Onex unveils two new funds, targets credit(2)

Canadian private equity firm Onex revealed currency-related losses of $77 million during a conference call following the release of its third quarter earnings report.

Publicly listed Canadian firm Onex revealed plans for its next two funds during a conference call following its third quarter earnings report. The firm is preparing to raise Onex Partners III, a C$4.5 billion ($4.7 billion, €3.2 billion) fund expected to hold a first close in August 2008. Onex will contribute C$1 billion to the fund.

Onex has also acquired a 50 percent interest in distressed credit firm GK Capital, founded in 2005 by Michael Gelblat and Stuart Kovensky. The firm will be renamed Onex Credit Partners. Onex will contribute C$50 million to supplement the fund’s existing C$300 million in assets. The fund will purchase undervalued credit securities; in the immediate future Onex said it will pursue opportunities to acquire senior secured leveraged loans.

Onex reported that its revenues were up 25 percent to C$6 billion from the third quarter of 2006, but recorded a net loss of C$77 million. Onex attributed the loss in large part to foreign currency translation losses on US cash and securities.

Onex currently does not hold any asset-backed commercial paper, and so will not face any write-downs as a result of the subprime mortgage collapse.

Onex’s shares fell around 4.4 percent after the earnings report was issued, down to C$34.61.