating assets at its credit investment platform so far in 2024.
“Onex is making progress in its plans to drive growth in shareholder value, and we were pleased to see fundraising start to gain momentum in the quarter,” chief executive Bobby Le Blanc said in a news release.
Onex oversees a total of US$35.1-billion in assets for its clients. A year ago, the company paused fundraising on a new private equity fund with a multibillion-dollar target, Onex Partners VI, owing to a lack of support from investors such as pension plans and insurers.
The move came during a slowdown in activity across the private equity sector, as investors grappled with rising interest rates, the prospect of a recession and a freeze in the initial public offerings that allow fund managers to cash in on businesses they own.
In a conference call Friday, Mr. Le Blanc said the fundraising environment has improved in the past six months, “but we’re still not at the normal levels we experienced over the past three or four years.” He said the market for IPOs and other exits from investments also improved in recent months, but he “wouldn’t call it normal yet.”
Onex is sitting on US$1.4-billion of cash it can commit to new investments. In the call, Mr. Le Blanc said that while the company is always looking at potential acquisitions, “the amount of competition feels the same, but the inventory [of investment opportunities] is down.”
Onex made a US$10-million profit in the three months ended March 31, compared with a US$232-million loss in the same period a year ago, when the company wrote down the value of its private wealth business.
Andrew Willis