CLOs drive growth of Onex's credit unit in Q2

The Canadian firm’s growing credit arm will have a role to play in helping the group increase its own capital under management to $10bn by 2017.

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.