Onex Corp has set a US$6.5 billion target for its fifth flagship fund, which would be the largest in the private equity firm’s 33-year history.
In its report of first-quarter 2017 results, the Toronto investor said it recently launched fundraising for Onex Partners V. Onex, a listed firm, plans to commit about US$2 billion.
Closing on US$6.5 billion would give the fund about 14 percent more in committed capital than its predecessor, which collected US$5.7 billion in 2014.
Founded in 1984 by Chairman and CEO Gerry Schwartz, Onex raised its first PE fund in 1999. In addition to contributing its own resources, Onex secures third-party capital from a range of global institutional investors, including pension funds, sovereign-wealth funds, banks, insurers and family offices.
The Onex Partners funds have been earmarked for large-cap buyouts of operating companies in North America and Europe. Active in more than 15 sectors, the vehicles generally focus on carve-outs, growth platforms, restructurings and other opportunities.
Onex also has a mid-market investment arm, ONCAP, which raised US$1.1 billion for its fourth fund last November. In all, eight Onex Partners and ONCAP funds have accounted for close to US$12.4 billion in third-party capital.
Onex has been quite active on the deal-making front of late. In March, Onex Partners IV wrapped up its acquisition of Parkdean Resorts, a U.K. owner and operator of caravan holiday parks, for about US$1.65 billion (£1.35 billion).
The Parkdean deal was preceded in December by Fund IV’s $1.37 billion buy of Save-A-Lot, one of the largest discount grocery retailers in the United States.
Onex has been just as busy monetizing portfolio assets. Since January, the firm has completed three major liquidity events.
They include initial public offerings of trade-show operator Emerald Expositions and door-and-window manufacturer Jeld-Wen. Onex shared in the proceeds but continues to hold majority interests in both companies.
Onex also this week sold USI Insurance Services to KKR and Caisse de dépôt et placement du Québec for an enterprise value of US$4.3 billion. The sale awarded Onex with a gross multiple of invested capital of 3.4x and a gross return of 34 percent.
Since inception, Onex reports its private equity activity has generated a gross 2.7x of invested capital, which translates into a gross IRR of 28 percent. Fund IV is currently showing a gross 1.1x of invested capital and a gross IRR of 11 percent.
Onex is among the world’s 50 largest PE firms, according to Private Equity International‘s PEI 300.
(This story has been updated to reflect the close of the USI sale and to add background about Onex.)
Photo of Gerry Schwartz courtesy of Reuters/Mark Blinch