Onex Partners V raises lion’s share of $6.5 bln target in first close

Onex Corp held an initial close on fundraising for its fifth flagship private equity fund, securing 80 percent of the $6.5 billion target.

In its second-quarter report Onex said it raised $5.2 billion for Onex Partners V in July. Included in the amount is $3.1 billion of third-party capital. Additionally, Onex, a listed firm, committed $2 billion, while management made a minimum 2 percent commitment.

The initial close positions the fund to become the biggest in the Toronto investor’s 33-year history. If it meets the $6.5 billion goal, Fund V will be 14 percent larger than its predecessor, which collected $5.7 billion in 2014.

Founded in 1984 by CEO Gerry Schwartz, Onex raised its first PE fund in 1999. Limited-partner resources have typically come from global institutional investors, including corporate and public pension funds, sovereign-wealth funds, banks, insurers and family offices.

The firm’s Onex Partners series, launched in 2003, makes large-cap buyouts of operating companies in North America and Europe. Active in more than 15 sectors, the funds have focused on carve-outs, growth platforms, restructurings and other opportunities.

Onex also has a mid-market investment arm, ONCAP, which closed ONCAP IV at $1.1 billion in November. To date, nine Onex Partners and ONCAP funds have accounted for $15.6 billion in third-party capital.

In May, Onex also initially closed the debut fund of its direct-lending arm, raising $290 million of its $500 million target.

Onex has invested in more than 90 companies, completing about 570 acquisitions with a total value of $70 billion. In its most recent deal, wrapped up in March, the investor acquired Parkdean Resorts, a U.K. operator of caravan holiday parks, for about $1.65 billion (£1.35 billion).

Since inception, Onex reports its private equity activity has generated a gross 2.8x of invested capital, which translates into a gross IRR of 28 percent on realized, substantially realized and publicly traded investments.

Performance was boosted by recent liquidity events. They include this year’s initial public offerings of trade-show operator Emerald Expositions and door-and-window maker Jeld-Wen, and the $4.3 billion sale of USI Insurance Services to KKR and Caisse de dépôt et placement du Québec.

Onex is led by Schwartz and a team that includes Senior Managing Directors Ewout Heersink, Robert Le Blanc, Seth Mersky and Anthony Munk.

Earlier this year, Onex hired Laurence Goldberg from Barclays to serve as a managing director. It also promoted Amir Motamedi to managing director. Both serve in the firm’s New York office.

Photo of Gerry Schwartz, chairman and CEO of Onex Corp, courtesy of the firm.