Onex opens real estate fund with $200m

The diversified Canadian company has formed its first private equity real estate fund with an initial investment of $200m one year after raising a $2.2bn buyout fund.

The Canadian conglomerate Onex Corporation announced the formation of its first private equity real estate fund, Onex Real Estate Partners, with an initial commitment of $200 million (€154 million).

Onex Real Estate Partners is led by Michael Dana, the former president of the Delta Group, a real estate investment fund, and former co-head of real estate investment banking at CSFB and DLJ. His team will include 5 other professionals who worked with Dana at the Delta Group.

Dana noted that the fund's initial focus will be North American assets, but they will look to grow internationally over time. In addition, as they encounter larger deals, the fund will tap co-investors or investors in other Onex funds.

Onex’s foray into the real estate sector comes on the heels of two other closings for private equity real estate funds. This week, Boston-based BayNorth Capital, the former real estate arm of private equity firm Charlesbank, closed its sixth fund on $430 million and Chicago-based real estate investment firm Heitman LLC closed on $400 million.

Onex Corporation is a diversified holding company based in Canada with total revenues of approximately C$16 billion. Onex Partners, the private equity arm of Onex, held a final closing on a C$2.2 billion (US$1.65 billion) fund in February 2004. Onex Corporation committed C$525 million (US$400 million) to the fund, making it a 25 percent limited partner.

Onex Partners has been an active buyer recently, acquiring four companies in the past three months. In December, the firm purchased two health care companies from publicly-traded Laidlaw International for approximately C$980 million. The month before, Onex Partners announced two additional transactions:  the C$300 million acquisition of Cosmetic Essence from Boca Raton, Florida buyout shop Brockway Moran and the C$225 purchase of the Center for Diagnostic Imaging.