Onex flagship fund tops $5 bln as largest yet

Firm: Onex Corp

Fund: Onex Partners IV LP

Target: $4.5 billion

Amount Raised: $5.2 billion

Placement Agent: Credit Suisse

Onex beat its fundraising goal by about $700 million and exceeded the fund’s 2009 predecessor, the $4.3 billion Onex Partners III, by about $900 million, in a sign of strong interest from limited partners. Onex said it committed $1.2 billion to Fund IV. The fund brings Onex’s total assets under management to $21 billion.

An LP told Buyouts earlier this year that Onex would most likely wrap up its flagship fund by the end of June, which it has now done.

Among the investors in Onex Partners IV LP, the California State Teachers’ Retirement System pledged $200 million, the Maine Public Employees’ Retirement System approved a $60 million commitment, and the Los Angeles County Employees Retirement Association earmarked $150 million.

Onex listed $4.84 billion raised from 70 investors in a May 20 Form D amendment for Onex Partners IV LP. In separate Form D filings, it also disclosed $180 million in commitments from three investors for Onex Partners IV PV LP and $26 million raised for Onex Partners IV Select LP from 31 investors.

Gerry Schwartz, the chairman and chief executive of Onex, said in a prepared statement the firm will continue to partner with “outstanding management teams to build great companies” as it embarks on investments from the new pool.

Among its recent deals, Onex said in April it will earn a 2.2x multiple on the $5.4 billion sale of Gates Corp, a manufacturer of power transmission belts and fluid power products, to affiliates of The Blackstone GroupCanada Pension Plan Investment Board is also a seller of Gates Corp.

In March, Onex said it would sell The Warranty Group, a provider of extended warranty contracts, to an affiliate of TPG Capital for an enterprise value of $1.5 billion. Onex said it earned a 3.1x return on the deal.

On the acquisition front, Onex said in January its USI Insurance Services platform paid an undisclosed sum to buy 42 insurance brokerage and consulting offices from Wells Fargo Insurance, a unit of Wells Fargo & Co. Equity for the deal came from Onex Partners III LP.

All told, Onex reported a gross IRR of 28 percent and a gross multiple of 3.0x capital invested from realized, substantially realized and publicly traded investments over the life of the firm, the company said.