Onex Corp said it is preparing to launch its fourth mid-market private equity fund now that ONCAP III is approaching full investment.
In its report of first-quarter 2016 results, Toronto-based Onex said it is “now in a position” to raise ONCAP IV as its predecessor was more than 75 percent invested as of March 31. ONCAP III has so far invested in seven companies and completed 14 add-on acquisitions.
Onex did not give a target size for ONCAP IV. ONCAP III collected $800 million in a final close in September 2011.
Led by Managing Partner Michael Lay, ONCAP has operated as the mid-market investment platform of Onex since the establishment of its debut fund in December 1999. Focused on acquisitions of businesses in a range of North American industries, it has consistently raised larger amounts of third-party capital with each new fund offering.
Onex has taken a substantial equity stake in all prior ONCAP funds. The firm chipped in $252 million for ONCAP III, giving it about 31 percent of total capital committed.
At the end of March, ONCAP III’s portfolio was showing a gross internal rate of return of 30 percent, and net return of 20 percent, Onex noted in its first-quarter report. The fund was also showing a gross multiple of 2.1 times invested capital as of March 31, and a net multiple of 1.6 times.
Photo of Gerald Schwartz, chairman and CEO of Onex Corp, courtesy of Reuters/Mark Blinch