CLOs drive growth of Onex's credit unit in Q2

Canadian alternatives group Onex has placed its private debt arm, Onex Credit Partners (OCP), at the heart of its strategy to grow assets under management to $10 billion by 2017, alongside its much larger private equity operation.

Speaking during a second quarter earnings call on Wednesday, chief executive Gerry Schwartz said Onex currently managed about $5.9 billion of its own capital, but was on track to hit $10 billion by the end of 2017.

OCP raised its largest CLO to date during the second quarter, offering about $1 billion in securities and loans via in a private placement transaction that included about $90 million purchased by Onex.

OCP accounts for $360 million of Onex’s overall balance sheet AUM, excluding $348 million invested in a segregated OCP unleveraged senior secured loan strategy fund.

In addition to the $5.9 billion of its own capital under management, the group has $16.4 billion of capital invested or committed on behalf of its investors. About a quarter of that amount is currently managed by OCP, Onex said in its results presentation. OCP CLO-5 and OCP CLO-6, both launched during the second quarter, accounted for about $1.2 billion of that total. Across the six vehicles, OCP has now raised $3.3 billion of CLO capital.

Other long-term goals included growing capital per share by 15 percent per annum, and growing fee-generating assets by 10 percent annually, Schwartz said.