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Nigel Wright, former chief of staff for Prime Minister Stephen Harper, is pictured at a hearing on Parliament Hill on in 2012.

Sean Kilpatrick/The Canadian Press

Whatever the rumours, Nigel Wright is not holing up in London until the Mike Duffy affair blows over. He's there to build Onex Corp.'s European business and has made a commitment to stay put for a long time.

Mr. Wright was Prime Minister Stephen Harper's chief of staff until he resigned in May, 2013, an event triggered by the revelation of a $90,000 cheque he wrote to Mr. Duffy to cover the senator's questionable living expenses. Mr. Wright moved to London two weeks ago to join Onex's small team and has bought an apartment in Covent Garden, a short jog to Onex's offices near Piccadilly Circus.

Friends and colleagues of Mr. Wright say he's planning a six-year run in the London office of Onex, the private equity giant that is based in Toronto and led by chairman and CEO Gerry Schwartz, Canada's highest-paid boss. Mr. Wright, who has always been publicity shy, declined to comment about his new life after three years in the Prime Minister's Office and a year in legal limbo.

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Another reason for his mum status is that he will almost certainly be called to testify in Mr. Duffy's trial, which is to start in September. Last month, Mr. Duffy was hit with 31 charges, including fraud, in relation to allegedly false expense claims and breach of trust. Three of the charges, including fraud on the government, relate to the cheque he accepted from Mr. Wright.

Mr. Wright himself was investigated for bribery, fraud and breach of trust but learned in April that he would not face charges. The Harvard law graduate chose to return to Onex, where he had worked as a managing director from 1997 until he joined the PMO in 2010, along the way making himself rich (he didn't even charge expenses when he was in the PMO) and building his reputation on Bay Street as a savvy and hard-working business analyst and deal maker.

Acquaintances say it is not clear whether Mr. Wright will actually be leading the London office. What is clear is that Onex wants to build a European presence and thinks Mr. Wright is the ideal man to help put the company on the European private-equity map. During his last stint with the company, he played a key role in Onex's expansion into aerospace (Spirit AeroSystems and Hawker Beechcraft) and a couple of other industries.

Most of Onex's vast portfolio of investments are in the United States. At last count, Europe, still the world's biggest market, accounted for a mere 16 per cent of revenues. "His move to the U.K. reinforces our commitment to the London office," Mr. Schwartz said when announcing Mr. Wright's return.

Onex, with $21-billion (U.S.) worth of assets under management, is one of the few big private equity firms without a fighting presence in Europe. Some of its larger rivals, like Apollo and Blackstone, have dozens of senior partners in London and other European cities. Founded in 1984, Onex did not open a London office until 2012. Before Mr. Wright's arrival, it was staffed by an overworked team of two managing directors – Tony Morgan and David Hirsch. Mr. Wright will be the third director and the trio plans to bulk up the office with local investment talent.

Onex is not a complete stranger to Europe. In 2010, Onex, through its $4.7-billion Onex Partners III fund, invested $1.2-billion in Tomkins, the British-based maker of belts and hoses for the industrial and automotive markets. Since then, Tomkins' business units have been sold off at a substantial profit. The biggest remaining European holding is KraussMaffei, the German maker of equipment that shapes plastics, such as injection moulding machines.

Onex made a big splash in the United States, its traditional stomping ground, with billions of dollars worth of investments in everything from commercial vehicles, such as Allison Transmission, to warranty underwriting, such as Warranty Group. But that market became swamped with viciously competitive private equity firms. And because of cheap money and oceans of liquidity, asset values may have reached bubble status.

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Onex hopes Europe will become a fruitful hunting ground for its newest and biggest fund, the $5.2-billion Onex Partners IV. But it is well aware that European prices are high too, with both strong and weak companies trading at high multiples to cash flow. "You have to be very selective and careful when you're making an acquisition," said an Onex executive in Toronto who did not want to be identified. "You need to find an angle that works, not just paying more than the next [private equity] firm at auctions."

Its European strategy is unlikely to stray from its comfort zone. Onex likes traditional businesses; it is not, for instance, prone to taking punts on new social media platforms. It generally goes after companies with strong free cash flow, high barriers to entry and the potential to grow through bolt-on acquisitions. Industries on its hit list include manufacturing, packaging, health care, business services, chemicals, defence and building products. The still tentative European economic recovery, and the restructuring of European industries that were hit hard by the recession, will play into Onex's hands.

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