Onex Corp
TSX:ONEX
Onex Corp
Onex Corporation, founded in 1984 by Gerry Schwartz, stands as a formidable pillar in the private equity landscape, a testament to strategic foresight and operational deftness. Headquartered in Toronto, Ontario, the company is structured around a fundamental vision: to acquire, manage, and build businesses with the potential for substantial growth. Onex accomplishes this by deploying its capital in undervalued or underperforming enterprises across diverse industries, seeking not just to hold, but to actively shepherd these businesses to greater productivity and profitability. By leveraging an intricate understanding of market dynamics, coupled with hands-on operational improvements, Onex ensures that these acquired entities are well-positioned to thrive and deliver strong returns on investment.
The financial engine that powers Onex's success lies in its dual-source revenue model, comprising both its proprietary capital and funds managed on behalf of third-party investors. As Onex invests its own formidable capital alongside that of its investors, it aligns interests closely, creating a symbiotic relationship that fosters trust and accountability. Revenues are hence generated through management fees and carried interest from its private equity funds, as well as income from directly investing its capital. With this holistic approach, Onex not only scales its operations but also enhances its ability to weather market cycles and craft resilient enterprises, making it a stalwart example of strategic growth in the ever-evolving world of private equity.
Onex Corporation, founded in 1984 by Gerry Schwartz, stands as a formidable pillar in the private equity landscape, a testament to strategic foresight and operational deftness. Headquartered in Toronto, Ontario, the company is structured around a fundamental vision: to acquire, manage, and build businesses with the potential for substantial growth. Onex accomplishes this by deploying its capital in undervalued or underperforming enterprises across diverse industries, seeking not just to hold, but to actively shepherd these businesses to greater productivity and profitability. By leveraging an intricate understanding of market dynamics, coupled with hands-on operational improvements, Onex ensures that these acquired entities are well-positioned to thrive and deliver strong returns on investment.
The financial engine that powers Onex's success lies in its dual-source revenue model, comprising both its proprietary capital and funds managed on behalf of third-party investors. As Onex invests its own formidable capital alongside that of its investors, it aligns interests closely, creating a symbiotic relationship that fosters trust and accountability. Revenues are hence generated through management fees and carried interest from its private equity funds, as well as income from directly investing its capital. With this holistic approach, Onex not only scales its operations but also enhances its ability to weather market cycles and craft resilient enterprises, making it a stalwart example of strategic growth in the ever-evolving world of private equity.
Transformational Deals: Onex announced its acquisition of Convex and a new strategic partnership with AIG, describing these as transformational moves with potential for long-term shareholder value.
Convex Performance: Convex has delivered strong growth, with gross written premium up 22% annually since 2022 and improved profitability, making it a standout in the insurance sector.
AIG Partnership: AIG committed $2 billion to Onex's private equity and credit funds, expected to drive $15–20 million in incremental fee-related earnings and future fundraising tailwinds.
Fee-Related Earnings (FRE): Onex expects to exit 2025 with a firm-wide FRE run rate of $17 million, ahead of plan, with further upside as AIG and Convex allocations grow.
Strong Credit Results: Credit business continues to outperform, raising or extending $10.7 billion in structured credit assets and achieving a strong $50 million FRE run rate at quarter-end.
Private Equity Activity: Multiple realizations and new investments resulted in $360 million in proceeds; notable exits include OneDigital and WestJet, with the latter sold at a 40% premium to prior valuation.
Capital Allocation Shift: Onex is moving towards a capital-light model, targeting up to 10% commitments in new funds and considering select, concentrated investments in sectors where it has deep expertise.
Liquidity and Funding: Onex expects to have $500 million in liquidity at the close of the Convex deal and projects meaningful additional liquidity from future private equity realizations.
