Onex Credit plots to double its size by 2017

Some of the growth plans hinge on the Canadian manager's new ambitions in Europe.

Onex Credit, the credit focused arm of Toronto private equity firm Onex Corporation, wants to grow its assets to $10 billion by 2017. The current $5 billion assets under management already represent an 80 percent increase over the past year, Bobby LeBlanc, senior managing director in New York, said on Onex’s earnings call Friday (14 November).

 

Some of the growth should come from Europe, where Onex Credit recently opened an office and is seeing a lot of opportunity. Onex also priced its seventh US CLO earlier this month at $514 million.

 

Seth Mersky, senior managing director, said in response to analysts’ questions that he’d expect it to take four to six months for the firm to start executing on European CLOs. “The timeframe for gathering assets and raising the liabilities stack for European CLOs won’t be materially different than the US.” 

 

Onex Credit doesn’t plan to go on much of a hiring spree in Europe, though. After appointing Stephen Baker to lead the new London office, Onex might add another analyst to the credit group there, but Mersky said he doesn’t expect to do much more hiring over the first few years. “You don’t need the same level of infrastructure because [the London team] will share analysts and portfolio managers that are already based in the United States and often look at US dollar credits that have euro tranches,” he said.

 

Onex's shares have performed well so far this year. They closed at $62.06 at the end of the day on Friday, while they started trading at around $57.40 in January this year and have been on an upward climb since experiencing a dip in March of 2009 at $15.48 per share.