Oncap postpones launch of small-cap fund amid executive departure

  • Why is this important: Oncap requires LP permission for certain Fund IV efforts
  • Onex mid-market PE platform postpones launch of a small-cap platform
  • Oncap exec is leaving for Leonard Green: Buyouts

Oncap, Onex’s middle-market private equity platform, postponed the launch of a small-cap platform called Oncap Growth after the senior executive focused on the effort decided to leave the firm, according to a note to investors seen by Buyouts.

“In light of this new development, we are deferring our plans to launch Oncap Growth, our small-cap private equity platform, for the time being,” the note said.

Evan Hershberg, managing director, decided to leave Toronto- and New York-based Oncap, Buyouts has reported. Hershberg, who’s worked at Oncap since 2004, will join Leonard Green & Partners early next year, sources said.

Details of the small-cap platform were not available. Oncap will seek permission from limited partners in Oncap IV to allow the fund to continue to pursue deals requiring $50 million or less in equity, the note said. Oncap closed Fund IV on $1.1 billion in 2016.

If LPs approve, Oncap will transfer a $41 million investment in AutoSource into the flagship Fund IV, the LP note said. Oncap made the AutoSource investment in May in anticipation of forming the Oncap Growth platform, the note said.

Managing Director Mark Gordon, Director Adam Shantz and Eugene Polevoy, senior associate, will stay on Oncap’s investment team and focus on smaller opportunities for Fund IV, the note said.

Oncap was formed in 2000 and has completed 23 investments, generating a 4.4x gross multiple of capital invested and a gross IRR of 41.6 percent of 13 realized or publicly traded investments, according to the firm’s website.

Action Item: Check out Oncap’s Form ADV here: https://bit.ly/2O0jqSZ